Thursday, March 11, 2010

Second letter to Judge Pauley

From: RDShatt@aol.com
To: rdshatt@aol.com
CC: asoukup@cov.com, agreene@orbitz.com, asteyer@steyerlaw.com, Ann_ruck@yahoo.com, Ashleigh.jurkoshek@orbitz.com, altmanlaw2@aol.com, bnagin@sidley.com, bjasinski@carolina.rr.com, bonnys@csgrr.com, bbrosnahan@kasowitz.com, cmtlaw@aol.com, chris@chrisgraeser.com, chris.lipsett@wilmerhale.com, bamford@oz.net, dosborn@osbornlawpc.com, daniel.squire@wilmerhale.com, darrell.palmer@cox.net, dlanger@bm.net, dstewart@hulettharper.com, douglascoleesq@att.net, efsiegel@efs-law.com, edward@hasbrouck.org, edwardcochran@adelphia.net, ekvr@sbcglobal.net, fiona.schaeffer@weil.com, cashbonas@hotmail.com, ourfreebies@comcast.net, gpilcher@lawoklahoma.com, hrobins@morganlewis.com, ibizar@balloonstoll.com, jskess@charter.net, jacob.jou@gmail.com, jim@schragbaum.com, fastowj@dicksteinshapiro.com, jill.easton@orbitz.com, clasaxn@earthlink.net, joed@csgrr.com, jclasen@rc.com, kjc1585@earthlink.net, kennelson@mclaw.com, kroger@morganlewis.com, mladner@mofo.com, mbishop@drhrlaw.com, mdavidoff@bm.net, N.A.Bacharach@att.net, wblack@feesmith.com, pkamenar@wlf.org, onewaywonl@gmail.com, downeyjustice@gmail.com, rsglaw@bellsouth.net, bpatterson@rjplaw.net, rgordon@bm.net, srabinovici@morganlewis.com, selwynberg@hotmail.com, mjburman@nyc.rr.com, tami.o'quinn@sabre-holdings.com, tom@schragbaum.com, tdonlon@rc.com, wjdrakeford@gmail.com, barringtonlassoc@cox.net, wwade-gery@mofo.com
Sent: 3/11/2010 7:07:12 A.M. Central Standard Time

Subj: Letter to Judge Pauley

[Copy of this email sent by US Mail to Judge Pauley]

March 10, 2010

The Honorable William H. Pauley III
United States District Court
Southern District of New York
United States Courthouse500 Pearl Street
New York, New York 10007-1581

In re Currency Conversion Fee Antitrust Litigation MDL Docket No. 1409, M 21-95

Dear Judge Pauley,

I was an objector in this case (you may find an electronic copy of my September 2007 objection at this internet webpage
http://robertshattuck.blogspot.com/2007/11/september-2007-credit-card-currency.html ).

I have decided to go outside the judicial system and take my objections about this and other class action (and other "junk") litigation to candidates and voters in the 2010 elections.

In December of last year I sent emails to announced candidates for the U.S. House of Representatives and the Senate reading as follows:

From: RDShatt
To: ___________
Sent: 12/__/2009 _______Central
Standard Time
Subj: Plaintiffs' lawyers impede economic recovery

Dear ____________,

I am an Alabama resident.

I think plaintiffs' lawyers impede the country's economic recovery. I also
think they undermine business ethics. They particularly stand in the way of
sensible medical malpractice reform as a way to lower the nation's health care
costs.

I have a blog How To Combat Plaintiffs' Lawyers
where I record my efforts to communicate with lawmakers, judges, attorney
generals and academics, among others, about how I believe plaintiffs' lawyers
ill serve societal interests. I receive no remuneration for any of my
activities. I am not a member of any tort reform organization, chamber of
commerce, or any other organization that has an interest in opposing plaintiffs'
lawyers.

Congress is debating more stimulus, health care reform, and other
governmental action to get our nation's economy back on track, and the country
is moving toward the 2010 elections that will be a referendum on how the current
Congress performs about these important domestic issues.

I hope you, as a United States Senator or Representative, or as a candidate
for the Senate or the House of Representatives, will look at the contribution
the plaintiffs' lawyers make to the country's economic difficulties and will
consider, advocate and propose legislative action to lessen the problem of the
plaintiffs' lawyers.

Thank you.

Sincerely,


I am going outside the judicial system in this fashion because I believe it is a closed one in which judges and lawyers are out of touch with economics, business ethics and genuine justice.

I have reviewed your Memorandum & Order dated October 22, 2009, in which you approve attorneys' fees of $51,250,000, plus expenses of $3,708,072. I was particularly interested in your section captioned "Public Policy Considerations."

With all due respect, your Honor, I think the lodestar method and the percentage recovery method are mindlessly based on (mindless) precedent that woefully fail in critical thinking about "Public Policy Considerations".

Here would be my statement of "Public Policy Considerations":

In exercising its discretion as to approval of attorney fees in class actions, the court should be reasonable and not approve something thatis not reasonable.


Reasonableness is properly determined with reference to a standard based on
social utility and cost benefit principles. If there is little or no social
utility of the litigation or if it has disutility, attorney fees that are
approved should not exceed the social utility. Social utility is not subject to
hard and fast quantification, and a subjective evaluation and weighing of
factors and considerations is unavoidable.


The basic question is what is the social utility of a class
action litigation and how does its utility compare to the cost of
the litigation in terms of legal fees of all the plaintiffs' and defense
attorneys and the time burden on non-attorneys, such as defendant's employees,
who are called on to participate in the litigation.It is contended
that class action litigation frequently has little or no social
utility and, in fact, has a significant component of negative disutility.


First, class action litigation generally does not promote an
objective of the law to lessen corporate wrongdoing, and it is in fact
counterproductive to that end and it undermines the fostering and inculcation of
e thical business conduct. Argumentation in support of this contention is
set out in an article of mine entitled "Does the Civil Liability
System Undermine Business Ethics?", which you can find at this internet
webpage http://robertshattuck.blogspot.com/2007/11/i-thought-this-would-be-effective-email.html
Second class action litigation is frequently dubious in serving the social
utility of "doing justice." The main reason it is dubious is that
insufficient attention is paid to the extent to which the litigation is about
making transfers of amounts by and among parties in interest who are not
culpable of any wrongdoing. It is possible there has been wrongdoing by
corporate employees and other individuals, and as a result some innocent
parties have received a benefit from the wrongdoing and other innocent parties
have had a loss or cost imposed on them. Whether or not there has been
wrongdoing, the case should largely be considered as an unjust enrichment case
among innocent parties, and nothing more. The facts and circumstances of all the
persons who have been unjustly enriched and at whose expense they have been
unjustly enriched are likely highly variable and somewhat indeterminate,
and class action litigation is largely bereft of consideration
and investigation, or opportunity for argument, as to persons who are
contended to have been unjustly enriched, the particular facts about whether or
not he was unjustly enriched or, if he was unjustly enriched, about whether more
is being claimed from him in the litigation than the amount by which he was
unjustly enriched.
If the foregoing "Public Policy Considerations" are disregarded in evaluating social utility, and attorneys fees in excess of social utility are approved, that will continue to elicit more dysfuntional class action litigation and contribute to more mindlessness in the future.
In my view, under the foregoing "Public Policy Considerations," there should have been no approval of attorneys fees in excess of $1,000,000. Neither my objection in this case, nor that of any other objector, persuaded you not to approve the attorneys fees you approved in the amount of $51,250,000, plus expenses of $3,708,072.

Those (and other class action) attorneys' fees are a significant amount of economic resources, and knowledgeable, serious minded persons would want to think carefully about how those resources are being deployed, about the value (or disutility) that results from their expenditure, and alternative ways to use the resources to achieve the social objectives. I think these persons would include lawmakers, judges, academics in the legal, business and ethics fields, state attorneys general, and prosecutors. I have spent and will continue to spend a great deal of time and effort soliciting views from such persons and compiling them in my blog (which you can find at this internet website http://robertshattuck.blogspot.com/ ).

I hope I have gotten your attention.

Thank you.

Sincerely,



Robert Shattuck
3812 Spring Valley Circle
Birmingham, AL 35223
(205) 967-5586
rdshatt@aol.com

Wednesday, March 10, 2010

1-800 Flowers

From: RDShatt@aol.com
To: Molnarsettlement@tgcginc.com, JPowell@KilpatrickStockton.com
CC: invest@1800flowers.com, mediainquiries@1800flowers.com, tfrank@gmail.com, pkaplan@omm.com, cvergara@OMM.com
Sent: 2/26/2010 7:24:26 A.M. Central Standard Time

Subj: Complaint about Molnar v. 1-800-Flowers class action lawsuit

[Copy of this email sent by US Mail to Judge Sinanian
and also to Judge Lichtman of the Los Angeles Superior Court]

February 26, 2010

The Honorable Zaven V. Sinanian
Los Angeles Superior Court
Dept. 23
111 North Hill Street, Los Angeles, California 90012

Re: Complaint about Molnar v. 1-800-Flowers Retail, Inc. Case Number BC382828

Dear Judge Sinanian,

Upon receipt of the class action notice, I sent an email to the Board of Directors of 1-800-Flowers, with copies to counsel, complaining about the Molnar case. The text of my email is appended below.

As my email states, I believe we have a closed legal system in which judges and lawyers are out of touch with economics, business ethics and genuine justice. As my email further states, I am availing of the upcoming 2010 elections to go outside the legal system to register my complaint about class action lawsuits such as the Molnar case. (If you are interested in what I am saying and doing, you may learn more by going to my blog and this webpage in my blog:
http://robertshattuck.blogspot.com/search/label/E0.%202010%20elections.)

(In support of my contention about our closed legal system, I would further like to point out that the ABA Justice Center ostensibly solicits the participation of "involved citizens," but it has made no reply to several emails I have sent to it asking to participate in its activities as an "involved citizen." See this link in my blog: http://robertshattuck.blogspot.com/2009/11/aba-justice-center-follow-up.html.)

Although I don't think judges pay attention to small class action objectors, this is what I said in an objection I filed in another class action in the Los Angeles Superior Court, to wit, Papadakis v.. Northwestern Mutual Life Insurance Company, Los Angeles Superior Court Case No. BC 322788:

In exercising its discretion as to approval of the settlement and attorney fees, the court is obligated under the law to be reasonable and not to approve something that has no reasonableness.
Reasonableness is properly determined with reference to a standard based on social utility and cost benefit principles. If there is little or no social utility of the litigation or if it has disutility, attorney fees that are approved should not greatly exceed the social utility. Social utility is not subject to hard and fast quantification, and a subjective evaluation and weighing of factors and considerations is unavoidable.
The basic question is what is the social utility of this litigation and how does that compare to the cost of the litigation in terms of legal fees of all the plaintiffs' and defense attorneys and the time burden on non-attorneys, such as defendant's employees, who are called on to participate in the litigation.
It is contended that this litigation has little or no social utility and, in fact, has a significant component of negative disutility.
First, this litigation does not promote an objective of the law to lessen corporate wrongdoing, and this litigation is in fact is counterproductive to that end and it undermines the fostering and inculcation of ethical business conduct. Extensive argumentation in support of this contention is set out in Exhibit A hereto, entitled "Does the Law Undermine Business Ethics?"
Further this litigation is very questionable in serving the social utility of "doing justice." The main reason it is questionable is that it is likely there has been insufficient attention paid to the extent to which this litigation is about making transfers of amounts by and among parties in interest who are not culpable of any wrongdoing. It is possible there has been wrongdoing by corporate employees or other individuals, and as a result some innocent parties have received a benefit from the wrongdoing and other innocent parties have had a loss or cost imposed on them. Whether or not there has been wrongdoing, the case should be considered as an unjust enrichment case, and nothing more. The facts and circumstances of all the persons who have been unjustly enriched and at whose expense they have been unjustly enriched are likely highly variable and somewhat indeterminate, and it is likely there has not been adequate investigation, or opportunity for argument, as to persons who are contended to have been unjustly enriched, the particular facts about whether or not he was unjustly enriched or, if he was unjustly enriched, about whether more is being taken from him in the litigation than the amount by which he was unjustly enriched.
The below objectors have been in the plaintiff class in several class action lawsuits in which there has been wrongdoing or alleged wrongdoing and in which the litigation resulted mainly in transfers by and among innocent parties in interest who were not culpable of any wrongdoing and in which little or no attention was paid to which of the innocent parties were unjustly enriched, the amount of their respective unjust enrichments, and whether there was any correlation between the amount required to be borne by an innocent party in interest and the amount by which the party was unjustly enriched. These class action lawsuits had no or negative social utility on balance and various objections were made to them. Because these objections are illustrative about the lack of social utility, and may serve as enlightenment about the lack of social utility of this litigation, these objections relative to these other class action lawsuits are appended below as Exhibit B (a credit card currency conversion fee class action lawsuit), Exhibit C (a Charter cable TV internal wire maintenance fee), Exhibit D (a Xerox securities class action), and Exhibit E (Middlesex County Retirement System) and also as Exhibit F an analysis of a Tyco securities class action for which there was not status as a member of the plaintiff class and as Exhibit G an analysis of certain Enron litigation for which there was not status as a member of the plaintiff class .If the social utility of this litigation is to be evaluated and judged under the foregoing criteria of (i) does it tend to lessen or tend to promote corporate wrongdoing, and (ii) to what extent does it serve justice by having innocent parties in interest who have been unjustly enriched to pay over their unjust enrichment, it is probably the case that more factual development is needed as to clause (ii). Defendant's counsel would be an appropriate attorney to do that factual development.Absent such further factual development showing that more plaintiffs' fees are warranted based on social utility, we contend that the social utility of this litigation does not warrant plaintiffs attorneys fees in excess of $1,000,000.

In the Papadakis case, Judge Lichtman approved plaintiffs' attorneys fees of $27,785,214 and expenses of $4,119,039. http://www.nmclass.com/pdf.

In my view, fee approvals such as in the Papadakis case exhibit a mindlessness of looking at precedents for class action attorneys fees (which were themselves mindless) without any critical thinking about social utility as articulated above.

If judges decline to think critically about social utility and do not take social utility into account in approving attorneys fees, that encourages more dysfunctional class action litigation (as opposed to discouraging the same by reducing attorneys fees that are approved to reflect social utility), and it warrants citizens going outside the legal system to try to correct the matter.

In December of last year I sent emails to announced candidates for the U.S. House of Representatives and the Senate reading as follows:
http://robertshattuck.blogspot.com/2009/12/candidates-for-us-senate-and-house.html

With all due respect, Your Honor, I believe you will base your approval of attorneys fees on mindless precedent and will not engage in social utility analysis. Thus, I hope you will respect my decision to try to publicize this matter to candidates and to the voters in the 2010 elections.

(Perhaps I am too negative in my views about judges being oblivious to social utility considerations. I would refer you to recent actions of Judge Phillips of the Central District of California, Eastern Divison, in a "coupon" class action case involving Honda that is reported on here: http://centerforclassactionfairness.blogspot.com/2010/02/victory-in-honda-case.html .)

Thank you.

Sincerely,
Robert Shattuck
3812 Spring Valley Circle
Birmingham, AL 35223
(205) 967-5586

[email sent to Board of Directors of 1-800-Flowers]

From: rdshatt@aol.com
To: invest@1800flowers.com, mediainquiries@1800flowers.com
CC: Molnarsettlement@tgcginc.com, JPowell@KilpatrickStockton.com
Sent: 1/21/2010 7:02:21 A.M. Central Standard Time
Subj: To Board of Directors: Complaint about Molnar class action lawsuit

Ladies and Gentlemen:

I have received notice of the Molnar class action lawsuit and settlement (http://www.molnarsettlement.com/).

I believe that plaintiffs lawyers and many of their class action lawsuits (such as this one) impede our nation's economic recovery and impair business ethics.

Based on my personal experience arising from receiving class action notices (see, e.g.Papadakis v. Northwestern Mutual Life ), I believe this is a closed legal system in which the judges and the lawyers are out of touch with economics, business ethics and genuine justice.

As a result, I am availing of the upcoming 2010 elections to go outside the legal system to register my complaint about what goes on, which you may learn about here in a blog of mine. I hope to hold up the Molnar litigation as a case in point for criticism.

Whether I will bother filing an objection with the court in the Molnar litigation remains to be seen.

Defendant corporations and their Boards of Directors are in a far better position than Ito try to fend off the predations of the plaintiffs' lawyers. If they choose to cave because the legal system is lacking in rudimentary reasonableness and common sense, that highlights the futility of a person like myself objecting to the court.

I hope the directors will be supportive of Senatorial and Congressional candidates who take a position against plaintiffs' lawyers in the 2010 elections.

Thank you.

Sincerely,
Robert Shattuck