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Common Council committee discusses legal action against Hyundai and Kia over thefts

Twenty-eight cars stolen a day. That statistic was at the center of the issue Milwaukee Common Council’s Judiciary and Legislation Committee took up again Monday — possible legal actions regarding the rampant theft of Hyundai and Kia vehicles.

This comes after a private lawsuit was launched regarding the issue.

“We’re forced to rely on anecdotes and rumors coming out of the rank and file, that portray to us that they’re one big revolving door. People are arrested, they go in the front door and right out the back door, and within 24 hours they’re out stealing another car,” said 4th District Alderman Robert Bauman.

He said it seemed like it was hard to nail down the facts in regards to Kia and Hyundai theft during testimony from the City Attorney’s Office Monday.

Tenth District Alderman Michael Murphy said the issue is more than just rumor.

“Very few cases are eventually prosecuted from stolen vehicles,” said Ald. Murphy.

He said 50% of these offenders are under the age of 16.

Ald. Murphy suggested looking into inviting the head of children’s court, Judge Laura Crivello, as well as the district attorney, to speak on what issues they face addressing the situation.

One of those issues Ald. Murphy identified was the fact that these are kids, and oftentimes not the driver.

“Individuals who are caught in the car, that are not driving the vehicle, generally are released within a few hours to their guardian,” said Ald. Murphy.

He said sometimes they’re caught four, even five times.

To change this, Ald. Murphy thinks some sort of detention center for these youth could be established using ARPA funds, something tried in Portland.

“Instead of just releasing them immediately, they would be referred to this location and then proper social services would intervene to see why this individual is being involved,” said Ald. Murphy.

Thirteenth District Alderman Sean Siker said we need to figure out if more outreach is needed or if there really are just no consequences.

“If that’s the case, that seems to be the obvious thing staring me in the face,” said Ald. Spiker.

The council asked the city attorney if other cities have faced similar struggles, and if so, if they took legal action against Hyundai and Kia.

“I’m wondering if other municipalities had perused as municipalities, as opposed to private entities, any litigation,” said Ald. Spiker.

While city attorneys said Denver has seen similar issues, though not on the level of what’s happening here in Milwaukee, they hadn’t taken legal action against Hyundai or Kia.

City Attorney’s Office officials said the best possibility of perusing a cause of action is based on public nuisance laws.

That’s when the council went into private session to further discuss the matter, although they did make it clear that they aren’t taking any legal action at this time.

New York’s incredible shrinking lawsuit against Exxon could mean trouble for Massachusetts

By Legal Newsline

New York’s surprising decision to drop half its case against ExxonMobil in the closing arguments of a closely watched trial over climate-fraud claims was unusual and probably indicates the state never had the evidence it needed, said an experienced litigator who has handled environmental lawsuits for government clients.

Whether Massachusetts heeds the warning and trims its nearly copycat lawsuit filed against ExxonMobil last month is unknown. But the fact New York Attorney General Letitia James decided not to try to convince a judge of the merit of the state’s fraud claims should be “persuasive” in Massachusetts, said Brian Glasser, an attorney with Bailey Glasser in West Virginia and D.C. who has won tens of millions of dollars in civil verdicts over his career.

“Massachusetts can’t be bound by the failure of New York’s case,” said Glasser, who isn’t involved in the litigation. “But if it’s the exact same fraud claim, I don’t know where the evidence is going to come from.”

After a multiyear investigation started by her predecessor Eric Schneiderman (who stepped down after being accused of assault by multiple women), AG James sued ExxonMobil last year on claims it kept two sets of climate books – one to reassure investors it was considering the future cost of carbon in its planning and another with lower carbon costs it used to evaluate the profitability of future investments.

That was a 180-degree switch from Schneiderman’s initial theory, which was that ExxonMobil knew the true costs of global warming but was hiding them from the public.

The final switch came in the first sentence of New York Assistant Attorney General Jonathan Zweig’s closing argument, when he said he would only address claims based on the Martin Act, an all-purpose statute that doesn’t require the state to prove fraudulent intent. Judge Barry Ostrager, an experienced securities litigator before he became a judge, interrupted Zweig.

“And what about the fraud claim?” he asked.

“Not advancing that at this time, your Honor,” Zweig answered.

The state’s last-minute concession angered ExxonMobil’s attorney, Paul Weiss partner Theodore Wells, who said it wasn’t fair for the state to subpoena 4 million documents, depose numerous ExxonMobil executives and subject the company to a trial only to drop half its case on the close.

“Right before we started this trial, as you know, the state of Massachusetts copied the claim word for word,” he told the judge. “And we have a right, after trying the case, I submit to either a stipulation that says they didn’t produce evidence to support the claims and a dismissal with prejudice.”

Judge Ostrager shut Wells down immediately, saying the state’s maneuver meant the fraud claims had been dismissed with prejudice and the matter was out of his hands.

Plaintiffs frequently prune their cases before trial based on which claims they believe they have the best chance of proving in court, Glasser said. In a contract dispute, for example, there may be four breaches of contract but the client only needs to prove one to win so an attorney might drop the other three on the eve of trial to concentrate on the strongest one.

“To take it all the way to the end and walk at closing arguments, though, that’s very uncommon,” Glasser said. “At the end of the day the reason they dropped those claims must have been they didn’t have good evidence to prove a fraud. You must have clear and convincing evidence.”

ExxonMobil argued from the beginning the state didn’t have any evidence of fraud or misleading statements to the public. New York argued ExxonMobil misled investors by applying lower future costs of carbon in internal models it used to evaluate potential projects but the company said its highly confidential planning documents were invisible to outsiders and couldn’t have influenced the price of its stock.

To find a Martin Act violation, Judge Ostrager must decide if ExxonMobil made a false statement when it said it applied a uniform future price of carbon across all its operations and that the statement was material to investors. The state doesn’t need to prove intent, but it must prove materiality, which it attempted to do with a $1,050-an-hour expert who found news of California’s climate investigation – but not New York’s – influenced ExxonMobil’s stock price.

In Massachusetts, Attorney General Maura Healey faces a higher bar, because she must show that ExxonMobil made fraudulent statements with the intent of deceiving investors and the public. Her sweeping claims also raise the prospect of a First Amendment defense, since she accuses ExxonMobil of using its public statements to delay what she considers to be necessary efforts to transition away from fossil fuels toward renewables. ExxonMobil will likely argue its statements are protected speech about matters of public debate.

Muddy Waters reports Burford Capital to watchdog as battle between the two escalates

By Mark Shapland

The row over the finances at litigation funding giant Burford heated up further today as hedge fund Muddy Waters said it will report the company and its directors to the City regulator, alleging they misled investors.

Muddy Waters intends to handover over its 25-page report on the litigation financier to the Financial Conduct Authority and ask it to launch a probe.

A spokeswoman said: “Muddy Waters is now contacting the FCA as we believe Burford uses particular accounting techniques which manipulate its financials.”

The fund wants a forensic examination of Burford’s business and will call on the FCA to go through the company’s emails to find evidence of wrongdoing. The spokeswoman added: “The FCA should obtain Burford’s emails and internal documents. They may have tripped themselves up.”

Yesterday the FCA said it would be launching a wide-ranging investigation into potential illegal manipulation last week of Burford’s shares.

Burford, whose second-biggest investor is beleaguered fund star Neil Woodford, claimed traders had been deliberately driving down its share price shortly after Muddy Waters released a cryptic tweet on Tuesday by using a technique known as spoofing.

Today Muddy Waters said it had “nothing to hide regarding our own actions”. Burford refused to comment on news of the short-seller’s FCA submission.

The battle between the two companies has divided the City. Burford has been a stock-market darling since its float in March 2014 and has fast grown to become a rare AIM success story. Today analysts at Numis, which serves as Burford’s house broker, slammed Muddy Waters’ report.

Analyst James Hamilton said: “We believe Muddy Waters’ comment that Burford is ‘arguably insolvent’ is up there with comments like the Earth is arguably flat. The group is by far the least-leveraged specialist lender that we cover.”

But Canaccord, which is Burford’s 11th-largest shareholder, wants to see changes to its corporate governance and has called for chief financial officer Elizabeth O’Connell to step down.

O’Connell is married to chief executive Christopher Bogart and Canaccord argues that the relationship does not sit well with institutional investors.

Bogart said Muddy Waters’ allegations against him and his wife were “innuendo” and that she was an experienced investment banker.

State’s tort laws encourage litigation, Independent Insurance Agents & Brokers of Louisiana says

By Kyla Asbury

BATON ROUGE – Jeff Albright, CEO of Independent Insurance Agents & Brokers of Louisiana, believes auto insurance premiums in Louisiana are among the highest in the country because there are double the amount of claims in Louisiana than any other state.

“The reason for our high insurance premiums in Louisiana is very clear,” Albright said. “We claim that we are injured in car accidents twice as often as the national average. If we make twice as many claims we will pay more for insurance.”

Albright said the question is why Louisiana has twice as many claims as to the national average.

“There are two reasons,” Albright said. “First, our tort laws encourage claims and litigation.”

Albright said Louisiana also has extremely low minimum limits of $15,000, which makes it cheaper in the short term to settle claims.

“The problem is that in the long run, people expect ‘In a wreck…get a check!'” he said said.

Albright said the automobile insurance/tort reform bill, House Bill 372, passed the House by a vote of 69 to 30 but died in a Senate committee. There is significant support in the Legislature to bring the state’s tort system in line with the rest of the country, he said

“The problem is that the Senate Judiciary A Committee was specifically appointed to kill any tort reform efforts,” Albright said. “Six of the seven members of the committee are trial lawyers.”

Albright said he believes term limits and elections in the fall will bring dramatic changes to the state Legislature – particularly in the Senate.

“We are hopeful that these changes in the Legislature will provide an opportunity to bring Louisiana’s tort system and automobile Insurance rates in line with the rest of the country,” Albright said.

The Advocate reported that businesses and insurance companies back the bill, which is sponsored by Rep. Kirk Talbot, R-River Ridge.

Changing suits: Mass tort-focused law firms adapt with times, even as TV commercials remain ubiquitous

By: Brett Johnson

Anyone who has sat within several feet of a television set between the hours of 9 a.m. and 3 p.m. is bound to have heard the line, soundtracked sometimes by foreboding music, prefaced always with an ominous “Attention.”

“If you or a loved one has been diagnosed with mesothelioma …”

It’s more than a stretch, but, in some minor way, you can blame Mark Eveland for that daytime pleasure.

The co-founder and CEO of Verus LLC was among the pioneers of what’s referred to as the original mass tort, asbestos personal injury claims. He’s associated with a group of legal experts that engineered some of the first-ever mass tort settlements in this area and disbursed more than $6 billion in settlement funds and expenses in the process.

The area of mass tort, which is a large number of lawsuits consolidated into one legal action rather than separate lawsuits due to the amount of plaintiffs and defendants involved, has been big in New Jersey. The state has one of the most active legal dockets for these cases, and it houses a significant portion of the firms specializing in it.

It’s an area of law that’s changing, but those involved in it don’t think it’s losing relevance.

Nevertheless, those changes are being experienced firsthand by Verus, a Princeton firm that can’t be blamed for the TV commercials, which also aren’t going away.

Things were changing even back when the firm launched in 2003. Asbestos companies were filing for bankruptcy protection left and right, shielding them from future lawsuits. So, Verus looked to manage the different caches that were being created in the wake of those bankruptcies. Those settlement trust funds, which the firm now manages close to half of, pay current and future asbestos claims.

The issue today is simple: Asbestos fell out of use in the late ’70s and early ’80s. So, although the reported delay between exposure and the development of cancer has kept mesothelioma cases steady over time, the number of asbestos-related injuries isn’t on its way up.

“We’ve had a stable amount of asbestos cases from malignancies that are arising now,” Eveland said. “But the number of cases is nowhere near what it was 10 years ago, because the amount of nonmalignant claims — such as someone with impaired breathing — has fallen off.”

Starting about three years ago, Verus has had to start considering how its team’s skillset could be applied to some work outside asbestos-related mass tort. Late last summer, it launched a new technology product specifically designed with other types of mass tort in mind.

It’s looking to medical devices and pharmaceuticals as the future of wide-sweeping lawsuits. So, the firm’s proprietary platform helps streamline the review of medical records and other data that once was available only as stacks of paperwork.

“Data can be gathered quickly electronically these days, but that doesn’t mean it’s accurate,” he said. “So, what we do is also make sure the data — something like proof of usage of a medical product — is right, so that the litigating parties can trust it and make decisions based on it.”

So far, none of the current examples of mass tort involving medical devices or pharmaceuticals, such as litigation involving the alleged health effects of talcum powder or hip and knee implants, have matched the scope of asbestos-involved injury claims.

But Eveland has his eye on one phenomenon that could grow to that scale: the use of opioids.

“That’s the one that could eventually get to the size and scale of what we saw with asbestos,” he said. “The addiction rates among people taking them have been so significant, and the amount of individuals taking them and suffering significant damage or death as a result of overdoses is enormous.”

Another emerging area of mass tort might be human trafficking, Eveland said, citing the signing of the Allow States and Victims to Fight Online Sex Trafficking Act earlier this year.

“That law made the tools the government and lawyers have to pursue litigation of this much stronger,” he said. “If I were to read from the tea leaves, I’d say that companies with online platforms that host or somehow enable people advertising prostitution could have a significant number of lawsuits brought against them.”

Just as Eveland speculates about how mass tort might be expanded, he’s aware that there are some political winds moving in the other direction.

There are two sides to every story, as he says himself. And there’s a lot of lobbying being done to clamp down on mass tort on the legislative level.

“So, there could be some mass tort reform initiatives signed into law that make it more difficult to pursue these cases,” he said. “For mass tort lawyers, that just means finding new ways in helping the injured achieve justice. This area of law will never disappear, but it might look different.”

Do the ads work?

So, are those seemingly low-budget television commercials urging anyone with mesothelioma to call without delay actually effective today?

The answer is: surprisingly, yes.

Law firms running these advertisements — betrayed as they might be by production values that won’t win any awards — are identifying affected people and targeting them through modern data science in increasingly sophisticated ways, according to Mark Eveland of Verus LLC.

“The granular level of detail and the rapidity at which these advertisers can make decisions on where and when to run ads has really amped up,” he said. “So, if you see an ad on CNN at a certain time, chances are they’ve got data that makes them certain they’ll get a higher response rate than if they ran it on a TV Land rerun of ‘Gunsmoke.’”

But law firms aren’t limiting themselves to television when looking for potential clients.

“These days, it has become common for law firms to find people who have been injured by leveraging social media platforms and online advertisements — instead of just billboards, newspapers and television advertisements,” Eveland said.

How the Finance Industry Is Trying to Cash In on #MeToo

By: Matthew Goldstein and Jessica Silver-Greenberg

Accusations of sexual harassment have felled dozens of executives, but in one quiet corner of the financial world, the #MeToo movement looks like a golden opportunity.

Companies that offer money to plaintiffs in anticipation of future legal settlements are racing to capitalize on sexual harassment lawsuits.

That is setting off alarms in some quarters because the industry, like payday lenders, has a history of providing cash at exorbitant interest rates to customers who need the money for living and sometimes medical expenses.

The largely unregulated companies have operated with less public scrutiny than the rest of the litigation finance industry, which provides money to law firms to fund commercial lawsuits.

Historically, settlement-advance businesses have targeted personal injury and medical malpractice plaintiffs, many of them referred by their lawyers. But in recent months, lawyers say, more pitches are directed at women with sexual harassment claims.

For example, days after news broke of the Hollywood mogul Harvey Weinstein’s history of sexual harassment, LawCash, a settlement-advance company, was trying to cash in. “Sexual abuse is a crime #HarveyWeinstein,” read a LawCash tweet. The Brooklyn company offered cash upfront to sexual abuse plaintiffs “if you or someone you know is in need of financial help.”

The settlement-advance firms get paid back only if a plaintiff collects money from a lawsuit. They make money by charging interest rates as high as 100 percent, which they are able to do because technically the money is considered an advance — not a loan — and therefore is not subject to state usury laws.

Consumer groups call the industry predatory. The companies counter that they are providing a vital service to people without other options.

Legal and business experts said there are scores of firms providing advances to tens of thousands of plaintiffs each year. The largest firms make cash advances totaling up to $40 million a year, according to an unpublished 2014 report by Diligence, a business intelligence firm.

Legal Bay of Fairfield, N.J., is one of the settlement-advance firms trawling for sexual harassment clients.

In one October news release, Christopher R. Janish, its chief executive, said he had “set aside a large portion of their presettlement cash advance funding specifically for plaintiffs of sexual harassment cases.” The next month, the firm trumpeted its “special focus for victims of unwanted sexual advances.”

Mr. Janish said he did not know if the pitches had landed any clients. “It just really is more of a public awareness and branding thing,” he said.

The firms advertise on television and include hot-button search terms on their websites to lure traffic. That was how Heather Rothermund of Redding, Calif., learned of Nova Legal Funding in Los Angeles last summer. She had sued her employer, an adult care facility, for failing to discipline a co-worker who she said had groped her breasts and forced his hands down her jeans. Along with a state civil rights agency, she sought $250,000 in damages. The facility’s owner did not respond to a request for comment.

Ms. Rothermund, 41, said the alleged assault left her with bills for therapy and anxiety medications that she couldn’t afford. Her car was about to be repossessed when she came across Nova’s online advertisement. The company advanced her $2,000 against an anticipated future legal settlement, she said.

The money got her out of a financial hole and helped her avoid having to accept a lowball settlement offer. She said that if the case settled within the year she might owe $4,000 — double what she borrowed. If the case drags on, she will owe more.

“It is expensive, but it does help and it is available,” Ms. Rothermund said.

For the past two decades, settlement-advance companies have been chasing the hottest — and most lucrative — trends in litigation. They have provided advances to victims of surgical vaginal mesh products; those suffering from ailments related to the Sept. 11, 2001, terror attacks; and former National Football League players with brain injuries.

“There are some companies that are trying to ride that ‘me too’ thing, and we are not doing that,” said T. Thomas Colwell, chief executive of TriMark Legal Funding in Oregon. “That is just opportunistic.”

Mr. Colwell said his firm had been providing cash advances to women with sexual harassment claims for 15 years. He said many clients worked in less glamorous industries than Hollywood and needed money to cover basic living expenses.

Only a handful of states regulate or license the settlement-advance firms, and little more than a website is necessary to get into the business.

Mr. Janish formed Legal Bay in 2014, a few years after getting out of state prison in New York for orchestrating a $13 million stock manipulation scheme.

Legal Bay’s promotional materials don’t mention Mr. Janish’s past. He said his legal history wasn’t relevant to customers. “My only obligation is to disclose to them the terms of the money they seek,” he said.

Last year, the Consumer Financial Protection Bureau and the New York attorney general sued R. D. Legal, claiming the New Jersey firm took advantage of former N.F.L. players who expected to receive money in the league’s landmark concussion settlement. The authorities claimed that R. D. Legal had tricked the players “into costly advances on settlement payouts.”

Just last week, Colorado’s attorney general announced a $2 million settlement with LawCash and another settlement-advance firm, Oasis Financial, saying they charged personal injury plaintiffs “predatory interest rates.”

The industry says it charges high fees to compensate for the risk of not being repaid.

But the industry’s lucrative model has attracted mainstream financial institutions. The D. E. Shaw hedge fund, the private equity firms Parthenon Capital and Victory Park Capital, and Germany’s DZ Bank have either bought stakes in or lent money to settlement-advance firms. D. E. Shaw has sold its stake in Oasis Financial.

In addition to providing cash upfront to sexual harassment plaintiffs, some firms are pursuing the more traditional form of litigation finance, providing money to law firms in exchange for a cut of potential settlements.

Nova — the same company that advanced money to Ms. Rothermund — plans to announce that it will provide financing for lawyers pursuing Hollywood sexual harassment cases.

“We’re trying to level the playing field in cases against big Hollywood players,” said Ron Sinai, Nova’s founder.

And Legalist, a San Francisco litigation finance start-up, said that a Weinstein-related marketing pitch had attracted new clients, and that the company was now bankrolling three lawsuits against alleged sexual abusers.

The practices used by the settlement-advance industry have proved particularly controversial, uniting consumer groups and big business in opposition. Consumer activists argue that recipients don’t understand how quickly the costs accumulate. Business groups, including the U.S. Chamber of Commerce, argue that cash advances artificially drive up litigation costs.

“I would never recommend an individual finance his or her recovery,” said Robert Kraus, a New York employment lawyer. “It is inconsistent for a lawyer, if he believes in a client’s case, to recommend that he or she should limit their recovery.”

Some of the larger settlement-advance firms use lawyers to drum up business. The firms recruit lawyers in much the same way that pharmaceutical companies woo doctors: with perks such as holiday gift baskets and invitations to year-end parties.

At Oasis, one of the industry’s biggest players, employees who got a lawyer to send at least three clients in a year were celebrated as “hunters,” according to court documents in an employment dispute.

Oasis, which spends millions of dollars each year on TV advertising, said it had provided funds to 200,000 customers since it opened in 2003.

Michael Gibson, a former case manager at Oasis, said he had worked on up to 70 cases a day. The typical customer, he said, borrowed less than $2,000 but paid a fee that was the equivalent of an 80 percent annual interest rate.

“My personal opinion is that legal financings are predatory loans,” Mr. Gibson said.

Some customers say the cost is worth it.

Nickie Burdick, 28, had been unable to work for two years after she was injured in a car accident. Ms. Burdick, of Batavia, N.Y., said her attorney had suggested she take out a loan against a potential settlement in her case.

She knew the rates were steep, but she didn’t see another viable option, she said. She recently has been borrowing $2,000 a month from Oasis, accruing $220 in fees each time.

“It was either that or I lose my house and be homeless,” she said.