I received many replies to my email to Congressional candidates about the oil disaster in the Gulf of Mexico. After I collected the replies, I sent the below form of email to the Congressional candidates or their staff members who had replied to me:
From: RDShatt@aol.com
To:
Sent: 5/23/2010 _____.M. Central Daylight Time
Subj: Re: Campaign question for you about Gulf of Mexico oil catastrophe: ...
Dear _____,
Thank you for your below reply to my email.
This election year is infused with anger and resentment against Congress. There is growing sentiment that the country's elected lawmakers in Washington have failed the American society.
I agree with that view, and I would like as many incumbents as possible to be thrown out of office and for someone else to be given the opportunity to do a better job for the country.
Voters who are angry with Congress have a variety of reasons.
My main reason is that I think our lawmakers are corrupt in being more interested in preserving themselves and their perks in office, rather than doing what is right for the country.
One example is the way Congress allowed the plaintiffs' lawyers to keep medical malpractice reform out of the health care law that was adopted earlier this year. Our lawmakers did not do right for the country there.
I emailed you and other Congressional candidates about the Gulf of Mexico oil disaster to raise another way our lawmakers do not do right by the country.
There is no question that the country, through non-corrupted lawmakers, needs to lay out rules in advance that reflect legitimate economic and social policy trade offs concerning regulatory oversight of oil industry operations and also concerning liability in the case of accidents. These rules could reasonably include no limitation of liability or they could provide for a limitation of liability. If Congress makea a policy decision in favor of the latter, Congress may then need to make a determination whether society as whole, through the use of tax revenues, should give financial aid to victims of the Gulf oil disaster that are not compensated because of a liability limitation.
Further, to the extent there will be liability for an accident, the country needs to have mechanisms, set up by non-corrupted lawmakers, for determining details of the liability under the law, including its amount and to whom the liability is owed.
In writing my email to you and other Congressional candidates, I had this question in mind: How much should it cost the country to determine the details of the liability in the Gulf oil catastrophe. Should it cost $500,000,000 to determine the details of that liability, or one billion dollars, or two billion dollars, or more?
I frankly don't think it should cost more than $50,000,000 to determine the details of the liability in the oil catastrophe in the Gulf.
I think a corrupt failure of our Congress is that it will allow hundreds of millions, or billions, of dollars to be paid to plaintiffs' lawyers (and defense lawyers) in the determination of the details of the oil disaster liability. Those moneys would be much better spent by society as part of the compensation paid to persons who suffer significant losses from the disaster. The moneys could also be better spent by not being paid at all and being available for use by BP and other parties who had the misfortune of being a cause of the accident, in order that those parties can continue their legitimate business of producing oil for the benefit of the county, providing jobs, and paying dividends to hundreds of thousands of stockholders, big and small, including retirement plans, who are dependent on and deserving of financial returns from their investments.
The lawyers are not deserving of hundreds of millions or billions of dollars being paid to them growing out of the Gulf oil catastrophe, but our Congress corruptly allows such things to happen.
There are many reasons for thinking the American society is ill served by its elected lawmakers in Washington and for wanting to throw incumbents out of office and giving others an opportunity to do a better job for the country.
This email indicates my reasons, and I hope tens of millions of other Americans will also act on their reasons for voting out incumbents in November.
Sincerely,
Rob Shattuck
Tuesday, May 25, 2010
Email to Congressional candidates re oil disaster
A couple of weeks ago I sent the below form of email to my working list of Congressional candidates:
From: RDShatt@aol.com
To:
Sent: _/__/2010 ____M. Central Daylight Time
Subj: Campaign question for you about Gulf of Mexico oil catastrophe:
The article at this link http://www.dailyfinance.com/article/federal-law-may-limit-bp-liability-in/1042217/ and other more recent articles indicate a federal law was passed following the Valdez oil spill that may limit BP's liability related to the Gulf of Mexico oil disaster.
The article also reports that Democratic Senators introduced legislation to raise the limit to $10,000,000,000.
Do you agree with the existing federal law? Do you think the limit should be raised?
Thank you.
Rob Shattuck
3812 Spring Valley Circle
Birmingham, AL 35223
From: RDShatt@aol.com
To:
Sent: _/__/2010 ____M. Central Daylight Time
Subj: Campaign question for you about Gulf of Mexico oil catastrophe:
The article at this link http://www.dailyfinance.com/article/federal-law-may-limit-bp-liability-in/1042217/ and other more recent articles indicate a federal law was passed following the Valdez oil spill that may limit BP's liability related to the Gulf of Mexico oil disaster.
The article also reports that Democratic Senators introduced legislation to raise the limit to $10,000,000,000.
Do you agree with the existing federal law? Do you think the limit should be raised?
Thank you.
Rob Shattuck
3812 Spring Valley Circle
Birmingham, AL 35223
Tuesday, May 4, 2010
Oil disaster in the Gulf
I live in Alabama. The unfolding catastrophe in the Gulf of Mexico is on track to have devastating economic, environmental and human consequences that will go on for years. One would prefer not to think about them.
As saddened as we all are by the event, there immediately begins the work out of how the public institutions of government, charity and the law will address what has happened.
This raises for debate what role the plaintiffs' lawyers should play in the work out.
This blog has made lengthy disquisition that the role of plaintiffs' lawyers should be lessened and society would be better served if the work out of the Gulf oil disaster was done more under the auspices of criminal prosecutors, regulators, state attorneys general and legislators.
Given the very large size of the Gulf oil event, and its currently unfolding status, it seems appropriate to make it a subject of periodic discussion in this blog.
A good starting point for discussion might be that federal law enacted as a result of the Valdez oil spill may limit recoverable damages against BP, as discussed in the below article.
Federal law may limit BP liability in oil spill
By ERICA WERNER
AP posted: 7:51 PM 05/03/10
Comments: 2Print Text Size A A A
EmailMore
WASHINGTON -A federal law may limit how much BP has to pay for damages such as lost wages and economic suffering in the Gulf Coast oil spill, despite President Barack Obama's assurances that taxpayers will not be on the hook.
A law passed in response to the 1989 Exxon Valdez spill in Alaska makes BP responsible for cleanup costs. But the law sets a $75 million limit on other kinds of damages.
Economic losses to the Gulf Coast are likely to exceed that. In response, several Democratic senators introduced legislation Monday to raise the liability limit to $10 billion, though it was not clear that it could be made to apply retroactively.
White House press secretary Robert Gibbs said Monday the administration's commitment was for BP to pay for all costs associated with the spill.
Obama said the same thing during a tour of the area Sunday. "Let me be clear: BP is responsible for this leak; BP will be paying the bill," the president said.
Kenneth Baer, spokesman for the Office of Management and Budget, also noted that if BP were found to have acted negligently in the spill or to have violated federal laws, the damages cap under the Oil Pollution Act would be lifted.
Baer said BP could also be held liable under additional federal or state laws.
"You can be sure that BP will be held accountable to the full extent of the law," he said.
Nevertheless, the existence of the liability cap might complicate Obama's commitments to make BP pay for numerous costs anticipated in the Gulf such as shortened fishing seasons and lost tourism. It is not clear how high those costs could rise.
"We're glad that the costs for the oil clean up will be covered, but that's little consolation to the small businesses, fisheries and local governments that will be left to clean up the economic mess that somebody else caused," said Sen. Robert Menendez, D-N.J., a sponsor of the legislation raising the cap, which the administration said it supported.
BP issued a fact sheet Monday committing to pay "all necessary and appropriate cleanup costs" as well as "legitimate and objectively verifiable claims for other loss and damage caused by the spill." A company representative did not immediately return a phone message seeking comment on whether claims would be paid out over $75 million.
Beyond the $75 million in law, the federal government also maintains an Oil Spill Liability Trust Fund supported by industry fees. It can make a total of $1 billion in payouts per incident to individuals, businesses and governments.
Roughly 2.6 million or more gallons has spilled into the Gulf since the April 20 blast that sunk an oil rig and killed 11 workers.
On Monday afternoon top administration officials, including Interior Secretary Ken Salazar, Homeland Security Secretary Janet Napolitano, economic adviser Lawrence Summers and energy adviser Carol Browner, met with BP CEO Tony Hayward and BP America Chairman and President Lamar McKay at the Interior Department.
The 90-minute meeting was closed to reporters, but officials said discussion centered ongoing response efforts, as well as an update on BP's mitigation plans for potentially affected Gulf Coast states. It was the latest in a series of meetings between administration officials and BP.
BP officials said little as they left the session.
"Very constructive dialogue," Hayward told reporters as he and other BP officials got into a car.
Summers and Browner declined to comment.
As saddened as we all are by the event, there immediately begins the work out of how the public institutions of government, charity and the law will address what has happened.
This raises for debate what role the plaintiffs' lawyers should play in the work out.
This blog has made lengthy disquisition that the role of plaintiffs' lawyers should be lessened and society would be better served if the work out of the Gulf oil disaster was done more under the auspices of criminal prosecutors, regulators, state attorneys general and legislators.
Given the very large size of the Gulf oil event, and its currently unfolding status, it seems appropriate to make it a subject of periodic discussion in this blog.
A good starting point for discussion might be that federal law enacted as a result of the Valdez oil spill may limit recoverable damages against BP, as discussed in the below article.
Federal law may limit BP liability in oil spill
By ERICA WERNER
AP posted: 7:51 PM 05/03/10
Comments: 2Print Text Size A A A
EmailMore
WASHINGTON -A federal law may limit how much BP has to pay for damages such as lost wages and economic suffering in the Gulf Coast oil spill, despite President Barack Obama's assurances that taxpayers will not be on the hook.
A law passed in response to the 1989 Exxon Valdez spill in Alaska makes BP responsible for cleanup costs. But the law sets a $75 million limit on other kinds of damages.
Economic losses to the Gulf Coast are likely to exceed that. In response, several Democratic senators introduced legislation Monday to raise the liability limit to $10 billion, though it was not clear that it could be made to apply retroactively.
White House press secretary Robert Gibbs said Monday the administration's commitment was for BP to pay for all costs associated with the spill.
Obama said the same thing during a tour of the area Sunday. "Let me be clear: BP is responsible for this leak; BP will be paying the bill," the president said.
Kenneth Baer, spokesman for the Office of Management and Budget, also noted that if BP were found to have acted negligently in the spill or to have violated federal laws, the damages cap under the Oil Pollution Act would be lifted.
Baer said BP could also be held liable under additional federal or state laws.
"You can be sure that BP will be held accountable to the full extent of the law," he said.
Nevertheless, the existence of the liability cap might complicate Obama's commitments to make BP pay for numerous costs anticipated in the Gulf such as shortened fishing seasons and lost tourism. It is not clear how high those costs could rise.
"We're glad that the costs for the oil clean up will be covered, but that's little consolation to the small businesses, fisheries and local governments that will be left to clean up the economic mess that somebody else caused," said Sen. Robert Menendez, D-N.J., a sponsor of the legislation raising the cap, which the administration said it supported.
BP issued a fact sheet Monday committing to pay "all necessary and appropriate cleanup costs" as well as "legitimate and objectively verifiable claims for other loss and damage caused by the spill." A company representative did not immediately return a phone message seeking comment on whether claims would be paid out over $75 million.
Beyond the $75 million in law, the federal government also maintains an Oil Spill Liability Trust Fund supported by industry fees. It can make a total of $1 billion in payouts per incident to individuals, businesses and governments.
Roughly 2.6 million or more gallons has spilled into the Gulf since the April 20 blast that sunk an oil rig and killed 11 workers.
On Monday afternoon top administration officials, including Interior Secretary Ken Salazar, Homeland Security Secretary Janet Napolitano, economic adviser Lawrence Summers and energy adviser Carol Browner, met with BP CEO Tony Hayward and BP America Chairman and President Lamar McKay at the Interior Department.
The 90-minute meeting was closed to reporters, but officials said discussion centered ongoing response efforts, as well as an update on BP's mitigation plans for potentially affected Gulf Coast states. It was the latest in a series of meetings between administration officials and BP.
BP officials said little as they left the session.
"Very constructive dialogue," Hayward told reporters as he and other BP officials got into a car.
Summers and Browner declined to comment.
Friday, April 23, 2010
Will the Plaintiffs’ Lawyers Make Goldman More Ethical?
[op-ed submission to The Wall Street Journal]
Will the Plaintiffs’ Lawyers Make Goldman More Ethical?
Part of the plaintiffs’ lawyers’ propaganda is that they make corporations more ethical.
This contention is deserving of critical evaluation in the context of a national controversy about the social utility of the litigation that the plaintiffs’ lawyers purvey.
If the contention is true, and plaintiffs' lawyers do contribute to making corporations more ethical, it is appropriate for lawmakers and judges to take that into account in their legislative and judicial actions concerning those lawyers’ litigations.
If, on the other hand, the proposition is false, lawmakers and judges most definitely need to contemplate that the lawsuits in question do not make corporations more ethical. Further, if the proposition is worse than false, and if plaintiffs’ lawyers actually undermine business ethics, that is even more important for lawmakers and judges to take cognizance of.
At first blush, one would think that class action lawsuits against corporations surely cannot undermine business ethics and surely must have a positive effect for improving corporate behavior.
How in the world could that not be so? How could class action lawsuits against corporations possibly undermine business ethics?
Deeper consideration reveals that there are reasons why plaintiffs’ lawyers might not improve corporate behavior.
These reasons start with human nature; and that, in human nature, it is a fact of life that self-seeking motivations are powerful and predominant, and altruism is weak. Also, there is a predicate that, in order to deter corporate wrongdoing, it is necessary to deter officers and employees from doing the activities that constitute the wrongdoing.
Given human nature, if punishment and other sanctions, including civil liability, are to have a deterrent effect against corporate wrongdoing, the effect will be much stronger to the extent they are imposed personally on culpable officers and other employees who conceive, design, and implement the actions and activities that constitute the corporate wrongdoing. Merely to punish or impose liability on the corporation may not be sufficient to deter the employees.
It is true that employees who participate in a corporate wrongdoing do not want their corporation to experience a punishment or liability from the wrongdoing, but this incentive to avoid a corporate wrongdoing can be ineffective for various reasons.
First, wrongdoing is not always clearly black and white. If individual officers and other employees are not exposed to possible punishment and sanctions against them personally, they can be more inclined to rationalize going ahead with the design and implementation of a questionable corporate activity where only the corporation is subject to possible adverse consequences.
Further, the object of corporate wrongdoing is to gain a financial benefit for the corporation by increasing revenues or lessening costs and expenses. The corporate time frame for doing this is short term, when compared to an uncertain, longer term time frame in which corporate wrongdoing may or may not come to light and the corporation as a result may or may not suffer adverse consequences from litigation about the wrongdoing. Employee compensation is determined in the shorter time frame in which the employee’s contribution to helping the corporation’s bottom line currently is very relevant. In these circumstances, an officer or other employee not at risk for punishment and sanctions against him or herself personally can have increased willingness to participate in wrongful corporate activities that enhance the corporate bottom line currently, thereby get recognized compensation wise currently, and as a result disregard the longer term risk for the corporation only.
If human nature makes for a greater deterrent effect if punishment and sanctions are imposed on culpable officers and other employees personally, the plaintiffs’ lawyers have a problem with that. Their financial objectives cannot be achieved by going after the wrongdoing employees, because there are too few of them and their pockets are not deep enough. The plaintiffs lawyers financial objectives can only be achieved by going after the corporation, and indirectly its many innocent shareholders and others, such as the employees who are innocent of the corporate wrongdoing and also the corporation’s customers, all of which shareholders, employees and customers are the real parties in interest and who ultimately pay the price when a corporation has to pay a judgment or settle a contested legal liability.
This focus of attention of the plaintiffs’ lawyers to extract moneys from the many who are innocent parties (because the culpable employees are too few to generate a big pot for the lawyers) plays out in various ways to undermine the business ethics of the corporation.
It gives the culpable officers and employees cover and protection and diverts resources away from punishing and holding those culpable persons accountable.
The cover and the protection derive from the propensity of society to fool itself into thinking that, since a big bad corporation has been made to pay a lot of money for alleged corporate wrongdoing, proper deterrence is being achieved. So fooling itself, society fails to give adequate attention to the harder work of holding culpable employees personally liable.
This gets helped by a large diversion in fact of economic resources to paying the plaintiffs’ lawyers for going after the corporation and innocent parties, whereas those resources would be better deployed for spending on criminal and regulatory investigations and prosecutions that hold accountable culpable employees personally.
Further, while the plaintiffs’ lawyers want to obscure their modus operandi of going for the big pot of money that can be gotten in small amounts from many innocent parties, the public has at least a vague sense that something is amiss in what the plaintiffs’ lawyers are doing, and the public vaguely senses that the law, and the deployed financial resources are, not being properly utilized to hold the culpable employees accountable in order to better achieve deterrence.
The public further senses that something is amiss when so much of the class action litigation alleging corporate wrongdoing is settled without any meaningful determination of what the wrongdoing in fact was, and the law thereby fails to give guidance to other persons about what is and is not wrongdoing.
These and other distortions in the civil liability system that are wrought by the plaintiffs’ lawyers in order for them to achieve their financial objectives breed much disrespect, if not contempt, for the law. They foster a belief that the law is not about what is right or wrong, ethical or unethical, and just or unjust; rather, it is about manipulation by lawyers to line their pockets to the detriment of society’s interest in a properly functioning civil liability system.
Cynical corporate officers and other employees who are prepared to engage in possible corporate wrongdoing can well gain justification in their minds connected to disrespect for the law. Their thoughts can be along the lines of, if society makes the law a game for lawyers to play to line their pockets, why should they as employees be deterred from a possible corporate wrongdoing if the corporation will get a financial benefit in the short term, the employees will get increased current compensation for that, the corporation may get away scot-free in the end, and, if something untoward ultimately happens for the corporation, that is no skin off the backs of the culpable employees. After all they are only doing what the plaintiffs’ lawyers do, which is profit at the expense of innocent parties.
Yes, there are good reasons for thinking that plaintiffs’ lawyers do not contribute to making corporations more ethical, and, in fact, they undermine business ethics. Yes, there are good reasons for thinking the plaintiffs’ lawyers will not make Goldman more ethical and may make Goldman less ethical.
Will the Plaintiffs’ Lawyers Make Goldman More Ethical?
Part of the plaintiffs’ lawyers’ propaganda is that they make corporations more ethical.
This contention is deserving of critical evaluation in the context of a national controversy about the social utility of the litigation that the plaintiffs’ lawyers purvey.
If the contention is true, and plaintiffs' lawyers do contribute to making corporations more ethical, it is appropriate for lawmakers and judges to take that into account in their legislative and judicial actions concerning those lawyers’ litigations.
If, on the other hand, the proposition is false, lawmakers and judges most definitely need to contemplate that the lawsuits in question do not make corporations more ethical. Further, if the proposition is worse than false, and if plaintiffs’ lawyers actually undermine business ethics, that is even more important for lawmakers and judges to take cognizance of.
At first blush, one would think that class action lawsuits against corporations surely cannot undermine business ethics and surely must have a positive effect for improving corporate behavior.
How in the world could that not be so? How could class action lawsuits against corporations possibly undermine business ethics?
Deeper consideration reveals that there are reasons why plaintiffs’ lawyers might not improve corporate behavior.
These reasons start with human nature; and that, in human nature, it is a fact of life that self-seeking motivations are powerful and predominant, and altruism is weak. Also, there is a predicate that, in order to deter corporate wrongdoing, it is necessary to deter officers and employees from doing the activities that constitute the wrongdoing.
Given human nature, if punishment and other sanctions, including civil liability, are to have a deterrent effect against corporate wrongdoing, the effect will be much stronger to the extent they are imposed personally on culpable officers and other employees who conceive, design, and implement the actions and activities that constitute the corporate wrongdoing. Merely to punish or impose liability on the corporation may not be sufficient to deter the employees.
It is true that employees who participate in a corporate wrongdoing do not want their corporation to experience a punishment or liability from the wrongdoing, but this incentive to avoid a corporate wrongdoing can be ineffective for various reasons.
First, wrongdoing is not always clearly black and white. If individual officers and other employees are not exposed to possible punishment and sanctions against them personally, they can be more inclined to rationalize going ahead with the design and implementation of a questionable corporate activity where only the corporation is subject to possible adverse consequences.
Further, the object of corporate wrongdoing is to gain a financial benefit for the corporation by increasing revenues or lessening costs and expenses. The corporate time frame for doing this is short term, when compared to an uncertain, longer term time frame in which corporate wrongdoing may or may not come to light and the corporation as a result may or may not suffer adverse consequences from litigation about the wrongdoing. Employee compensation is determined in the shorter time frame in which the employee’s contribution to helping the corporation’s bottom line currently is very relevant. In these circumstances, an officer or other employee not at risk for punishment and sanctions against him or herself personally can have increased willingness to participate in wrongful corporate activities that enhance the corporate bottom line currently, thereby get recognized compensation wise currently, and as a result disregard the longer term risk for the corporation only.
If human nature makes for a greater deterrent effect if punishment and sanctions are imposed on culpable officers and other employees personally, the plaintiffs’ lawyers have a problem with that. Their financial objectives cannot be achieved by going after the wrongdoing employees, because there are too few of them and their pockets are not deep enough. The plaintiffs lawyers financial objectives can only be achieved by going after the corporation, and indirectly its many innocent shareholders and others, such as the employees who are innocent of the corporate wrongdoing and also the corporation’s customers, all of which shareholders, employees and customers are the real parties in interest and who ultimately pay the price when a corporation has to pay a judgment or settle a contested legal liability.
This focus of attention of the plaintiffs’ lawyers to extract moneys from the many who are innocent parties (because the culpable employees are too few to generate a big pot for the lawyers) plays out in various ways to undermine the business ethics of the corporation.
It gives the culpable officers and employees cover and protection and diverts resources away from punishing and holding those culpable persons accountable.
The cover and the protection derive from the propensity of society to fool itself into thinking that, since a big bad corporation has been made to pay a lot of money for alleged corporate wrongdoing, proper deterrence is being achieved. So fooling itself, society fails to give adequate attention to the harder work of holding culpable employees personally liable.
This gets helped by a large diversion in fact of economic resources to paying the plaintiffs’ lawyers for going after the corporation and innocent parties, whereas those resources would be better deployed for spending on criminal and regulatory investigations and prosecutions that hold accountable culpable employees personally.
Further, while the plaintiffs’ lawyers want to obscure their modus operandi of going for the big pot of money that can be gotten in small amounts from many innocent parties, the public has at least a vague sense that something is amiss in what the plaintiffs’ lawyers are doing, and the public vaguely senses that the law, and the deployed financial resources are, not being properly utilized to hold the culpable employees accountable in order to better achieve deterrence.
The public further senses that something is amiss when so much of the class action litigation alleging corporate wrongdoing is settled without any meaningful determination of what the wrongdoing in fact was, and the law thereby fails to give guidance to other persons about what is and is not wrongdoing.
These and other distortions in the civil liability system that are wrought by the plaintiffs’ lawyers in order for them to achieve their financial objectives breed much disrespect, if not contempt, for the law. They foster a belief that the law is not about what is right or wrong, ethical or unethical, and just or unjust; rather, it is about manipulation by lawyers to line their pockets to the detriment of society’s interest in a properly functioning civil liability system.
Cynical corporate officers and other employees who are prepared to engage in possible corporate wrongdoing can well gain justification in their minds connected to disrespect for the law. Their thoughts can be along the lines of, if society makes the law a game for lawyers to play to line their pockets, why should they as employees be deterred from a possible corporate wrongdoing if the corporation will get a financial benefit in the short term, the employees will get increased current compensation for that, the corporation may get away scot-free in the end, and, if something untoward ultimately happens for the corporation, that is no skin off the backs of the culpable employees. After all they are only doing what the plaintiffs’ lawyers do, which is profit at the expense of innocent parties.
Yes, there are good reasons for thinking that plaintiffs’ lawyers do not contribute to making corporations more ethical, and, in fact, they undermine business ethics. Yes, there are good reasons for thinking the plaintiffs’ lawyers will not make Goldman more ethical and may make Goldman less ethical.
Monday, April 19, 2010
Email to ethics professionals re Goldman
From: RDShatt@aol.com
To:
Sent: 4/18/2010 ______.M. Central Daylight Time
Subj: What do ethics professionals think about Goldman?
Goldman is hot off the weekend's headline news.
The immediate speculation is that the plaintiffs' lawyers are "foaming at the mouth". http://blogs.wsj.com/law/2010/04/17/plaintiffs-attorneys-foaming-at-the-mouth-over-goldman/
Will the plaintiffs' lawyers make Goldman more ethical?
I think not. (See Does the Civil Liability System Undermine Business Ethics? )
What do you think?
Rob Shattuck
RESPONSES THAT WERE RECEIVED BACK
#1
I'm wondering whether you might want to begin by thinking a bit about the role of bonus in all this? Indeed, you might want to step back a step further and ask whether employees of GS were taught to think too much about people in general, and themselves in particular, as merely self-interested creatures all of whose interests must come down to $$$.
The court cases, if we ever have trials, will reveal a good deal about who knew what and when. We may even find out that, at crucial stages, the left hand of client service did not know what the right hand of hedging was doing. Getting such information out is one good thing plaintiff's lawyers can do. Recovering GS's ten billion in bonus to executives and seeing the money paid to clients (with 1/3 to their lawyers may be another) seems like a fair outcome. I don't think it will make Goldman more ethical--but that's because I think GS will probably be going the way of Arthur Anderson, Enron, and all the other organizations that forgot the difference between a fair return and "wealth maximazation".
Picking on plaintiff's lawyers is like picking on the vultures. By the time a company is in danger of being made less ethical by fear of lawsuits, it is already falling well short of good business practices. The vultures do not gather over the heads of the healthy.
#2
Hate to be flip or ignorant, but I haven’t a clue.
But then, Zhou Enlai, when asked about the impact of the French Revolution, reportedly said, “It is too soon to say." Check back with me.
#3
legal systems are reactive and don't make anybody more ethical...it is a fear based control type system...
leadership development and training make people more ethical
socialization can do that too
#4
Remove me from the mailing list, please
#5
No, and it will not make them taller or healthier. But it may claw back some of the money stolen from investors and restore a measure of justice. And that is ethical. Of course the rent (attorneys fees) is sky high in that hall of justice.
To:
Sent: 4/18/2010 ______.M. Central Daylight Time
Subj: What do ethics professionals think about Goldman?
Goldman is hot off the weekend's headline news.
The immediate speculation is that the plaintiffs' lawyers are "foaming at the mouth". http://blogs.wsj.com/law/2010/04/17/plaintiffs-attorneys-foaming-at-the-mouth-over-goldman/
Will the plaintiffs' lawyers make Goldman more ethical?
I think not. (See Does the Civil Liability System Undermine Business Ethics? )
What do you think?
Rob Shattuck
RESPONSES THAT WERE RECEIVED BACK
#1
I'm wondering whether you might want to begin by thinking a bit about the role of bonus in all this? Indeed, you might want to step back a step further and ask whether employees of GS were taught to think too much about people in general, and themselves in particular, as merely self-interested creatures all of whose interests must come down to $$$.
The court cases, if we ever have trials, will reveal a good deal about who knew what and when. We may even find out that, at crucial stages, the left hand of client service did not know what the right hand of hedging was doing. Getting such information out is one good thing plaintiff's lawyers can do. Recovering GS's ten billion in bonus to executives and seeing the money paid to clients (with 1/3 to their lawyers may be another) seems like a fair outcome. I don't think it will make Goldman more ethical--but that's because I think GS will probably be going the way of Arthur Anderson, Enron, and all the other organizations that forgot the difference between a fair return and "wealth maximazation".
Picking on plaintiff's lawyers is like picking on the vultures. By the time a company is in danger of being made less ethical by fear of lawsuits, it is already falling well short of good business practices. The vultures do not gather over the heads of the healthy.
#2
Hate to be flip or ignorant, but I haven’t a clue.
But then, Zhou Enlai, when asked about the impact of the French Revolution, reportedly said, “It is too soon to say." Check back with me.
#3
legal systems are reactive and don't make anybody more ethical...it is a fear based control type system...
leadership development and training make people more ethical
socialization can do that too
#4
Remove me from the mailing list, please
#5
No, and it will not make them taller or healthier. But it may claw back some of the money stolen from investors and restore a measure of justice. And that is ethical. Of course the rent (attorneys fees) is sky high in that hall of justice.
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:
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.
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
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: RDShattI 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.
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 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 socialIf 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.
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.
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 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
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
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