McCollum’s Legal Bargain

By KENRIC WARD – March 29, 2010 – 6:00pm

Attorney General Bill McCollum’s lawsuit against the federal government’s newly enacted health-care program has drawn political fire as a costly quixotic venture.

State Sen. Dan Gelber, who is running for McCollum’s job, calls the litigation “frivolous” and “destructive to the office.”

Gelber, a lawyer from Delray Beach, said he would not have brought the suit, and joins fellow Democrats from around the state in slighting its prospects for success.

But, while everyone is entitled to their political opinions and legal predictions, there’s no debating the fact that, based on cost, the McCollum lawsuit is a bargain for Floridians.

According to the $50,000 contract signed with constitutional scholar and litigator David Rivkin, Florida has retained a team of attorneys for an hourly rate comparable to that of a run-of-the-mill paralegal.

“It’s absurd to complain about the expense,” says William Large, president of the Florida Justice Reform Institute. “The state is getting one of the best and brightest legal minds for $19 an hour.”

Large calculates that rate by dividing the $50,000 retainer’s hourly rate of $250 by the 13 participating states.

“Mr. McCollum is well within his rights, acting as a good fiscal steward of the state,” Large says.

Large saw the other side of the coin a decade ago, when Florida paid $3.4 billion in contingency fees to attorneys to prosecute Big Tobacco. In the settlement that resulted, some lawyers raked in fees of as much as $112,000 an hour.

McCollum is supporting legislation — House Bill 437 and Senate Bill 712 — that would cap contingency fees and require an open, cost-benefit vetting process before state agencies can employ outside legal counsel on contingency.

Critics of McCollum’s legal challenge have suggested the attorney general is contradicting himself by retaining outside counsel to fight the feds. Yet, monetarily speaking, there’s no comparison.

While Rivkin’s usual rate is $950 per hour, the constitutional scholar has been retained by the 13 states at $250 per hour. It is expected that the states will share the costs equally — which comes out to a rate of $19.23 per hour.

If additional states join the suit, as some expect, the hourly charges to each participant would go even lower.

The contract is capped at $50,000 in fees and is not based on contingency fees.

“What’s everyone so scared about?” Large asks. “This is a constitutional matter that deserves to be debated.”

Indeed, even Gelber declines to commit to withdrawing from the suit if he is elected in November.

“It depends on where the case stands,” he says.

McCollum is undaunted by his opponents and unapologetic about his legal gambit.

“This unconstitutional (health-care) law would ultimately cost the state of Florida billions of dollars to be implemented,” he says.

As with all cases litigated by the Office of the Attorney General, civil defense attorneys and civil appeals attorneys track their time for the purposes of accounting for costs, assigning resources and recouping expenses in the event of successful outcomes.

The AG’s office has set up a case-specific tracking system for those attorneys to report time spent on this suit for the purposes of eventually recouping expenses from the federal government.

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Contact Kenric Ward at [email protected] or (772) 801-5341.

http://sunshinestatenews.com/story/mccollums-legal-bargain

Reasons for optimism about recovery?

March 26, 2010 | Beth Kassab

Dare I say it? Things are looking up for businesses.

It’s too early to call the economic recovery a solid upturn. The current upward path is still plastered with warning signs: “Beware potential dips ahead.”

Yet three developments during the past week converged to lend new optimism about our financial mending.

Tort Reform

The first is a package of bills that is sailing through the Legislature with blessings from both the business lobby and the trial lawyers.

The foes came together to usher through significant protections for businesses against lawsuits — changes that could save them millions of dollars a year in claims — while the lawyers scored a few wins of their own.

The idea is that businesses would use those savings, however big or small, to steady their balance sheets.

“If you look at most retailers with low margins and high competition, you find that those costs are passed on to customers,” said William Large, president of the business-backed Florida Justice Reform Institute.

It remains to be seen, however, if businesses will now also pass anticipated savings from the legislation on to customers.

Publix Super Markets Inc., which lobbied hard for a bill that makes it more difficult for customers to sue the store if they, say, slip and fall on a banana peel in the produce aisle, wins the tallest tort reform trophy.

The bill, one of four in the package, essentially puts the burden on the customer to prove the store was negligent, a reversal of a 2001 state Supreme Court decision against Publix that retailers say opened up the floodgates for fraudulent slip and fall cases in Florida.

According to Large’s group, Publix’s average payments for slip and fall cases soared 141 percent for its Florida stores after the court ruling compared with an increase of just 59 percent at its stores outside Florida.

Big tourist attractions like Walt Disney World will also benefit from the legislation, but that may be little consolation considering Disney’s loss on another one of its priorities that was heavily watered down in the name of compromise.

That bill sought to allow parents to waive the right to sue when their children are hurt or killed on rides or other activities because of a business’ negligence. The new version only allows parents to sign away their right to sue because of an “inherent risk” — such as a big wave knocking over a jet ski — but leaves companies open to far more troublesome negligence lawsuits.

Overall, though, businesses appeared to exercise improved clout over the trial lawyers with longtime advocates John Thrasher, R-St. Augustine, and Joe Negron, R-Stuart, taking seats in the Senate this year.

Mortgage write-downs

Bank of America last week unveiled a new program in which it will forgive up to 30 percent of the principal on tens of thousands of home loans in which the owners are underwater.

The once unthinkable plan now could be poised to become the new industry standard in dealing with the ongoing foreclosure crisis. With Bank of America coming around to the idea, other lenders are expected to follow.

That could go a long way toward keeping people in their homes and making payments rather than walking away. And, in turn, could help steady the housing market and increase consumer confidence.

More hiring?

On Friday we learned state unemployment crept up slightly to 12.2 percent in February from 12 percent in January. But on the bright side, hiring was also up with a gain of 26,300 jobs from January — the first positive month-over-month job numbers since November 2007.

There’s no guarantee the growth will be sustained, but as we move into the summer, it’s possible that increased seasonal hiring by the tourism industry could help keep the momentum going.

http://articles.orlandosentinel.com/2010-03-26/business/os-cfb-kassab-tort-reform-03292010-20100326_1_tort-reform-jet-ski-businesses