Proof positive that tort "reform" does not prevent frivolous lawsuits

One of the major goals of the "reform" movement is to enact "loser pays" legislation, which would force the losing party in a lawsuit to pay the legal fees and other expenses of the winning party.  A substantial step in that direction is "offer of judgment" legislation, which has two effects.  The direct effect is that if a defendant makes a formal offer of judgment that the plaintiff doesn't accept, the plaintiff will have to pay the defendant's legal expenses unless the plaintiff gets an award as high or higher than the offer of judgment.  The indirect effect of "offer of judgment" legislation occurs when damage caps have been enacted: If a defendant offers a judgment as high or higher than the damage cap, the plaintiff is basically given "an offer he can't refuse."

The "reformers" tell us that a good way to eliminate frivolous lawsuits is to enact "offer of judgment" legislation.  Proof that it doesn't comes in the form of Roy Pearson:

"Keep in mind that the defendants apparently made a formal offer of judgment in the case, in the neighborhood of $12,000 or so. So if Pearson wins, but wins less than that amount, he may be on the hook for all of the defendants' legal fees over the last year and a half. Since those fees would amount to far more than the case was worth, it would be poetic justice."

Source: Overlawyered: Pearson penultimate (?) update - the trial ends

The next time you hear a "reformer" argue for "loser pays" or "offer of judgment" legislation, bring up the Pearson case.

Technorati tags: Roy Pearson, pants lawsuit, loser pays, offer of judgment, overlawyered, David Nieporent, tort Reform

Comments

[Ted]

And I suppose your next argument is that imprisonment doesn't stop crime, because crime happens anyway?

You're not that stupid, are you? So I have to assume that you're just being dishonest, and are deliberately ignoring that the point is that loser-pays would (1) reduce frivolous litigation at the margin and (2) prevent someone like Judge Pearson from accepting the offer of judgment and stealing $12,000 from the innocent dry cleaners.

As long as you're attacking hypocrites, why not criticize your other blog (and ATLA) for not coming to the defense of Pearson's $54 million pants-suit when they defend the obesity litigation that uses the same legal theory that Pearson does?

[E-Bell]

There's just one problem:

Overlawyered initially had it wrong, but they've now updated their post with a correction.

D.C.'s offer of judgment rule (Rule 68, which is the same as the federal rule) awards only COSTS to the defendant. Not attorney's fees. These types of costs include copying costs, witness fees and the like.

The defendants in Pearson's case will be lucky to get a hundred dollars out of the deal.

[Justinian Lane]

E-bell: Thanks!

Ted: Since DC's offer of judgment rule doesn't function as I earlier wrote, the point is moot. However, neither "loser pays" nor any other "reform" will prevent pro se nutjobs from filing frivolous lawsuits or otherwise abusing the system.

Pearson's theory of liability is sound; if a dry cleaners lost his pants, he's entitled to some restitution, so there's no reason for me to attack anyone for supporting his theory of liability. Where he's gone off the deep end is in the amount of damages he is seeking.

FYI: I don't support obesity lawsuits unless the plaintiff can prove that either the merchant(s) falsified the nutritional information of their product or added some substance to the food specifically to make it addictive. I'm beginning to think Chipotle does the latter as I've developed an unhealthy addiction to their steak fajita burrito.

Justinian Lane wrote:

"Pearson's theory of liability is sound; if a dry cleaners lost his pants, he's entitled to some restitution, so there's no reason for me to attack anyone for supporting his theory of liability."

Pearson's theory of liability is not sound.

The dry cleaners found his pants. They tried to return it to him. He refused it and claimed it wasn't his, even though the size matched him exactly, and even though the tag on the pants matched his receipt exactly.

The clear conclusion here is that not only is Pearson's damage claim insance, his theory of liability is based upon his own fraud and lies. To even give him 1 cent would be a travesty of justice. The fact that this case even reached trial which forced the Chungs to incur inordinate attorneys' fees is a travesty of justice.

[Ted]

Pearson's theory of liability is sound; if a dry cleaners lost his pants, he's entitled to some restitution, so there's no reason for me to attack anyone for supporting his theory of liability.

Is it once again the case that you're posting on something without knowing what you're talking about? ATLA condemned Pearson for his lawsuit.

neither "loser pays" nor any other "reform" will prevent pro se nutjobs from filing frivolous lawsuits or otherwise abusing the system.

And once again, you don't know what you're talking about, as the Prison Litigation Reform Act did a very good job of substantially reducing pro se nutjob litigation.

[Justinian Lane]

The AAJ/ATLA (When they officially change their web site, I'll just call them the AAJ.) condemned Pearson for seeking millions of dollars in damages under the CPPA (Consumer Protection Procedures Act). Pearson contends that he's entitled to $1,500 per day in damages for signs that say "satisfaction guaranteed" and "same day service." A sane application of the statute would hold he is entitled to, at best, one violation of the CPPA when the dry cleaners lost his pants.

There is some discrepancy over whether Pearson's suit pants were truly lost. The Chungs contend they found his suit pants, while Pearson claims the pants the Chungs found were not his. Giving Pearson the benefit of the doubt, (which he probably doesn't deserve) Pearson is entitled to the replacement cost of his suit, and perhaps $1,500 under the CPPA.

I've yet to see anyone, including the AAJ/ATLA argue that Pearson is not entitled to either get his pants back or get a replacement suit. Would you care to argue that dry cleaners can lose their customers' clothing with impunity? If not, then you're forced to agree that at least ONE of Pearson's theories of LIABILITY is sound. Again, it's the requested damages that are insane, and it's the requested damages that the AAJ/ATLA condemned.

The reason the PLRA reduced inmate litigation is because it required inmates to exhaust their administrative remedies prior to filing suit. There are no administrative remedies available in the vast majority of tort cases, so you're off base to use this as an example of a useful "reform."