TorteDeForm

Justinian Lane

The "reform" movement’s silence speaks volumes about their true motives

Read enough "reform" literature, and you'll see the same themes, repeated over and over again.  They include:

  • The contingency fee system encourages plaintiffs' attorneys to file frivolous lawsuits
  • The court system is clogged with thousands upon thousands of questionable lawsuits, thus depriving legitimate litigants of their day in court
  • Rent-seeking attorneys actively seek out lawsuits, sometimes even manufacturing cases by paying plaintiffs
  • Plaintiffs with small injuries sue for big money

The following article illustrates every one of these litigation sins, yet the "reform" movement isn't complaining:

Cook County Circuit Court has been turned into a frenetic debt collections machine, a reflection of easy credit gone sour and a collections industry determined to get paid.

More than 119,000 civil lawsuits against alleged debtors are clogging courtrooms, and at least half will result in judgments that debt collectors will use to dock wages, seize bank accounts and file liens against homes, compounding the woes of troubled borrowers. (Emphasis added.)

But because debt collectors operate on volume—pushing through lawsuits based on little more than lists of names, addresses and alleged amounts due—there are also plenty of instances of mistaken identities, cases where debts are alleged when the bills have been paid and even situations where people have fallen behind and tried to work out repayments only to be hauled in to court.
"The system is out of control," said Michelle Weinberg, a supervisory attorney at the Legal Assistance Foundation of Metropolitan Chicago. "It's one thing to call a debtor on the phone. It's another thing to file a lawsuit in court." (Emphasis added.)

....

A new breed of collector has transformed the industry in the last decade, purchasing distressed debt from credit card issuers, retailers and other consumer lenders. Debt buyers usually only pay pennies on the dollar for packages of unpaid bills that include limited electronic information about the borrowers. [This isn't much different than what Milberg Weiss did, when you think about it.  That firm paid plaintiffs so it could bring suits on their behalf.  Debt collectors are paying creditors for the right to bring suits, too. - JCL]

....

Since 2000, the number of debt-collection cases in Cook County has more than doubled, to an estimated 130,000. The vast majority of suits are against Chicago residents. In 2007, debt collectors obtained 60,699 default judgments where the accused debtor did not appear in court.

....

Consumer groups say the high number of default judgments can mask flaws with the lawsuits. Credit agreements and payment histories are often not included when suits are filed. Instead, debt collectors file an affidavit attesting to the validity of the debt, and it's not unusual for that affidavit to be erroneous, said Bob Hobbs, deputy director of the National Consumer Law Center. (Emphasis added.)

Andersen acknowledged that there is ambiguity about the minimum evidence needed to verify a debt. In New York, an Urban Justice Center study in 2006 found that in 99 percent of a sampling of default judgments that the evidence used to obtain the judgment did not meet the state's legal standards. (Emphasis added.)

Source: Debt collectors pushing to get their day in court -- chicagotribune.com

(Hat tip to Consumer Law & Justice Blog)

Look at that last highlighted portion: The vast majority of debt collection suits end up with a default judgment.  And 99% of those default judgments are based upon legally insufficient evidence.  That means that the majority of debt collection suits aren't supported by legally sufficient evidence - they're truly frivolous lawsuits.  In Chicago alone, debt collection agencies have filed over 100,000 frivolous lawsuits, yet the "reform" movement isn't working to put a stop to their practices.  Why not?

Because for all their talk about restoring fairness & predictability to the justice system, many "reformers" actually have one simple goal: To make it harder for individuals to sue corporations.  In their eyes, the only good plaintiff is a corporate plaintiff, and the only defendant unworthy of protection from suit is an individual defendant.  To many "reformers," this is how the court system should function: As a tool for businesses to use against each other and against individuals.  Fairness has nothing to do with it.

One hundred and nineteen thousand lawsuits, in just one city.  And the "reformers" declared a crisis when only 20,000 silica lawsuits were filed in the entire state of Mississippi.  Now, I know someone out there is chomping at the bit to challenge the legitimacy of those silica lawsuits, perhaps ready to point out that much of the medical evidence in those suits may have been fabricated.  But in these debt collection suits, the only evidence is often a self-serving affidavit prepared by the plaintiff.  An appropriate analogy would be if an individual filed a silica lawsuit and the only evidence submitted was an affidavit that they personally wrote.  It's an affront to the justice system to call such an affidavit "evidence."  Imagine the outrage if thousands of consumers sued a manufacturer based upon nothing more than an affidavit that said, "I bought Acme's product, and it injured me."

If groups like the Chamber of Commerce truly cared about protecting the civil justice system, they'd be spending some of their millions of dollars to rein in these abusive debt collectors who clog the courts with these truly frivolous lawsuits.  But the fact is groups like the Chamber are funded by debt collectors, and the Chamber isn't going to bite the hand that feeds it.

Justinian Lane: Author Bio | Other Posts
Posted at 2:28 PM, Jun 19, 2008 in Civil Justice
Permalink | Email to Friend


Comments

congratulations - I did not think it possible for you to reach this level of dishonesty. I was wrong - you did it after all !

Posted by: Paul W Dennis | June 19, 2008 11:05 PM

How can you possibly say reformers are ignoring this issue when Overlawyered covered this news story on June 9, ten days before you did -- the day after the news story came out.

(Paul Dennis, I think, has the right explanation -- given that you read the Overlawyered post and responded to it. You owe the world another apology, but given that you still haven't read The Product Liability Mess, and your post criticizing me for accurately characterizing a book you haven't read, we're never going to see you admit that you're wrong.)

Posted by: Ted | June 20, 2008 8:17 AM

I criticized the U.S. Chamber of Commerce for not spending money to end abusive debt collector lawsuits - not you, so calm down. Believe it or not, you are not the entire reform movement.

If you want to talk about your article, talk about it in the proper context. Your article tangentially used the Tribune article to argue that consumers are better off with arbitration. It didn't slam the debt collectors for filing frivolous lawsuits or clogging the courts. With all the ink you regularly spill over legally frivolous lawsuits and legally insufficient evidence, it's surprising you didn't at least mention that debt collectors are guilty on both counts.

If you're irritated that you didn't get proper attribution, I apologize. I had gotten so wrapped up in responding to your false claims about the benefits of arbitration that I had forgotten all about the Tribune article until I saw it again at the CLJ blog.

Oh, and by the way, were you ever going to admit that you didn't know how default judgments worked until I explained it to you?

Posted by: Justinian Lane | June 20, 2008 9:57 AM

Excellent post. Another theme is: anyone who presents a reasoned argument in opposition to tort "reform" is dishonest.

Posted by: Kia | June 20, 2008 11:06 AM

"default judgments"

Now you're just trolling, Justinian. Your post was wrong, and you were wrong even after you changed your position three times, as Lawyer pointed out to you.

Why are you here commenting instead of reading The Product Liability Mess, so you can apologize for your post criticizing me for accurately characterizing a book you still haven't read?

Posted by: Ted | June 20, 2008 12:31 PM

Ted, don't accuse me of trolling. Once again, you added nothing of substance to one of my posts, promoted your own site, and accused me of dishonesty; you're trolling.

The fact is you falsely represented how default judgments operate in federal court. I corrected you and quoted caselaw at length. Correct caselaw, which you haven't refuted, btw. I also didn't change my position once, let alone three times. My post and the law of default judgments speaks for itself, and if you want to debate either, do so in that thread and not this one. What you're doing here is commonly referred to as "thread crapping."

I'm not going to debate The Product Liability Mess with you in this post. I already pointed out that my problem with your characterization of the book was your failure to admit that the author disagreed with your interpretation of the work. Even if I agreed with your interpretation of the book, it would still be dishonest of me not to note that the author claims he meant something else entirely. You've stated that in the future you'll note the author's claim, so my work is done; you're now going to give readers all the facts instead of just those you like.

So when is Overlawyered going to run a lengthy piece about how debt collectors are relying upon insufficient and sometimes-false evidence to win judgments against debtors? Or do you only care about frivolous lawsuits when deep-pocket corporations are the defendants?

Posted by: Justinian Lane | June 20, 2008 12:51 PM

In other words, you still haven't read the book that you opined on.

Posted by: Ted | June 21, 2008 1:56 AM

In other words, you still haven't read the book that you opined on.

Overlawyered has run a number of stories on bad behavior by debt collectors in court -- including the one quoted in this post, where we beat you by over a week.

Not only that, we actually read the books we write lengthy posts about.

Posted by: Ted | June 21, 2008 1:58 AM

Too bad you don't read the Federal Rules of Civil Procedure before you write lengthy posts about default judgments in federal court.

And for the record, I didn't opine on the book. I pointed out how you dishonestly refused to acknowledge that the author of the book disagrees with your claims about the book.

So... are you ever going to actually address my arguments, or merely shout "read the book" at my every post? Perhaps it would be easier if I just grant you a running objection so you can quit wasting everyone's time.

Posted by: Justinian Lane | June 21, 2008 12:10 PM

I see that not only do you not read books you opine about, you don't read the Overlawyered posts you opine about, either.

Posted by: Ted | June 22, 2008 8:58 AM