Saturday, June 17, 2023

Another Day, Another Click-Bait Story

Don't believe everything you read in the newspapers.

A screaming headline announces every conservative's wet dream, Starbucks forced to pay $25M to manager fired for being white!  Finally, this racial equality thing turns around for the conservative side.  Take that, PC!  Take that, Woke!  Take that, BLM!   White folks have rights!

The startling amount seems staggering at first, unless you are a lawyer and realize, right off the bat, it is pretty specious.  Time was, juries could award staggering amounts of money, not for damages, but for "punitive damages" - in other words, amounts of money to punish wrongdoers so they wouldn't do it again!  It wasn't that the plaintiff was damaged by that amount or deserved that money, only that the jury wanted to "send a message" about an issue and get people (which includes corporations) to take notice.

It was a fun game for litigation attorneys - they would usually take half the proceeds as a result.  But a more conservative Supreme Court has put a damper on the deal.  Basically, any award of "punies" which are more than four times the actual damage amount is suspect, and anything over ten times, well, probably violates the 14th Amendment.

One of the cases involved a guy who bought a BMW that was damaged in transit.  The dealer repaired the damage and repainted the vehicle and when the owner found out, sued for damages and was awarded $4000 and a staggering $4M in punitives.  It made no sense and was an example of "litigation lottery" where wily lawyers would try to find a sympathetic jury and maybe win big - or not.  Of course, this spurred a lot of copycat litigation which clogged up our courts with trivial cases like this.

(Incidentally, such repairs are part and parcel of the car business.  A "brand-new" car may have been repaired at the factory, in transit, or at the dealership - and most probably are.  BMW's standard was that if repairs exceeded 3% of the car's value, it would be sold as used.  It seems like a reasonable standard.  We live near a car port, and we know a fellow who makes a living with "paintless dent repair" by taking out dings and nicks from brand-new cars that are damaged in transit (they are parked very close together in the ships and door dents are common).  Some car makers like Audi wrap their cars in blankets and put little plastic discs over the wheels.  For their lesser Volkswagens, no such protection is available.  I guess the upper-crust buyer demands more perfection - but then again, after 100 miles, you'll have rock chips anyway.  Expecting a car to be "perfect" is just stupid.)

Note that in most foreign countries, you do not have the right to a jury trial for civil matters.  The US Constitution wasn't clear on this and the Supreme Court, in an early decision basically punted and said since the Constitution was not specific on the matter, civil trials must also be included in the right to a jury trial.

Even before these cases, though, spectacular punitive awards were routinely reduced on appeal - or cases were settled, post-verdict, for lesser amounts, as litigating attorneys knew their large awards would be whittled down.  Moreover, they didn't want to go to the trouble of appealing the case anyway.

So, for example, the famous McDonald's Cup 'o Coffee Case was reduced on appeal, and eventually settled for a mere $600,000.  Still an expensive cup of coffee, but then again, skin grafts on your vagina are no Swiss picnic, either.  Ladies,  your crotch is not a cup-holder!

Oddly enough, $600,000 is the damage award in this "They Fired Me For Being White" case as well. But given all of the above, even if the "damages" are shown to be $600,000 (and that calculation will likely be reduced on appeal as well), $25M in punitives is way out of the ballpark.  Using the 4:1 standard, the most the Jury could have awarded would be $2.4M in punitive damages.  Still a lot of money, but a helluva lot less than $25M.  And even with the staggering legal fees at a "White Shoe" law firm, it is worthwhile for Starbucks to appeal a case like this - as the punitives are a no-brainer.  Knock down the "actual" damages or get a new trial - and well, they will settle for far less. Given that the plaintiff's attorney takes half, I suspect this lady will end up with $500,000 or less.  A lot of money, sure, but not enough to retire on.

But that's not the point. Very few of the outlets reporting this story analyzed this in detail and made the obvious comment that a jury award of punitive damages isn't a real award.  The Judge at trial may even reduce these, knowing that the award will not withstand appeal.  It isn't a real number and Starbucks will never be on the hook for that amount.  Yet one outlet claims "Starbucks ordered to pay $25.6M" when in fact they haven't been forced to pay anything just yet.

But hey, big numbers make for big clickbait.  And the plebes don't know the law or indeed understand the first thing about our legal system.  But they hate Starbucks and they hate political correctness, and this click-bait title panders to their preconceived notions.  Finally, the white man gets a break!  That's what they think, anyway.

Of course others will click on the premise that "This is an OUTRAGE!" - either because they are against large jury awards, or because they think that only black people can be discriminated against. 

So you see how this is a win-win for the media.

As I noted in a very early posting, Howard Stern figured this out long ago - people who HATED him would listen twice as long, just to fuel their outrage.  Today, this is a business model - harvesting outrage like it was electricity and we are in sleep pods in The Matrix.  No doubt, the "Metaverse" will make this a perfect closed-loop.

Don't be baited.  Don't believe every click-bait headline you see!