McKenna’s Suits Against the Republican Party and BIAW

October 7, 2008

Yesterday’s entry about the lawsuit against the Republican Party drew a comment that warrants notice. James Tierney of Columbia Law School’s National State Attorney General Program saluted Rob McKenna’s decision to bring the lawsuit against the Republican Party. I perhaps did not call attention to my recognition of this decision as a commendable action. Earlier I praised McKenna for suing the B.I.A.W., a major Republican contributor.

Mr. Tierney says that it was appropriate for the Attorney General’s office to bring the action instead of having an independent law firm pursue it. This is certainly something beyond my expertise, but the decision does at least raise a question of a conflict of interest. Given the wide ranging responsibility of the Attorney General’s Office, I am sure that this comes up with some frequency and that it has been adequately resolved in terms of professional responsibility.

My question is that given the appearance of what might commonly, not professionally, be viewed as a conflict of interest, the A.G.’s decision not to pursue immediate action, as is sought in the lawsuit by the two former state supreme court justices, is politically questionable. The citizen suit makes it appear that the A.G.’s office might be going lightly on the case by not seeking immediate remedies.

I should emphasize that there probably is a perfectly sound basis for not seeking the relief sought in the citizen’s suit. In fact the citizen’s suit asks the court for emergency permission to gather evidence so the matter can be decided shortly. The A.G.’s office may very well have determined that there was no such evidence or that the search for such evidence was inappropriate in light of the immanence of the election.

Much of this speculation, however, might have been avoided by hiring outside counsel to pursue the lawsuit. There is certainly nothing impermissible about the Attorney General’s office handling the case, but in the emotional charged context of this election, it may have been prudent to avoid the faintest question about the role of politics in the decisions regarding the litigation.

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Ladenburg’s Statistics Counter Tort Reform Argument

June 20, 2008

I attended a seminar at which John Ladenburg, the Pierce County Executive and candidate for Washington Attorney General, spoke and gleaned some statistics that I thought I’d share. We often hear about the crippling burden of litigation and the extravagant liability that businesses and government are exposed to.

Most governmental entities insure against litigation expenses and awards but Pierce County decided to cancel its policy and self-insure. In the course of doing this Pierce county kept careful track of its litigation and related expenses. The results are surprising.

From 2001 through 2007 Pierce County was involved in a total of seven trials and binding arbitrations. One each year on average. The County won all the trials and lost two of the three arbtrations. That’s two adverse results in seven years.

To sue the government a person must first file a claim. These claims are investigated and the County reports its decision on the claim to the claimant. About half of the claims are paid because they are meritorious, although usually payment is for less than the amount asked.

The half which are not paid, after receiving the explanation from the County, usually drop their claims. Only about roughly three to six percent of the claims result in lawsuits in Pierce County. Once filed, the vast majority the lawsuits against Pierce County are dismissed or settled.

This procedure in which the people’s claims are treated respectfully and a fair settlement is sought from the beginning has resulted in cutting amounts paid in the settlement of claims almost in half over the seven year period. This approach has saved the County a great deal of money.

Mr. Ladenburg’s impression is that high jury awards and huge litigation expenses are not the result of frivolous claims by litigation-crazed citizens, but a result of the aggressively adversarial treatment of people with claims. By refusing reasonable claims and settlement offers, governmental (and other) entities add to the burden on the courts and increase their own risks.

If you have ever been in a lawsuit with a big corporation or governmental entity, chances are that you perceived a refusal to entertain a settlement offer you thought was reasonable and a strategy that drove up the cost of the litigation. The strategy of some “deep pocket defendants” and their insurance companies is to make the litigation prohibitively burdensome and expensive, so people cannot see it to conclusion.

Mr. Ladenburg’s statistics suggest that plaintiffs are generally reasonable and those who are not reasonable meet with an appropriate fate in court. Corporations (governmental and private) that are aggressively litigious must bear a significant share of the responsibility for the caseload imposed on our courts.


Foreclosure Rescue Scams

January 4, 2008

Washington, like most other states, is beset with scams to cheat homeowners out of the equity in their homes. With rising interest rates and increasing signs of economic downturn the number of foreclosures is rising at a startling rate. On a significant scale criminals are taking advantage of distressed homeowners by offering means of escaping foreclosure that promise retention of the family home. Most commonly these scams involve deeding title to an “investor” who leases the property back to the home owner with “an option to purchase.” Sometimes these scams just involve vague promises of refinancing, then after obtaining the personal information from the consumer’s loan application, forging a deed. These criminal practices, behind a veneer of “professional assistance,” are epidemic throughout the county.

Several states have passed legislation aimed at curbing these crimes and the Washington State Attorney General this week proposed that similar legislation be passed in Washington. The proposed legislation includes notice requirements and a five day right of rescission but most significantly requires that the homeowner receive 82% of the equity in the event that the property is sold to a third party.

This ought to serve to curb the problem, but it would be very useful if there were enhanced prosecution of these criminals as they are largely under the radar of state and local prosecutors.