In Stevens v. Vons Companies, a 2006 case, a Simi Valley Superior Court jury awarded over $18 million to a Vons grocery clerk who was making $750 a week. $16.7 million of that award was punitive damages, intended to punish Vons for retaliating against Stevens after he complained of being sexually harassed by the store manager. The outsized verdict made the rounds in the media. Stevens and his lawyers were interviewed on the television evening news. The public spoke out against the jackpot jury system and questioned how a woman could ever sexually harass a man. After that, news of the verdict quickly faded from the media.

And what happened to Stevens? If you thought he retired into a life of fabulous wealth and comfort, you’d be wrong.

Soon after the jury issued its verdict, the judge ruled that the jury award was excessive. The judge threatened a new trial unless Stevens was willing to accept a “remittitur”, meaning a reduction of his award from $18 million to just $2.4 million. According to Stevens:

The judge gave me a generous choice between a hanging and a firing squad. He made it clear that if I elected the new trial, it would be in his court again, and I was advised that I would not win the second time . . . I have lost my family, my job and my health insurance during this process, and much of the money I did receive has basically gone into the case.
Reuters Press Release

Not surprisingly, Stevens chose to accept the reduction. Unfortunately, that did not stop Vons from appealing the case anyway.

More than 2 years later, in January 2009, the Court of Appeal finally denied both Von’s appeal and Steven’s request to reinstate the original $18 million jury award. Stevens then unsuccessfully appealed that decision to the California Supreme Court. He ultimately took his case to the highest court in the land, the U.S. Supreme Court.

In October 2009, the U.S. Supreme Court quietly declined to hear Stevens’ appeal. This time, there were no TV cameras or news reporters waiting to interview Stevens or his lawyers. After all the time and expense of those appeals, one has to wonder how much is even left of Stevens’ jury award today.

The moral of the story: the $18 million award is what gets reported in the papers. What only rarely gets reported is the aftermath.

On April 29, 2012, a federal court jury unanimously sided with Chopourian and found that Mercy Hospital had engaged in sexual harassment, retaliation, wrongful termination, intentional interference with her job search, defamation and meal and rest break violations. The jury slapped Mercy Hospital with a landmark $168 million verdict, consisting of economic damages, emotional distress damages and punitive damages.

During the 11-day trial, Chopourian testified that she was tormented and sexually harassed by surgeons and medical staff for 2 years. Chopourian recounted how one harasser told her, “you’ll give in to me”, to which she replied, “I’ll never give in to you”. Chopourian told reporters, “I’d look at my supervisor and say, ‘Do something.’ They’d just laugh”. Witnesses confirmed that one of the surgeons would greet employees with “I’m horny”. Chopourian’s lawyer, Lawrence Bohm, described the hospital as a “raunchy, vile, toxic workplace”.

A year after being terminated, Chopourian found a new position. She lost that job, however, after Mercy withdrew Chopourian’s hospital privileges – typically the kiss of death for medical professionals. Chopourian became unemployed and continued to live off donations from friends and family at the time of trial.

After the verdict, Mercy General Hospital President Denny Powell issued a statement saying they would appeal: “We do not believe that the facts support this verdict or judgment. We stand by the actions we took in ending our relationship with this former employee.” Chopourian’s attorney responded, “It’s very disappointing that they want to appeal after so much evidence and after so many witnesses came forward so bravely.”

And here’s something I first read for my high school English class but that has stayed with me ever since. Maybe it will speak to you as well.

“Meditation XVII”

No man is an island,

Entire of itself.

Each is a piece of the continent,

A part of the main.

If a clod be washed away by the sea,

Europe is the less.

As well as if a promontory were.

As well as if a manor of thine own

Or of thine friend’s were.

Each man’s death diminishes me,

For I am involved in mankind.

Therefore, send not to know

For whom the bell tolls,

It tolls for thee.

• John Donne

Stay safe out there.

Have you ever been called to testify as a witness at a deposition (a “deposition” is a fancy way of saying a lawyer-conducted witness interview conducted under oath that is recorded by a court reporter) or at a trial? If so, then you have the right to recover “ordinary witness fees”. According to California Government Code § 68093:

Except as otherwise provided by law, witness’ fees for each day’s actual attendance, when legally required to attend a civil action or proceeding in the superior courts, are thirty-five dollars ($35) a day and mileage actually traveled, both ways, twenty cents ($0.20) a mile.

So for example, if you have been subpoenaed to testify at a deposition and you live 5 miles from the place where you are to be deposed, you would be entitled to a witness fee of $35 plus 20 cents per mile for the 10-mile round trip. That equals $37.

If you are called to testify in a federal lawsuit, then the witness fee is higher. Under 28 USC § 1821, you are entitled to a witness fee of $40 per day of attendance plus travel costs. If you travel by “common carrier”, such as by bus or train, then “travel costs” means your actual travel costs. If you travel by “privately owned vehicle”, then “travel costs” means a per mile rate established by the Administrator of General Services, which is generally the standard mileage rates set by the IRS. For example, in 2013, the IRS standard mileage rate is 56.5 cents per mile, up one cent from 2012.

Using the same example as above, you would be entitled to a witness fee of $40 plus 56.5 cents per mile for the 10-mile round trip. That equals $45.65.

If you have further questions regarding testifying as a witness, feel free to discuss it with a lawyer.

In AT&T Mobility LLC v. Concepcion et ux., AT&T had charged consumers $30.22 for phones that they had advertised as “free”. That didn’t seem right to two consumers, Vincent and Liza Concepcion, who decided to bring a class action lawsuit against AT&T. The Concepcions chose to bring the lawsuit as a class action because it made no economic sense for them to individually sue AT&T for just $30.22. By bringing everyone together in a class action, the Concepcions could sue AT&T for all of the money that had been overcharged to all consumers in the class.

However, it turns out AT&T’s fine print had a clause that prohibited class actions, thereby forcing the Concepcions and other consumers to sue AT&T individually. Today, the US Supreme Court held that that obscure clause was enforceable.

What does this mean? It means companies now have the power to ban class actions against them and force consumers to bring individual lawsuits, no matter how small the amount of money at stake. Consumer-rights advocates are saying that this ruling would spell the end for small claims involving products or services. They say the devil is in the details. But in this case, it is in the fine print.

Employees are not safe either. The Concepcion ruling will likely spill over into labor and employment law cases throughout the country, as employers who read Concepcion start incorporating class action bans into their own employee policies and contracts. Also, as Andrew Cohen of the Atlantic Monthly points out, Concepcion is a foreshadowing of how the Supreme Court will likely rule on Wal-Mart v Dukes, a class action being brought by 1.5 million women against Wal-Mart for discriminatory pay practices.

Now that the Concepcions’ class action has been thrown out by the highest court in the land, it appears AT&T will get to keep the millions of dollars it fraudulently collected from consumers after all. This is because, as Justice Stephen Breyer noted in his dissent, who in their right mind is going to bother with an individual lawsuit against AT&T for $30.22?

Breyer wrote in his dissent (joined by Associated Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan):

In general agreements that forbid the consolidation of claims can lead small dollar claimants to abandon their claims rather than to litigate. I suspect that it is true even here, for as the Court of Appeals recognized, AT&T can avoid the $7,500 payout (the payout that supposedly makes the Concepcions’ arbitration worthwhile) simply by paying the claim’s face value, such that “the maximum gain to a customer for the hassle of arbitrating a $30.22 dispute is still just $30.22.” What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim? In California’s perfectly rational view, non class arbitration over such sums will also sometimes have the effect of depriving claimants of their claims (say, for example, where claiming the $30.22 were to involve filling out many forms that require technical legal knowledge or waiting at great length while a call is placed on hold). Discover Bank sets forth circumstances in which the California courts believe that the terms of consumer contracts can be manipulated to insulate an agreement’s author from liability for its own frauds by “deliberately cheat[ing] large numbers of consumers out of individually small sums of money.” Why is this kind of decision–weighing the pros and cons of all class proceedings alike–not California’s to make?

The Concepcion decision takes its place next to Citizens United v. Federal Election Commission and Lilly M. Ledbetter v. The Goodyear Tire & Rubber Co., Inc. as one of the worst decisions in recent memory to come from the Supreme Court’s conservative faction (Chief Justice Roberts and Associate Justices Antonin Scalia, Samuel Alito, Clarence Thomas and Anthony Kennedy). It is now up to Congress to pass a law that effectively overturns Concepcion, just as they overturned the Ledbetter decision with the Lilly Ledbetter Fair Pay Act of 2009.

If you believe companies and employers should not be allowed to steal even small amounts of money from their customers and employees, please write to your congressional representative and ask him or her to support H.R.1020 and S.931, both entitled “The Arbitration Fairness Act of 2009″. And look for a bill to be introduced in Congress that explicitly overturns Concepcion.

Then there’s this news story about Kevin Y. Jung, a prominent Bellevue, Washington lawyer who was shot in the head and critically injured while sitting in his car in his office parking lot. The shooter? His opposing counsel, William R. Joice, a former prosecutor and Air Force fighter pilot. The two had represented opposing parties in a civil lawsuit involving the fraudulent sale of a Korean store. Joice testified at his trial that he had fallen behind in the case due to his inexperience and decided upon shooting his opponent as a way of buying himself time. Joice ultimately did buy himself time. A lot of it. A Seattle, Washington judge sentenced Joice to 31 ½ years. Meanwhile, Jung’s condition deteriorated and he finally died of complications from his gunshot wound.

Finally, there is this article of unknown origin that was recently passed on by a colleague. It purports to be a defense lawyer’s guide to waging psychological warfare against plaintiff’s lawyers. I have doubts about authenticity of this article. Nevertheless, its description of the tactics employed by some lawyers rings all-too true. Read for yourself and decide. It may give you a clue of what you’re in for should you decide to file a lawsuit.

Psychological Warfare: The Best Defense to Any Plaintiff’s Claim

The warfare starts when you first hear from the Plaintiff’s attorney or a lawsuit is filed. Immediately search all public records, court records, state bar records, the internet, MySpace, Twitter and any other sources you can find, including the attorney’s website or websites for information on both the Plaintiff’s attorney (“Counsel”) or the Plaintiff. You can find a lot of good information about the attorney or client’s mood at particular times, confidence, vulnerabilities, tenacity or lack thereof or anything you can add to your arsenal. This information usually also allows you to be able to tell your client how often the Plaintiff’s attorney appeals cases and whether they are in it for the long haul, if they only take cases to trial that they are sure to win and their general approach.

Keep in mind when reviewing records of Counsel’s litigation history, that Counsel losing trials and filing a lot of appeals is never a good sign. That means Counsel does not settle cases that probably should be settled and seems to spend more time and resources than he or she should on cases that are not likely winners and likes to litigate. This type of Counsel has convinced himself or herself that they are on a righteous campaign and they are far more dangerous than those trying to simply make a living and do not believe in our litigious society. This type of lawyer is the most dangerous and can cost your client a lot of money. Be very cautious about litigating against a lawyer that regularly appeals the case following a trial loss. It is always more prudent to try to resolve the matter with these lawyers.

One of the best methods for inducing a settlement that is more beneficial to your client is to shake the confidence of the Plaintiff’s lawyer, a lot of which will reach the Plaintiff, and if done correctly, can get the lawyer to outright dismiss the case for a waiver of costs, regardless of the merits of the case. There are several approaches you can take, but using all of them in a multi-pronged attack is the most effective using the following steps:

First, build a relationship with Plaintiff’s counsel and always be very pleasant and warm at first contact. Tell them how you look forward to working with them. You may even have common interests that you are aware of from their Facebook or other social media page. You may attend the same Temple or Church for all you know, both love Pugs or a particular breed of dog or even have mutual friends. You can make the Plaintiff’s attorney believe you are an ally in justice or someone they can trust to give them straight answers or even help them in a time of need. But, you need to build the bonds through what you have in common and shared experiences. Be sure to covertly encourage Counsel to share as many experiences, feelings or interests as you can get them to and feign interest by even asking good pointed questions. Counsel will think you care and you respect them and even have an interest in who they are. No matter how irrelevant and trivial their stories are to the case you are litigating, you are building a bond that will later be used to possibly get them to dismiss the case for a waiver of costs or accept a meager settlement.

Second, after the deposition of the Plaintiff, you have had enough time to dig up what you can on both the Plaintiff and his attorney, you can talk about the case with the Counsel emphasizing as many similar cases that you can that have crashed and burned. Discuss cases in which large attorneys’ fees awards have been made against the Plaintiff. These cases are few and far between but the Plaintiff’s lawyer will not know that in many cases or whether you yourself do it often, you can even tell Counsel that you specialize in cases in which that can be done and assigned to those cases. But do not be so obvious and say that you are assigned to Counsel’s case for that reason. If you are asked, just say cases are assigned by the intake attorney and that the cases are not discussed for possible attorneys’ fees recovery until further in the litigation. However, if the Counsel seems experienced or sophisticated, do not even attempt the attorneys’ fees recovery threat because you will lose all credibility.

Tell Counsel about the high cost bills you have gotten converted to judgments against the Plaintiff. Explain that your costs are at least five figures. This is easy to do with copying, investigators, subpoenas or anything that is not done in house. Tell them that many of the Plaintiff’s you have gotten costs against, even sue Counsel out of anger and use the Plaintiff’s litigation history to support this. The Plaintiff and Counsel have no idea what costs will be allowed and cannot ask you for an itemized list. If Counsel asks how the costs could be that high, immediately, with no hesitation and in full confidence, explain that your office is very thorough and meticulous and that is a low cost number by your standards. Not only does this justify your costs, you are making the defense case insurmountable. Listen closely on the phone as you will almost be able to hear Counsel’s heart sink. All the information you use for this purpose, if you use any actual data at all, should generally be from one of your offices anywhere in the country in the event Counsel tells you that his client will dismiss if he or she sees proof of this. This happens more often than you think. The ability to produce the proof later can mean the difference between an early victory and going to trial. The Plaintiff’s attorney will have no idea if you actually worked on the case you use as the proof and will take your word for it, and the reality is, at that point, it is academic.

Now that you have whittled Counsel’s resolve, tell the Counsel that you are willing to help them get out of the mess you have convinced them that they are in with this meritless case and you will plead with your clients for a waiver of costs for a dismissal, while telling them that your clients are furious that the case was even filed, will not settle the case, want to go to trial and win the case at any expense and sue the Plaintiff and Counsel. You then become the one trying to save the Plaintiff and Counsel by mediating between them and your client.

But, be careful not to attempt to do slam the Plaintiff’s case on the facts alone if the Plaintiff’s counsel has had a lot of success on these facts based on their litigation history and especially if they have far more experience than you do with cases on these facts. This happens often with lawyers that specialize and niche Counsel. For example, a “Lemon Law” lawyer will almost always have more experience on certain fact patterns than you do. It goes without saying that Counsel that specializes is always the hardest to shake, if not impossible if you do not have helpful information gathered. On the other hand, you will have a field day with attorneys whose websites say they practice personal injury, criminal law, family law, business law, trusts and estates, immigration, DWI defense, real estate and mediation. These attorneys are taking any cases they can get and are vulnerable to a psychological attack.

It is also helpful to use this approach when you have a motion pending, usually a dispositive one that the Plaintiff’s attorney has not started working on and is dreading the thought. The motion is more effective as an incentive to settle for a waiver of costs if it is riddled with exhibits and a compendium of cases from outside the jurisdiction that the Counsel does not want to have to read. Counsel is also busy and as solo practitioners may miss dates on discovery. If a date is missed or you have any other reason to file a motion to compel before you press for a dismissal, do so. Ask for as much as you possibly can in sanctions and strike the fear in Counsel. But, always say your client or preferably the client’s in house counsel is so furious that the case was filed that he or she is the one making you do all this. You are personally against asking for sanctions and sympathize with the Plaintiff’s attorney but have no choice, but you are there to offer a lifeline by letting them out with a waiver of costs and waiving the sanctions. Regardless of the outcome of the motion, the sanctions are a drop in the bucket for your client but would financially cripple the Plaintiff and Plaintiff’s counsel, so this is a great weapon that we have and one of the most effective. It is not that hard to drum up a discovery dispute to be able to file the motion, and again, blame your client or in house counsel, you are always the good guy.

If the Plaintiff’s attorney talks about his client not settling and feeling like he or she needs to get something out of it, this is where you have to pay a little bit of money, and this is always an amount your client would gladly pay. Just make sure the amount is high enough that the Plaintiff’s attorney will get a little something out of it to make them go away or be able to cover their rent for the month, as many of them live hand to mouth. This is never more than five figures and is just a token. Explain to your client that they are merely driving by in their Bentley’s and kicking a few gold coins out of their car door as they driving by.

You can open up this attack in some cases very effectively with a meet and confer letter on a dispositive motion. Use all testimony harmful to the Plaintiff, as well as exhibits and any declarations you can get from people who detest the Plaintiff, have been sued by the Plaintiff or are even ex-spouses of the Plaintiff. Even if they are just character attacks and irrelevant declarations, the declarations will have an incredibly demoralizing impact. You may be able to find dilatants you will want to use on Facebook, Twitter and/or Court records.

Third, which is a Golden Rule or sorts, is to never paint a case as hopeless to Counsel based on Counsel’s abilities or experience. You will make Counsel resentful, angry, hurt and given Counsel something to prove. That is the last thing you want. Even if he is clueless, he can get past dispositive motions and win at trial. Many of us have been burned that way. The inexperience of lack of knowledge just means we will win the psychological war. Always find a case in the public record that Counsel was successful on. Even there is no much, pick anything. Say things like “I know you are really good because we researched you. I saw you won that opposition to a demurrer on the Jones v. Smith case. Your worked was good that I kept a copy.” Getting a copy of one successful pleading if the Plaintiff attorney has not won any trials costs almost nothing but makes Counsel truly believe you respect Counsel’s work, skills, reputations and you have no doubt about their legal acumen. Then, revert to your point about how they are taking a risk and wasting time and may as well work on their meritorious cases and put their skills to good use.

Lastly, you need to emotionally wear the Plaintiff down to have a good attack. Send subpoenas to their employers, doctors, family or anyone else you can think of. It is very embarrassing for Plaintiffs to have everyone know about their lawsuit, as many people look at litigants as opportunists and it is scary for most Plaintiffs to have all of their privacy taken away. More importantly, it is a heavy burden on the Plaintiff’s counsel to run around town trying to find out who received a subpoena and what they know and then meeting and conferring. Your fallback position is always that you have no idea what the doctor or employer or whoever you sent the subpoena to could have and therefore it could be relevant to the case.

Also send investigators to talk to all the neighbors and loved ones. Anyone hearing from an investigator makes the Plaintiff have a lot of explaining to do to that person. The Plaintiff will not want to discuss the lawsuit and if they do, it gives you more people to depose. Furthermore, many times, the Plaintiff’s explanation to their employer will just make the employer nervous about keeping them employed and the explanation to neighbors, friends and family will likely make little sense as they cannot articulate legal principles with confidence. Many lay people would say they do not understand how “you filed a legitimate lawsuit and you are being investigated.”

These strategies are effective because most Plaintiffs’ attorneys are isolated as solo practitioners or at small firms and are swamped with work that we bury them in. They do not have anyone to review the files and give them encouragement. You become the only outside voice giving an “independent” evaluation. These strategies cost very little time and money and are very effective in saving your clients millions of dollars, regardless of how solid the Plaintiff’s claim is. You dash the hope of the Plaintiff and the Counsel that you would ever settle for any substantial amount of money and your client is so angry that they will fight to the end and then come after the Plaintiff and their attorney. You can make any Plaintiff’s attorney believe that your case is not worth the hassle and their time is better spent on the multitude of other cases they have.

The Judgment of King Solomon

Remember the tale of King Solomon and the dispute over the baby? The tale is recounted in the Bible in 1 Kings 3:16-28. According to the tale, two prostitutes who lived together each had an infant son. One prostitute accidentally smothered her son while sleeping, and then switched her dead son for the other prostitute’s live son. The two prostitutes naturally fought over the live infant. Then the dispute was brought to King Solomon. He ruled that the baby should be cut in half and each half given to the disputants, and then carefully observed the disputants’ reactions. The real mother cried out that she would rather the live baby be given to the other prostitute than kill the baby. The lying prostitute demanded out of spite that the baby be cut in half. King Solomon immediately awarded the baby to the real mother, earning his place in the history books for his wise judgment.

In our system of justice, judges are called upon to be as wise and fair as King Solomon. Judges must engage in a balancing act of acting as neutral referees, process managers and gatekeepers of evidence. Judges are charged with ensuring a fair and efficient process for the parties, witnesses and jury, keeping inappropriate evidence from reaching the jury, and enforcing strict adherence to laws. That’s a tall order to fill, of course. In reality, not all judges are infallible. A few may be susceptible to flawed judgment, bias, prejudice, and even misconduct.

The Many Ways A Judge Can Affect Your Lawsuit

Even in a jury trial, a judge must still make scores, if not hundreds, of close judgment calls that can go either way and that can, ultimately, win or lose your lawsuit for you. Some experts have gone so far as to call the judge the “Thirteenth Juror” (in California, juries have 12 members). See, for instance, this Findlaw article, “The Judge’s Decision To Throw Out The Jury’s Guilty Verdict On The Murder Charge”, discussing the “thirteenth juror standard” under which a judge can throw out a jury’s verdict in a criminal trial.

During a jury trial, a judge’s management of the case can affect how the jury ultimately views the case in countless ways by:

1. Approving/disapproving certain evidence, witnesses, parties, and attorneys
2. Sustaining/overruling the objections of attorneys at trial
3. Keeping out/admitting controversial evidence to the jury
4. Taking over or commenting on an attorney’s witness or jury selection examination
5. Imposing time limits on various stages of trial
6. Participating in the drafting of the verdict form and jury instructions that goes to the jury

The judge also has the power to substitute his judgment for the jury’s. At all phases of litigation, parties can file sudden-death motions (demurrer, motion for judgment on pleadings, motion for summary judgment, motion for judgment as a matter of law, motion for directed verdict, motion for judgment notwithstanding verdict) which literally put the case into the judge’s hands and let her decide the winner, whether or not a jury has spoken. If the other party can’t prove to the judge that they have enough evidence to survive the motion, the suit is over. In some cases, this means the judge can even reverse a jury’s verdict, turning victory into defeat!

What makes the situation even more challenging is the fact that so many decisions of the judge are protected from appeal. In many cases, a party who is unhappy with a judge’s rulings must prove to the Court of Appeal that the judge “abused” his discretion – a high bar for any party to overcome.

Do’s and Don’t's

Disrespecting or angering your judge is never a good idea. The judge can decide to take it out on you in thousands of ways, big and small. The judge could also find you in contempt and fine you or even throw you in jail. It is amazing how often this obvious bit of common sense can be lost on parties and attorneys alike. Walk into any courtroom and you may witness all kinds of surprising behavior on display in the courtroom, ranging from childish temper tantrums to bald-faced lying.

According to ABC News’ “Inside Lindsay Lohan’s Medicine Cabinet”, tabloid regular Lindsey Lohan got into hot water for having an obscene message to the judge painted on her fingernail. And according to AOL News’  “Woman Locked Up for Low-Riding Pants”, a New Orleans woman who wore low-riding shorts in court was sentenced by the judge to 10 days in jail for contempt.

Here are a few tips for the next time you have to appear before a judge:

1. Dress appropriately: Avoid baseball caps, bandannas, low-riders, tank tops, T-shirts with obscene messages, mini-skirts, etc. Business attire is safest.
2. Show up on time: If you’re stuck in traffic, call your lawyer immediately so that he can inform the court.
3. Address the judge as “Your Honor”: Don’t call her “Judge”, “Sir” or “Ma’am”.
4. Stand up straight: Try not to slouch. Try to keep your hands out of your pockets.
5. Leave food and drinks in the car: Most courts prohibit drinks and food in the courtroom.
6. Speak politely: Absolutely no obscenities and slurs.
7. Stay behind the table: Don’t approach the judge, the clerk or the reporter unless the judge gives you permission.

Dinging Your Judge

In California state court (but not in federal court), parties have the right to reject their first-assigned judge due to “prejudice” and ask that a new one be assigned to their case, provided they do so quickly (California Code of Civil Procedure § 170.6). Starting in 2001, the new judge has been assigned randomly. See “Bascue Institutes Policy of Random Reassignment Following 170.6 Disqualifications”. Lawyers refer to this process as “peremptory challenge”, or as “dinging” or “papering” the judge.

Thanks to the advent of email, forums and listservs, your lawyer should be able to access the latest thinking on judges. Of course, dinging your judge is not always advisable. In some (usually smaller) courthouses, word can spread fast and your new judge may not take your dinging of his colleague personally. Also, there is no guarantee that you will get a preferable judge the second time around.

According to Met News opinion piece, “Judging Judges”, the Los Angeles Superior Court judges who were “dinged” the most between 1/1/01 and 6/30/03 were as follows (note, this data is now several years old and several of these judges are no longer alive or sitting on the bench):

1. Ronald Sohigian  (358)
2. Mary Ann Murphy        (148)
3. Alan Buckner      (100)
4. David Workman  (92)
5. Malcolm Mackey          (92)
6. Richard Hubbell  (70)
7. Alexander Williams III (67)
8. David Yaffe         (66)
9. Ernest Hiroshige (61)
10. Jeffrey Wiatt       (60)
11. Irving Feffer        (59)
12. David Schacter    (57)
13. Aurelio Munoz     (56)
14. Dzintra Janavs    (54)
15. Fumiko Wasserman     (50)

Interestingly, several of the judges on this list now enjoy excellent reputations as fair and effective judges. So take this list with a grain of salt.

Finally, consult with your lawyer. The decision to ding your judge is in almost all cases best left to him.

In the current economic climate, many employers are no longer able to generate the same amount of income they did just a couple years ago. This has resulted in furloughs, pay cuts, and massive layoffs for employees. In addition to losing their main source of income – their paychecks – employees have had to suffer additional financial hits due to bad investments in real estate and stocks. These losses have forced many to file for bankruptcy or resort to other drastic means. It should come as no surprise that our law firm has seen an increase in the number of calls from employees requesting information on how to protect their assets from creditors trying to collect on debts.

Asset protection devices can provide effective protection against creditors for employees and their families who are facing bankruptcy, foreclosure, lawsuits, etc.

Tip 1: Professionals Watch Out

Those engaged in professional occupations in particular, such as doctors, lawyers, dentists, engineers, and accountants, should engage asset protection devices, as they are more vulnerable to being sued. In California, professionals are personally responsible for liability arising out of the practice of their professions.

Tip 2: Living Trusts Don’t Protect against Creditors

A common misconception is that a living trust will provide creditor protection. Living trusts do provide important benefits after the owner’s death, such as avoiding probate and reduction of estate taxes. However, living trusts do not provide creditor protection. If you are interested in asset protection, there are other trusts and methods available, considered to be “advanced” planning techniques, which will provide creditor protection if used and maintained properly.

Tip 3: A Qualified Personal Residence Trust Can Save Your Home

Some time ago, our law firm was contacted by a client who was a long-time employee at a successful retail business. Due to the financial crisis, however, the business lost money and was forced to close. Some of the suppliers who were owed money by the retail business sued the employee, arguing that he was personally liable for the contracts. The employee was aware that nothing could be done to avoid the lawsuit, so his main concern became protecting his home from the business creditors.

One option would have been to defend against the lawsuit and prevail. However, as any lawyer will tell you, victory in a lawsuit is never guaranteed, even when you are not at fault. A lawsuit can also be costly and could put you even further in debt.

A better option would have been to have set up a Qualified Personal Residence Trust (“QPRT”) to shield his home from creditors before the lawsuit was filed.

The QPRT is a trust technique that permanently transfers either a principal residence or a vacation home to your children while you are still living. Because you have already given your home to your children irrevocably in the trust, and it no longer belongs to you, your creditors cannot go after the house – technically you no longer own the house.

Caution: a QPRT is irrevocable and cannot be changed once it is set up. You cannot later choose to give your home to other people.

On the bright side, even after you set up a QPRT, you can sell your current home and replace it with a new home, and many of the tax advantages of home ownership remain available to you.

Another advantage is that, unlike an outright gift directly to your children, a QPRT gives you the legal right to continue living in the home. The QPRT will set a number of years for which you have the right to occupy the house and retain all income-tax benefits of home ownership (the “term”). After the term expires, you still have the right to continue occupying the house in exchange for rent paid to your children.

For example, you can set up the QPRT term for ten years. After ten years, if you want to continue to live in the house, you can pay reasonable rent to your children.

The QPRT is also one of the few methods available which can provide some protection for licensed professionals such as doctors, lawyers, dentists, architects, engineers, etc. This is important because professionals are normally unable to use most asset protection methods to avoid professional liability.

The QPRT also provides additional tax benefits. Transfers made during your lifetime are subject to gift taxes, and transfers made after you die are subject to estate taxes. With a QPRT, your children will be able to get a substantial discount on gift taxes owed. In addition, all future appreciation will be excluded from your estate, and it will not be subject to estate tax upon your passing.

Tip 4: Act Now BEFORE Problems Arise

A key point to remember is that most of these asset protection techniques must be put into place before the possibility of a creditor claim or lawsuit occurs. For example, the client mentioned above was already facing a lawsuit, and so it was too late for him to set up a QPRT. If he had set up the QPRT earlier, he could have protected his home. It is very important that the QPRT planning is done before problems arise.

Conclusion

There are many additional techniques that can provide creditor protection, as well as tax benefits. Please contact our offices if you wish to get a more detailed review of your assets and the techniques that would allow greater creditor protection for those assets. The QPRT is an advanced estate planning technique, and there are many other factors to consider before creating one. If you have questions about the QPRT or other techniques, please call our office.

The Law Offices of Ernest J. Kim has offices in Irvine, San Francisco’s Financial District, and Los Angeles. The law firm focuses on estate planning law, including preparation of living trusts, powers of attorney, marital property declarations, wills, irrevocable life insurance trusts, family limited partnerships, charitable gifts, private foundations, and other irrevocable trusts. Tax analysis is also provided for those with estates in excess of the exemption limits. After-service includes trust administration services, estate tax returns, probate filings and probate administration. You can visit their law firm website or call them at 1-800-793-5633.

Has FMLA/CFRA been good for the workplace?

Ever since FMLA went into effect in 1993, it has been a success. A U.S. Department of Labor report issued in June 2007 found employee reactions to FMLA to be uniformly positive. The report referenced a 2000 Westat Report which had found that “89% of employers reported that the FMLA has had either a positive or neutral effect on employee morale”. Numerous employees also commented that FMLA encouraged a “greater sense of loyalty to their employer”.

Nevertheless, some argue that FMLA/CFRA does not go far enough. I have already posted about how U.S. leave policies continue to lag far behind those of other countries around the world. See “U.S. FMLA/CFRA Leave Lags Far Behind Rest of World”. The AFL-CIO also cites a national survey conducted by the National Opinion Research Center of the University of Chicago which found:

1. the U.S. ranks at the bottom of 21 high-income nations in providing parental leave for workers
2. 1 in 6 workers were fired, disciplined or threatened by their employer for taking time off for illness or to care for a sick family member
3. Nearly 50 percent of private-sector workers and 76 percent of low-income workers have no paid sick days

It isn’t hard to understand why better leave policies would be better for everyone. According to Deborah Leff, president of the Public Welfare Foundation, paid sick leave is not only good workplace policy, but “good public health.”

The lack of paid sick days has real consequences for Americans forced to choose between losing a day’s pay or going to work sick. It’s difficult for employees to be productive when they are not well. They also expose co-workers and customers to illnesses.
“Sick and Fired: U.S. Workers Struggle Without Paid Sick, Parental Leave”

Employers complain that leave policies can be difficult to administer and that leave abuse is rampant.

Marc Freedman, director of labor law policy for U.S. Chamber of Commerce, had this to say:

It’s just too confusing and too vague. Right now, the system is such that it allows an employee who wishes to, to game the system.
“Do employees abuse the Family and Medical Leave Act?”

But employers should be asking themselves, is it really in their interests to have sick employees or employees with sick family members reporting to work for fear of losing pay or their jobs? Because the data suggests that that is exactly what is happening. The Institute for Women’s Policy Research conducted a study that concluded improved medical leave laws could save the U.S. economy $8.1 billion a year by preventing lost productivity due to sick workers, the spread of illness to co-workers and customers and worker turnover.

Besides, a suspicious employer can always ask the employee to undergo a second examination in order to get a second opinion whether medical leave is really justified. It is difficult to understand why more employers don’t take advantage of this little-used regulation.

If you believe your employer has interfered with or retaliated against your medical leave rights, contact a lawyer right away as strict filing deadlines may apply.

Am I eligible?

Unfortunately, FMLA/CFRA does not protect all workers, only those who have:

• worked at least one year for their employer,
• have worked at least 1,250 hours in the past year, and
• whose employer has at least 50 employees working within 75 miles of the employee’s worksite.

According to U.S. Department of Labor June 2007 report, the eligibility requirements for FMLA/CFRA means that only 76.1 million workers out of 141.7 million total U.S. workers, or 53%, are eligible for FMLA protection (the other 47% have to rely on their employer’s leave policies).

How much medical leave is allowed under FMLA/CFRA?

Under FMLA/CFRA, employees are entitled to take a maximum of 12 weeks of unpaid medical leave to care for a newborn, newly adopted child, seriously ill family member or for their own serious illness (under FMLA but not CFRA, this includes incapacity due to pregnancy, childbirth or related medical conditions). You may be entitled to an extension of leave past the 12 week maximum if you have a mental or physical disability that requires a leave extension as an accommodation of that disability (this assumes the employer is aware or has been informed of your disability and/or associated work restrictions). It is illegal for an employer to treat you differently or punish you for taking medical leave. You also have a right to be reinstated to your position upon return from your medical leave unless you are a “key employee”.

Is the leave paid or unpaid?

FMLA/CFRA (and PDLL) leaves are unpaid. According to the AFL-CIO, the lack of paid leave ”presents a significant obstacle for those who cannot afford to take FMLA leave”. This claim is backed up by a 2000 Westat Report which found that the most commonly noted reason for not taking leave was inability to afford it.

Of course, if you’re lucky, your employer will choose to pay you during such leaves, or apply your paid sick leave/vacation time to your medical leave.

What if I’m pregnant?

If you are incapacitated due to pregnancy, childbirth or related medical conditions, you may qualify for 4 months of leave under the California Pregnancy Disability Leave Law (PDLL). You can then take an additional 12 weeks of CFRA (but not FMLA) leave “for reason of the birth of her child, if the child has been born by this date” and assuming you have enough time left in your CFRA bank. 2 Cal. Code of Regs. § 7291.13(c).

Note, the above eligibility requirements for FMLA/CFRA do not apply to PDLL. To qualify for PDLL, you need only work for an employer who has 5 or more employees.

Conclusion

In Part 2, I will discuss whether FMLA/CFRA has been good for the workplace and what further improvements can and should be made, if any.

If you believe your employer has interfered with or retaliated against your medical leave rights, contact a lawyer right away as strict filing deadlines may apply.