Ethics Observations On The Financial Massacre Of The Aurora Massacre Plaintiffs

James Holmes’s 2012 attack on the Century Aurora 16 movie theater showing “The Dark Knight Rises” killed 12 people and wounded 70 others. Many of the survivors and relatives of those killed sued Cinemark, the theater’s owner, in state and federal court, arguing that lax security was the cause of the attack. Cinemark’s defense was that the shooting was unforeseeable. Two suits went forward, one in state court and one in federal court, with different plaintiffs. Cinemark prevailed in both. After the recent jury verdict for Cinemark in the state court case this summer, the company had sought nearly $700,000 from the victims under the “loser pays” Colorado law, which directs that the winning side in a civil case is entitled to recover its legal costs from the losing side. This is the predominant system in England and Europe. The litigation costs of Cinemark in the federal case are likely to be more than $700,000, maybe a lot more.

What’s going on here (the best question to begin any ethics inquiry)? Well…

1. The law suits were a terrible idea. This was the result, in part, of the increasingly popular ideological virus in our society that is slowly reprogramming previously functioning brains to believe that nobody should have to pay for their misfortunes, and that somebody with deeper pocket and more resources should always be obligated to pay instead. This is increasingly a staple of leftist thought: the government, insurance companies, corporations, people with more money, all of them should be potentially on the hook when misfortune strikes others, because that’s fair.

2. It’s not fair, though.  It is profoundly un-American and unethical.

If those parties have caused the damage, or had the power and responsibility to mitigate it, or promised to pay for it, then there are ethical arguments to support them paying some or all of the expenses. But if something terrible happens to you, those people should have no more obligation to be accountable for your harm than you should have responsibility for taking care of them. That’s not the message sent by the culture though. Lawyers love the message that if you are harmed, somebody else can be found to ease your pain. They love it, because they can share in the bounty if a lawsuit seeking damages prevails, and this attitude guarantees more lawsuits.

3. It was predictable that these lawsuits against the  movie theater would be filed, because there was bound to be  greedy and/or incompetent lawyers who would take the cases. It was not a suit that should have been brought, however, and the plaintiffs should have listened when lawyers told them that, as I’m sure some did. Do you know how many mass shootings there have been in movie theaters? None. Zero. Rival gangs have had shootouts at a drive-in, and arguments have escalated into violence in ticket lines, and individuals have been attacked and killed for talking during a film, and movies about violence have sparked riots. No one, however, had ever done what James Holmes did, so it was ridiculous to try to make the theater pay damages because it didn’t anticipate what had never happened before.

4. The law suit was not technically frivolous, since it argued for a new standard of liability, so it was not an unethical lawsuit in legal ethics terms. It was still, however, an unethical lawsuit—in universal, right and wrong terms— that aimed to punish a corporation that did nothing wrong, based on the unethical principle that we are not responsible for the burdens of our own misfortunes. The lawsuits failed the Rule of Universality—would we want such a principle to apply to all tragedies?—-the Golden Rule, and utilitarianism. In an article about the case in the Los Angeles Times, victim and plaintiff Marcus Weaver is quotes as saying, “We all knew they were liable. We knew they were at fault.”  How did they “know” that, since the theater management wasn’t liable, and wasn’t at fault? Who gave them the bizarre idea that it was? What lawyers failed their ethical duty to explain that the culture pf blame-shifting for catastrophes had warped their common sense and values?

5.  If the plaintiffs in Colorado were not informed by their attorneys that there was a real risk of their woes being magnified by having to pay litigation costs after they lost, which was likely, that was unethical, as well as malpractice.

6. According to the Los Angeles Times,  the federal judge overseeing the case told the plaintiffs’ attorneys that he was prepared to rule against their clients, and urged the plaintiffs to settle with Cinemark. What? Judges can’t do that! They can’t give one party a heads up on what he’s going to rule so they can get a settlement from the party that doesn’t know what the other party knows! No such settlement would be enforceable. I presume the judge will be hearing from the judicial discipline committee.

7. The illicitly-planted settlement, which would have given plaintiffs $150, 000 to split rather than the millions they were seeking, fell apart because a single victim refused to accept it. Her child was killed in the shooting, she was left paralyzed and the baby she was carrying had been lost, so she had reason to be unreasonable and selfish…but reason to be unreasonable and selfish isn’t justification. Her stubbornness, be it born of frustration, anger, misery or an obsession with revenge, was irresponsible and destructive, and he lawyer should have told her so, and perhaps did.

8. Because of the single victim who felt entitled to place the other plaintiffs at risk in the hope of a miracle that wasn’t going to happen, the loss of the case placed the burden of more than $700, 000 dollars on the victims, as well as additional costs of the federal suit. Many will say that this is unfair to the victims. I hate loser pays as public policy, but it certainly isn’t unfair in a case like this. Cinemark was forced to spend well over a million dollars because a lot of people randomly harmed by a madman felt that the law should redistribute misery. It was a wrongful, unfair, dangerous lawsuit, Imagine what measures would have to be put into place after Caremark lost, in every movie theater in the country. Airport-style security for moviegoers, pat-downs, armed guards, wildly increased insurance premiums, extra exits in theater. Heck, who knows what else? Bullet proof seats? Silent buzzers to summon police for a once in a millennium event? The inevitable result would be higher movie tickets, as you and I would have to pay for a lone gunman’s act in Colorado. A possible result would be the end of the movie industry.

9. The victims deserved to lose. Everyone should be thrilled that they did.

10. Today we learned that Cinemark has offered a deal in which it will drop its claims for litigation costs if the victims will agree not to appeal the cases. This is a wise move, if only from a public relations standpoint. Maybe it is a deal inspired, at least in part,  by compassion, which would make it an ethical move as well.

11. All but four plaintiffs have agreed to this settlement, meaning that if they do forward with appeals and lose, as they should, the four will be solely responsible for the costs. No one should feel sorry for them when they do lose. They are rolling the dice, gambling hundreds of thousands of dollars that they will get lucky with an unjust ruling.

12. How do you like your loser pays now, Rosie? In 2007, Rosie O’Donnell shot off her big mouth on “The View” to the effect that the U.S. should have a loser pays system. The problem with “loser pays” is that while it discourages bad suits, long-shot suits and ill-conceived suits like these, it also discourages legitimate suits in cases where the litigation costs will soar and one of the parties is much better equipped to pay for them. I explained this on the old Ethics Scoreboard, and in 2010 re-posted that piece here, when  loser pays raised its ugly, misshapen head again. An excerpt:

…Why don’t we have the British system that turns every lawsuit into a major financial risk to the plaintiff? We don’t have it  because it would effectively cut off anyone without millions of dollars to burn from redress from major injuries caused by large and wealthy organizations. America has a contingent fee system in personal injury cases, which means that lawyers get paid only if a case prevails. It also has a system of court-ordered punishments, including court costs and fines, for plaintiffs and lawyers who bring absurd lawsuits…

Rosie’s brilliant solution would discourage even the most deserving plaintiffs from suing corporations that sold them deadly cars, bad drugs, fatal toys and other defective products. It would make it harder for working parents to sue negligent hospitals that left their child blind and brain-damaged, and careless surgeons who amputate wrong legs or miss obvious tumors while examining patients. The Catholic Church would have loved Rosie’s system when it was being brought to court for allowing sexual predators to serially molest young boys.

America leads the world in product safety because victims of negligence and callousness can sue without fear of being clobbered by companies that can spend, or threaten to spend, millions in their defense. The big pay-off from contingent fees, some of which are certainly excessive, provides incentive for plaintiff’s attorneys to sink millions of their own into legitimate cases, allowing them to be tried.

[Loser pays] would be a gift to every manufacturer of a dangerous product, every designer who paid more attention to aesthetics than safety, every bad doctor, every careless driver, every dishonest insurance company, and every shoddy construction company.

 

 

23 Comments

Filed under Business & Commercial, Ethics Alarms Award Nominee, Ethics Scoreboard classics, Ethics Train Wrecks, Law & Law Enforcement, U.S. Society

23 responses to “Ethics Observations On The Financial Massacre Of The Aurora Massacre Plaintiffs

  1. Other Bill

    I had no idea any states in the U.S. had loser pays rules. Nasty.

  2. Phil Alperson

    You lost me at “leftist thought.” Are you the spawn of Newt Gingrich?

    • The left believes that all needs and costs of misfortune should be spread out across the population, regardless of individual choice, effort, merit, enterprise and fortune. Healthcare, food, education, housing, guaranteed jobs, with corporations and the wealthier (but not necessarily wealthy) paying the costs.You know that. Are you in denial?

  3. Arthur in Maine

    “[Loser pays] would be a gift to every manufacturer of a dangerous product, every designer who paid more attention to aesthetics than safety, every bad doctor, every careless driver, every dishonest insurance company, and every shoddy construction company.”

    Well, the Brits don’t seem to be overrun with dangerous products or shoddy construction companies. They do have a place for bad doctors, though… national health.

    I recall reading a pretty decent argument a few years back that would at least potentially create a solution to the issue of loser pays when an individual or small group goes up against a deep-pocketed defense. The solution? Bonding. Establish bonding agencies that will back a plaintiff. Plaintiff (or plaintiff’s counsel) only has to put up a reasonably small amount; the bonding agency covers the risk of the rest PROVIDED that the bonding agency can be convinced of a reasonable likelihood the plaintiff will prevail.

    This would essentially mean an independent review of the merits of a case in the very early stages.

    I think it’s an idea worth exploring. There are certainly some problems with the concept that would need to be addressed, but having worked in areas of risk management in the past, the biggest cost driver of the current tort system nationally really isn’t the chances that a plaintiff will win a a huge jackpot. It’s the smaller cases.

    Insurers know how much it will cost to defend a case that’s open-and-shut in favor of the defendant, So do the plaintiff’s attorneys. If the case will take $15,000 to defend, the plaintiff’s counsel will offer to settle for, say, $10,000 and defense is likely to accept, because doing so means defense only bills around $3k. Paintiff’s counsel pockets around $3K for spending an hour or two with the plaintiff and writing a few snotty letters, the plaintiff himself walks way with around $7k that he doesn’t deserve, and the insurance company saves $2K. Right and wrong don’t enter in.

    With bonding, it would seem that this is far less likely to happen.

    You’re the lawyer here, though, Jack. I’d be intrigued to know your thoughts on this option.

    • I am in favor of limited loser pays, where the loser pays if either is found to be true by a court.

      1. The plaintiff or the plaintiff’s attorney committed fraud before the court. (Obviously, only the attorney would be on the hook if only the attorney was found to have committed fraud before the court.)

      2. The defendant was entitled by law to have the case dismissed before trial, at then time the complaint was filed.

  4. 4. The law suit was not technically frivolous, since it argued for a new standard of liability, so it was not an unethical lawsuit in legal ethics terms.

    Arguments for new standards of liability are to be made before legislatures, not courts.

    Establishing or revising standards of liability is a legislative function. The judicial function is to apply these standards to resolve cases and controversies.

    A lawsuit that asks the court to apply a standard of liability not adopted by statute is per se frivilous.

    • A jury that finds a defendant liable on the facts when similar clients haven’t been is establishing a new standard.

      • That can be appealed of course. Juries are not supposed to set nwew standards.

        • Michael, tort law overwhelmingly evolves via case law, not legislative actions. THere’s no legislative definition of negligence. If a jury decides a theater is negligent not to prevent mad killers, the theater is negligent. If that verdict would violate law, then the judge shouldn’t let the case go to the jury.

          Strict liability began in courts, and was picked up in legislatures.
          Rule 3.1: Meritorious Claims & Contentions
          Advocate
          Rule 3.1 Meritorious Claims And Contentions

          A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law.

          If the court or jury can’t modify the law, why bother?

  5. JimHodgson

    I have no desire to see “loser pays” as the rule for all lawsuits, especially where product safety, negligence and resulting personal injury are concerned, but I also know firsthand that some categories of frivolous, baseless lawsuits are filed and allowed to proceed far too often, with little discouragement or punishment from the courts. I am speaking from my experience in assisting our county attorney and my previous employer’s liability insurance attorneys respond to lawsuits from terminated employees claiming wrongful firing from our Sheriff’s Office. Seldom was a summary judgement issued for our side, no matter how ridiculous or nonsensical the suit’s allegations. The attorneys would tell me,” I know the plaintiff says ‘X’ and your documentation clearly proves ‘Y,’ but apparently the court wants to hear what they have to say.” I have spent literally hundreds of hours gathering documents, being deposed and arranging depositions, and answering myriad questions from attorneys, all for “nuisance lawsuits” that were settled due to the high cost of continuing litigation rather than any wrongdoing on our part. As one of the insurer’s attorneys told me. “They sue for a million dollars but they will settle for the price of a new car.” Many of the plaintiff’s attorneys were very adept at tactics designed to so draw out the process and burden the our side with repeated requests for the same information presented eight different ways, hoping we would throw in the towel and tell the insurer, “Settle, already!” For the insurance carrier, it is just a financial calculation rather than a matter of who was right and who was wrong. And while the announcement of the multi-million dollar lawsuit is always front page news, the story about the puny settlement is always page 8, below the fold. A number of these suits, especially in election years, were politically motivated. “Loser pays” in such cases might have prevented a lot of taxpayer funds and resources being wasted on baseless lawsuits, and kept the civil courts from being used as some politician’s surrogate.

  6. At #8 – I’m a bit confused at this. The single victim hold-out was in the Federal trial. Aren’t the damages of $700k from the already concluded state trial?

  7. I was not following you back in 2001, but would you not agree that the ideological virus you speak of had its origins in the aftermath of the WTC. 3000 people lost their lives in an unpredictable and unprecedented act of belligerence. Our response was to make 3000 descendants of the victims (NB none of whom were heroes except for the first responders) millionaires

    • No, I’d say that was a major outbreak of the virus that was already well embedded in the national bloodstream, but that’s a perfect and glaring example. It was a purely emotional policy that defied precedent. The victims of 9-11 were no deader than anyone else who is killed by being in the wrong place at the wrong time.

  8. E2 (nee Elizabeth I)

    The key here, it seems to me, is what the plaintiffs’ attorney actually told the plaintiffs. Did they know what they were really risking? Did the attorney make it clear that they might, in fact, lose? That Colorado had this weird law that might come back to bite them? That juries could, and do, surprise you? Jack, to what extent would a plaintiff’s attorney, who really, really wants to take this to court, put all the negatives on the table as realistic outcomes? You know trial lawyers: how likely is this behavior on the part of plaintiff’s attorneys?

    “Loser pays” might, in just this instance, force attorneys — not potential plaintiffs because they are coming from an entirely different, and perhaps irrational, place — to be more realistic and honest about their chances for success, especially if the attorney is sued for malpractice in this instance,

    The concept that there is something to lose on both sides when a suit is per se frivolous will not be learned in the mind and heart: it will be learned in the pocketbook unless plaintiffs’ attorneys take the lead.

  9. Neil A. Dorr

    Jack,
    I’d be more inclined to agree if so many patent troll and personal injury attorneys didn’t work on contingency fees.

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