Casino Courts and Tall Stack Bullies

Most people think of the US Legal system as a place where Judges decide right and wrong, even if they don’t get who is right and wrong correct all of the time.  Which is why there are Appeals and Supreme Courts.  This condition is partially due to the simple fact that, hopefully, most people only get to see the inside of a courtroom on TV, whether fictionalized, reality TV, or through the lenses and filters of Cable News.

It’s due to these unchallenged notions, that anyone who is unfortunate enough to be on the receiving end of a civil lawsuit, that there’s shock and surprise when their attorney, who has been fully briefed on the merits of the case, suddenly turns the topic to “Legal Economics”, which is a euphemism for legal extortion.  It means the other party has the funding necessary to hire a legal team to make the process of fighting a case so expensive, that the best option is capitulate and pay the person who does not deserve it a settlement.

If you’ve ever played Texas Hold’em in a real casino, particularly on a no-limit table, you become acutely aware of the players who have overcome the initial buy-in limit and accumulated tall stacks of chips from which they peer over with their 23rd latte – having been there all night, the next morning and afternoon.

Tall Stack Bullies can wipe out your $100 buy-in in a single hand, if you aren’t careful.  And, theyHoldem_aces don’t give a hoot about having a non-suited 2-7 set of cards.  They know that for the fact that you have just put up an ante, and perhaps said yes to a raise, that you are likely to fold and give away those chips because they might be holding Pocket Aces.

When it’s your business or livelihood, your attorney will tell you that they may, in fact have a 2-7, but if they don’t, and you go all in, you could lose your whole stack. And, since all metaphors break down, maybe even more than that stack.  You could wind up indebted to the attorney who is supposedly on your side, even though, once again, the facts support you winning on the merits.

I happen to have had the unique experience of going up against a former business associate who has acted in this manner, who partnered with a plant in our company.  I believe they knew all along what they were doing and intended to crash our company and sell off the assets.  I have tons of evidence, written, and even verbal recordings.  But, after 2 years of litigation, even though it was referenced in pages and page of documents both my attorney and I presented (I self-represented Pro Se in one of two cases, all the way to trial, and partially in the other), few of these facts were ever reviewed, let alone presented, before a Judge.

As we are collectively learning, in the Age of Trump, sometimes, and that sometimes emphasis is important, facts just don’t matter.  They really don’t, and I’m going to help those of you about to argue with me in your head understand why.

It’s pretty simple: Because Rule 11, which is theoretically designed to protect parties from abusive attorney practices, and its associated law does not make the Plaintiff who loses a case pay for the legal fees of the Defendant unless a high bar of criteria is met.  As a result, few attorneys are sanctioned, and their bullying behavior have become normalized after decades and decades of abuse.

You have either been through this yourself and are nodding, or you are scratching your head and thinking I’ve spent a few too many years on conspiracy theories or in the legal haze of Colorado.  Give those nodding a chance to validate me before judging me.

In fact, you don’t have to believe me, an acknowledged left-liberal-hippie-progressive, that these abuses have gotten out of hand.  I ask that you consider listening to Rep. Lamar Smith, who authored HR720 The Lawsuit Abuse Reduction Act of 2017, which was read into the record of the 115th Congress (current), and is now before the Judiciary Committee.  It’s also over at the Senate where the Judiciary Committee Chairman Sen. Chuck Grassley has entered the identical bill, S.237.

Or, ask any of the 8 Republican Co-Sponsors, one of whom is Sen. Marco Rubio, and another is from Colorado, Rep. Ken Buck.  Yeah, this business-owning hippie is siding with the opposition on this matter.

I spoke to both Rep. Smith and Rep. Buck’s offices on Monday, March 6, as I saw this bill coming up for possible floor actions this week.  While there has been almost universal contention on a laundry list of issues since Trump was elected, I saw this as something where my experience was unique, and I actually had the ability to contribute and work with those whom I would normally disagree.

The change they’re proposing is surprisingly simple: Change the word “may” to “shall”. It means that instead of sanctions that “may” apply when an attorney is abusive, it “shall” apply.  In pure form, without further amendments, we revert to “loser pays”.

There’s another added paragraph:

in paragraph (4), by striking “situated” and all that follows through the end of the paragraph and inserting “situated, and to compensate the parties that were injured by such conduct. Subject to the limitations in paragraph (5), the sanction shall consist of an order to pay to the party or parties the amount of the reasonable expenses incurred as a direct result of the violation, including reasonable attorneys’ fees and costs. The court may also impose additional appropriate sanctions, such as striking the pleadings, dismissing the suit, or other directives of a non-monetary nature, or, if warranted for effective deterrence, an order directing payment of a penalty into the court.”.

If you’ve been through hotly contested litigation, you’ll eventually drop your jaw as the other attorney says something that is both pragmatic and simultaneously unashamed abuse.  The current legislation references this example lawyer-talk:

“I really don’t care what the law allows you to do. It’s a more practical issue. Do you want to send your attorney a check every month indefinitely as I continue to pursue this?”

Or, as the attorney we were up against said to me: “You need to settle. Mr. ______ is never going to stop!”  He hasn’t, by the way.

The irony of my life surprises even me sometimes.

I have that threat recorded, and lawyers don’t seem to care. There’s another stubborn fact in the way: It’s really really hard to get an attorney sanctioned for abuse. Like nearly impossible.  Even if I have evidence of perjury. Particularly if you are a small-stack pro-se litigant who can’t afford the deposition or filing fees.  You get bullied because you just don’t have enough chips to play in a casino you thought you had a Constitutional right to have your grievance heard within.

Here’s the thing: I know something most others don’t because I’ve won twice by not backing down to the bully. And, one of those times it self-represented all the way into the trial room.  Just like the fat guy with 23 lattes sitting on an unsuited 2-7, they keep that stone face all the way to the last tense moment when they fold. And, you don’t even get to know they had that 2-7.

Of course, the devil is definitely in these details. There was an attempt to address this in 1993 with an Amendment to Rule 11, and those proposing the current legislation claim that this change would result in a more pure system of “loser pays”, which would make the US system a bit more like the system in the UK.

If you read the House Report on HR720, there is quite a bit of reason you haven’t seen me reference Democratic Party support of this action, in spite of its apparent logic.  That could make me the rube, so I have to mention that this bill and change to our law does come with two big concerns: That this leads to a new abuse where “satellite litigation” then diverts attention from the merits of the case, causes additional expense, and merely makes the process of pursuing your legal rights even more risky should you decide to take on the Tall Stack Bully as a Plaintiff.  It also creates a mandatory requirement that disallows a Judge from applying discretion, which is a practice that has been disastrous in 40 years of War on Drugs cases.

And, of course, this isn’t the first time this law was proposed.  It’s identical to the Lawsuit Abuse Reduction Act of 2011. At that time, the American Bar Association opposed the changes, citing how the changes to Rule 11 in 1983 led to an explosion of Motions for sanctions until two things were changed in 1993: The ability for Judges to use discretion, and the so-called “safe harbor” rule, that effectively gave an attorney 21 days to withdraw the offending paper without bearing the consequences.  If they continued beyond that time, then the discussion about the action being willful, malicious, or outrageous conduct enters the picture.

According to those who still oppose it, there’s been relative calm since that storm of 1983-1993.  But, whether you’ve had an experience like me, or you simply observe how Donald Trump operated in over 3600 lawsuits over decades, there’s clearly still plenty of tall-stack bullying going on in our Casino Courts.  It may not be an epidemic, but it’s certainly disruptive to catastrophic to those who are abused.  I see no reason for inaction or waiting till a majority of Americans have experienced it.

So, while I have strong support for this change to Rule 11 overall, there’s clearly a need for input from the electorate that gets into these nuances.  If you read the House Report, it goes into all of these in fascinating detail with references.  It’s a bit wonky, but not too bad. Again, if you’ve ever been through this type of litigation, you’ll have flashbacks, I can almost guarantee.  Hopefully you aren’t in a state of PTSD.

There are legitimate concerns, and I’ll state clearly that I believe Judges should have discretion in applying penalties and repayment of fees. I do not believe in one-size-fits-all mandatory judgments. We have Judges for a reason, so they can apply judgement.  There is too much variation between cases to force a binary choice when there are many shades of gray.

There should be a period between giving notice of an impending Motion, giving the offending attorney time to withdraw.  Twenty-one days is plenty.  But, after that, the attorney proceeds risking peril.

I also believe there should be some exceptions. And, that’s where the thing we can agree upon for 99% of cases turns into an endless battle. But, in spite of quantity, those few cases where exceptions should apply shouldn’t be a system of injustice over the messiness of having to craft careful exceptions. This bill should not be ramrodded through Congress just because many of us have had it with these legal bullies. We should take appropriate time to ensure that a new set of victims is not created.

And, I’ll add one more concern to the list: While it’s nice you could get a refund on your expenses, this doesn’t address the simple fact that many can’t pony up the fees or find a pro bono attorney to ever see that hope.  The Casino Courts are merciless on this subject, particularly if you attempt Pro Se representation. You have to pay to play. Period.

I’ll be writing more on this subject, particularly as this bill winds its way through Congress.  If you have been through this, or get my drift, it’s a call to action.  This is going to be the most fundamental change to our legal system in decades, and while I understand the amendments that Democrats are proposing, and agree with them, I’m willing to risk that downside in order to feel less risk as a business-owner of losing more time in my life to frivolous lawsuits.

It’s time to step outside of the boxes we put ourselves in, and recognize, regardless of party affiliation, that we need to make a change to Rule 11 in order to make a fundamental change to the way attorneys approach cases on the basis of Legal Economics and Bullying vs. the actual merits of a case.  Having our grievances heard in a court, otherwise known as Right to Remedy, is a fundamental Constitutional right, and for those with Small Stacks, this Casino Court System is neither kind nor fair.

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