Thursday, May 03, 2007

Why We Need Tort Reform

An administrative law judge is suing his dry cleaner for $67 million...all because they ostensibly lost his slacks.

According to court documents, the problem began in May 2005 when (Roy) Pearson became a judge and brought several suits for alteration to Custom Cleaners in Northeast Washington, a place he patronized regularly despite previous disagreements with the Chungs. A pair of pants from one suit was not ready when he requested it two days later, and was deemed to be missing.

Pearson asked the cleaners for the full price of the suit: more than $1,000.

But a week later, the Chungs said the pants had been found and refused to pay. That's when Pearson decided to sue.

(Chris) Manning (the Chungs' attorney) said the cleaners made three settlement offers to Pearson. First they offered $3,000, then $4,600, then $12,000. But Pearson wasn't satisfied and expanded his calculations beyond one pair of pants.

Because Pearson no longer wanted to use his neighborhood dry cleaner, part of his lawsuit calls for $15,000 — the price to rent a car every weekend for 10 years to go to another business.

"He's somehow purporting that he has a constitutional right to a dry cleaner within four blocks of his apartment," Manning said.

But the bulk of the $65 million comes from Pearson's strict interpretation of D.C.'s consumer protection law, which fines violators $1,500 per violation, per day. According to court papers, Pearson added up 12 violations over 1,200 days, and then multiplied that by three defendants.

Much of Pearson's case rests on two signs that Custom Cleaners once had on its walls: "Satisfaction Guaranteed" and "Same Day Service."

Based on Pearson's dissatisfaction and the delay in getting back the pants, he claims the signs amount to fraud.

Pearson has appointed himself to represent all customers affected by such signs, though D.C. Superior Court Judge Neal Kravitz, who will hear the June 11 trial, has said that this is a case about one plaintiff, and one pair of pants.

Can one pair of pants be worth trying to ruin the business owner? Clearly, Pearson thinks bullying the Chungs is a good use of the legal system and he is abusing the privilege.

I've always been a little squeamish about tort reform, simply because, as a law student doing pro bono work, I saw some of the working class people who got shafted by the system and couldn't get compensation because they didn't have the money for an attorney. On the other hand, high profile abuses like this one (and the McDonald's coffee case) provide more incentive for reining in the entire system. Of course, it doesn't help that a presidential candidate made millions as a trial lawyer with junk science.

In the pants case, the Chungs are garnering enormous sympathy from average, every day citizens who see Pearson's suit as the very definition of a Rule 11 violation. Here's hoping Pearson gets booted. And doesn't get his pants.

UPDATE: Patterico has more news about this suit.