Lawsuit Abuse Fortnightly #7-12

Published July 15, 2008

Vulture Capitalist

Former New York Gov. Eliot Spitzer earned his legal spurs as state attorney general by prosecuting greedy capitalists. Now he’s trying to become one himself.

Until his resignation in March after revelations he regularly visited high-priced call girls while simultaneously prosecuting other prostitutes, Spitzer portrayed himself as a crusader. He was out to rescue little-guy victims, he said, who were being preyed upon by greedy, opportunistic corporations. Many of the cases he brought were viewed as legally flimsy, but he skillfully used the media to win plea agreements and force resignations before the cases ever got to court. He became known as “the scourge of Wall Street.”

Now, about two months after his resignation, he has announced plans to start a “vulture fund” to “scoop up distressed real estate assets around the country, revamp them, and flip the properties for a profit.” Using his father’s real estate firm as a base, Spitzer’s vulture fund “is moving aggressively to occupy a niche created by the credit crunch, the subprime mortgage crisis, a surge in foreclosures, and a declining real estate market. He is looking to mine for riches in projects that banks are no longer willing to finance.” So much for his devotion to the downtrodden.

Source: Jacob Gershman, “Spitzer Mulls Starting Vulture Fund, Tells Unions of Plan for Real Estate,” New York Sun, June 10, 2008

Subprime Legal Advice

And speaking of the subprime mess, the dean of UCLA School of Law believes it came about because too few lawyers were involved in mortgage transactions.

“One of the problems with real estate transactions is that a lot of people go into them without a lawyer so they don’t know what they’re buying,” said Michael Schill, a noted real estate law scholar before becoming dean. He added lawyers could have advised their clients more accurately about the terms of the loans in their transactions.

Nice try, Dean Schill, but no cigar–real estate lawyers get paid only if the transaction closes.

Source: Dan Slater, “UCLA Dean on Mortgage Crisis: Too Few Lawyers in Home-buying,” WSJ law blog, June 12, 2008

You May Approach the Bench, Baby!

A convicted murderer now on death row is seeking to have his conviction overturned because the prosecutor at his trial and the judge presiding over it were engaged in a long-standing tryst.

The defendant’s lawyer said in court papers it was “common knowledge” that the duo had been involved in a relationship for six years, raising “reasonable doubt on the judge’s capacity to act impartially.” The defendant’s right to a fair trial under the federal and Texas constitutions was violated, his lawyer said. Sounds like a pretty good argument. Trial lawyers always try to cozy up to the judge in their cases, but this prosecutor went a little too far.

Source: Adam B. Ellick, “Texas Inmate Says Judge and Prosecutor Had Affair,” The New York Times, June 13, 2008

Drinking on the Job

An exotic dancer who wrecked her car on her way home from work is now suing the Alabama strip club that employed her, for compensation for her injuries.

The woman alleges she was required to encourage customers to buy her drinks as part of her job, receiving a commission for each drink sold. She was so good at her work, the complaint says, she left the club “in a highly intoxicated state” one night and crashed her car.

Her bosses were negligent in allowing her to leave work in that condition, she says. Their real negligence, though, was in serving her full-strength drinks, not watered-down ones.

Source: Eric Velasco, “Stripper sues club saying job led to car wreck and injuries,” Birmingham News, May 27, 2008

Hairy Situation

The city of Houston wants its policemen to look professional, so it passed an ordinance banning them from growing facial hair. Four policeman have now sued over the policy, alleging it discriminates against those who cannot shave for medical or religious reasons.

Black men sometimes develop a condition called pseudofolliculitis barbae, otherwise known as ingrown hairs, the suit alleges. This causes inflammation, rashes, and scarring, according to the American Osteopathic College of Dermatology. Instead of reaching a reasonable accommodation, the city voted to spend $150,000 defending the lawsuit. There is a much cheaper solution, though, or at least there was in the 1950s:

For faces
Chapped and sore
Keeps ’em comin’
Back for more

Source: Associated Press, “Houston to Shell Out $150,000 to Defend Police Beard Ban,” May 29, 2008;;

Moneyed Trouble

The late Leona Helmsley’s dog Trouble may still be a bitch, but she’s no longer a “rich bitch.” Helmsley, who died last year, bequeathed a $12 million trust fund to her dog, but a New York City judge reduced it on June 16 after the trustees said the dog could live in style for the rest of her life on a mere $2 million. The other $10 million will go to Helmsley’s charitable foundation.

Trouble will live out her days at the Helmsley Sandcastle Hotel on Lido Beach in Sarasota, Florida, in the care of the hotel’s general manager. The manager is paid $60,000 to serve as Trouble’s guardian. The trustees pay $100,000 per year for security (Trouble has been known to bite), $8,000 for grooming, $1,200 for food, $2,500 to $18,000 for medical care, and the balance for miscellaneous expenses. Trouble evidently was not represented by counsel, so an appeal is unlikely.

Source: Dareh Gregorian, “Screw the Pooch, Leona’s Pup Loses $10M of trust fund,” New York Post, June 16, 2008, via Wall Street Journal Law Blog

Rolling the Vice

A $3.5 billion class-action case has been filed against casinos in Ontario, Canada by compulsive gamblers who filed official requests with the casinos not to admit them. When these gamblers showed up and successfully got past casino security, they sued. It’s the casinos’ fault, the suit alleges.

The casinos failed to use high-tech “exclusion” methods, the suit alleges. As a result, class members were able to continue gambling, which they say was not the gamblers’ fault and “disrupts, compromises, and ultimately destroys the lives of individual problem gamblers by causing a range of harms for them and their family members including emotional, social, financial, legal, employment, educational, and health-related harms.” Not to mention denial.

Sources: Joe Fantauzzi, “Couple launches class-action lawsuit over problem gambling,” York Region, June 12, 2008, via Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce

Lawsuit Abuse Fortnightly

Published by The Heartland Institute (312/377-4000), a nonprofit 501(c)3 organization founded in 1984.
Phone 312/377-4000, fax 312/377-5000
Back issues are available online at
Publisher: Joseph L. Bast
Editors: Maureen Martin, Diane Carol Bast

Information on lawsuit abuse can be found on these Web sites:

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