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BUYING JUSTICE
Chapter One: THE FACTS
OF LIFE IN AMERICAN COURTS:
MONEY MATTERS
Paul D- was a litigation warhorse before I was born and
an old friend of my father who I had joined in practice in the 70’s. Dad
had figured I would learn about the reality of the civil courts by
following Paul around and though my law school had allowed me to
practice in the criminal courts of Massachusetts for two years by the
time I graduated, we all recognized that the civil courts were a very
different arena. So, for the first few years of practice I worked a good
deal with Paul, a massive six foot three inch lion of a man, now
growing a bit stout, often rumpled, but still enjoying the theatre of
the court room.
He would stride into court, grinning and shaking hands
with the myriad other counsel who knew him, carefully polite yet
familiar with the judges who would watch him approach with amused
anticipation, for Paul knew how to charm a jury and laugh with a judge,
never taking the matters at hand so seriously that he would become
intolerant of the give and take of the court room. His opponents were
always the “honorable gentlemen” or “learned lady,” the court always
“Your Honor,” the jury always an, “august assembly here to do justice,”
and the court room, “the center piece of American justice.” All said
with a slight smile but with an undercurrent of total conviction.
He practiced all over the San Francisco Bay Area and we
would spend hours driving to and from courts in his Cadillac, discussing
witnesses, the cases, the judges, truth and justice. He was a bit
dismayed at my intensity.
By then, I had already tried over a hundred cases in the
sordid and brutal criminal courts of Boston, its suburbs and Cambridge,
bitter crowded places of rancor, chaos and corrupt judges. One judge had
bellowed at me, “We don’t follow the Constitution in Charlestown,” quite
seriously. And he was right.
My law school had a clinical program where, after some
training, we law students were allowed to practice criminal law on our
own in their District Courts and I took full advantage, often having
four or five cases going at a time. I had become grim and determined,
built up a winning record by fighting hard and ruthlessly against the
DAs. In that system, we all knew that the judges and juries
automatically assumed the defendants were guilty and simply wanted the
trials over as fast as possible to “avoid wasting the tax payer’s
money.” I would argue back that the Constitution could not be ignored to
save money and worked day and night to get my clients out of the system.
Somehow I managed to convince more judges and juries than
I would have expected. But my law school clinical program career ended
with a true blow up. A reporter had been following me around on one case
regarding a fourteen year old child who had been arrested forty two
times, had been pled guilty by each public defender who had represented
him, had never had a trial and did not even know that the system allowed
him to have a trial. His crime was inevitably car theft…joy riding…but
by now he was automatically arrested by the police who had seen him in
court so often that they assumed he was the one who stole any car in
Roxbury.
He was surprised when I visited him in jail before trial.
No lawyer had ever done that before. He told me he had not stolen the
cart, had not done a lot of the past crimes he had pleaded guilty to…but
also admitted he had often stolen cars, “for riding around in” in the
past. His voice became flat and hopeless when I discussed the evidence
since he knew very well that what he said did not matter. He would end
up in jail for three to four months regardless of what type of case he
had. The judge in juvenile court had sentenced him quarterly for years
now and knew him well.
I told him we would try his case before a jury and he
had just stared at me, wondering what the game was. Two months later he
was acquitted and the Boston judge, furious at the jury, staring at the
little boy who was literally jumping up and down with joy in the court
room, immediately revoked his past probation and took the now crying boy
away on the spot. The judge glared at me as I watched my client
disappearing behind the bars in the bailiff’s holding cell.
And the reporter who had been in the spectator section
had the story on the front page the next day. His description of the
judge was eloquent. The judge, now even more furious, called the head of
our clinical program and demanded that I contact the paper and deny the
story. The program head, a famous criminal lawyer in his own right,
looked at me curiously as I refused. I was young and outraged and had
seen my client put behind bars after an acquittal and was so angry my
hands shook. He glanced at my hands, sighed and leaned back in his
leather chair.
“Won’t make any difference, you know. The judge is a
political appointee. He’s not going to be replaced.”
“Doesn’t matter. The paper’s correct. I didn’t ask him
to do the story. Didn’t even know he was there. But it’s accurate.”
The professor stared out the window. Then he considered
me for a while. “You can never go back in that court room, you know.
Ever.”
“I don’t want to hurt the program…”
He laughed. “You know what’s good about this school? No
one takes us on. Ever. We own this town...but you show up in that court
room, he will nail you. You’re graduating soon, anyway…?”
“One month left.”
“Then it doesn’t much matter…You’ll go off to do
corporate law or environmental law in sunny California and no one will
remember in six months.” I flushed since he had accurately predicted my
plans. He picked up the phone, called the judge and told him on the
spot that our law school stood behind the story. From across the desk I
could hear the judge’s angry retort on the phone. But my professor only
winked at me. “Your Honor, our student claims the substantial accuracy
of the story and that means we would have to start our own staff
investigating if we wish to have him retract. That would take months and
require the involvement of administration. The Provost might very well
have to interview both the student and yourself. Very complicated
process”
And so it went for the next five minutes as the judge
backed down…but the last words I heard as I left the office were the
professor soothingly saying over the phone, “He’s graduating in a few
months. Off to California. I doubt if you will see him, again, anyway…”
And my client stayed in jail for four months with his
probation revoked.
Paul would hear such stories, shake his head at the
foibles of the lower criminal courts of Massachusetts, and pat my arm.
“They do odd things in some courts, son. Always have and always will.
But what can you expect for free work?”
I straightened. We were in a small restaurant near the
court house, eating bad sandwiches and waiting for the afternoon
hearing. “Free? What do you mean ‘free?’ I worked for that child as hard
as ever I did for any company...we’re talking of the rights of the
accused..…”
“But no money, don’t you see?” He looked at me and saw I
did not. “I don’t mean you altered your preparation because you didn’t
charge. I mean, there was no money in it. For anyone. Criminal law. A
loss of money no matter what…”
“Money? What does money have to do with it. We are
arguing for freedom of the accused….?”
“Sure. Four months in the life of a kid who never worked
a day in his life and stole cars half of the time. A judge who makes the
same salary no matter how hard he works or does not work. A DA with a
case load greater than he can handle. And you, a student almost done
with a prestigious law school, not being paid, ready to come out here
and see where law and money work in tandem…”
I glared at him. He smiled. “Yeah, I know, you don’t want
to hear it. But in this country…when we are talking of reality…you buy
justice. Buy it like any other commodity. You want a good car and not a
piece of junk to drive in? Buy it. Want a nice house and not a hovel?
Buy it. Want a nice suit and not jeans? Buy it….”
“Justice is not a house.”
“Neither is medical care and you buy that, don’t you?
Want the best doctor? Expect to pay him less than you pay at a clinic?”
He laughed now.
I stiffly retorted, “I happen to think I was better than
most of the private attorneys there by the end of my second year…”
“And I happen to think you were right. You are better.
And that, my boy..” He paused for effect, “is why you are here learning
civil law, being paid good money to do it, by people who have the money
to afford you. You could train on the indigent…you did train on them…but
once you graduated, you are here with me and the level of practice, the
type of judges, the types of courts, the types of adversaries….”
“That’s damned cynical, Paul,”
“That’s damned realistic. Yeah, I know you started a
foundation here. To represent some indigents. For free. You have some
volunteers….”
“Good lawyers and law students…”
“Sure. But how many cases can you handle? Three? Four?
Well, it’s the public defenders who handle 99% of the cases and those
guys are overworked and underpaid, just like the DAs. You know why?”
“Yeah, ..no money.”
“It’s all about money, boy, all about money. You find the
best justice where the people can afford to buy it and don’t you forget
it. Clients buy justice if they think it is worth it to them and those
that can’t afford it have to hope it trickles down anyway…;” He
laughed, but without humor. “And…the amazing thing is that it works so
well…” He thought for a moment. “It’s like capitalism, isn’t it? You
wouldn’t think an economic system based on greed and making money would
create all this wealth and the good life, but it does. And our legal
system works just the same. Good justice based on money being passed
around to those who provide it.” He saw my expression and changed the
subject to the trial we were starting that afternoon.
It was twenty years later after O.J.’s acquittal that I
heard from him again. By then he had long retired and was living in an
assisted living facility, having suffered several strokes. His voice was
a bit slurred but I could tell he was laughing. “You saw the verdict,
right?” I acknowledged I had. I pointed out that concerns of racism
played a large part in the acquittal and that the police had badly
bungled the case. But Paul was having nothing of it. “Money. Simple
money. The DA works for the government on salary. OJ bought the best
money could buy. He bought the justice.” He laughed again. “You get what
you pay for, boy. What you pay for.”
He died a year later, and I am sure he laughed and argued
his way into heaven.
Chapter Two: CRUSHING
THE OPPONENT WITH DOLLARS
“So it’s like this,” I said to the Japanese executive who
clearly was not happy to be sitting in a lawyer’s office in San
Francisco discussing why he breached the agreement. “One buys justice.
Each side pays for the best attorney it feels is warranted, each
attorney puts on the best case that he or she can, acting as
adversaries, and the judge or jury decide who is right. The process
takes two to three years, and most of that time is taken up with
discovery.”
He raised his eyebrows. This was in the early eighties
and most Japanese business people were just beginning to learn the
foibles of the American system. I went on. “Discovery allows both sides
to submit written questions that the other side must answer and to
actually ask questions of them under oath before a court reporter…no
judge there…and the transcript of the examination may be used in court.
Those are called depositions.”
He said nothing.
“We can also ask them to produce any documents we want
that are relevant. Can even inspect premises or ask them to admit if
certain facts are true. All this any American attorney can do. Unlike
Europe or Japan, such discovery is the meat and potatoes of any case.”
“Meat…?”
“The essential part of any case. Most cases are won or
lost in deposition. Skilled counsel can look over the transcripts and
pretty well determine who is going to win or lose. Most cases settle.
Ninety percent never go to trial…but almost all proceed through
discovery…and if they do not settle, then the depositions can often win
or lose a case at trial. If they change their testimony or deny they
made an admission in the deposition, we can impeach them before the
jury.”
He did not seem impressed. “In Japan, we have trained
judges who investigate and determine the truth of the matter. They do
not practice law as advocates. They are only judges and their job is to
find the truth, not rely on others to present their versions of the
matter to them.”
“Yes, I know. But here we have the adversarial system. It
is assumed that an essentially passive judge, listening to two committed
advocates…each representing each side as best as they can…will discover
the truth.”
He smiled slightly. “That is like saying if I mix two
colors and throw them at the wall, the resulting mix will be more
beautiful than either color.”
I smiled back. “That can happen. Blue is my favorite
color and comes from that mix.”
“Yes…but most usually all that happens is black.” He
sighed. “But you and I cannot alter the system. We must work within it,
of course. It will be expensive?”
“Yes. Each deposition costs perhaps five to eight hundred
dollars an hour and if there are multiple parties, you can have half a
dozen attorneys all charging at the same time.”
“As here.”
“As here. Depending on the number of witnesses, a case
can easily have a dozen depositions, each costing five to twenty
thousand dollars for each party. They are powerful tools. But very
expensive.”
“Yes. And in the United States, the winning side does not
necessarily get paid his attorney’s fees that he had to spend, is that
correct?”
I was watching his face. He knew where this was going.
“That is correct. Unless you have a contract to the contrary or a
special statue is involved. Each side pays their own attorneys…”
“And there is no limit on what the attorney’s fees may
be? I could spend fifty thousand dollars over a five thousand dollar
matter and force the other side to do the same?”
“That happens. People get emotional. And if your opponent
starts spending money, you normally have to match it or face losing the
case. “
“In Germany, the winning party always gets the attorneys
fees from the losing party.”
“Not here.”
“Not here.” He paused. “Very well, I wish you to expend
one hundred thousand dollars on this matter within the next four months,
please. More, if possible, but at least that.”
There was a moment of silence. “That can happen but need
not. We can limit the costs of the depositions by not taking all of them
immediately and perhaps seeing if we need to take the latter ones based
on the testimony of the former ones…”
“No. Please. Take all of them now, if you can. I am
prepared to spend the money.”
I did not like how this was developing. Another moment of
silence before he continued. “Our opponent is…a “start up” I think you
call it. I happen to know his budget for the entire matter is less than
seventy thousand dollars. If he spends this much immediately, he will
not have resources to continue the matter after that. He will settle. Or
he will lose.”
“The ethical rules do not permit me to merely take
depositions to crush a person. There must be legitimate legal grounds…”
“And there are, are there not? You do have legitimate
questions to pose for the fifteen or so witnesses we have already
discussed? You said you would eventually need to do that…”
“Yes…”
“So, please do them all at once. Money will decide the
matter. That should not concern you. This is a fight about money, after
all. Why should money, then, not decide it right now?”
I leaned back in my chair and wondered why he was
annoying me so much. He had just told me I would earn a lot of money
quickly. He was right that the depositions were legally justified. He
was right that we would probably bankrupt our opponents by using a
“scorched earth” type of litigation technique that they could never
afford to match. It was entirely ethical so long as there were valid
grounds for the discovery. He was watching my face, his head tilted
slightly. “I have insulted you, I can see…”
“No, no. I have just not heard the matter put so bluntly
before. It does not sound pretty.”
“Pretty?” He smiled. “Your system is, forgive me, not
very pretty. If one buys justice…as you put it…then how can the man with
less money hope to compete? I am simply putting the matter, however
crudely, forward as the most appropriate tactic to cut this sad matter
short…”
“Our system is, in my opinion, the fairest and most
carefully constructed system of procedures to achieve justice ever
created…”
“Yes, yes, I can see you are sincere. But…forgive me
again…a system of complex and complete rules that depends on money to
achieve its ends is, by nature, incapable of fairness in many instances,
is it not?”
“There are special rules that allow the truly indigent to
have filing fees waived and public access to attorneys such as legal aid
programs…”
“Which are over burdened, are they not? And not available
for the middle class, correct?”
“And contingency arrangements are often available.
Personal injury plaintiff cases are usually contingency and they make up
the bulk of the cases the average American files.”
“Do they have any choice? They would perhaps file more if
they did not have to exhaust their resources to file claims for beach of
agreements and such….but we digress. Will you commence the case as I
suggest? Within your Code of Ethics limits?”
I paused but could see no reason not to comply. “Yes…yes,
of course.”
The defendant lasted longer than we thought….his budget
was somehow expanded to perhaps one hundred and fifty thousand dollars.
But, six months later, he finally was forced to settle. My Japanese
client considered the process as both predictable and a modified form of
bribery.
““I have spent two hundred thousand dollars making sure
your court system would crush the opponent due to his lack of
resources.”
“You spent two hundred thousand dollars preparing your
case and if we had gone to trial we would have won based on that
preparation…”
“Yes, yes, I am sure you are right. But the economics of
the situation have trumped…that is the right word? Trumped? Trumped the
ability to have the trial. What was our opponent to do once we decided
to spend the money necessary to try the case fully?”
“If he had created the right contract…one providing for
attorneys fees to the prevailing party…the game would have been far
different.”
“So you tell me. But that simply means that wise parties
can create paperwork to do that which your court system should do
automatically. Such as Germany does, correct?”
“Yes, I suppose…”
“Do not appear so grim, Mr. Stimmel. You prospered. I
prospered. And since you feel we would have won the case, justice
prospers, no?”
I had no ready response. But somehow….somehow it was not
very satisfying.
Chapter Three: Changing
the Rules
It was Jim’s biggest contract and his biggest chance to
“move to a higher level of customer,” he told me, a little breathlessly.
He was an electrical contractor who had worked his way up from
residential to small office buildings and was now looking at a contract
which exceeded seven figures and would take his entire crew over a year
to complete. The customer was a large warehouse style retail outlet who
was opening two local branches and Jim’s company was contracting to take
on the entire job.
The contract was the size of a small novel. Its table of
contents was four pages long. The customer was in an expansion mode and
had developed its form contract for use in two dozen states and fifty
different projects. Jim took one look at the massive document and came
in to discuss it.
He watched warily as I flipped through the many pages. He
licked his lips and leaned forward. “You know we can’t really ask for
too many changes. I mean, if they don’t want to work with us, there are
a dozen other contractors ready to grab the job. I just need to know the
important stuff. Really important stuff…”
He and I had gone through some pretty tough litigations
on some past smaller jobs against recalcitrant general contractors and
owners with good success using his own contract. Thus, when I gave him a
long look he already knew what I was going to say. He grinned. “Yeah, I
know. Some time spent being careful now can save tens of thousands
later…Yeah, yeah, I’ve seen that.”
“It’s more than that, Jim. Much more.” He leaned back
in his chair, interested. I leaned forward. “You’re in the big leagues
now. Dealing with companies that keep a staff of attorneys on payroll
and who are engaged in a dozen litigations each month. These are not
just pros at selling gadgets to consumers. These are pros at
litigation…and pros at writing contracts that make you twist and turn.”
“There’s a lot of money at stake here and I need the
business.”
“Understood. But let me ask you this. See this clause
here? Number 12.6?”
“Yeah.”
“It says they can alter the contract at will. Any time.
Based on their own needs. And you have to adjust.”
“Yeah. But…”
“Let me finish. So they tell you they decided to cut your
contract in half and give it to someone else…someone who they found who
is cheaper. But you’ve already geared up for thirty men on the job and
now have to cut to fifteen. And have no work for the fifteen laid
off…and no jobs outstanding since you did not bid any, thinking you
would put all your men in this job.”
“But that would cost them, too. Gearing up someone else.”
”Maybe…but the real point is it gives them power over
you, does it not? They tell you they are planning to cut you in half
since they found someone cheaper…but won’t do it if you cut your price
by ten percent. You’d have to go along with that, right?”
A long pause. “Yeah.”
”Or let’s just be brutal and say they breach the
contract. Refuse to pay you part of it claiming your work is
substandard. And you have to go to court. There is no
arbitration clause. No attorney’s fees clause awarding
fees to the prevailing party, right?”
“Yeah.”
“Which means they could spend two hundred thousand in
fees in the first year of the case. Meanwhile, you’ve left the job since
they aren’t paying you, you have to pay me two hundred thousand to fight
them while scrambling to get more work since this job ended too soon.
You don’t get back my fees even if you win since it’s not provided for
in the contract…you’d only get your lost profits, not your attorney’s
fees, right?”
He said nothing, just looked grim. I went on. “They have
their own staff of in-house lawyers. They make ten million or more a
month in net profit. If they have to spend a few hundred thousand in six
months to drive you into the ground…do you think it would hurt them?
After a few months you’d have to settle for whatever they want to offer.
You’d be broke and have no choice. They can set the terms.”
He said nothing, just looked at the contract. I went on.
“Put even more simply, the contract is like a gun. Either side can use
it to enforce its rights. But if they have the money and they have the
power….then they have bullets in that gun. Do you?”
“You assume the worst in them. They seem decent people to
me.”
“And they probably are. And all this probably won’t
happen. The point I am making is that this contract gives them all the
power and you have next to none. Even if the contract was fair, they
have so much more money that they can afford to grind you into the
ground and you’d have to settle for anything to avoid having to pay me
more than you have.”
“That’s not right. I mean, we’re supposed to have a
decent system of justice, aren’t we? How can it be if they can crush me
like that?”
“Jim…you buy justice in this country.” I thought of Paul
D and knew that somewhere he was smiling. “They can afford more justice
than you can and they can use that to their advantage. But there are
ways to equalize the resources so you can each afford pretty much the
same. But that means you have to work on the contract to even the
playing field. If you don’t…then this
contract may look like you each
have the same right to go to court…but practically speaking, that right
is useless to you. That can be altered by the right contract.”
“You don’t have to buy justice if we rewrite it?”
“No, can’t do that for you…but I can make it so that you
both have about the same pocket book in the end. Using
arbitration we can cut the cost of litigation so that
both sides can afford it equally. And by awarding attorney’s fees to the
prevailing party, you are made whole if you win…which is critical for
your cost benefit analysis of the entire case.”
“But how about their ability to simply replace me at
will?”
“That’s a different issue and we should fight that
clause…but in terms of having realistic enforcement power in the
courts…a few clauses allows both sides to buy justice. Without that, the
rest of the contract matters little…”
“But the contract protects me…”
“Not if you do not have economic ability to match their
litigation budget. Either you have to be a lot bigger and richer or we
have to alter the forum to one in which both sides can afford the
fight…both sides can afford the justice.”
“Arbitration?”
“And attorneys fees paid to the winning party. With
arbitration discovery is strictly limited in most cases…no depositions
or perhaps one. In litigation you could have twenty depositions. And
that makes up half the cost of a case. And a jury trial costs four or
five times more than the average arbitration.”
“OK. Got it. But it will still cost a lot, won’t it?”
“It’s all relative. A full bore construction jury trial
over a complex contract could easily cost you five hundred thousand to a
million to try and take three years. That same matter before an
arbitrator or panel of arbitrator will take less than a year and cost
you less than a hundred thousand. And…”
“”Yes?”
“They can’t pump up the cost much. Can’t start really
expensive discovery. They can up the cost of an arbitration a little…but
not much and with an attorneys fees clause, we get it back if we win.”
“But if we lose?”
“We end up paying their fees, quite likely. So…we had
better be sure of a strong case before we begin. But the main point I am
trying to make is simple: if you have to buy justice, go to a store you
can afford. Don’t try to outbid them at Tiffany’s. Buy your justice at
Wal-Mart and if they have to do the same, you have a chance.”
He looked at my ceiling for a few moments. Then smiled.
“But they will have figured it out, right? They won’t go for it.”
“It’s a great test of good faith. Arbitration is far from
perfect…but it’s fair and cheap. And big companies fear juries. If they
refuse arbitration, you might want to wonder why. It may mean they are
predators…”
“Predators?”
“Some big companies use the courts to destroy subs who
have done their job. It’s cheaper than paying them the rest of the
contract. I doubt if these guys are like that…but if they refuse
arbitration, you might want to check them out a whole lot more.”
We went through the rest of the contract, taking half a
day, and spent the next week negotiating it with their in house counsel
from New York. Tough negotiation and much give and take, but we did get
arbitration and the attorneys fees clause and the job went well. Did the
clauses matter? Not in that job….
But two jobs later Jim was saved by that very arbitration
clause that he had by then insisted upon in every contract with a large
entity. As we discussed enforcement of the arbitrator’s award, including
attorneys fees awarded to us, he looked up suddenly and smiled. “Cheap
justice isn’t so bad, now is it?”
Since we had spent over a hundred thousand to get that
award, I raised my eyebrows. “Cheap? Most of the world couldn’t even
afford this arbitration.”
“True. But given the alternative…a million bucks spent in
a trial against a multinational conglomerate, this seems pretty good.”
I nodded. “You know that old saying, ‘Justice delayed is
justice denied?’”
“Yeah?”
“Well it has a corollary. ‘Justice that cost too much is
justice only for the one with the most money’.”
“Not very pretty.”
“Truth is not always pretty, Jim.”
“But winning is…”
“Now THAT is true…” |
