PayPal gets spanked

[Archive]

Posted By: jay behrens

I just got this email and thought it might be of interest to others. The Cliff Notes version is that PayPal got sued for improper freezing of accounts, etc and instead of going to court a settlement has been reached where PayPal gets to claim they did nothing wrong but get to fork over $9m plus for doing nothing wrong.


Dear jay behrens,


IF YOU OPENED A PAYPAL ACCOUNT BETWEEN OCTOBER 1999 AND JANUARY 2004, YOU MAY BE ENTITLED TO A PAYMENT FROM A CLASS ACTION SETTLEMENT.


PLEASE READ THIS NOTICE CAREFULLY.


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

In re PayPal litigation
Case No. CV-02-01227-JF (PVT)

NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT


1. WHY DID I GET THIS NOTICE?
You have been sent this Notice because the records of PayPal, Inc. indicate you are a current or former PayPal account holder. This means you may be eligible to receive a payment from the proposed class action settlement in the lawsuit In re PayPal Litigation, Case No. 02 1227 JF PVT, pending in the United States District Court for the Northern District of California in San Jose. This Notice provides a summary of the terms of the proposed settlement. It also explains the lawsuit, your legal rights under the settlement, what benefits are available to you under the settlement, and how to get them.


2. WHAT IS A CLASS ACTION?
In a class action, one or more people, called Class Representatives (in this case Roberta Toher and Jeffrey Resnick), sue on behalf of people who have similar claims. All of these people are members of the Class. One court resolves the issues for all Class Members, except for those who exclude themselves from the Class. United States District Judge Jeremy Fogel is in charge of this class action.


3. WHAT IS THIS LAWSUIT ABOUT?
In early 2002, Plaintiffs Roberta Toher and Jeffrey Resnick filed separate lawsuits against PayPal, Inc. These two cases were later consolidated into one lawsuit in the United States District Court for the Northern District of California, San Jose Division, entitled In re PayPal Litigation, Case No. CV 02 01227-JF (PVT). The lawsuit alleges that PayPal violated the federal Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. §§ 1693 et seq., including provisions requiring PayPal to supply customers with information about dispute resolution procedures and to follow certain procedures when investigating complaints of unauthorized or incorrect electronic fund transfers. For example, the lawsuit claims that PayPal did not provide account statements in the manner required by the EFTA. The lawsuit further alleges that PayPal has placed inappropriate restrictions or other limits on customers' accounts and engaged in other improper practices. Based on these practices, the lawsuit asserts claims under California state law for conversion, money had and received, negligence, and violations of consumer protection statutes.

PayPal does not believe that it did anything wrong. In fact, PayPal disputes that the EFTA, originally passed in 1978, applies to its business. PayPal denies any and all liability for the claims alleged in the lawsuit. The Court did not decide in favor of the Plaintiffs or PayPal. Instead, beginning in the fall of 2003, the parties began a series of settlement negotiation sessions mediated by United States Magistrate Judge Edward Infante. Eventually, in November 2003, both sides agreed to a settlement in principle. By settling their claims, both parties avoided the uncertainty and cost of a trial. The settlement provides money and other benefits to the Class. On June 11, 2004, the parties entered into a formal, written Settlement Agreement, which is on file with the Court and available on the Internet at https://www.paypal.com/settlement/. By entering into the Settlement Agreement, PayPal is not admitting any wrongdoing. PayPal continues to believe that it did not do anything wrong. The Representative Plaintiffs and the attorneys appointed by the Court to represent the Class believe that the settlement is fair to Class Members. By this notice, the Court is not expressing any view on the merits of the lawsuit.


4. HOW DO I KNOW IF I AM PART OF THE SETTLEMENT?
On July 12, 2004, Judge Fogel entered an order granting preliminary approval of the settlement and certifying the following class for purposes of the settlement: All Persons who opened a PayPal account during the period from October 1, 1999 through January 31, 2004. Excluded from the class are any judicial officer to whom the lawsuit is assigned; PayPal and any of its affiliates; any current or former employee, officer, or director of PayPal; anyone who resides in Austria, Belgium, Denmark, Germany, Greece, Finland, France, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, The Netherlands, or United Kingdom; and all persons who timely and validly request exclusion from the class pursuant to this notice.

Thus, if you opened a PayPal account between October 1, 1999 and January 31, 2004, and are not one of the excluded persons listed above, you are a member of the class.


5. WHO REPRESENTS ME IN THIS CASE?
To represent the class, the Court has appointed Plaintiffs Roberta Toher and Jeffrey Resnick as Representative Plaintiffs and their counsel of record as Class Counsel. The Court has also appointed the following attorneys and law firms as Co-Lead Counsel:

A. J. De Bartolomeo
Girard Gibbs & De Bartolomeo LLP
601 California Street, Suite 1400
San Francisco, California 94108

Robert C. Finkel
Wolf Popper LLP
845 Third Avenue
New York, New York 10022


6. WHAT DOES THE SETTLEMENT PROVIDE?

A. Injunctive Relief
The settlement requires that PayPal consent to the entry of an order, called an injunction, that mandates various changes to PayPal's business practices. PayPal has already implemented these changes. The injunction includes PayPal's agreement to comply with certain notice and error resolution procedures of the EFTA, and to follow certain procedures for limiting accounts and responding to and returning funds to customers whose accounts have been limited. A copy of this injunction can be found as Exhibit D to the Settlement Agreement, entitled "Form of Injunctive Order."

B. Monetary Relief
Under the settlement, PayPal will pay $9.25 million into a settlement fund, to be held in an interest-bearing account. The fund will be used (1) to make payments to class members who submit valid claims before the claims deadline; (2) to pay certain costs of giving notice to the Class and of settlement administration, as approved by the Court; and (3) to pay attorneys' fees and expenses to Class Counsel in the amount awarded by the Court. Class Counsel have proposed that, after deduction of notice and administrative costs and Class Counsel's attorneys' fees and expenses, the balance of the fund ("Net Settlement Fund") be applied in accordance with a written plan of allocation. (The following explanation is qualified in its entirety by reference to the Plan of Allocation attached to the Settlement Agreement as Exhibit C, a copy of which is on file with the Court and available on the Internet at https://www.paypal.com/settlement/.)

1. Certain Definitions
Certain capitalized words are used in this part of the Notice to describe the way in which the Net Settlement Fund will be allocated. These capitalized words have the following meanings:

(a) "Released Persons" means PayPal and its past and present partners, affiliates, predecessors, successors, assigns, parents, subsidiaries, officers, directors, attorneys, and employees.

(b) "Fund Claimants" are class members who submit timely, valid claims in accordance with the procedures described in this notice.

(c) "Dispute Resolution Claimants" are Fund Claimants who contend that, prior to February 1, 2004, they:

(i) experienced or reported to PayPal an unauthorized or incorrect electronic transfer to or from their PayPal account including, without limitation, electronic transfers initiated by (a) the Fund Claimant; (b) PayPal in connection with, among other things, chargebacks, refunds, buyer complaints, PayPal's Seller Protection Policy, Buyer Complaint Process and/or Buyer Protection Policy; or (c) any third party;

(ii) had access to their PayPal account improperly, incorrectly or erroneously limited or restricted, in whole or in part;

(iii) made a request for information in connection with PayPal's restriction or limitation of the Fund Claimant's PayPal account or regarding an incorrect or unauthorized electronic transfer to which PayPal did not respond at all or did not respond to the Fund Claimant's satisfaction.

(d) "Statutory Damage Fund Claimants" are all Fund Claimants who are not Dispute Resolution Claimants.


2. Statutory Damage Fund Claimants
The plan of allocation designates $1 million of the Net Settlement Fund to a "Statutory Damage Fund," to be distributed equally among all Fund Claimants who are not Dispute Resolution Claimants. This means that if you are a member of the Class and do not fall within the definition of a "Dispute Resolution Claimant," as set out above, you can make a claim for a payment from the Statutory Damage Fund. The Statutory Damage Fund provides compensation for potential statutory damages under the Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. §§ 1693 et seq. Statutory damages under the EFTA are limited by law to no more than $500,000 for any class of individuals claiming "the same failure to comply." Plaintiffs' counsel contended in the litigation and for purposes of settlement that PayPal was potentially liable for multiple failures to comply, a position PayPal vigorously opposed.

The Statutory Damage Fund Claim Form requires you to provide certain identifying information and sign a statement under penalty of perjury authenticating your claim, which may be subject to verification by PayPal's records. To make a claim for payment from this fund, please complete and submit the Statutory Damage Fund Claim Form available on the Internet at https://www.paypal.com/settlement/ in accordance with the instructions on the form.

3. Dispute Resolution Claimants
The balance of the Net Settlement Fund will be allocated for distribution to Dispute Resolution Claimants. If you fall within the definition of a "Dispute Resolution Claimant," as set out above, you have the right to make a Dispute Resolution Claim. You can choose to submit either the Short Claim Form or the Long Claim Form available on the Internet at https://www.paypal.com/settlement/. If the Court awards attorneys' fees and costs in the amount requested, Class Counsel estimate that there will be approximately $4.3 million to pay the claims of Dispute Resolution Claimants. Half of the money allocated to Dispute Resolution Claimants will be allocated to pay Short Form Claimants (the "Short Form Fund"). The other half will be allocated to pay Long Form Claimants (the "Long Form Fund").

a. Short Form Claimants
The Short Claim Form requires you to provide certain identifying information and sign a statement under penalty of perjury, which may be verified using PayPal's records, that you experienced an unauthorized or incorrect electronic transfer or an account limitation or denial of access to your account. If you make a timely, valid claim using the Short Claim Form, you will receive a payment of $50, unless the amount needed to pay all of the Short Form claims exceeds the Short Form Fund. In that case, the Short Form Fund will be divided equally among all Short Form Claimants. If the amount needed to pay all of the Short Form claims is less than the amount of the Short Form Fund, the money left over will be added to the Long Form Fund.

b. Long Form Claimants
The Long Claim Form requires you to provide certain identifying information; give the details of the account restriction(s) and/or unauthorized electronic fund transfer(s) you experienced; state the amount of your claim, and sign a statement, under penalty of perjury, which may be subject to verification by PayPal's records, that you actually suffered the claimed damages. You should also provide any documentation you have that will support your claim, as explained in more detail on the Long Form.

If you make a timely, valid claim using the Long Claim Form, an independent, court-approved claims administrator will evaluate your claim and determine the amount you should receive. In making this determination, the claims administrator will take into account the amount of damages you claim; the nature of your complaint; the quality of the supporting documentation you provide; your recoverable damages; the probability that you would be successful on your complaint; and such other factors that the claims administrator considers relevant. If the amount needed to pay all of the Long Form claims is less than the amount of the Long Form Fund, the money left over will be added to the Short Form Fund.

c. Balance after payment of Long Form and Short Form Claimants
If there are sufficient funds to pay all Short Form and Long Form Claimants in full in accordance with the written plan of allocation, any remaining funds will be divided equally among all Dispute Resolution Claimants to supplement their recoveries.


7. HOW DO I MAKE A CLAIM AND GET A PAYMENT?
To make a claim for payment, please complete one of the claim forms (Statutory Damage Claim Form, Short Claim Form, or Long Claim Form) available on the Internet at https://www.paypal.com/settlement/. To make a valid claim, you will need to (1) fill out the claim form electronically and (2) print the signature page of your claim form, sign it and return it by mail to the address provided on the claim form. You must complete the claims procedure no later than October 23, 2004. Your payment will be transferred electronically to your PayPal account. If you do not have a current, unrestricted PayPal account or you indicate on the claim form that you prefer to receive a check, payment will be made in the form of a check, sent by first class mail to the address provided on the claim form. If you are paid by check, a $1.00 charge will be deducted from your payment to cover the cost of issuing and mailing the check. The claims administrator will not issue checks for less than $1.00. Such amounts will instead be reallocated to those claimants who are entitled to receive distributions.


8. WHAT AM I GIVING UP IF I PARTICIPATE IN THE SETTLEMENT?
If you do not exclude yourself from the class and the settlement is granted final approval, the judgment entered upon approval of the settlement will dismiss the lawsuit with prejudice, and will release any and all claims, demands, rights, liabilities, and causes of action of every nature and description whatsoever, known or unknown, matured or unmatured, at law or in equity, existing under federal or state law, that were or could have been asserted in the Litigation against the Released Persons, including without limitation, claims under the Electronic Fund Transfer Act, California Business and Professions Code §§ 17200 et seq.; the California Consumers Legal Remedies Act, Cal. Civ. Code §§ 1750 et seq.; and for PayPal's alleged conversion, breach of the User Agreement or other contract, money had and received, unjust enrichment, and negligence under California law or any other state or federal law arising out of, among other things, PayPal's restriction or limitation of accounts; PayPal's dispute resolution policies, practices and procedures; PayPal's debit of accounts following the receipt of chargebacks, buyer complaints, reports of unauthorized access or in connection with its Seller Protection Policy, Buyer Complaint Process or Buyer Protection Policy; PayPal's alleged conversion of funds; and PayPal's compliance with the Electronic Fund Transfer Act, 15 U.S.C. §§ 1693 et seq., or any similar legislation arising under the laws of any state. You will be permanently barred from bringing any such claims that arose prior to February 1, 2004. With regard to accounts that were limited prior to February 1, 2004, however, you will not be releasing claims to recover any balance that remained in the account 180 days after the account was initially limited.

In summary, if you do not exclude yourself, you will not be able to sue, continue to sue, or be part of another lawsuit against PayPal relating to the legal issues in this case. You will be bound by all proceedings, orders, and judgments entered in connection with the settlement, whether favorable or unfavorable, and will be represented by the Representative Plaintiffs and Class Counsel for purposes of the settlement. If you do not exclude yourself from the class, and the settlement is granted final approval, your claims against PayPal and its affiliates will be released as described above. If you are a class member, you may, if you wish, appear in this lawsuit through your own attorney at your own expense. You need not do so to participate in the settlement, however.


9. WHAT IF I WANT TO EXCLUDE MYSELF (OPT-OUT) FROM THE SETTLEMENT?
If you do not want to remain a member of the class and participate in the settlement, then you must mail or deliver (email is not considered adequate), such that it is RECEIVED on or before September 7, 2004, (1) an original written, signed request for exclusion to Co-Lead Counsel at the following address:

Co Lead Counsel:
PayPal Class Action Settlement
A. J. De Bartolomeo
Girard Gibbs & De Bartolomeo LLP
601 California Street, Suite 1400
San Francisco, California 94108

and (2) a copy of the written signed request to PayPal's counsel at the following address:

PayPal's counsel:
PayPal Class Action Settlement
Morgan Lewis & Bockius LLP
One Market
Spear Street Tower
San Francisco, California 94105

This request for exclusion must contain your name and address; be signed by you; and include the reference "In re PayPal Litigation, Case No. CV-02-1227-JF (PVT)."

If you exclude yourself from the class, you will not participate in the settlement and cannot receive any payment from the settlement. Your claims will not be released.


10. HOW WILL THE LAWYERS FOR THE CLASS BE PAID?
From the inception of the litigation in early 2002 to the present, Class Counsel have not received any payment for their services in prosecuting the case, nor have they been reimbursed for any out-of-pocket expenses. If the Court approves the proposed settlement, Class Counsel will make a motion to the Court for an award of attorneys' fees of up to $3,332,500 and reimbursement of expenses of up to $135,000, to be paid from the $9.25 million settlement fund. Class Counsel will also seek reimbursement from the settlement fund on behalf of certain of the named plaintiffs in the litigation for reimbursement of their expenses related to their service as class representatives in the litigation, in an aggregate amount not to exceed $15,000. The motion will be heard at the settlement hearing described below in Section 11.

Class Counsel's motion for an award of attorneys' fees and reimbursement of expenses is based on various factors that include the benefits obtained for the class through litigation. These benefits include the $9.25 million cash settlement and PayPal's agreement to the injunctive relief requirements. In addition, certain changes to PayPal's business practices are attributable in part to this litigation, including PayPal's decision to undertake to return to its customers approximately $5.1 million in those accounts to which access was limited for 180 days or more; modifications to PayPal's arbitration provision in its User Agreement and its replacement with a clause that limits PayPal's ability to compel arbitration where the total amount of the award sought is $10,000 or greater; and various other changes in PayPal's business practices during the pendency of the litigation.

Class Counsel submitted their proposed request for attorneys' fees to the Magistrate Judge who had previously presided over discovery and settlement discussions. Class Counsel's request for attorneys' fees is equal to the amount recommended by the Magistrate Judge.


11. WHEN AND HOW WILL THE COURT DECIDE WHETHER TO APPROVE THE SETTLEMENT?
The Court will hold a hearing on September 24, 2004, at 9:00 a.m., before the Honorable Jeremy Fogel, United States District Judge, United States District Court for the Northern District of California, Courtroom 3, 5th Floor, 280 South First Street, San Jose, California 95113. The purpose of the hearing will be to determine (a) whether the proposed settlement should be approved as fair, reasonable, and adequate; (b) whether the application by Class Counsel for an award of attorneys' fees and expenses should be granted; and (c) whether the lawsuit and class members' claims should be dismissed with prejudice pursuant to the settlement. The Court reserves the right to adjourn or continue the hearing without further notice to the class.

You may attend the hearing if you wish, but are not required to do so to participate in the settlement.

If the settlement is not approved by the Court, the lawsuit will proceed. If there are further actions taken in the case that affect your rights, you will receive notice as determined by the Court.


12. CAN I COMMENT ON THE SETTLEMENT?
If you decide to remain in the class, and you wish to comment in support of or in opposition to the settlement or Class Counsel's motion for attorneys' fees and expenses, you may do so by mailing or delivering your written (non-email) comments, such that they are RECEIVED on or before September 3, 2004, as follows: (1) the original must be sent to the Court at the following address:

Clerk of the Court
United States District Court for the Northern District of California
280 South First Street
San Jose, California 95113

and (2) copies must be sent to Co Lead Counsel and PayPal's counsel at the addresses listed in Section 9, above.

Your written comments must contain your name and address; be signed by you; and include the reference In re PayPal Litigation, Case No. CV-02-1227-JF (PVT). If you wish to appear and present your comments orally at the hearing, your written comments must contain a notice that you intend to appear and be heard, a statement of the position you intend to present at the hearing, and any supporting arguments.

If you do not comply with the foregoing procedures and deadlines for submitting written comments or appearing at the hearing, you will not be entitled to be heard at the hearing; contest or appeal from approval of the settlement or any award of attorneys' fees or expenses; or contest or appeal from any other orders or judgments of the Court entered in connection with the settlement.


13. HOW CAN I GET MORE INFORMATION ABOUT THE SETTLEMENT?
You can get more information by writing Plaintiffs' Co-Lead Counsel electronically or by first class mail at:

paypalsettlement@settlement4onlinepayments.com

Girard Gibbs & De Bartolomeo LLP
601 California Street, Suite 1400
San Francisco, California 94108

Wolf Popper LLP
845 Third Avenue
New York, NY 10022

This notice is a summary and does not describe all details of the settlement. For full details of the matters discussed in this notice, you may wish to review the Settlement Agreement dated June 11, 2004 and on file with the Court or visit https://www.paypal.com/settlement/. Complete copies of the Settlement Agreement and all other pleadings and papers filed in the lawsuit are also available for inspection and copying during regular business hours, at the Office of the Clerk of the Court, United States District Court for the Northern District of California, 280 South First Street, San Jose, California 95113.



PLEASE DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.

DATED: July 12, 2004



BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA


This PayPal notification was sent to sabrjay@yahoo.com. To modify your notification preferences, go to https://www.paypal.com/PREFS-NOTI and log in to your account. PayPal will not sell or rent any of your personally identifiable information to third parties. For more information about the security of your information, read our Privacy Policy at https://www.paypal.com/privacy. Replies to this email will not be processed. Copyright© 2004 PayPal, Inc. All rights reserved. Designated trademarks and brands are the property of their respective owners. PayPal is located at 2211 N. First St., San Jose, CA 95131.

[Archive]

Posted By: ramram

might I say: "The attorney's just got rich again". (Sorry Hal, et al.)

[Archive]

Posted By: Dan

$265 last year. I sent the item that was sold, the buyer did not wish to take insurance on the item, 5 months later the buyer filed a complaint and said that he never received the item. Yes, 5 months, well, Paypal gave him the money out of my paypal account. I fought it with them for several months but they refused to budge.

Oh yeah, I may see my money after all.

Thanks for the thread of hope.

[Archive]

Posted By: Ben

I had a buyer claim non-receipt on me for a $600+ item just this month. I sent the card priority express with tracking, the most reliable method by far in Canada, and successful delivery was in fact confirmed on the tracking website on July 8th. The claim was filed on the 7th. I know the card got there, I've been sending cards express w/tracking for years with never even the slightest problem. In fact, I sent out 4 other cards THAT DAY, all arriving on the same day as the one that was "not received" and all those buyers were happy.

Anyways, Paypal still decided to refund my $600 to the buyer, because I failed to send with delivery confirmation. I can't believe this- even if a card is delivered successfully and proved as such, all the buyer needs to do is claim (lie) about non-receipt and he'll get his money back? This is absolutely unjust and they don't seem to give two sh*ts about it.

[Archive]

Posted By: jay behrens

I think the lone exception to having to have DC on a package is if you send it overseas. I recently sent a pakage to England. The buyer claimed he never got it. Fortunately, I sent the thing Global Priority, so it had a tracking number. When I sent PayPal a copy of the receipt with the tracking number, that put an end to the guy's claim.

The one thing I've learned from my brother's and other people's bad experiences with PayPal is that if someone pays via PayPal, it always gets DC and if it's going overseas, it goes Global Priority no matter how much the customer protests against the extra shipping.

Jay

[Archive]

Posted By: petecld

I hate to go against the grain here but Paypal worked in my favor. I never got an item and thanks to Paypal, I got my money back.

How do I keep from having buyers lie about not receiving items just to get their money back? DON'T TAKE PAYPAL. If enough sellers stop taking Paypal, you'll be amazed how fast the rules will change.

[Archive]

Posted By: Tim Newcomb

As a buyer I love paypal for the convenience and speed.

As a seller I've heard too many horror stories like Ben's and Scott Gaynor's, so I don't take it. For all I know this loses me some bidders who are too lazy to send checks (which is not a criticism, as I too would much rather hit a few buttons than write a check, stamp an envelope, etc.)

Pete is right-- let's all stop taking paypal and see if they change their tune-- I fear the $9M lawsuit is a drop in the bucket and won't even make them blink--

Tim

[Archive]

Posted By: Julie

Just because of the constant charges.

[Archive]

Posted By: warshawlaw

Meanwhile, those of us who've been screwed by Paypal and simply decided to eat the costs may now have a shot at getting our money back and a chance to use Paypal again under circumstances that are more equitable. But that's not important to you, right? All that counts for guys like you is that the lawyers should not be paid, right? I am so sick of hearing this BS.

Let's talk facts, not insurance company and chamber of commerce propaganda: This case happens to be something many of us know about first hand because so many of us have been shafted by Paypal. Paypal screws sellers, period, and has been doing it for years, but when was the last time you saw them voluntarily repay money taken from an account on bogus grounds? Answer: never. It took a lawsuit to get them to repay the people they cheated and change their activities. Without this case, I never see my $400 again. Also, no one puts up $9,000,000.00 just "because". These clowns can disclaim responsibility all they like but the fact is that WE know and they know that they were guilty as hell of precisely the abuses specified and they are paying to settle the allegations. It may interest you to know as well that (1) the court, not the lawyers, decide on the attorneys' fees in class action cases, (2) the lawyers take these cases on a purely contingent basis and eat all the attendent costs, so if the defendant decides to fight rather than settle, the lawyers are in for the long haul to the tune of hundreds of thousands of dollars or more out of pocket and no guarantee of repayment, and (3) if you are offended by the fees, file a protest per the order. If you don't file a protest and/or don't appear to protest the fees, shut your pie hole--you have no right to complain.

I could tell you about cases that would curdle your milk. I have a client who was crippled at 11 by a drunk driver. They settled the case with a structured settlement that placed bonds in trust to generate a stipend each year to pay his medical care and living expenses (he had to have assisted living in a group home for the rest of his life). The trustee with the help of the banks who were supposed to be monitoring the investments stole the bonds, pledged them in various deals as collateral (or spent it) and lost it all. Then the bastards went bankrupt. This happened to over 100 other crippled and brain damaged people. The resulting class action forced the banks who were managing the looting to step up and pay back the funds so that people like my clients would receive the care they need. I suppose you'd prefer not to pay the attorneys for that one, either. Enron, Worldcom, Arthur Andersen, any of these ring a bell? Who is going to go after the dogs behind these scams and others like them? The government? Not when you slash enforcement budgets with tax cuts for millionaires.

You like Paypal freezing accounts and sending money back to lying purchasers? You like the Broadway Ricks of the world shilling with impunity because ebay doesn't see enough evidence? Keep whining about attorneys getting paid for their services. Just don't come to me when you are ripped off or injured.

[Archive]

Posted By: Reid Bruce

As an insurance defense attorney turned trial lawyer (and yes, a dreaded Mississippi trial lawyer at that), it pains me to always be on the defensive when it comes to attorney's fees. Would you criticize a business person for running a successful business or a stock broker for successfully investing money? Plaintiffs attorneys and class action attorneys are no different. They put up their own money and place it in an extremely risky situation TO HELP PEOPLE AND ACT AS A REGULATING FORCE. Yes, we make money...and we are the only profession who gets blasted for it constantly. Attorneys don't make that money automatically. Any trial lawyer worth his salt puts in 12 hour days, 6 days a week and lives through the incredible stress of having your client's livelihood hanging in the balance. Also, without effective regulation by the states or the federal government, it often falls upon trial lawyers to ensure that corporations don't commit fraud without consequences or pollute the environment without penalty. That is the purpose of punative damages, to deter future wrongful conduct. The bottom line is this, hate us all you want and continue to scream tort reform and class action reform. Just don't complain when your daughter or son is killed on an operating table and the worst thing you can do to the doctor afterwords is take his insurance company for $250,000.00 or less (about 1/3 of what the doctor makes in a year). You tell me if its worth it.

[Archive]

Posted By: ramram

Attorneys do protect all of us but just the same, most are not doing it because they feel a moral obligation to help the down-trodden. Like most businesses, it's the profit and the risk versus reward that drives their work. Just like any business, they take advantage of the laws and try to make a profit. Unfortunately, if it's a business drawing that profit nobody typically notices. If it's an attorney lawfully making a profit it can sometimes appear distasteful. None-the-less, that's why reform is necessary when it gets too disagreeable.

As an example, when I see all of our surgeons being driven out of state because of medical malpractice insurance, I think we have a problem. Yes, I believe in part that the problem has been exacerbated by attorneys seeking those profits. They are also aided by a grieving family that is not always thinking clearly and a jury pool that is often emotional or incompetent (i.e. Simpson jury). No, I would not like to see my son harmed by an incompetent doctor but I would take my chance at that minimal occurrence over not having that specialist available to the emergency room because he has now packed up and moved to another state.

The world operates much like the pendulum of a clock. When something moves too far to the extreme, forces pull it back until it oftentimes moves to the other extreme, until pulled back again. We don't need the chamber of commerce and insurance industry to tell us when it's time to bring it back in line. Likewise, when we see the other damaging extreme, we'll know it's time to pull the other way as well.

[Archive]

Posted By: Josh

Very well stated

"I had a better year."
Babe Ruth, on why he got paid more than the President of the United States.

[Archive]

Posted By: Reid Bruce

Ramram, point well taken. I will be the first person to agree that there are unscrupulous plaintiffs lawyers out there that lie, cheat and steal. Unfortunately, every profession suffers from bad apples. I would urge people to realize that you can't throw the good out with the bad, though. If you punish all plaintiffs for the actions of a few plaintiff's lawyers, the vast majority of people who lose out are people who have done nothing wrong to begin with...the clients. As to bad lawsuits, there are some, and my opinion is that a lawyer who pursues this path repeatedly should face severe sanctions and lose his license. One quick note about medical malpractice insurance and I'll shut up and get back to baseball. Insurance companies exist to abate risk and pay out judgments. That is their only function. The problem that we are facing is not higher judgments (which is a myth), but insurance companies who made extremely bad investments in land and stocks during the middle to late 1990's. When profit margins started to decrease, stock prices did as well. Hence the rate increases...across the board (even my legal malpractice insurance shot up at a rate equal to medical malpractice insurance and lawyers weren't getting sued any more than they usually do). As California's tort reform tought us, insurance reform must occur simultaneously with tort reform if malpractice rates are to decrease. If I were a doctor who had never been sued, I'd be angry at my insurance company for raising my rates, not the trial lawyers who sue the bad doctors out there. At any rate, the bottom line is that there should be fewer lawyers and the lawyers we have should be competent and well regulated. I just hate to see those persons who are truly injured have their compensation cut because of a few greedy idiots.

[Archive]

Posted By: Kenny Cole

Spare me the sob story about doctors leaving. That's right up there with "the check's in the mail." A couple of years ago, the government perfomed a study on that issue, looking at 5 of the alleged "medical malpractice crisis" states, in each of which the doctors made that same claim. The result of the study was that the claims were "wildly exaggerated" and that the study was "unable to confirm" that it was occurring in ANY of those states.

I don't know about other states, but here in Oklahoma, one carrier insures about 80% of the doctors. It is a mutual company, so every insured doctor owns a piece. I can't tell you how many times I've had a doctor tell me that Dr. X committed egregious malpractice, but that he would lie and deny it if called to testify. I've got some friends who defend doctors, and I also can't tell you how many times they've laughed over a beer while their telling me how far beneath the standard of care their client fell, but how they got him off anyway.

The fact of the matter is that doctors don't get hit near as often as they should. They are also absolutely the worst at policing their profession. Further, they almost never settle because they are so successful at trial. However, when they do, it is never because they were negligent, its because either the plaintiff's lawyer cheated or their lawyers were incompetent. In short, they always want to have it both ways. Oh, did I mention that doctors are also among the most litigious people I've ever met when it comes to a business deal going south? They're way in favor of suing then - its only when they get sued that a problem exists.

I just went through all of the public hearings conducted by the Oklahoma Legislature on so-called "medical malpractice reform." Almost nothing the doctors said could be substantiated. While I agree that doctors' malpractice rates are rising, all of the evidence points to poor insurance investments as the root cause of the problem. The other problem which doctors face is low reimbursement rates from medicare and health plans. Neither one of those problems is caused by verdicts or settlements in medical malpractice cases.

Most of the doctors I know make upward of $500,000 a year. Most of the surgeons I know make upward of $1,000,000 a year. And I'm suppsed to feel sorry for them when they rightfully are held responsible for maiming or killing someone? I should tell my clients not to sue those poor doctors because that will raise their malpractice rates and they'll only make $1.2 million this year instead of the $1.4 million they were expecting? I don't think so.

Every professional person who makes a substantial amount money does so because they have had advanced training in their field of practice. That's fine. That's why the got the advanced training. However, the flip side of charging a lot of money due to having advanced training
is that people they serve (assuming that a doctor can ever be said to "serve" anyone) are entitled to rely upon their advanced training. When a professional screws up, the results can be catastrophic and when that occurs, the professional should not be held to any different standard than the guy who screws up by running a stop sign and causing a deadly wreck.

While some of them don't act like its true, doctors wake up in the morning and put on their clothes just like "regular" people. Negligence is negligence, whether committed by a neurosurgeon or a ditch-digger. Doctors aren't entitled to any special exemptions just because they have M.D. behind their name. I better stop now, because this is one topic that always gets me pissed off.

[Archive]

Posted By: ramram

Kenny - I can agree with some of your points but I also question many of your conclusions as well as what study you're reporting about. My philosophy is that when it looks, smells and quacks like a duck, then it's a duck. I live on the border of Kansas and Missouri and we've seen the exodus. I don't even think we're one of the states on the "critical list". Tell me this...if you make a litigation mistake, what is the cost? You just might lose the case if the other attorney didn't make more mistakes. You're rarely held more accountable than that unless it is an extreme situation (has anybody heard how hard it is to disbar an attorney? Sometimes murder won't even trigger disbarment). A doctor, however, is understandably held to higher standard but most expect them to be mistake-free (especially an emotional family as well as an emotional jury). Unfortunately, it isn't possible. They're not perfect but, God forbid, if they make that mistake then there is a plaintiff attorney waiting at their door. I can guarantee you're not exposed to that degree of microscopic oversight. Mix an understandably imperfect profession, deep pockets, emotions and an attorney and what do you get? More zeros than we can count. There has to be controls because we all end up paying that doctor's bill in the end.

[Archive]

Posted By: Anonymous

"The problem that we are facing is not higher judgments (which is a myth), but insurance companies who made extremely bad investments in land and stocks during the middle to late 1990's. When profit margins started to decrease, stock prices did as well. Hence the rate increases...across the board."

Finally, somebody has the guts to say it!! It's not the lawyers causing the increases, but the insurance companies!! We need to stop blaming lawyers.

Now, lets get back to baseball cards!

[Archive]

Posted By: ramram

Hey! Did anybody see that Paypal got nailed in a class action lawsuit?

[Archive]

Posted By: Kenny Cole

Ramram,

Two quick answers to your questions. If I make a "mistake" at trial, I probably don't get sued if its a judgment call. At least I probably don't lose that suit. Neither do doctors. Making a judgement call, even if it turns out poorly, isn't generally considered negligence for doctors, lawyers, or any other profession I'm aware of.

As for your concerns about doctors leaving, I wonder where they're going. They are making the same claim in practically every state. Somewhere in the world there must be a location that is just chock-full of all those doctors who are leaving or retiring early (because they can). I wonder where that mecca of medical knowledge is. Given those statements, I also wonder why most state medical associations show that the number of M.D.s admitted to practice in their respective jurisdictions keeps increasing. With everyone leaving, that doesn't make much sense to me. Must be that new math.

Also, I don't know which side of the border you live on, but if you live in Missouri, you already have those wonderful medical negligence reforms you think you so desperately need. According to Missouri's ex-Insurance Commissioner, who testifed at the hearings here, they have been in place for several years. Have they caused doctors' malpractice premiums to go down? Not according to the ex-Insurance Commissioner. Rather, just like everywhere else that has passed "reforms," they have continued to increase.

In any event, this is a tired subject. I agree that we should get back to cards.

[Archive]

Posted By: ramram

Kenny, you know if you went to an AMA meeting we'd all be yelling, "Oh my God, they killed Kenny!". (Yeah...Southpark...Sorry, couldn't help it)

BTW, I grew up in Missouri and now live in Kansas. Bought an old Doctors house cuz you can get them cheap over here.

It's been a constructive dialogue but, yes, we better get back to cards.

[Archive]

Posted By: Kenny Cole

Ramram,

Having once been owned by a doctor, I'll bet your house is real big. Probably still had all the furniture in it too. As quick as they're leaving Kansas to go to that mythical elsewhere, I can't imagine them stopping for something as trivial as packing their belongings.

Did you also get the Mercedes? Being strapped for cash because of all those premium payments, malpractice payouts and whatnot, I'm sure the doctor couldn't afford to keep it as a 4th car any longer. You probably you got it for a song. You should be ashamed of yourself for taking advantage of the poor doctor's misfortune like that. .