Yip Yap Times

The $67 Million Pants

THE $67 MILLION PANTS AND TORT REFORM


The $67 million court drama of the disappearing dungarees ended this week with a judgment for the owners of Custom Dry Cleaners, Jin and Soo Chung.

The pants plaintiff, his dubious Honor Judge Roy Pearson of Washington, D.C., had sued the dry cleaners for $67 million dollars for the loss of a pair of treasured trousers he said he had wanted to wear on his first day on the bench. He actually cried in court as he testified of the emotional trauma of losing his favorite suit pants.

Thank goodness sanity ruled the court. Judge Judith Bartnoff of the D.C. Superior Court denied Pearson's claim and instead, ordered him to pay the Chung’s court costs. The Chungs still have to pay tens of thousands of dollars in legal fees. Their lawyer will request the court to order Pearson to pay these, but it's not likely the judge will comply since D.C. law has an "offer of judgment" that lets the defendants collect court costs but not the major expense of lawyers' fees.

This case belongs in the San Francisco Museum of Oddities, displayed as the Mother of all frivolous law suits. It is the classic poster child for tort reform.

It all started two years ago when Pearson paid $10.50 to have a pair of pants altered. He was mighty unhappy with the results. He charged that the job wasn't finished on time and that the pants he received were someone else's. He demanded $1,150 for a new suit; the Chungs refused. So off to court he went to sue for damages.

What damages were there outside of $1200 for a new suit, especially since the Chungs offered a settlement of $12,000 to end the law suit? It seems Pearson needed compensation for ten years' worth of weekend car rentals so that he could go to a different dry cleaner. He wanted $500,000 for emotional distress and $542,000 in legal fees. He was representing himself and charged $425/hour. Under D.C. consumer laws, he claimed that the cleaners' "satisfaction guaranteed," that omnipresent marketing slogan, was a fraudulent claim which entitled him to damages of $1,500 per day. Putting all this together, he calculated $67 million. Despite all the tear-jerking misery he claimed to have suffered at the hands of this dry cleaners, he magnanimously dropped his pants suit (no pun intended) to $54 million.

Why would a busy judge not toss such a suit out into the dumpster behind the courthouse? Of greater importance, what laws could allow Pearson to initiate such a ludicrous suit? The source of Pearson’s power came from consumer laws that allow complainants to multiply the stated penalty for a single infraction by the entirety of a business's clientele, or by all the days in the calendar, with no need, amazingly, to prove actual injury. How do you spell frivolous law suits? According to a June 18 Wall Street Journal commentary by Walter Olsen: “This sort of mechanical damage-multiplication has been a key engine in shakedown scandals in California (where roving complainants have mass-mailed demand letters to small businesses over technical infractions); in "junk-fax" litigation demanding billions from hapless merchants in Texas, Illinois and elsewhere; and in important sectors of litigation aimed at bigger businesses, including claims against credit-card providers and purveyors of "light" cigarettes.”

All of the above would go away if tort laws demanded a demonstration of actual injury. But the best tort reform is to get rid of all the lawyers. If that is not an option, then “loser pays” and rules to show injury to justify the suit would go a long way in stopping frivolous law suits and ridiculously high awards. Good for America, bad for the litigation lobby. Given the hundreds of millions of dollars at stake, the war for tort reform will reach epic proportions if it ever gets to the legislative battle lines. In the meantime, businesses will continue to pay billions in insurance premiums, doctors will continue to order costly and unnecessary lab tests and the consumer will continue to pay and pay.

Labels: legal, pants, tort reform

posted by Lisa @ 12:52 PM