Declarations and Exclusions

Election 2006: The Weigh-In is the Way Through

Following current California Insurance Commissioner John Garamendi as he bareknuckled his way to the Democratic nomination for Lieutenant Governor proved so aggravating that Decs&Excs suspended posting for a month after the June primary election.  Now, with the November general election little more than three months away, the time has come to begin covering an even more draining topic: the race to become Garamendi's successor.

Let's begin today with a simple Internet-based experiment.

The major party candidates for Insurance Commissioner are Republican entrepreneur Steve Poizner and the current Democratic Lieutenant Governor, Cruz Bustamante.  If we search each man's name through Google, what do we find about these candidates as candidates?  (All results below are as of late July, 2006.  Given the fluid nature of Google, those results are likely to vary in future.)

At the top of the results page for a Google search for Steve Poizner, we find what we would expect to find: two links, one "sponsored" and one free range, to Poizner's official campaign website, JoinSteve.com.  The version of the site that exists as of this writing is actually less informative than the site the campaign maintained while Poizner was running, essentially unopposed, for the Republican nomination.  As of today, there is no substantive information at the site, only an opportunity to sign up for e-mail updates -- be warned, Mr. Poizner, I am on your list now -- and a page for making contributions to the campaign.  Otherwise, the site is under construction and the campaign asks that we "check back soon."

Moving to the next stage in our experiment, what do we find if we run a Google search for Cruz Bustamante?

The first result, perhaps not surprisingly, is a link to the State of California's official site for the Office of the Lt. Governor.  In contrast to the approach of Commissioner Garamendi, who has not hesitated to posture himself for his run for Lieutenant Governor in official press releases from the Department of Insurance, there is no evidence on the Lieutenant Governor's website that Bustamante is running for any other office.  In fact, the site as a whole is a bare-bones effort, perhaps reflecting the conventional wisdom that the post of Lieutenant Governor of California is good for little more than setting its occupant up to run for some other, more interesting office.

To return to Google: search though you might, through several pages of results, you will not find a link to a site for Cruz Bustamante's campaign for Insurance Commissioner.  (In a nice touch, however, it appears that the Poizner campaign has made the necessary arrangements to have its own sponsored link appear in the right hand column of the Bustamante results page.)

How are potential Bustamante supporters to find their way to their candidate online?  Perhaps the site of the California Democratic Party can help.  The party's "Election 2006" page does include a list of the Democratic candidates for statewide office, each with a hyperlink to the candidate's site.  Here one can find links to Democratic campaigns for Governor (Phil Angelides), for Attorney General (the return of Jerry Brown!) and, of course, for Lieutenant Governor (He Who Need Not Be Named).

And where are we led if we click the name of Cruz Bustamante?  Click it yourself and see:

"Start with Cruz"

Not an election campaign website at all, "Start with Cruz" chronicles the candidate's personal campaign . . . to lose weight. 

Just prior to the June primary, Los Angeles Times columnist Steve Lopez provided a blow by blow account of his shameless ambushing of candidate Bustamante:

Cruz Bustamante was in town last week, making a quick pass as election day drew closer.  If you've lost track of the musical chairs in Sacramento, he's the portly, termed-out lieutenant governor who's hoping to become state insurance commissioner.

His major selling point is a campaign promise to lose 50 pounds, and the devil in me invited him to lunch at Barragan's Mexican Restaurant & Cantina in Echo Park.  Yes, that's a bit like inviting a recovering drinker to a beer festival, but I wanted to see what Bustamante is made of.

* * *

I told him I had seen him on television talking about weight loss, and I just wondered how the diet was coming.  He began the year having porked up to 278 pounds, but in his defense, the job of lieutenant governor isn't much of a workout.  The biggest tasks on any given day are to go to lunch and then try to stay awake the rest of the day.

At his last weigh-in two weeks earlier, he had gotten down to 235, putting him seven pounds short of his goal.

'I weighed 233 this morning at the hotel,' he said as I reached for the menu and began perusing the appetizers.  Probably down to 232 by now, he bragged.

I nodded agreeably.

And then, the trap is sprung as Lopez reaches into his bag and produces . . . . 

Actually, you should read that part for yourself.  [Reg. req'd].

All of this frolicsome banter is really just the first tentative sounding of what is likely to be Decs&Excs' recurrent theme as the campaign proceeds: Neither of the major parties' candidates for Insurance Commissioner is particularly qualified for the job. 

Neither candidate has any personal or professional background relating to insurance, whether as friend to or foe of the industry they propose to regulate.  Neither, I suspect, wants the post of Commissioner for its own sake: Bustamante is only seeking the position because (1) he is termed-out as Lieutenant Governor, (2) he has already been defeated once (in the Gray Davis recall election) by Governor Schwarzenegger, and (3) it was some other prominent Democrat's turn to run for every other statewide office.  For his part Poizner -- last seen heading up the unsuccessful campaign for the legislative redistricting initiative in the Governor's disastrous Special Election of 2005 -- has to start somewhere in his quest for statewide office and the Commissioner's job was going to be open.

It is possible, of course, that one or both of these men will rise to the occasion at some point as Election Day approaches, addressing himself directly and intelligently to the complex practical and policy issues inherent in regulating the insurance industry.  Until that day, however, skepticism will remain the prevailing attitude on this weblog and Decs&Excs' motto will be, to paraphrase Shelley,

"Look on these candidates, ye voters, and despair."

One Enchilada Short of a Discrimination Complaint

In March, reporting on California state appellate Justice Sills takedown  of Proposition 65 "Bounty Hunters", I remarked that the opinion provided "an illustration of how well-intentioned (if overreaching) legislation can be put to less than laudable use in the wrong hands."   Here is another example, this time involving the Americans With Disabilities Act (ADA):

Jerry Doran is disabled, confined to a wheelchair since a 1985 automobile accident left him paralyzed and unable to walk.  Since then, he has become, by his own admission, "a litigious advocate," filing more than 200 lawsuits in state and federal court against restaurants and other public establishments throughout California, alleging insufficient disability access.  He has filed so many suits, in fact, that he has begun to lose track.  That inability to recall the details of each occasion on which he has been wronged by one fast food emporium or another came back to haunt Mr. Doran when he went to trial before U.S. District Court Judge Cormac J. Carney earlier this month on a claim that he had suffered from discrimination based on his disability at Del Taco restaurant #415 in Mission Viejo -- conveniently located a mere 500 miles from his home.

Judge Carney returned judgment in favor of the defendant restaurant, on the ground that Doran had no standing to bring the action.  Although there was no question that Mr. Doran is disabled, Judge Carney was ultimately unable to persuade himself that there was evidence sufficient to prove that Doran had actually sustained any harm at, or had ever actually been to, the Mission Viejo Del Taco.

After describing and praising the purposes of the ADA, Judge Carney's Memorandum Decision [PDF] notes that it is a tool prone to misuse:

Despite the important mission of the ADA, there are those individuals who would abuse its private cause of action provision by filing lawsuits solely with the intent to profit financially.  This potential for abuse of the ADA has been well documented in the Central District of California . . . .  Courts have referred to this proliferation of ADA lawsuits as a 'cottage industry' and have labeled plaintiffs who file these lawsuits 'professional plaintiffs,' 'serial plaintiffs,' and 'professional pawns.'

* * *

The consequences of this abuse of the ADA are severe: businesses and insurers are harmed, the integrity of the bar is called into question, and the public's confidence in the courts is impaired. . . .  Simply put, this litigation abuse of the ADA results in the exact harmful consequences that Congress sought to eradicate by passing the ADA.  As more than one court has observed, the result of this abusive litigation is that 'the means for enforcing the ADA (attorney's fees) have become more important and more desirable than the end (accessibility for disabled individuals).'

Most of the remainder of the opinion focuses on the discrepancies in Doran's responses to interrogatories, his responses to questions in deposition three weeks later, and his testimony at trial, in which key details -- such as how often and when he had actually visited the Mission Viejo Del Taco -- slipped and slid uncontrollably.  Highlights:

• Doran first went to Del Taco #415 in Spring of 2002 or in Spring of 2003, unless his first visit was in 1988.

• Prior to filing suit, he went to the location twice, or perhaps three times, or possibly just once, although he may have gone there on as many as five or six occasions.

• "Mr. Doran's complaint refers to objects -- display racks and vending machines -- which do not even exist at Del Taco restaurant #415."

• "When Mr. Doran stated that he ordered an enchilada to eat during his alleged visit, he must have been testifying about a trip to a Taco Bell restaurant since Taco Bell -- and not Del Taco -- serves enchiladas."

• "When describing the barriers he encountered at Del Taco restaurant #415, Mr. Doran stated that the hand dryers in the restroom were located too high. . . .  Because Del Taco restaurant #415 does not have hand dryers in its restrooms, it is clear that Mr. Doran was testifying about a visit to another restaurant, or place of public accommodation, when asked to identify the barriers he encountered."

• "When asked if there were any fast food chains that Mr. Doran frequented that he had not sued, he replied that he had not sued Kentucky Fried Chicken.  In fact, Mr. Doran has sued Kentucky Fried Chicken.  When asked to try again, Mr. Doran replied that he had not sued Jack in the Box.  Although apparently unbeknownst to him, Mr. Doran has sued Jack in the Box also."

At least Mr. Doran resisted the temptation to respond that "they all look alike to me."

A Ruse by Any Other Name [updated]

Ted Frank of Overlawyered and David Weigel of Hit and Run and Al Kamen of the Washington Post, among others, confirm report (see Update below) that ATLA -- the erstwhile Association of Trial Lawyers of America, the leading national organization for our worthy brethren in the plaintiffs' bar -- has elected to change its name to the American Association for Justice.

ATLA/AAJ is behind the times with this name change idea: it has been eleven years now since the California Trial Lawyers Association changed its name to become the Consumer Attorneys of California.

Here, though, is the troubling question that first sprang to my mind on hearing about this latest name change:

Which member of the Association will reap the enormous fee recovery that will go to the first to file a class action trademark infringement/likelihood-of-confusion lawsuit against the rechristened organization on behalf of the Justice League of America?

[Justice League cover via Steve Englehart.]

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UPDATE [1600 PDT]:   

Oh, phooey!  This story may in fact be just too good, and too amusing, to be true.

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FURTHER UPDATE [072106]: 

Norm Pattis of Crime & Federalism is seriously unamused by ATLA's name change.   So much so, that he is electing to resign his own membership in the organization:

What's in a name?  Not much.  Unless you are a trial lawyer ashamed of your calling and afraid that someone might some day come seize your Lear Jet. 

American Association for Justice?  Forgive me, but I thought all members of the bar were a member of that association.

FINAL [?] UPDATE [072106, 1518 PDT]:

It's official: the name change is for real and has been formally adopted, per Evan Schaeffer, who is certainly in a position to know.

Martin Grace is attempting to ascertain the secret identities of members of ATLA/AAJ.

There is, so far as I am aware, no truth to the rumor that the erstwhile trial attorneys' opposite numbers at DRI are considering a name change of their own, to the Society for the Perpetually Vigilant Scourging of Evil.

Your Assignment, Should You Choose to Accept It, May Include Attorneys' Fees

Resolving a split between appellate districts, the California Supreme Court has ruled that the recipient of an assigned claim for breach of the implied covenant of good faith and fair dealing receives with the assignment the right to claim recovery so-called Brandt attorney fees. 

In February, 2005, Decs&Excs reported on the Court of Appeal's decision in the case of Essex Insurance Co. v. Four Star Dye House, summarized this way:

When an insured prevails against an insurer on a claim for 'bad faith,' the attorneys’ fees that the insured incurred in recovering the unpaid insurance benefits can be awarded as an element of the insured’s damages under the so-called Brandt Rule.  [Brandt fees have been discussed previously here and here.]   Now a panel of the Second District Court of Appeal has ruled that an insured is permitted to assign the right to recover Brandt fees.

As noted then, the Second District in Essex rejected a contrary view -- that Brandt fee claims are not assignable -- adopted by of the Sixth District Court of Appeal in Xebec Development Partners, Ltd. v. National Union Fire Ins. Co. (1993) 12 Cal.App.4th 501.  Because of the disagreement among the state's appellate courts, it is no surprise that the California Supreme Court accepted a petition to review Essex and to sort out the conflict.  After examining the question, the Court has now adopted the Essex view as the rule in California. 

Writing for a unanimous Court, Justice Kennard gets right to the point:

The issue here is this: When an insured assigns a claim for bad faith against the insurer, and the assignee brings a tort action against the insurer that includes a claim for wrongfully withheld policy benefits, may the assignee recover Brandt fees?  Our answer is “yes.”

Following a lengthy and informative discussion of the general law on recovery of attorneys' fees and on assignability of claims, and of the rationale of the original Brandt decision, Justice Kennard ultimately sides with the claimants on practical grounds:

We reject Essex’s argument that because Brandt fees are tort damages, they are recoverable only if incurred by the insured personally, rather than by the assignee. . . .  Had Sanchez [the insured] brought the bad faith action against Essex, his right to recover Brandt fees would be unquestioned.  As the assignee of Sanchez’s claim against Essex, Five Star stands in his shoes, and so may assert his right to recover any Brandt fees incurred in prosecuting the assigned claim.  We agree with the Court of Appeal here that the right that Sanchez assigned to Five Star was the 'right to recover the policy benefits in full, undiminished by the attorney fees incurred in bringing the action to recover those benefits.'  Were we to accept Essex’s argument, Sanchez would no longer be assigning the right to recover the policy benefits in full.

* * *

Disallowing recovery of Brandt fees in cases such as this would result in a windfall for the insurer, whose liability for tortious conduct would be significantly reduced because of the fortuitous circumstance of the assignment of the bad faith claim.  As we have recognized, recoverable Brandt fees may exceed the contract benefits wrongfully withheld.  [Citation omitted.]  Disallowing recovery of Brandt fees incurred by assignees would also tend to discourage assignment of bad faith claims against insurance companies, contrary to the public policy favoring transferability of causes of action. 

The California Supreme Court's decision in Essex Insurance Co. v. Five Star Dye House, Inc. (July 6, 2006), Case No. S131992, can be accessed at these links in PDF and Word formats.

[Note: The links will expire in approximately 120 days; the opinion should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

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UPDATE [1023 PDT]: 

J. Craig Williams has additional thoughts on the case at May it Please the Court.