Law And More

PLAIN DEALER Editorial Praises AG Dann's Corruption-Busting

Today, an editorial in THE PLAIN DEALER praised Ohio Attorney General Marc Dann for "Getting a grip on the gravy train."  In particular the editorial saluted his "new rules for his office's use of outside counsel, a realm in which well-connected private sector lawyers land lucrative state contracts."  Dann ran on a platform of purging corruption from state government.

I am happy that this attorney general is receiving recognition for his mission.  With an activist media, especially in the blogosphere, political leaders often get more than their fair share of criticism. 

On the other hand, I have my own theory about corruption: That it should be kept from becoming excessive. End of story. The analogue is the Manhattan restaurant one:  If the rats stay in the basement and don't dine with the guest on the main floor, that dining spot and the city health officials are doing a great job.

Growing up in the late 1950s in Jersey City, New Jersey, I heard story after story about how well machine politics - think Mayor Frank Hague - worked.  The trains, figuratively, ran on time.  If your father needed a job, he got one. I got one which put me through college. The garbage never hung around.  The level of corruption was sufficient to guarantee efficient government but seemed to contain breakers on excess.  The greedy, the lazy, the rats who wouldn't stay in the basement were made to conform to what was in the interest of the greater good.  When corruption-busters ran against the machine, we just rolled our eyes. 

Note:  When I went to graduate school in the midwest in the late 1960s, my colleagues and neighbors were shocked by my cynicism.

COLUMBUS DISPATCH Headlines AG Dann Speech Coverage With "No Swearing ..."

Imagine your state Attorney General being branded as the guy with the "salty tongue?"  Ohio AG Marc Dann has seemed to develop his trademark by swearing or holding back the profanity.  Dann watchers are increasingly noting which way he played it when: Profanity or not, and at what gala event.  Even the U.S. Chamber of Commerce legal website is keeping score on this one.

Today, James Nash at THE COLUMBUS DISPATCH headlines his coverage of Dann's speech at the Cleveland City Club by "No swearing, but no love for the feds."  The rest of Nash's coverage is pretty tame.  In fact, for me, too tame.  That speech has plenty to take issue with.

For instance, I would have raised questions about Dann's being so active on a national level.  Is this good for the struggling citizens of OH or is it primarily good for the higher media profile of this AG? [among others, Dann was featured in THE NEW YORK TIMES and FORBES].  Nash states, "Dann pointed to a case where he and other attorneys general are taking on the Securities and Exchange Commission in a case involving an Illinois company accused of stock fraud.  The state officials accuse the SEC of siding with the company." On page five of the printed copy of his speech, Dann cites two instances when he reached beyond the jurisdiction and borders of his state to intervene in matters that he contends are in the ultimate interest of those in OH. 

Isn't there lots to get done at home in OH?  If Dann weren't such a national activist, there might not be the need for the state to contract with so many outside attorneys.  Cleaning up that process, he mentions on page three of the speech, has been one of his priorities.  That priority has received ample media attention.

Another issue: The economy, stupid.  On page three of the speech, Dann notes, "I've seen the faces of my neighbors in Youngstown who have gone from $30 or $40 dollars per hour to $10 or $15, and I am constantly vigilant to make sure that our initiatives do not cause the same kind of economic devastation in other parts of Ohio."  But, aren't they? 

The vigilance which Dann is exercising in chasing after big business could result in the state's being declared a tort nightmare or judicial hellhole. That drives economic development away.  Business, large and small, is terrified of the litigation risk. It's a form of uncertainly they - and Wall Street - don't want to deal with.

Certainly, fraud, negligence and indifference to consumers should be rooted out and punished.  But there is such a thing as over-doing the crime-stopping. Think the famous or now infamous reign of Chief Crime-Stopper Eliot Spitzer. Some currently see that as over-vigilance.  The non-stop pursuit of supposed miscreants on Wall Street by Eliot Spitzer [see "Wall Street: What Went Wrong," THE ECONOMIST, November 25-December 1st, 2006, p 11, pp. 69-71] has perhaps dealt a devastating blow to the financial-markets industry in the U.S.  Over-regulation, my pretty, leads to making business difficult to conduct.  And, as the court victory of Richard Grasso, former head of the New York Stock Exchange, demonstrates, Spitzer wasn't always chasing the right targets. 

The editors of THE ECONOMIST opine, "Not since the 1980s, when the nation was in a spin about the coming of the Japanese, has there been such anxiety in America over foreign competition [in the securities business, especially initial public offerings]. Depending on who did the study, such as McKinsey, it's estimated that America will lose 30,000 to 60,000 Wall Street jobs to London and Asia.

So, I gotta ask and wonder why Nash didn't ask: Is Dann's crusading spirit undermining his passion to shore up the good jobs left in OH?  Brief tale:  Twice Massachusetts, an old state with plenty of old housing, was invited to join in the Rhode Island lead paint trial.  Twice it said no.  MA is thriving economically, especially in attracting new-economy industries.  RI isn't.

The media might do more for the future of OH by paying attention to Dann's anti-business policies rather than his "salty tongue."   

That Cleveland City Club Speech by OH AG Marc Dann

Today, Ohio Attorney General Marc Dann delivered a speech at the Cleveland City Club [available here]. 

To me, it seems like an odd sort of address.  It seems especially unusual to be giving such a speech at at time when THE PLAIN DEALER June 22, 2007 headline blares "Ohio bled jobs in '00-'05."  In that PLAIN DEALER article by Frank Bentayou, the first paragraph states, "Ohio lagged far behind the nation in creating businesses during the first five years of the 21st century, a U.S. Census Bureau report shows."  There's more.  Northeast OH not only lost jobs but businesses as well.  That's the backdrop - economic and political - for the speech.

Well, on page three of the printed copy of Dann's speech, this state Attorney General notes that he did his homework.  In his efforts to clean up how the state recruits, screens, hires and compensates outside counsel [should that even be a priority, right now?] he sought input from a group of general counsel for several Fortune 500 companies in Cincinnati.  Fine.  It was at that meeting, Dann goes on in his speech to explain:

"During our conversation I had learned that they [representatives of the Fortune 500] were deeply concerned over the fact that while the members of the European Union had finally agreed upon a unified regulatory structure that would make it easier for firms to do business and create capital and jobs, the federal government's regulatory scheme, which essentially consisted of no regulation at all, threatened to place their U.S. operations at the mercy of 50 state AGs who would, eventually and inevitably, move to fill the vacuum created by the lack of federal action."

The way I interpret the soft underbelly of this conversation was that the business community was calling to the OH AG's attention how the U.S., because of possible over-regulation and excessive scrutiny, could be at a competitive disadvantage with the European Union et al.  To me, they were asking the OH AG to be even-handed in how he carried out his duties.

Seems this might not have registered on Dann's radar screen. But the oddness doesn't end there. Dann continues on in the speech to chronicle how he was making up for "the federal government's refusal to exercise its regulatory authority" that was "breeding an unprecedented level of corporate arrogance."  That making up included how he was trying to play hardball a la Eliot Spitzer model with a bunch of alleged corporate miscreants.  But hasn't this style proved harmful to the industry, in an era when there is global competition for these good jobs?  There are proven more effective ways of fixing what ails the commercial sector.

Class-Action Lawsuits - Not So Sexy To Media, Any More

The plaintiff bar which keeps putting together class-action lawsuits can't depend on being high-profile through media attention.  According to the Institute for Crisis Management's Annual Report, in 2006, coverage of class-action lawsuits fell by six percent.  [Report in subscription-based Odwyerpr.com]. 

Will there be a Supreme Court hearing in Rhode Island on the ongoing lead paint public nuisance litigation and the media not show?

Andrew Cuomo - Activist AG Era Over, Problem-Solver Begins

As we know from our own careers and watching others' professional climbs and falls: Choose your mentors and models carefully.  In terms of the high-profile role of the state attorney general, newbies like Ohio Marc Dann and even non-newbies like Rhode Island Patrick Lynch might study the new approach that New York attorney general Andrew Cuomo seems to be rolling out.

Perhaps the most gifted political leader since Bill Clinton, Coumo has not only selected his causes carefully - e.g. going after student-loan abuses vs. the field he knows from his Clinton Administration days which is lead paint.  He also is redefining the role of the attorney general. The shift seems to be from activist crusader to that problem-solver. 

Today in the Law Blog on THE WALL STREET JOURNAL, Peter Lattman plays back a conversation this AG had with Ben Lawsky who serves as his special assistant and general counselor.  As Lattman reports it, Lawsky jokes with Cuomo about you are what you sue.  According to Lattman, Cuomo laughed at time.  Later he said to Lawsky, "It's not you are what sue. You are what you solve."

Note: Later today, OH AG Dann's speech on the changing role of the states will be posted on his website.  I will be analyzing the contents on this blog.

The Little Engine That Could - Might Help Prevent 21st Century Lead Epidemic

The love American children have for the Thomas Tank Engine might just do the trick in preventing a 21st lead epidemic.  Those Thomas & Friends products aren't cheap - $10 to $70 each - so the children affected are from families who know how to take action. And so they are. 

For example, in the Michigan legislature, Representative Andy Coulouris introduced three bills which would specify a limit on the amount of lead in children's products. However, these sorts of policy changes might extend beyond the U.S. 

In THE NEW YORK TIMES opinion section, on June 22nd, Christian Warren zeroes in on the Thomas Tank Engine lead problem as an opportunity to address this health matter globally.  Think of all the Chinese factory workers at risk and putting their children at risk through the lead dust they might bring home on their clothes.  A historian with the New York Academy of Medicine, Warren shrewdly couches this in terms of self-interest, "Our children will not truly be safe from hazardous products and environmental hazards until stiff standards are global norms."

And in general media have been no slouch in publishing heart-wrenching accounts of how mothers had to pull the little engine that could from their child's hands or gather up all the Thomas & Friends toys as the children slept - to avoid an emotional meltdown.

The Not-Republican - Value Investor Todd Sullivan Responds

Value investor Todd Sullivan, contributor to THE WALL STREET JOURNAL and FORBES as well as publisher of VALUE PLAYS, responds to the post "Marketing & Sale of American 'Justice' - The Not-Republican."

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Todd Sullivan says, on the record:

"First things first.  No small business owner, and I speak from experience, wants a mandatory wage increase.  I am highly skeptical of Rick Perstein's article [in THE NATION] on that basis alone.  If the question was: Would it hurt you? then the answer in most cases was probably not, since the market has priced wages above the minimum level for the overwhelming majority of jobs for years.

"Now, America.  Polls and votes have consistently revealed people will answer questions one way in public and another in the booth.  America clearly has a center-right tilt when it comes to its politics.  This is illustrated by 20 of the last 28 years of Republican control of the White House.  Republican anger at Bush and those in Congress is not a disagreement with policy But, that they did not push hard enough to enact the policies they ran on.  When it comes to immigration, social security reform, safe-guarding the tax cuts, and health savings accounts, elected Republicans failed their voters in pushing these reforms through.  They had the numbers, but congressional leadership lacked the ability to get the job done.  Republicans stayed away from the polls last year to teach those responsible a lesson.  The lesson? "If we send you there, get the job done." They did not, go sit down.

"Where do we go next year?  Mitt vs. Hillary barring an implosion by either candidate.  Now, a year in politics is a lifetime and who knows what will happen but that is your match up.  Hillary is as hated as she is loved and just cannot win.  She is a nice story and the NY TIMES will drool all over her and anoint itself the Hillary PR machine but outside of Manhattan, that will not matter and if the last two elections have proven anything, it will hurt.

"If the Internet has done anything, it has given people the ability to access a huge array of news and information.  Access to the spectrum of political thinking has exploded beyond the nightly news and this has allowed many 'sacred cows' to be tarnished or proven just silly.  No longer do we just believe what is told to us as we can now look at the data from the privacy of our homes and draw our own conclusions.  We now know high taxes are not necessary to pay for government deficits (less spending is), affirmative action programs actually hurt those they pretend to help, racism is not rampant in America and the most effective way to bring people out of poverty is NOT handouts but requiring them to get jobs (and yes they are out there).

"Candidates (Democrats like Edwards, Kucinich) who run  on these outdated assumptions have no chance although the soundbites play well on "Hardball."  What the American people want is substance, not sound bites.

"Both Kerry and Gore failed to realize that."

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Reader comment welcome.  Please contact Mgenova981@aol.com.

Designating Something a "Public Nuisance" - So?

Clearly there was, well, a mystique surrounding the concept "public nuisance."  Now there isn't.  The remaining vestiges of the aura were destroyed, I am convinced, with the verdict for the defense in City of Milwaukee v NL Industries. 

James E. Hough of The Hamilton Consulting Group offers some provocative observations on all this in the firm's white paper "Recent Developments in Lead Paint Cases, June 2007." [Copy available free by contacting mgenova981@aol.com or hough@hamilton-consulting.com].

For instance, Hough points out, "the lead plaintiff lawyer [in Milwaukee v NL], who was representing the city under a contingent fee (to be paid only if the city won the case of there was a settlement) tried to mitigate his disappointment at the verdict by suggesting that it was important that the jury found that there was a public nuisance."  But, was that really "important?

As we lead paint watchers have thought through by now, almost anything can be stretched to fit the definition of public nuisance.  So? Also, Hough goes on in the next paragraph to observe, "The mere designation of something as a public nuisance is not depositive as to faulty and the penalty applied."  He then drills down into recent state supreme court rulings and how they might have or will influence the legal profession's understanding of public nuisance.

My take?  Public nuisance has become such a broad concept that it will be eventually discarded as a way to configure a legal complaint.

OH AG Dann's Concept of Role "self-contradictory," Posits Legal Expert

"It seems to me that this statement supposedly by Ohio Attorney General Marc Dann - "the attorney general's office is becoming the largest plaintiffs law firm in the state" - is self-contradictory," posits a legal expert, off the record.  This expert explains, "One agency is public, the other is private."

Reader comment always welcome.  Please contact Mgenova981@aol.com.

OH AG Marc Dann Opines, AG's office becoming largest plaintiffs law firm in state

When leadership runs into trouble, the questions usually concern the leader's so-called judgment.  That's what I'm wondering about in the still-new leadership of Ohio Attorney General Marc Dann. 

Tomorrow Dann is scheduled to deliver a speech at the City Club on the changing role of the states.  He contends, reports Sheryl Harris in THE PLAIN DEALER, that the role of federal regulators is shrinking.  As a result, the mission of protecting consumers, taxpayers and stockholders has passed to the states.  Okay.

My eyes start to bug, though, when Harris says that "Dann says that, for all intents and purposes, the attorney general's office is becoming the largest plaintiffs law firm in the state." 

I have to ask: Do taxpayers, those who narrowly define the function of state attorney general, and upholders of separation of powers really want the elected office Dann holds to morph into a sort of plaintiffs' law firm?  I would not have advised a client in elective office to articulate this on the record - or even have such a comprehensive mindset. The voters, I would explain to the client, might begin to question your judgment as a leader.