Category: Articles

Sun Tzu, Lao Tsu; Using yin and yang to help make your cases stronger

Yin and yang are, of course, Chinese archetypes describing two opposing aspects of a single common principle.  Yin is generally characterized as soft, slow, tranquil and gentle, while Yang is hot, restless, hard and rapid.  Westerners assume one is female and the other male, but that’s not strictly true.   In Chinese philosophy, both coexist, complementing even as they stand opposite.  Either gender can possess elements of either aspect without automatically being labeled as “sissy” or “butch.”

Still, we’re talking about practical principles here and what yin and yang teach us is, when working your cases, it is important not to overload on any one approach.  Too gentle never works, but neither does too harsh.

The best lawyers find a balance point and they work it.  Ever notice how folks will speak in admiring tones about attorneys who are fierce opponents in the courtroom but great to have a drink with afterwards?  That’s what I’m talking about.

So, two useful  perspectives on being a more effective trial lawyer can be found in the writings of those yinny and yangy Chinese ancients: Sun Tzu and Lao Tsu.

Sun Tzu, in case you never saw Wall Street or plotted the overthrow of anyone in particular, wrote The Art of War in 500 B.C.  His slender volume is the oldest military Lao Tsu, on the other hand, authored the Tao Te Ching,which according to tradition was completed somewhere in the 6th Century B.C.  The book embodies the essence of Taoism and, 2,500 years later, provides one of the major underlying influences in Chinese thought and culture.

Both volumes contain crisp little axioms that you can either ponder endlessly in search of higher meaning or, toss away dismissively.  I suppose it all depends on your personal outlook. Could be you are George Harrison at the feet of the swami.  Could be you’re a native New Yorker who stumbles into a Malibu ashram on saffron robe Sunday.

Personally, being part Chinese (Portuguese trading family.  Someone’s long ago mistress, apparently), I try to remember and apply both schools.  Two more arrows in my quiver, if you will.

Starting with the yang:

Sun Tzu said:  The art of war is of vital importance to the state.  It is a matter of life and death, a road either to safety or to ruin.  Hence it is a subject of inquiry which can on no account be neglected.

Practicing civil law is very much like engaging in the kind of warfare Sun Tzu describes in his book.  There are strategic challenges, supply and maneuver, training, intelligence, discipline and tactics.  The objective, of course, is to win justice for your client.  The battlefield is the courtroom.  The ground is generally hostile and consumer attorneys are usually out-manned and outgunned.

Accordingly, when pursuing a case, getting to the point is critical to success.  In war, then, let your great object be victory, not lengthy campaigns. So, be proactive in litigation, not reactive.  Even if the temptation is to lay back and let your files work themselves, that’s not a winning strategy.  Whoever is first in the field and awaits the coming of the enemy, will be fresh for the fight; whoever is second in the field and has to hasten to the battle, will arrive exhausted.

Keep your plan of attack to yourself when possible.  You can maintain tactical surprise while adhering to the letter and spirit of the Discovery Act.  The spot where we intend to fight must not be made known; for then the enemy will have to prepare against a possible attack at several different points; and his forces being thus distributed in many directions, the numbers we shall have to face at any given point will be proportionately few.

When you work your cases, don’t get stuck in a rut.  Vary your tactics to prevent becoming overly predictable. The general who thoroughly understands the advantages that accompany variation of tactics knows how to handle his troops.  The general who does not understand these may be well acquainted with the configuration of the country, yet he will not be able to turn his knowledge to practical account.

I highly suggest taking a couple of hours to either acquaint or reacquaint yourself with The Art of War.  Grab a printout off the internet and read it by the pool.  It’s only thirteen short chapters.  Read it and you’ll really get a supercharged educational experience.  Nothing like imagining 10,000 charging warhorses while getting the latest tips on when to ask for supermarket sweep sheets in your slip and fall case.  Adds spice to the proposition.

More in the yin category is Lao Tsu’s way of thinking.  This is softer philosophy but, again, you can’t have effective yang without its opposite and, Taoist principles are so cool, they even make wrinkled puppets sound profound in pretty much every George Lucas film ever made.

The three basic virtues in Taoism, called the “Three Jewels” or “Three Treasures” are compassion, moderation and humility.  All are virtues, even here in the West, though sometimes we throw one or more aside in our headlong rush to win.

Lao Tsu reminds us that in order to truly succeed, we need to accept that from time to time, we will fail.  Accept disgrace willingly.  Accept misfortune as the human condition.  What do you mean by ‘Accept disgrace willingly’?  Accept being unimportant.

We always need to be willing to speak openly and earnestly with jurors and judges as we present our client’s case.  He who does not trust enough will not be trusted. Juries, after all, are bull#$%@ meters.  Spinning a false yarn leads only to disaster. In all your dealings, treat others with dignity and respect.  A good soldier is not violent.  A good fighter is not angry.  A good winner is not vengeful. A good employer is humble.  This is known as the Virtue of not striving.  This is known as ability to deal with people.  This since ancient times has been known as the ultimate unity with heaven. This is also known as the mensch principle.

So, I guess the lesson for today is, don’t forget to ground your wisdom and knowledge in humanity.  As the Gerry Spence people teach, what we do is all about finding our own voice and using it to speak eloquently for our clients.  Whether it’s Eastern, Western, Christian, Jewish, whatever, stay true to your basic principles and according to the great rule of the universe, you will thrive.

 

Bill Daniels is a trial lawyer and shareholder with the law firm of DANIELS LAW in Sherman Oaks, CA.  A graduate of Loyola Law School of Los Angeles, he is a former member of the Consumer Attorneys Association of Los Angeles Board of Governors, a founding member of Loyola’s Civil Justice Program and a past president of the Encino Lawyers Association.  Since 2007, he has been named a Southern California “Super Lawyer” by Los Angeles Magazine.  Mr. Daniels focuses his practice on serious personal injury, insurance and employment. For information, visit our website at www.daniels.legal or contact us through e-mail: Info@danielslaw.com.
 

Ten Tips for Making Partner in a Plaintiff’s Firm (3/3)

  1. Keep a good work ethic.

There is a difference between having a good work ethic and being a good worker bee. The former makes you partnership material. The later defines a valuable employee.

What’s the difference? I believe it has to do with whether or not you approach your practice with a passion.

Partners in a consumer firm must be passionate about their chosen profession to the point of near obsession. There’s a practical reason for this. We’re collectively a constant target of bad jokes, we have powerful enemies and our general public image is at something of a record low. Contingent fee law is a gusher business, with funds coming in irregularly and unpredictably, so, a good month can be very good and a bad year, very, very bad. It is a practice environment where only self-starters able to perform consistently despite breathtaking discouragement will qualify, let along survive.

There’s also the simple business management necessity of a strong work ethic. Plaintiffs, of course, carry the burden in a civil proceeding. I’ve seen many practitioners take on a file and then allow it to sit dormant until the very last possible minute. Malpractice risk aside, this won’t get optimum results for the client in nine out of ten cases. Yet, since usually the clients don’t know the difference between proactive and reactive representation, it’s possible to get away with quite a bit of laziness, assuming it does not rise up and bite you on the nethers.

On the other hand, owners recognize sloth and are not likely to offer ownership to a slug. Work hard, my friend, always giving your best.

  1. Watch your caseload.

Work hard, but also work smart.

Besides being a closer, a prospective partner in a plaintiff’s practice must be an effective case manager.

Always keep in mind that as contingent fee lawyers, we are in the business of managing portfolio risk. By this I mean, there are a certain number of cases on your docket, only a portion of which will have any significant value. The remainder will either break even or be complete flops. In organizing your time and dedicating resources, you need to be able to separate the stars from the duds and deal with them accordingly.

In my experience, the 80-20 rule applies pretty well to a normal plaintiff’s practice, meaning roughly 20% of your cases will account for 80% of your revenues. What does that mean?

Well, for one thing, it means that if you have forty cases on your docket, on average you may expect that eight should come in strong, while the balance will either be non-productive losers or repay your time and investment, but just barely.

The clear upshot of all this is you don’t want to over-invest time and money in go nowhere cases or under invest in the ones voted most likely to succeed.

How do you tell the difference? Watch the caseload. If you don’t have good case picking skills, you probably shouldn’t be worrying about partnerships anyhow.

Case management software can make it easier to track your files. If your firm provides it, learn how to use it. But the old noodle is your first line of defense.

As Robert Heinlein once wrote, “Put all your eggs in one basket, and then watch that basket!”

  1. Give back to your profession.

Being a partner in a plaintiff’s firm means being a business getter. There are all sorts of strategies for marketing, branding and generating referrals, but the one that is time tested and mentor approved is giving something back to the profession you love.

There are plenty of opportunities out there. Just seek out one or two that suit your special passions or talents.

Writing scholarly articles to share your knowledge can work well and has the added benefit of helping you establish yourself as an expert in your field. Organizations like CAALA provide speaking opportunities where you can help educate your peers on current developments in the law.

If you have an interest in politics, get active with CAOC and the legislative process. Politics and lawyering go hand in hand and we can always use dedicated souls willing to volunteer their time to help preserve our precious right to seek redress through the American civil justice system.

Now, it is true there are attorneys and firms that sit back and take a free ride on the system. Don’t be that kind of lawyer. Be someone who gives back to your profession. It’s an important quality in a future partner.

  1. Be a part of your community.

I’ve never been particularly athletic. I can’t throw a baseball to save my life. But, when my son’s little league team needed a manager and no one else stepped forward, I volunteered for the job. The kids on the team all got to play. My son remembers that season very well. The folks in my neighborhood got to know me a little better and I made some friends.

Then there was the developer who wanted to put a high density senior residence in the middle of our single family home neighborhood. The neighbors started organizing to fight. I showed up to a meeting and they asked me to be a spokesperson because I was the only lawyer in the room. I wrote one letter and went to one meeting. Now, I’m the abogado who lives in the grey house under the oak tree with the horses. People smile and wave at me as they walk past the gate. It’s really a great feeling.

I went to law school to make a better life for my family. Now that I’ve spent some time in the profession, I’ve come to understand that what lawyers also need to think about is how to help build a better life for the communities they live in.

When I talk to my friends about young lawyers in their firms, we don’t usually share how competent they are or whether they are punctual or speak well. Usually, it’s about what a great person they are and how something they did touched the life of another in a good way. We assume that partner prospects are competent, skilled practitioners. Asking someone to join the family business requires looking at other qualities.

For me, when I see someone is actively contributing to their community, that’s a strong positive. If they give themselves generously to their neighbors, I assume they will give themselves generously to the firm. I like that in a lawyer.

  1. Don’t just do it for the money.

If you ask me I’ll tell you my law practice is a business, not a hobby, and I expect to earn money for my labor. Don’t make the mistake of thinking what we do is all about money, though. There’s a balance here. In order to succeed, you need to find where your personal balance lies.

When I was just starting out as a lawyer, I remember attending a vehicle inspection in a motorcycle crash case. When the experts were done with their photographs and measurements they left the room where the bike was kept and I was about to do likewise. Then I felt a hand on my sleeve.

It was the mother of the young man who had been killed in the crash. She’d been standing quietly in the background until now. I don’t know that we’d spoken more than a few words the whole day. I was engrossed in the technical part of the exercise. For her the occasion was solemn.

“I want to show you something,” she said, pulling me to the motorcycle. She bent down and pointed to some rust-colored stains on the frame. “Do you see that?” she asked. “That’s my son’s blood. I thought it was important for you see.”

Over the years, I’ve thought about that mother a lot because she taught me something important that day.

You see, up until that inspection, I’d thought my law practice was about filing complaints, answering interrogatories, taking depositions and arguing in court. That mother, my client, taught me I was completely and totally wrong. A consumer practice, you see, isn’t about paper and argument. It’s about blood.

I’ve been mentored by great lawyers. I’ve sat through lectures by legal legends. I’ve listened to war stories, read case briefs, poured through hundreds of practices guides, treatises and legal memorandum.

Yet, when I think about the core of our practice, my first thoughts always go to that mother mourning her son on that cold desert day so many years ago. What we do truly isn’t about the money. It’s about something infinitely more valuable.

  1. Be a mensch.

The dictionary defines mensch as meaning “a decent, upright, mature, and responsible person.”

Will being a mensch make you partner more quickly? I don’t know the answer to that.

I do know that the menschen who populate our profession are truly too numerous to name. I think there’s a reason for this and a lesson to be learned from their example.

At the end of the day, consumer lawyers are something unique in this world.

The human condition insures a steady abundance of trouble and strife. To address the fact of human frailty, society charges us to serve as advocates and counselors in a court of law. In an age where so many feel powerless and disenfranchised, we are empowered to help shape the laws of this great nation.

How we go about our charge defines not only ourselves and our profession, but because of the reach of our influence, the entire nation. This is weighty stuff. It’s one reason why the bar exam takes a full three days.

With great power comes great responsibility. It follows that all consumer lawyers are duty bound, if not honor bound, to live our lives according to the highest human principles and society’s most enduring moral values. I mean, it’s obvious, don’t you think?

So, you should be a mensch. It’s good for you. It’s good for the country.

Also, you might make partner. It couldn’t happen to a nicer person.

 

Bill Daniels is a trial lawyer and shareholder with the law firm of DANIELS LAW in Sherman Oaks, CA.  A graduate of Loyola Law School of Los Angeles, he is a former member of the Consumer Attorneys Association of Los Angeles Board of Governors, a founding member of Loyola’s Civil Justice Program and a past president of the Encino Lawyers Association.  Since 2007, he has been named a Southern California “Super Lawyer” by Los Angeles Magazine.  Mr. Daniels focuses his practice on serious personal injury, insurance and employment. For information, visit our website at www.daniels.legal or contact us through e-mail: Info@danielslaw.com.

Tips for Making Partner in a Plaintiff’s Firm (2/3)

 

Shoot straight.

People have expectations regarding consumer lawyers. Generally, they are low.

A lawyer named Impos Syble was shopping for a tombstone. After he had made his selection, the stonecutter asked him what inscription he would like on it.

“Here lies an honest man and a lawyer,” responded the consumer lawyer.

“Sorry, but I can’t do that,” replied the stonecutter. “In this state, it’s against the law to bury two people in the same grave. However, I could put `here lies an honest lawyer’.”

“But that won’t let people know who it is!” protested the consumer lawyer.

“Sure it will,” retorted the stonecutter. “People will read it and exclaim, “That’s impossible!”

I remember my father telling me while I was growing up that he would only do business with people who could be trusted to keep their word on a handshake. There are people who will argue that in this day and age that’s a quaint, outdated notion. I disagree.

It might be true we can’t avoid interacting with dishonorable individuals. Yet that doesn’t mean there isn’t value in being honorable ourselves. Or that cultivating character doesn’t have it’s own tangible rewards.

If becoming a partner in a law firm is much like getting married, then your known habit of dealing fairly and honestly with people outside the firm is likely to count in your favor when other lawyers are deciding whether they want you as a permanent member of their family.

Don’t fool yourself into thinking you can treat people outside your office badly or unfairly and word won’t come back that this is how you practice.

Trust is especially critical in a plaintiff practice, where the partners will often pursue their own cases with little outside supervision and their actions carry a direct financial consequence for everyone in the firm.

Be straight in your daily dealings and your path to partnership will straighten in turn.

  1. Be a closer.

A plaintiff attorney needs to be a closer, pure and simple.

Simply put, being a closer is the ability to figure out the right solution to your client’s problem and get it done. The less wasted motion and inefficiency, the better. Being a closer means the cases are moving, time and resources are used judiciously and the business of the practice progresses at an optimum pace.

Back when I was starting out with my old firm, I got a call from a gentleman who was having a run of real bad luck. He was a former sales manager for an insurance company who was disabled from working and whose home had been badly damaged in the Northridge earthquake. He had disability insurance, but it wouldn’t pay. He had earthquake insurance, but the carrier, the company he used to work for, was lowballing him. He had been forced out of his business. He had an unresolved claim for a personal injury totally unrelated to all his other troubles. He had been through two or three lawyers already and was a plaintiff in at least two lawsuits with two more waiting to be filed.

I’m honestly not sure I would take on that man’s troubles today, but this was early in my career and I liked the fellow. So I dug in and started working to dig him out.

What I discovered was, even though this fellow had several prior attorneys, none of those had been focused on closing anything. Which, as it turned out, was all the client needed.

So, I settled the injury case with a couple of telephone calls, which took care of lawsuit number one. I filed a bad faith claim against the disability carrier and then sent the defendant our own doctor’s report along with form interrogatories, which resulted in a quick mediation and a $1 million policy limits settlement thirty days later. A prior attorney had filed the earthquake bad faith case too late, so that case went away quickly. My client decided not to pursue a legal malpractice claim since the lawyer was a personal friend.

That left only the breach of contract claim against the insurance company that used to employ my client. I worked that case up for trial. Though I left the firm before the trial date, my old boss went ahead and tried the case. The jury awarded $17.5 million. The client was happy with that result.

Pretty much every successful plaintiff lawyer remembers a similar case where the big challenge was not so much legal reasoning as it was untangling a tangled mess. Closers are up to this challenge, because they never lose sight of why the client sought out counsel in the first place. After all, we are supposed to fix our client’s problems so they can move on with their lives. Our purpose is not to prolong the agony.

Failing to understand this key principle is probably the single biggest obstacle to either qualifying as partnership material or, more importantly, succeeding in a plaintiff practice.

I have known many fine lawyers who could think clearly, write compellingly and argue eloquently, but couldn’t close a case to save their lives. Some can’t resist the urge to hit for the fences every time out, even when the facts aren’t there. Others become fascinated with the legal process but forget that the client’s best interest might be a shortcut through the legal thicket rather than the long, long, way around. Some simply forget about the client’s best interest all together.

In a consumer practice, if you aren’t comfortable being a closer, you are probably destined to live out your days as an employee. Contingent fee lawyers are rewarded for being efficient. Inefficiency is punished. Not being a closer makes you horribly inefficient and certainly won’t make you a partner.

  1. Be realistic.

As I mentioned above, consumer firms are basically mom-and-pop small businesses that reflect the personalities of their owners. This being the case, it may be you are working with an owner or owners that love you personally and appreciate your work but are never going to share their business with you.

Sometimes, it’s because the owner doesn’t work and play well with others and knows it. Maybe there is a failed partnership relationship in the past and once bitten, twice shy. There are as many reasons why owners don’t take on partners as there are stars in the sky. Do not take it personally.

On the other hand, take a tip from the relationship gurus. If you believe you are stuck in a dead-end situation and it is making you crazy, it is probably time to think about moving on.

Only, be realistic about this, too. Not everyone is cut out to own their own business. A plaintiff’s practice is a risky undertaking. There are plenty of failed legal ventures past and there will be an abundance in the future. Consider whether you are willing to put your entire net worth on the line for a string of cases only a mother could love. The idea of a regular paycheck might seem more appealing.

As for myself, I went to law school in order to own a business. I made it clear to each of my employers that I intended to be an owner. In the end, I wound up becoming a partner in a firm that had a declared no new partner policy. So at least I have the personal comfort of knowing that, if it all goes south, at least it’s what I bargained for.

Make sure you ask yourself how much risk you are realistically willing to take. Answer yourself honestly.

Bill Daniels is a trial lawyer and shareholder with the law firm of DANIELS LAW in Sherman Oaks, CA.  A graduate of Loyola Law School of Los Angeles, he is a former member of the Consumer Attorneys Association of Los Angeles Board of Governors, a founding member of Loyola’s Civil Justice Program and a past president of the Encino Lawyers Association.  Since 2007, he has been named a Southern California “Super Lawyer” by Los Angeles Magazine.  Mr. Daniels focuses his practice on serious personal injury, insurance and employment. For information, visit our website at www.daniels.legal or contact us through e-mail: Info@danielslaw.com.

Tips for Making Partner in a Plaintiff’s Firm (1/3)

 

The long and winding road.

There really aren’t any hard and fast rules for forming a consumer trial firm. It follows that there isn’t a straightforward partner track, if what you are planning is a career in protecting consumer rights.

Now my brother, the corporate defense lawyer, always knew exactly what he faced as he set about trying to make partner at his silk stocking firm. From day one he was told what to expect, counseled on his progress, educated in the hallowed tradition of the firm and shown the way through whatever hoops he was expected to jump through in order to make the grade.

I’ve always assumed the only rule that universally applies to my own economic mobility as a consumer lawyer is survival of the fittest. So far, I haven’t seen anything to convince me I am wrong. Of course, I’m only mid-career.

You see, unlike institutional silk stocking firms, consumer firms tend to be smaller, less formal and more practical in how they move employees up into the ranks of owners.

Even the largest plaintiff shop tends to have a mom-and-pop flavor, with the culture generally reflecting the tastes and personalities of the individual owners. The reason is, firms that make up the plaintiff’s bar are, by and large, true entrepreneurs of the legal profession. While large firms tend to cultivate stable client bases built around old school ties, we consumer lawyers tend to focus our efforts on fixing problems that pop up in people’s lives to whatever extent the law, economics and the civil justice system will allow.

This fact of life is both the strength and the challenge of a plaintiff trial practice. The strength comes from our having to be a little smarter and a bit more creative than other lawyers who have the luxury of practicing the same type law over and over. After all, your suite buddy down the hall might get to focus each day on probate or contracts or even insurance defense. You, on the other hand, will be prosecuting sexual harassment on Monday, a truck accident on Tuesday, insurance bad faith on Wednesday, consumer fraud on Thursday and civil rights from Friday through Sunday. Then, come Monday, something else will come along.

It follows that to make it as a consumer lawyer at any level, you need to be tough, flexible and resilient. You also need to be a sharp business person. Not so much because money is a reward, but rather, because cash in the bank is fuel in the tank. Running a plaintiff’s practice can be an expensive proposition. Can’t get far without fuel.

How does this all add up to making partner? Or, perhaps, choosing one?

Well, if you step back for a minute, you’ll see that even though consumer firm structures vary, there are common principles that apply.

Adam Smith wrote:

The uniform, constant and uninterrupted effort of every man to better his condition, the principle from which public and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things toward improvement, in spite both of the extravagance of government, and of the greatest errors of administration.

The Wealth of Nations, Book II Chapter III. I think what Mr. Smith was trying to say was, as people strive to better themselves and their communities, they ultimately succeed despite the hurdles a hostile government and its functionaries raise in their path. This should be encouraging to you as a consumer attorney in an age of tort reform. It also gives us some insight into just what licks it takes to be an owner in a consumer firm.

In my view, the successful plaintiff firm is populated with highly motivated attorneys, all determined not to be naturally selected out of their industry. What they share in common is a passion for the work and an idealism that keeps their hearts fresh in the face of great adversity.

Sound like you? Then God bless, and let these ten basic principles guide you on your path to success.

  1. Be a Believer.

It’s easy to zealously advocate for a client who pays your hourly billing regularly and at the highest rate the market will bear. Heck, if the money is coming in, it’s hard not to over-advocate.

Much more difficult is standing up for someone who might not be so sympathetic. Especially when they have a close call claim and you are financing the case on a contingent fee. Then, it’s a whole different game.

In my experience, the single most important difference between a great lawyer and a mediocre functionary is whether that attorney truly believes in the people and causes he or she represents. Truly, the ability to believe and act on that belief can make all the difference.

A few years back, I took on the case of a young woman who was developmentally challenged. Physically, she was in her early thirties. Mentally, though, she had the intellectual capacity of a third grade child. She was a sweet, kind child, struggling along in a cold, adult world.

Her mother kept this woman-child at home as long as she could. But the mother, who was poor and disabled, eventually had to hand her daughter over to the care of a facility specializing in serving the mentally challenged.

At first the woman-child did well. She was placed in a six-member group home where all of the residents were women. She was happy there.

But the home operator had a sixty bed facility they needed to fill for business reasons. So, off this woman-child went, to a new home.

The sixty bed facility was mixed gender with little supervision in the living quarters. One of the male residents, higher functioning at about an eighth grade level, zeroed in on this young lady who was new in town.

The mother was horrified when her daughter started telling her, in a child-like manner, about having a male visitor in her room. The mother complained frantically to the home operator. She had meetings, made telephone calls. The operator refused to take any action.

Eventually, a child was born. He was beautiful to look at, but suffered severe neurological maladies from a malformation of his brain. So, he was blind from birth, had a chronic seizure disorder and faced a number of other physical and mental challenges. The woman-child’s mother, now a grandmother, came to us for help. She knew her grandson needed special care. She didn’t have any money to help him.

We took the case in as a medical malpractice matter, but it quickly became apparent that wouldn’t pan out. The defense was arguing we had no case at all. They claimed, with good support in law, the woman-child was above the age of consent, had a right to sexual privacy and the group home had no right, let alone duty, to interfere. When I asked one of the other lawyers in my firm to sit in on some medical expert depositions, he came away saying that this wasn’t a case we should be spending our time or money on.

Only, I couldn’t let go so easily. I’m a parent myself and I kept asking, “What sort of people would leave an eight-year-old girl” — because mentally, that’s who this woman-child was — “in close contact with a sexually active teenager?” It didn’t seem right to me, no matter what the case law was saying. The grandmother believed what had happened to her daughter was wrong. I believed that, too.

So, we set aside the law as it applied in general and started documenting why the home operator was derelict in this one particular case.

Discovery uncovered documents confirming the grandmother’s complaints. That led to evidence that the home’s operator had moved the woman-child into the mixed gender facility to enhance their profits. This created an inference that they were deliberately providing inadequate supervision to enhance their bottom line.

We turned up a trail of regulatory citations where the facility had been criticized for not adequately administering medication to the residents, which supported the grandmother’s testimony that she had been promised if her daughter couldn’t be relocated, then the group home would have its doctor administer a contraceptive.

At the end, what had looked like a no liability case settled for $2 million, the total policy limits available. The grandmother was able to buy a home where the entire family could live in dignity. That’s where they all live today. All because we believed.

Now it is true there are impossible cases that cannot be won or maybe should not be won. I’m not talking about those.

Rather, to win the right to partner up with real plaintiff’s lawyers, you need to have a sense of the righteous, the possible and the real. With all that in mind, believing in your clients and your cases will put you a long ways ahead in reaching your ultimate goal.

Bill Daniels is a trial lawyer and shareholder with the law firm of DANIELS LAW in Sherman Oaks, CA.  A graduate of Loyola Law School of Los Angeles, he is a former member of the Consumer Attorneys Association of Los Angeles Board of Governors, a founding member of Loyola’s Civil Justice Program and a past president of the Encino Lawyers Association.  Since 2007, he has been named a Southern California “Super Lawyer” by Los Angeles Magazine.  Mr. Daniels focuses his practice on serious personal injury, insurance and employment. For information, visit our website at www.daniels.legal or contact us through e-mail: Info@danielslaw.com.

Why Campbell Doesn’t Necessarily Mean We’re In The Soup

Why Campbell Doesn’t Necessarily Mean We’re In The Soup

  1. Introduction.

On April 7, 2003, the U.S. Supreme Court published State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. ___ (2003), its latest pronouncement on punitive damages as viewed through the lens of the Due Process Clause of the Fourteenth Amendment of the United States Constitution.

Campbell reversed a jury’s $145 million punitive damage award that had previously been upheld by the Utah Supreme Court. The punitive award was based in large part upon evidence of State Farm’s misconduct in not just Utah, but also across the entire United States.

Observing that the $1 million compensatory component of the jury verdict (reduced from $2.6 million by Utah’s intermediate appellate court) resulted in a compensatory/punitive damage ratio of 145-to-1, the high court applied a three-pronged analysis first announced in BMW of North America v. Gore, 517 U.S. 559 (1996).

The test required examining: (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases. Slip Op. at 7.

Writing for the 5-3 majority, Justice Kennedy found infirmities under all three Gore “guideposts.” What’s more, in reaching its holding, the majority announced, “We decline again to impose a bright-line ratio which a punitive damage award cannot exceed. Our jurisprudence and the principles it has now established demonstrate, however, that, in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” Slip Op. at 14.

So the question presents itself. What practical effect does Campbell present for a California product liability practitioner?

To learn the answer, we probably need delve no further than Romo v. Ford Motor Co., 99 Cal. App. 4th 1115, 122 Cal. Rptr. 2d 139 (2002).

The Romo opinion upholds a $290 million punitive damage award against Ford in a Bronco II rollover case, where the compensatory damages were $4,935,709.10 (reduced from just over $6.2 million by the trial court), a roughly 58-to-1 ratio. Finding that the punitive award squared with federal due process under Gore, the Fifth District of the California Court of Appeal engaged in an analysis similar to that in Campbell, excepting of course, the result.

After failing in efforts for hearing by the California Supreme Court or for de-publication of Romo, Ford filed a petition for certiorari to the U.S. Supreme Court, which is currently pending. 71 U.S.L.W. 3519 (Jan. 21, 2003).

Since Campbell discusses punitive damages in an insurance bad faith context involving essentially pure emotional distress damages, while Romo involved both death and serious personal injuries, we may well see the high court weighing in yet again on punitive damages in the near term, only this time in the product liability arena. Even so, using the Campbell rationale as our guide, practitioners should not lose heart. At least from an initial vantage point, it may well be safe to say that all in all, not that much has changed.

  1. Fourteen Years of Punitive Damage Jurisprudence.

During the past fourteen years or so, the U.S. Supreme Court has busied itself in reexamining punitive damages and how they apply in civil cases. The high court’s interest was fueled by a conservative concern that juries acting out of “arbitrariness, caprice, passion, bias, and even malice” were responsible for punitive damage verdicts that had “run wild.” See, TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 474-476 (1993) (J.O’Connor, dissenting).

The critical journey began with Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257 (1989), which held that neither the Excessive Fines Clause of the Eighth Amendment nor federal common law circumscribe punitive damage awards in civil cases between private parties.

Following were Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1 (1991), TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443 (1993), Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415 (1994), BMW of North America., Inc. v. Gore, 517 U.S. 559 (1996) and Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001).

In each, the high court has continually reexamined how punitive damages apply in civil actions and what, if any limits, the U.S. Constitution places on punitive awards.

While the detailed parameters of each decision leading up to Campbell are beyond the scope of this article, in each opinion, the majority declined to announce any specific formula for what constituted an upper limit of a punitive award under the Federal Constitution. Indeed, one important constraint over the years was the healthy conservative notion that, so far as punitive damages represent legitimate exercise of state police power, any potential limitations on such awards are properly reserved to the several states.

Then came Campbell.

The decision caused something of a stir upon publication, largely because it seemed as if the high court was applying some sort of fixed arithmetic formula for the first time to impose due process limits on punitive awards. As Justice Kennedy wrote:

We decline again to impose a bright-line ratio which a punitive damages award cannot exceed. Our jurisprudence and the principles it has now established demonstrate, however, that in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.

Slip Op. at 14.

So, where does Campbell leave the practitioner evaluating an action involving dangerous products?

  1. Why Campbell isn’t a Product Liability Decision.

Campbell involved an insurance bad faith action in which a Utah jury awarded $145 million in punitive damages based upon a failure to settle by State Farm.

While the Supreme Court agreed that “State Farm’s handling of the claims against the Campbells merits no praise,” it took issue with an 145-to-1 compensatory/punitive ratio in what it viewed as essentially a pure emotional distress matter.

The compensatory award in this case was substantial; the Campbells were awarded $1 million for a year and a half of emotional distress. This was complete compensation. The harm arose from a transaction in the economic realm, not from some physical assault or trauma; there were no physical injuries; and State Farm paid the excess verdict before the [bad faith] complaint was filed, so the Campbells suffered only minor economic injuries for the 18-month period in which State Farm refused to resolve the claim against them.

Slip Op. at 15-16.

True, the majority, in their haste to justify their arbitrary limit, came to some questionable conclusions. For example, Justice Kennedy wrote:

The compensatory damages for the injury suffered here, moreover, likely were based on a component which was duplicated in the punitive award. Much of the distress was caused by the outrage and humiliation the Campbells suffered at the actions of their insurer; and it is a major role of punitive damages to condemn such conduct. Compensatory damages, however, already contain this punitive element.

Slip Op. at 16.

This language leaves it open to speculation as to whether the high court was implying in its decision that juries uniformly ignore instructions specifically deleting punitive damages from a compensatory damage verdict.

Of course, in California, “Jurors ordinarily are presumed to have followed the court’s instructions.” Romo v. Ford Motor Co., 99 Cal. App. 4th 1115, 1131, 122 Cal. Rptr. 2d 139, 150 (2002). During the usual trial bifurcated on compensatory and punitive damages, BAJI 14.61 instructs: “Do not include as damages any amount that you might add for the purpose of punishing or making an example of the defendant for the public good or to prevent other accidents. Those damages would be punitive and they are not authorized in this action.” So, the comment about compensatory damages having a punitive component must apply to Utah only, or at least, cannot apply to California.

Even so, in discussing the Campbell rationale, it is critical to observe that the decision is distinguishable where personal injuries or death are the subject of a punitive award.

  1. Following Campbell, Personal Injury Justifies a High Compensatory/Punitive Ratio.

The majority appeared to carve out personal injury claims from its discussion, perhaps in order to save them for another day. Even so, Campbell is consistent with prior U.S. Supreme Court and California authority standing for the proposition that injury to persons cannot be fairly compared with economic injury.

The notion that wrongful conduct causing injury to another person is always of greater consequence than economic injury was a substantial basis for the result in Gore, where a 500-to-1 ratio between the damage suffered (cost of repair to a defectively painted BMW automobile) and punitive award ($2 million, reduced from $4 million by the Alabama Supreme Court) was held as exceeding constitutional limits. Campbell sticks with that notion, acknowledging that unlawful conduct that injures or kills is more reprehensible than economic injury as a matter of law.

“[T]he most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct.” We have instructed courts to determine the reprehensibility of a defendant by considering whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident. [Citations omitted.]

Slip Op. at 8 (quoting Gore, supra, 517 U.S., at 575-577).

By way of contrast, it was Ford’s “institutional mentality . . . shown to be one of callous indifference to public safety” that formed the basis for supporting a punitive damage award in the seminal Ford Pinto burn case, Grimshaw v. Ford Motor Co., 119 Cal. App. 3d 757, 174 Cal. Rptr. 348 (1981). The notion that injuring a person or taking human life justifies an enhanced punitive award has carried forward in California decisional law, most recently in Romo.

As noted . . . the ultimate question is whether the award is grossly excessive in relation to the interests the state seeks to protect through the award. As we have already discussed, defendant’s conduct was grossly reprehensible. While defendant did not intend the death to the victims, the award here cannot be compared to cases “involving a business fraud resulting only in economic harm.” [Citations omitted.]

Romo, supra, 99 Cal. App. 4th at 1150, 122 Cal. Rptr. 2d at 165.

The Court of Appeal in Romo noted that Ford’s conduct in marketing an unstable, inherently dangerous vehicle like the Bronco II, while failing to warn of its dangerous propensities, constituted conduct likely to cause human injury and death wherever Ford marketed the vehicle. “[Unlike Gore], where the defendant’s conduct was not even unlawful in all states and involved only economic consequences, the conduct here placed tens of thousand of lives at risk and actually claimed three lives in the present case.”

Since the Campbell punitive award substantially rested on State Farm’s national claims handling practices, some of which was not illegal in states other than Utah, this becomes an important basis for distinguishing Campbell in product actions.

Just as important, where punitive damages are justified in product liability actions, there is often substantial evidence of a long history of repeated, knowing, wrongdoing. The high court in Campbell noted that a higher compensatory/punitive ratio is generally justified by evidence of repeated wrongful conduct by a corporate defendant.

Although “[o]ur holdings that a recidivist may be punished more severely than a first offender recognize that repeated misconduct is more reprehensible than an individual instance of malfeasance,” in the context of civil actions courts must ensure the conduct in question replicates the prior transgressions. [Citations omitted.]

Slip Op. at 13 (quoting Gore, supra, at 577).

Again, this provides a significant basis to distinguish Campbell in product actions.

  1. Conclusion.

At the end of the day, so far as punitive damages and product liability is concerned, it really doesn’t appear that much has changed.

After all, in the 1981 seminal Pinto exploding gas tank case, Grimshaw, the trial court reduced a jury’s $125 million punitive award, reasoning that a 44-to-1 compensatory/punitive ratio was excessive as a matter of law. The reduction was to $3.5 million, a 1.4-to-1 ratio. Since under Campbell, it takes a 10-to-1 ratio or better before a punitive award is “suspect,” had Grimshaw been decided today, the trial court might well have felt more free to increase the number it allowed.

The U.S. Supreme Court, of course, will have the opportunity to weigh in on this discussion should it hear Romo. Even so, take heart. Just because we now have Campbell, doesn’t mean we’re in the soup.

The result is always the same. Innocent insureds are left to fend for themselves. The carrier and agents defend based on the notion that they owe “no duty” to have prevented or to right the particular wrong. A struggle ensues.

Bad faith law may be insufficient to address the situation, especially if the mistake has to do with a faulty insurance application or a failure to provide adequate limits or coverages. Breach of the implied covenant of good faith and fair dealing generally requires a breach of the insurance contract and the policy declarations or coverages are often exactly what the agents/carrier mistakenly put into place.

Catch 22, anyone?

The solution is to think outside of the box just a little bit and examine what is really going on in the insured/agent/insurer relationship, because the nature and extent of the relationship will ultimately define where the duty truly lies. Fortunately, this area is one of the few in insurance law that has grown more sympathetic to insureds during the past decade.

  1. Defining Different Levels of Duty.

The typical agent/carrier mistake problem requires analyzing duty at multiple levels. The duties can involve a fiduciary duty under certain circumstances, a duty to perform reasonably or a duty created by an oral or written contract.

The duties themselves will define the remedies available to the insured in the event of a breach so the level of duty involved becomes critical in prosecuting a claim.

Breach of fiduciary duty is the most interesting, both because it has recently been affirmed as available under certain circumstances (Tran v. Farmers Group, Inc. (2002) 104 Cal.App.4th 1202, 128 Cal.Rptr.2d 728) and because it presents a potential for obtaining punitive damages.

Negligent breach of a duty to perform resulting in damages is also important, but will generally only become available where the agent or insurer have acted in such a fashion where they can be seen to have adopted a special duty towards the insured. See e.g., Paper Savers, Inc. v. Nacsa (1996) 51 Cal.App.4th 1090, 59 Cal.Rptr.2d 547; Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 55 Cal.Rptr.2d 276; Free v. Republic Ins. Co. (1992) 8 Cal.App.4th 1726, 11 Cal.Rptr.2d 296. Under this theory, both agent and insurer may be liable for the agent’s negligence in misrepresenting policy terms or the extent of coverage provided. In addition, the measure of available damages may, in the right case, include attorneys fees and costs. Saunders v. Cariss (1990) 224 Cal.App.3d 905, 274 Cal.Rptr. 186.

Finally, where there is an oral or written agreement to provide a certain level of insurance protection, there is the potential for a breach of contract to provide insurance. The damages available would be the same as for any contractual breach.

Read more on this topic on my website, including:

  1. The Fiduciary Duty as applied to a Carrier. A significant duty in the proper case.
  2. Finding a Duty of Care.
  3. Finding a Contractual Duty.

Insureds sometimes need to rely on the expertise of agents and carriers to obtain the correct coverages and limits that will best protect them. When agents and carriers act as insurance experts but drop the ball, they should do the right thing. When they won’t, it’s up to the consumer lawyer to set things right.

 

Bill Daniels is a trial lawyer and shareholder with the law firm of DANIELS LAW in Sherman Oaks, CA.  A graduate of Loyola Law School of Los Angeles, he is a former member of the Consumer Attorneys Association of Los Angeles Board of Governors, a founding member of Loyola’s Civil Justice Program and a past president of the Encino Lawyers Association.  Since 2007, he has been named a Southern California “Super Lawyer” by Los Angeles Magazine.  Mr. Daniels focuses his practice on serious personal injury, insurance and employment. For information, visit our website at www.daniels.legal or contact us through e-mail: Info@danielslaw.com.

Better Understanding Efficient Proximate Cause in California Insurance Claims

2016-03-04-efficient_prox_cause

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Bill Daniels is a trial lawyer and shareholder with the law firm of DANIELS LAW in Sherman Oaks, CA.  A graduate of Loyola Law School of Los Angeles, he is a former member of the Consumer Attorneys Association of Los Angeles Board of Governors, a founding member of Loyola’s Civil Justice Program and a past president of the Encino Lawyers Association.  Since 2007, he has been named a Southern California “Super Lawyer” by Los Angeles Magazine.  Mr. Daniels focuses his practice on serious personal injury, insurance and employment. For information, visit our website at www.daniels.legal or contact us through e-mail: Info@danielslaw.com.

The Touhy Trap, 2016 Wildland Fire Litigation Conference Presentation

The Touhy Trap is a trap for the unwary. Forewarned and forearmed, it is not a trap that you need fear.

2016-04-22-the-touhy-trap

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Bill Daniels is a trial lawyer and shareholder with the law firm of DANIELS LAW in Sherman Oaks, CA.  A graduate of Loyola Law School of Los Angeles, he is a former member of the Consumer Attorneys Association of Los Angeles Board of Governors, a founding member of Loyola’s Civil Justice Program and a past president of the Encino Lawyers Association.  Since 2007, he has been named a Southern California “Super Lawyer” by Los Angeles Magazine.  Mr. Daniels focuses his practice on serious personal injury, insurance and employment. For information, visit our website at www.daniels.legal or contact us through e-mail: Info@danielslaw.com.

Coping with wildfire claims and 10 fire insurance DO’S and DON’TS

By Bill Daniels

I.     The Catastrophic Claim

           Recently, we watched in horror as more than 2000 homes belonging to our friends and neighbors vaporized in wildfires.

           Ah, but at least there’s insurance covering the homes you probably thought, as CNN droned on about fire lines and our brave firefighting crews.  Well, that can be true, and it can false.

           The fact is, whenever there is catastrophe, insurance problems rear their ugly head.  In a catastrophe such as the recent firestorms, you might not even know who your insurance company is.  The policies and all other important documents may well be cold ash by the time you begin to make your claim.

            There isn’t any boilerplate formula for advising insureds about how they might find their way through the insurance maze following a catastrophe.  There are, however, some situations that seem to come up time and time again.

           This article covers many of the common problems you  might face, as well as a brief primer on some of the most common defenses to coverage and bad faith claims you might encounter.  At the end, I’ve included a list of ten insurance claims Do’s and Don’ts you might find helpful.

Continue reading “Coping with wildfire claims and 10 fire insurance DO’S and DON’TS”

Tom Grisham Presentation: Establishing the Root Cause of Wildfires that are “Attributed” to Electrical Lines or Hardware Failure

(Presentation Notes)

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Bill Daniels is a trial lawyer and shareholder with the law firm of DANIELS LAW in Sherman Oaks, CA.  A graduate of Loyola Law School of Los Angeles, he is a former member of the Consumer Attorneys Association of Los Angeles Board of Governors, a founding member of Loyola’s Civil Justice Program and a past president of the Encino Lawyers Association.  Since 2007, he has been named a Southern California “Super Lawyer” by Los Angeles Magazine.  Mr. Daniels focuses his practice on serious personal injury, insurance and employment. For information, visit our website at www.daniels.legal or contact us through e-mail: Info@danielslaw.com.

CA Employment Discrimination and FEHA

In California, workers are protected from employment discrimination by law.

FEHA protects California workers from employment discrimination
Employment Discrimination laws in FEHA protect California workers

Some of the strongest employee protections are found “FEHA.”

The Fair Employment and Housing Act (FEHA) prohibits harassment and discrimination in employment because of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, mental and physical disability, medical condition, age, pregnancy, denial of medical and family care leave, or pregnancy disability leave (Government Code sections 12940,12945, 12945.2) and/or retaliation for protesting illegal discrimination related to one of these categories. Continue reading “CA Employment Discrimination and FEHA”