The Investor

The Lawful Truth

If you can't gamble, golf, or gossip about the war, how about complaining about lawyers and the law?

By 4.11.03

War of (No) Words

I'm not talking about the war or investing -- the two are closely related these days. In part, I want to demonstrate that Americans have the attention span to support a war that is measured in weeks rather than days. (I can't help but ask one question, though: How long until a piece of the head shows up on eBay?) In addition, the short-term money is now being made by betting against the crowd. When the market falls on bad war news, buy. When it rises on good news, sell or go short. The road to end the war, rebuild Iraq, heal international wounds (and wound international heels), and get our economy running again is too crooked for any one piece of information to foreshadow it all.

Tee Party

Without money and war, I have only two topics left: lawyers and golf. The Masters was rained out Thursday, so I will wait until next week to discuss the tournament. I will, however, make two predictions: (1) The Masters is exceptional among sporting events for living up to its hype and this year should be no exception; and (2) Martha Burk's protest will be so inconsequential that people will wonder what all the fuss was about.

This gives me 750 words and just the subject of the law to fill it. Luckily, there were two events this week that merit our attention. Naturally, because neither happened in Baghdad, both were ignored.

Punitively Yours

I have a natural distrust of any Supreme Court justice who calls himself a "strict constructionist." I think that's the lazy way out because it frees you from the obligation of reading anything about the law written after 1790. For this reason, and a few goofy things I've read in his opinions, I have doubted the legitimacy of Justice Antonin Scalia's towering intellect. But he was recently confronted with a situation that "politically" required one vote and doctrinally required the opposite. He stuck to his philosophy.

I'm talking about punitive damages, on which the Court last Monday threw out a $145 million punitive award (in a case in which compensatory damages were $1 million). Despite the expectation that the Republican appointees would fight to hold down punitives, Scalia continued his practice of dissenting from rulings that limit punitive damages because there were no such limits in merry olde' England or at the Assizes.

The majority of the Court, however, put the clamps on punitive damages in a way that ought to shut up the self-styled "legal reformers" out there. The case, State Farm v. Campbell, involved the insurance company's unreasonable refusal to settle a claim against its insured. The Supreme Court, in numerous ways, criticized the plaintiff's approach of demonizing the defendant to rack up punitive damages. (Let's face it, State Farm is almost too easy a target -- it was guilty of acting like an insurance company -- but that diverts the trial from the real issue, which is what State Farm did to the plaintiff. The jury concluded State Farm was liable to the plaintiff, but the punitive award was based on State Farm being scum-of-the-earth in general, not related to its conduct toward the plaintiff.)

More important, the Court is getting closer to putting numerical limits on punitive damages. Although the majority declined to impose "a bright-line ratio" of punitive-to-compensatory damages, it proceeded to do just that. According to the Court, "few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." It repeated its statements from prior decisions suggesting a ratio of greater than four-to-one is "close to the line of constitutional impropriety." (Courts never like to set these things in stone, but successive generations of litigants, like kids in the backseat screaming, "Are we there yet? Are we there yet? How about now?" forced the Supreme Court to spell it out.)

That should go a long way toward ending the push for tort reform, shouldn't it? Punitive damages are rarely awarded and this decision guarantees that the amounts will be limited. According to the National Center for State Courts, based on statistics from thirty states from 1991 to 2000, only 2.5% of plaintiffs who win tort jury trials get punitive damages.

The Right to Shut Up

Where do you stand on the issue of helping law enforcement when they are after a family member? Would you place your family ahead of the Constitution, and demonstrate the sincerity of your beliefs with a trip to prison? If you had to come back in the next life as Monica Lewinsky's mom or Susan McDougal, which would you choose?

University of Massachusetts President William Bulger gets to decide. The House Government Reform Committee has decided to give him immunity, following his prior invocation of his Fifth Amendment privilege against self-incrimination, when it calls him to testify. The Committee is hoping Bulger will either answer questions they want to ask his brother, James "Whitey" Bulger, or will divulge his brother's whereabouts. Whitey Bulger, accused of being involved in twenty-one murders while acting as an informant for the FBI, disappeared in 1995 after being informed he was going to be indicted.

William Bulger was quoted in the Boston Globe as saying he would go to Washington with a "cooperative spirit." I'm hoping he's just throwing a curveball to the media and the Committee and its lawyers. I want to see him show up, shut up, and dare the U.S. House of Representatives to put him in jail for refusing to rat out his brother.

As much as I respect the rule of law, I think you have to stick up for your family and friends before helping that faceless mass of "society." The only exception should be where your silence will endanger innocent people, like when David Kaczynski turned in his brother, who was still sending bombs through the mail.

The House also offered immunity to alleged mob boss Francis Salemme. Unless Salemme spills his guts first, he can give Bulger a demonstration of omerta. I predict, however, that Bulger already knows its meaning, and will show those guys in Washington the meaning of the word "loyalty."

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About the Author

Michael Craig is a writer in Scottsdale, Arizona.