13 posts categorized "Public Hiring of Attorneys"

Tuesday, April 19, 2011

Budget break. What’s a New Jersey Tort Reformer to do?

One of the most appealing aspects about tort reform is that it has the power to spur economic growth while being budget-neutral. 

That said, the legislative “budget break” – which is the period between the end of March and June when the Legislature is in recess while the Assembly and Senate Budget Committees meet to finalize the next fiscal year’s budget – can seemingly push tort reform to the back burner. 

Fortunately, there are some things tort reformers can do:

Take a look at your municipal budget.  How much money is your town or city spending on litigation costs?  It’s probably much higher than you think.  Could some endangered local government service be spared if its litigation tab weren’t so high?   Perhaps it’s worth mentioning at your next town council meeting, especially if a lot of cases are referred to expensive private firms.  You’ll be happy you spoke up when your next property tax bill is due. 

Review tort reform measures that were recently introduced.  Senators Jennifer Beck (R-Monmouth) and Loretta Weinberg (D-Bergen) recently introduced S-2800, which adds an additional protection for doctors to two of the proposals in S-760/A-1982.  The new bill addresses protecting a doctor from having his or her name linked to a malpractice suit prematurely.  It also provides protections for volunteer physicians acting and good faith and prevents doctors’ insurance premiums from automatically increasing when a lawsuit is filed.

Assemblyman John Burzichelli (D-Gloucester) also introduced several bills in late 2010 which would protect local governments from liability in certain instances where whether is to blame.  The bills were endorsed by the New Jersey League of Municipalities, which you can read about here

See where redistricting has left you.  Are you in a new legislative district?  Use this as an opportunity to educate your new legislators on the importance of a business-friendly climate in New Jersey.  Unless they live under a rock, they’ve heard this before.  But they might not have thought about tort reform as a means to achieving economic growth.  You can check the new legislative map here to see if your municipality has been moved to a different district.

In sum, the budget break is a great time for tort reformers to connect the dots between economic growth in Trenton and municipal and family budgets at home.  It’s a great way to keep up the momentum and learn more about your community at the same time. 

Tuesday, March 15, 2011

Must-read post by Robert Elliot Chilson via Trenton United - “Got Lawsuits?”

Must-read post by Robert Elliot Chilson via Trenton United - “Got Lawsuits?” http://trenton-united.blogspot.com/2011/03/review-of-city-council-agenda-for.html

Trenton United blogger Robert Elliot Chilson did his homework in advance of the City’s council meeting tonight – nearly two and a half pages of the city’s 8 page agenda are tort claims and civil actions!  You can view them the City’s website, under the heading “Communications & Petitions”:  http://www.trentonnj.org/uppages/3-15-2011%20DOCKET%20CITI1.doc

Chilson observes the following:

  • The City subcontracts a significant amount of its legal work to private law firms, which drives taxpayers’ total litigation costs even higher.
  • Nine of the actions are people suing the City for “Property Damage,” which he suspects are damage to cars due to potholes.  Wouldn’t this money be better spent on fixing the problem instead of incurring a bottomless financial aftermath of lawsuits?

It would be interesting to see where Trenton’s municipal insurance premiums stand in comparison to other municipalities in the state.  As we noted in an earlier post, the cost of liability claims per 100 residents rose 104 percent statewide between 2000 and 2010, according to the Municipal Excess Liability Joint Insurance Fund

Monday, February 07, 2011

What do taxpayers in New Jersey and Louisiana have in common?

We’re paying for lawsuits. Lots of them. 

The Louisiana Lawsuit Abuse Watch (LLAW) released a study which found that eight of the state’s municipalities spent a collective $52 million fighting lawsuits between 2006 and 2009.  $37 million was spent in the form of judgments and settlements; $14.9 went to outside counsel. 

That’s $52 million.  In eight towns.  In just three years!

You may recall a Lawsuit Reform Watch post from April 2010, in which the cash-strapped city of Irvington, New Jersey, faced the loss of 20 police officers and 10 firefighters to help close a $5 million budget shortfall.  This announcement from Mayor Wayne Smith came days before an appellate court rejected the city’s attempt to have its insurance company cover a $5 million personal injury suit. 

Melissa Landry, executive director of LLAW, acknowledged that some lawsuits are legitimate, but that some “are filed purely in search of enrichment from the lawsuit lottery.  At a time when Louisiana, like most other states, are struggling, the public’s financial resources could have made an impact elsewhere: preserving the jobs of law enforcement personnel. 

The report, “Drinking from the Taxpayer Trough” can be found here.     

Tuesday, November 30, 2010

Legal Cost Reporting Bill on the Governor’s Desk

In previous posts, we’ve emphasized the hidden cost of lawsuit abuse to New Jersey’s taxpayers, embedded in municipal and even school budgets.  Now, legislation to expose these costs to the light of day is on the Governor’s desk. 

S-1248, sponsored by Senators Ronald Rice (D-Essex) and Jennifer Beck (R-Monmouth), would prohibit the Division of Local Government Services, which is housed in the Department of Community Affairs, from approving the budget of a municipality or local authority until the municipality reports their involvement in lawsuits in which they have spent or are expected to spend more than $50,000 in legal fees. 

Local governments’ annual budgets must be approved by the State.  However, legal fees are often added to the budget after its approval, which can sometimes mask the true state of municipality’s budget. 

S-1248 also tackles outside law firms’ billing practices, which deters potential pay-to-play activity.  It’s harder for firms to bilk the taxpayer when municipalities are required to report the names of attorneys performing work and an explanation of their billing practices. 

In addition to reporting the names of attorneys performing work and an explanation of their billing practices, the number of lawsuits settled out-of-court and the amount for which they were settled must also be included.  Outstanding lawsuits and an explanation must be included as well, unless costs are expected to be covered by a liability insurer. 

Senator Rice acknowledged that the bill is largely aimed at alerting state official to large contracts awarded to outside firms.  “New Jersey taxpayers are paying enough for local governments and authorities without over-the-top legal contracts to political cronies,” he said in a statement.  “This bill is about making sure that local officials publicly report any legal contract in which the municipality is expected to spend more than $50,000, so that State regulators, lawmakers, and the governor can step in if necessary on behalf of the local taxpayers.”

Thursday, October 14, 2010

The legal defense line-item

Which is the best way to spend taxpayers’ money?  Your choices are the following:

  • $100,000 for a sixth-grader needing to transfer schools because of an allergy to cats on the premises;
  • $60,000 for an Arizona tourist who fell on a dilapidated sidewalk;
  • $650,000 to a psychiatric patient who gouged his eyes out

You may be tempted to say “none of the above,” but unfortunately, all of the above had their day in the Washington, D.C. legal system.  The sixth-grader’s $100,000 lawsuit against the government resulted in a $7,500 settlement for her family, with undisclosed legal costs for the District.  The Arizona tourist and psychiatric patient, however, received aforementioned settlements at taxpayer expense. 

Washington, D.C.’s economy is stronger than many cities of comparable size and its crime rate is slowly declining, but it’s hard to deny that $8.5 million would help quench the District’s charities and nonprofits’ thirst for coveted public funding.    

In an insightful piece in the Washington Post, Paul Schwartzman notes that the District paid out more than $50 million in legal settlements between 2007 and 2009.  Part of the taxpayers’ high tab is due to the District’s reluctance to settle cases early.  Another is derived in legitimacy, such as a tragic police mistake which cost two children their lives.  But, finally, a big reason is that D.C. has an abundance of lawyers.  As the District’s attorney general, Peter Nickles, puts it in Schwartzman’s piece, “There are more lawyers per capita in this city than any other city in the world.  And what do lawyers like to do?”

Evidently, they like to sue themselves.  All of the District’s residents underwrite these costs with their tax dollars and can appropriately cringe.  But plaintiff’s attorneys can look toward lawsuits against the government with confidence, because unlike the majority of the District’s residents, they see a high ROI rather than a reduction in services.  The lawsuit industry is indeed alive and well in our nation’s capital. 

Tuesday, August 31, 2010

Legal Services [not] worth $77,265.00 per month

Actually, three weeks, to be exact.

Two reports in the New Jersey Law Journal indicate that the plaintiffs in a lawsuit against Prudential Life Insurance Co. preferred to oust highly-paid attorney William Hunt, who was appointed as Master.  Instead, Hunt offered to lower his hourly fees from $450 to $350.

The trouble began when the plaintiffs’ attorney, Angela Roper, received a $77,265 invoice for Hunt’s first three weeks on the job.  The New Jersey Law Journal writes that Roper now argues that the master's appointment is not authorized by R. 4:41-1 because it was done without the parties' consent and in the absence of "extraordinary circumstances."  After receiving the first invoice, Roper's clients made a supplemental filing arguing that the cost would “unjustly burden” them.

Hunt was appointed Master by Bergen County Superior Court Judge Brian Martinotti due to the high volume of work needed in this case.  Two hundred thirty-seven suits were centralized for case management before Judge Martinoitti.  All were former employees of Prudential who claim that they were pressured to settle their claims of discrimination through alternative dispute resolution, rather than court.

Hunt’s tab is being picked up by Prudential, the two law firms representing the two main groups of plaintiffs, and a third-party defendant, all paying 25 percent.  The retroactive fee reduction saves them a collective $17,000.

Read Mary Pat Gallagher’s report here.

Thursday, July 22, 2010

Is a Contingency Fee tax break on the way?

The American Association for Justice (a.k.a, the trial bar) recently told its members to expect a tax break in upcoming rules & regulations from the U.S. Department of Treasury.  According to a report from John O’Brien of Legal Newsline, the AAJ’s director of Federal Relations, John Bowman, said that he is expecting an administrative rule from the Treasury, giving its members a tax break on contingency fee lawsuits. 

Senator Arlen Specter had introduced a bill very similar to the anticipated rule last year, but it failed to gain traction.  It would have allowed attorneys to deduct fees and expenses upfront for filing contingency fee lawsuits.  An analysis by the Washington Legal Foundation estimates that such a deduction could amount to 40 percent of litigation costs in some cases.   

Monday, June 21, 2010

Pay-to-play in PA update

Last year we wrote about the Bailey, Perrin & Bailey law firm, which made significant campaign contributions to the 2006 reelection campaign of Pennsylvania Governor Ed Rendell.  The firm was later awarded a no-bid contingency fee contract to sue Janssen Pharmaceuticals, a Johnson & Johnson subsidiary, over marketing of its drug Risperdal. 

Fortunately, this sort of eyebrow-raising partnership is not common in New Jersey, where the Corzine Administration operated in accordance with the Private Attorney Retention Sunshine Act (PARSA), throughout his administration.  NJLRA applauded the Executive Order issued by the Governor in late 2009. 

A judge dismissed the Commonwealth’s suit against Janssen, citing a lack of evidence.  While this is a step in the right direction for New Jersey-based Johnson & Johnson, there are other legal challenges ahead.  Businessweek reports that the same law firm will be representing the state of South Carolina against Janssen Pharmaceuticals., Litigation against its once-popular drug could cost the company billions of dollars.  The firm was a large financial contributor to state officials in South Carolina as well. 

Friday, May 28, 2010

Around the web, 5.28.2010

Why are so many Jersey moms having C-sections?

By Lorraine Ash and Andrea Clurfeld | Daily Record

May 25, 2010

Nationwide leader: 4 out of every 10 births in New Jersey are C-sections

Read Article

Woman files another suit against Oprah

By Kyla Asbury | Legal Newsline

May 25, 2010

Charlestown, W.Va. - A Charleston woman is suing Oprah Winfrey again, this time claiming the talk show host took funds from her Social Security account and deposited them into the U.S. Treasury.

Read Article

Chathams schools sue attorney, allege malpractice

By Sarah Schillaci | The Star-Ledger

May 16, 2010

The School District of the Chathams is suing its former attorneys for malpractice, alleging the firm cost the schools in excess of $1.5 million when it mishandled a 2005 dispute with a contractor.

According to a lawsuit filed last week in Superior Court in Morris County, Attorney Nuris E. Portuondo with the Morristown-based law firm of Schwartz, Simon, Edelstein, Celso & Zitomer failed to file documents on time that would have tipped the lawsuit in the district’s favor.

Read Article

Frivolous-Suit Sanction Lifted Where No Bad Faith Found

By Charles Toutant | New Jersey Law Journal

May 25, 2010

Filing a frivolous pleading requires not only the act but the intent, a state appeals court said Tuesday in reversing a $6,500 sanction against a lawyer.

The court said the judge who imposed the penalty on Clayton solo Melissa Hoffman failed to find that she acted in bad faith — either in filing a duplicative suit after one was dismissed or in failing to withdraw it when the threat of sanctions was raised.

Read Article

Thursday, April 22, 2010

Lawyers win big in sexual harassment settlement

Litigation dragged on for nearly seven years.  It ended when the plaintiffs – the Middlesex County Sheriff’s Department – agreed to a $1.59 million settlement, reports Tom Haydon in The Star Ledger. 

Two female sheriff’s officers filed a sexual harassment lawsuit against the county in 2006.  The paper trail led back to March 2002, when the officers say that the county personnel director failed to address their complaints. 

Admitting no wrongdoing, Middlesex Freeholders agreed to the settlement one day before the trial was set to begin in U.S. District Court in Newark.  County Freeholder Director Christopher Rafano said that the State’s discrimination laws “make it difficult, if not impossible, for the county to effectively defend itself.”  He said that Middlesex County will ask the Legislature to review discrimination laws and legal fee requirements.  Rafano said that the Legislature should also consider modifying the Tort Claims Act, which would provide immunity to public entities in discrimination cases.  Middlesex County will pay $837,500 in attorney’s fees under this settlement agreement; the plaintiffs will receive a total of $752,500.  This follows a $1 million settlement the county agreed to in order to settle a sexual harassment lawsuit filed by five female sheriff’s officers last May.  It’s unclear whether the county will be able to recoup the money from its insurance carriers.   

There are several unfortunate situations here.  First, the number of female sheriff’s officers who have had sexual harassment lawsuits settled with the county in the past year: seven.  What is the reason behind the flood of litigation? There are two possible explanations: there is clearly a hostile work environment that the Sherriff’s department has chosen to ignore – in which case, it’s about time this situation is addressed in criminal court and internal changes are made so other officers aren’t made to suffer through similar situations.  The focus should be on protecting employees, not making lawyers rich.  The other explanation is also hard to digest.  If, as the Freeholder stated, it’s “difficult if not impossible” for the county to defend itself against allegations of sexual harassment, (and I’m not suggesting it occurred here) what is to stop employees from filing frivolous lawsuits against the County when they know a large settlement is likely?  The county maintained that in at least one instance, the employee was fired not in retaliation, but because she failed a qualification test with her service weapon.  We need to examine the systemic reasons behind this statement, and determine what protections the county – and taxpayers – have against frivolous lawsuits when they do emerge. 

Next, the obvious: the lawyers involved were disproportionate winners in what is an unfortunate situation.  The settlement itself is huge, and $837,500.00 is a lot of money to make on the backs of women who say they were “subjected to years of sexual propositions, innuendo, and lewd, offensive behavior.”  After dividing the award between them, the alleged victims will each have $376,250.00 in damages.  Nothing to sneeze at, but it’s less than half of the attorneys’ compensation. 

While this case is over, the issues it raises are far from settled. 

Tuesday, October 27, 2009

Governor Corzine signs executive order backed by NJLRA

Kudos to Governor Corzine, who just signed Executive Order #157.  This E.O. affects the hiring of outside council to carry out the business of the Attorney General’s office. 

Like many states, New Jersey relies on contracts with private attorneys general to litigate the people’s business, as Attorney General’s offices everywhere face the difficult task of operating within tight budgets.  In New Jersey, an ever-expanding docket of lawsuits has created the need to hire private attorneys general to deal with such.  The Governor’s executive order restates his commitment to requiring New Jersey’s private attorneys general to be highly qualified and transparently selected.  For once, New Jersey’s hiring of outside council has positioned us to become an outlier on ethics – in a good way. Earlier this year, Pennsylvania Governor Ed Rendell found himself in political hot water for hiring private attorneys who donated substantial sums to his campaign.  NJLRA has maintained that citizens have the right to know why certain lawyers are selected to work on state contracts, how much money they are receiving for their services, and what matters they are pursuing.  Without the Governor’s Executive Order, the potential exists for pay-to-play. 

This is an excellent start for the taxpayers and businesses of New Jersey.  Hopefully the next legislature can work with the Governor – whomever he may be – to legislatively codify Governor Corzine’s Executive Order.

Wednesday, August 26, 2009

Pay-to-Play in Pennsylvania?

Readers of "Lawsuit Reform Watch" may recall our post earlier this summer about Governor Ed Rendell's office hiring a private firm with connections to the Governor to sue Janssen Pharmaceuticals, a J&J subsidiary. 

Yesterday LegalNewsline.com had a story about the suit, which is now before the Pennsylvania Supreme Court.  According to LegalNewsline, the Washington Legal Foundation has filed a amicus brief with the Court in support of Janssen's challenge of the Rendell contract.  Saying that it "takes pay-to-play to new heights," the WLF brief continues:

The retention of Bailey Perrin occurred in a manner that permits no one, least of all those responsible for that non-bid contract, to assert that the public interest or the taxpayers have been well served.

According to the story, the brief concludes that absent any public selection criteria, "there are no objective criteria that stand in opposition to the overpowering appearance of impropriety that exists here."

We at NJLRA will reserve judgment about whether Rendell acted in the public interest or if the selection of Bailey Perrin Bailey, which gave thousands to his re-election campaign, was untoward.  But at the very least this no-bid, unvetted contract to sue a corporation on behalf of the Commonwealth of Pennsylvania on a contingency fee basis (i.e. with money, not justice as the motivation) without a public selection process is unsound policy.

As we've noted before, we in New Jersey should be grateful that Governor Jon Corzine's administration is more enlightened on this note.  Corzine has adopted administrative policies requiring that these contracts with the State be awarded competetively and under public scrutiny.

Tuesday, May 12, 2009

NJ Hires More Private Attorneys in 2009

The Courier Post yesterday had an article entitled "Attorney General contracts not publicly bid" which detailed the NJ Attorney General's Office's routine practice of issuing State contracts without a public bidding process.  The list of so-called "waiver contracts" includes communications equipment and voter registration systems, but not the contracts for outside counsel.  According to the article:

Last year, the state spent $26.5 million on outside law firms, a 30 percent increase over 2007. Attorney General Anne Milgram said recently that staff cuts and a hiring freeze caused the increase, and warned that outside counsel costs could jump again this year. The amount includes $4 million shared by several firms for bond counsel work, $2.4 million for employment litigation, and $3 million for leftover costs connected to Gov. Jon S. Corzine's failed asset monetization plan.

We at NJLRA have no reason to suspect that anything untoward is happening with these contracts, as appears the be the case in Pennsylvania, but we think that the public deserves to know exactly how this money is being spent and to whom it is being given.  That insulates our public officials from any suspicion and gives voters piece of mind.