Friday, March 2, 2012

Small Claims Court

People like to threaten to to 'take you to court!'  How real is this threat?  Not very, as it turns out.

As a lawyer, I always get a chuckle from folks who like to tell me about the law.  And they usually repeat a lot of folklore and urban legends, and when I try to tell them the real deal, they interrupt me and say, "Well, you aren't much of a lawyer, because everyone knows that...."

Oh well.  I get the same amusement, as an Electrical Engineer, when some yahoo shows me their new electronic gadget, with such pride you would think they had designed and built it.  But alas, they are merely the consumer who the marketing department sold it to.  And the names Engineers have for the end consumer are not usually very polite.  Sucker is one of them.

And as a Patent Attorney, I also get a chuckle out of this, when a person shows off his new electronic toy - again, as if he invented it, instead of merely going into debt for it, as chances are, I wrote the Patent on it a decade ago, and it is only now just hitting the market.  I try to act amazed, just to humor them.

And you'll notice that I am not one of the suckers walking around with that piece of e-trash hanging off my belt, ear, or whatever, either.  That's for the suckers - excuse me, customers.

But I digress.

The funniest thing I hear all the time is "I'm going to sue!" and the context people say this in.  For example, on one car forum, someone started a thread ten years ago about "how we should all file a class action suit" against a car maker because their power windows broke.  These yuppie whiners go on and on about this, as they take the car to the dealer to get it fixed, and it costs $500 each time, because the dealer replaces the entire window assembly and charges $150 an hour labor.

I tried to point out to them that the culprit is a 99-cent clip that takes about a half-hour to install.  I even posted a series of pictures on how to disassemble the door and replace the clip yourself.  It isn't hard to do.

And I pointed out to them that getting mad at the manufacturer isn't fixing your window, and moreover after a decade, a class-action suit isn't likely.  And I pointed out to them that the only people who win lawsuits are lawyers, not the people wronged, and the lawyers want to see millions of dollars of damages and injuries before they will even consider such a case, and a few broken power windows, well, don't amount to much, particularly on decade-old cars.

But again, I get, from non-lawyers, the response, "Well, you must not be much of a lawyer, because...."

Well, perhaps I am not much of a lawyer.  But you ain't one, period.  And what you picked up on TeeVee or in the schoolyard is basically all wrong.  Yea, I know, after three seasons of "CSI" you can solve murder mysteries, and after 10 seasons of "Law and Order" you are now qualified to argue cases in court.

But actually, no.  I don't like watching those shows, as most lawyers don't, as they are so bogus that it isn't funny.  On TeeVee, lawyers do all sorts of things that would not last a microsecond in court.  On the TeeVee the lawyer gives long-winded testimony, enters hearsay as evidence, leads witnesses, assumes facts not in question, and generally takes the Rules of Evidence and throws them out the window.  Few Judges would stand for such grandstanding, and in fact, they don't.  And in fact, real courtroom drama is pretty darn boring, as anyone who has watched the courtroom network will attest to.

Filing lawsuits sounds like a swell idea - to right wrongs.  But the problem is, it is very, very expensive.   Even a broken down litigator is going to want $5,000 to $10,000 up front just to file a suit - or should, if he is smart.  A lawsuit is a complex and time-consuming process and can require an entire team of attorneys and paralegals to administer.   And since the costs are open-ended, any Attorney who doesn't get a retainer up-front is very foolish.

And if you are suing a "deep pocket" company that has a mega-lawfirm at its disposal, it will swamp your attorney with pleas, motions, and discovery requests, which will take up hours of attorney time and escalate costs rapidly.

And for this reason, most con artists steal $5,000 to $20,000 from their victims, knowing full well that even if the victim goes to the Police, the Police will say they have no jurisdiction or that no crime has been committed, but rather a tort, which is grounds for a civil suit.  If the victim hires a lawyer, the lawyer will gently inform them (if he is any good) that filing suit will cost thousands of dollars with no guaranteed result and moreover the victim will likely be counter-sued as a result.

So most victims fold their tents at this point and slink away.  And the con artists win again, which is why you should avoid dealing with con artists.  Anyone who steals less than $100,000 from you isn't worth going after.

What about contingency-fee litigation?  What about it?  The John Edwards ambulance-chasing scumbags of the world want one thing, and that is money and lots of it.  And they aren't going to make it taking your $5,000 dead parakeet case.  They want a dead person, or preferable a quadriplegic, who was run down by someone driving for a big, big company with deep pockets.  They want a slam-dunk-win case that a jury will get all weepy about, and result in a huge victory and a huge reward (reduced on appeal, of course).

The lawyer takes 60% or more (those "expenses" add up, particularly those $500-an-hour expert witnesses) and the victim ends up with a little more than the insurance company initially offered, sometimes less.

"But wait," you say, "I just heard about a big case where some guy won big!  John Edwards wrote about his big legal victories in his autobiography!"  And that is true, there are some big wins out there - just as there are at the casino.  And good Personal Injury Attorneys tout these loudly.  I get a newsletter from a Florida firm which highlights all their "big wins" but fails to mention any of their big losses.

Lawyers win lawsuits, period.  Plaintiffs and Defendants usually lose.  But most folks miss this salient fact, and in fact, it is the poor who are usually Plaintiffs in such suits and even after a big win, they usually remain poor - or return to poverty in short order.

So, unless you have a large claim and can afford the cost of an attorney, a lawsuit is not very realistic.  And unless there is a huge damage award that is near-certain, a contingency fee attorney is not very likely.  Small amounts of damages are hard to litigate and even harder to collect.   Heck, even large damages are hard to collect - ask the fellow who sued O.J. how that worked out.

But what about small claims court?  What about it?   Small claims court is one of those jokes the legal profession perpetuates to give the impression to the rubes that we actually do live in Norman Rockwell's America, where concerned citizens can stand up in a town hall meeting and state their piece, and the good folks of River City will vote their conscience.  Not the alternative view - that a small group of powerful and wealthy people control everything - because that's not the way things are, right?  Of course not.  Now keep your head down and eat your media kibble.

Yes, Small Claims court is a joke, and the punchline is that you expect justice from it.  But likely not.  To begin with, most courts have very small limits on how much you can sue for - a few thousand at most, some less than a thousand.   This is worth you taking time off from work to go after?  It is like challenging a parking ticket in the District of Columbia.  Who can afford to take a day off from work to challenge a $50 parking ticket?  Just pay the damn fine.  It doesn't matter if you were "right" - no one gives a shit.

When I was a youth and had naive ideas about causation and right and wrong, I rented an apartment from a slumlord.  The fellow was retired, and he bought a house in town with a large carriage house, and proceeded to divide it up into no less than 10 apartments, five in the house, five in the carriage house.  The neighbors must have loved him.  It was a cheap place to live and the turnover rate was pretty high.

I lived there for a year or two until I found a better place to live (or so I thought) and when the lease ended, I moved out,  and expected my security deposit back.  But of course, no security deposit was forthcoming.  I called the landlord, who up until then had been nice to me.  Now, he was not my friend.  He claimed I hadn't given him sufficient notice, even though the lease has expired.  He also claimed I had "damaged" the property by putting a nail in the wall to hang a picture.  After a few phone calls, it was clear he felt he was owed the security deposit.

So, I filed suit in small claims court.  A week later, we were scheduled to appear, and I waited and waited and waited.  The local magistrate was hearing cases for speeding tickets and misdemeanors and the like and finally at the end, he was about to adjourn, when the landlord finally showed up.   I had a friend with me as a witness and a deposition from another friend, that the property was clean and in good condition.  I also had a copy of the lease which I showed to the judge.

The landlord was livid, and he screamed at me, and at the judge, which was a mistake.  He simply felt that he could do what he wanted to, and that was that.  The judge read the lease and agreed with me that I was owed my security deposit.  But with regard to the "damages" he decided to split the baby in half, and deducted half the cost of "repairs" (which was mostly painting the place) from the deposit.  I won half my security deposit back.

So, after the court was adjourned, I asked the landlord for a check, and he said "fuck you" and left.  And I discovered that collecting such judgements was tricky at best.  I would have to record the judgement, place a lien on his property, and then try to get a Sheriff to tow his car or seize a bank account, or wait for him to sell a piece of Real Estate.  And the cost of doing this far outweighed the amount I was owed.

In terms of emotional satisfaction, it was a win for me, particularly after seeing the Judge read the landlord the riot act.  But in terms of financial satisfaction, it was a zero - if not a loss, considering my time and efforts involved.  Without a detailed knowledge of the legal system, which I did not have at the time, I was flying blind, and no one goes out of their way to help you, at that point.

A lady recently made headlines by suing Honda because her car did not get the EPA rated mileage that it was supposed to get.   A bunch of class-action lawyers had filed suit and, like most class-action suits, won token amounts for the car owners, and huge fees for the lawyers.  The lawyers always win.  This lady decided to "opt out" and file her own lawsuit in small claims court, instead.

To me, it is a spurious suit, as the actual mileage you get in a car depends entirely on how you drive it.   Ride the brakes, for example, and your mileage will suck.  Floor it off the line and slam on the brakes at the stop sign and mileage will suck.   And this is particularly true for hybrid cars - the subject of the suit - as they rely on regenerative braking to stop the car, which requires that you stop slowly and let the car recapture kinetic energy and convert it to electricity.  Slam on the service brakes, and, well, all you get is heat and brake pad dust - and crappy mileage.

Plus, the EPA rated mileage is not something that is within the control of the automaker.  It is based on an EPA test that is defined by the EPA and is not a guarantee of actual mileage, but just a number used to compare your car to others.  It would be like saying your tax assessed value on your house is an indication of its real worth.  It is not.  And moreover, the automakers are required to post this mileage rating.  So it is not like Honda lied about the mileage, made up a number, and then touted it in the ads to spur sales.  The government told them how to calculate mileage and then mandated that they post it.  Getting sued for obeying government regulations is idiotic.

And besides, everyone knows, "Your mileage may vary" - it is part of the lexicon, for Christ's sake.

But regardless of the merits of the suit (there are none) this lady brought suit, and the kindly judge let her win, so that we plebes will all go 'atta girl!' and be led to think the justice system actually dispenses justice, and not just windfalls for crafty lawyers.  But of course, Honda will appeal, and in the appeal, costs can escalate, as unlike Small Claims Court, the opponent can now bring to bear their entire legal staff and legal arguments, and basically swamp the other side.

But here, no great loss, as the case had no merits anyway.  Stop riding the brakes, lady!

Should you go to small claims court?  Should you threaten to sue people if they wrong you?  The latter is problematic and arguably illegal in some states.  Using the threat of a lawsuit is enough to get a lawyer disbarred, anyway.

But in most cases, it is an empty threat.  Few individuals can afford to follow through with such actions, and the few that do, well, have you ever had a friend who sued someone?  Even when they win they are never happy, are they?  That should speak volumes to you.

You should not rely on a lawsuit as a mechanism for enforcing performance of a contract or any other financial obligation.  Because it is hugely expensive, time consuming, and largely fruitless.  Rather, use the oldest mechanism in the book - never pay until services are rendered.  In 9 times out of 10, people who claim they are ripped off are the ones who pay up front for something and then never get what they expected.

Do some people succeed in small claims court?  Yea, it happens.  Where an opponent doesn't realize that they can get away without paying, if the claimant doesn't have the wherewithal to go about collecting.  But in most cases, all you will get is emotional satisfaction.

Which leads us to the next thing.  People who say, "I don't care about the money, its the principle of the thing" which of course translates into "It's about the money" - in most cases.

Seeking emotional validation is an utter waste of time and effort.  In 9 times out of 10, you are better off just moving on with life and learning from your mistakes.  For me, as a youth, I probably should have stayed at that apartment for another year, rather than move.  The rent was cheap and it was a pleasant enough place to live.   I ended up buying my first home after that, and likely, the best solution would have been to go house-hunting.

But I could have afforded to walk away from the security deposit - indeed, that is what happened.  Getting all riled up about it and being self-righteous and angry didn't serve to do much for me at the time.  And trying  to sift through what is "right" and "wrong" is usually a waste of time.  You rent an apartment from a slumlord, it is hard to act shocked when he treats you badly.  That is, after all, a predictable outcome, right?

In fact, you should expect nothing else.

* * * 

If you do decide to file a suit in small claims court (and don't say I didn't warn you!) contact your local court clerk for more information.  It is a State law issue.  How much you can sue for and what the procedures are, vary from State to State.

This is not a "how to" posting on how to go about doing this.

However, if you think it is going to be like "Judge Judy" where you get to stand up in court and orate before the judge about what a rotten person the other guy is, well, you are in for a rude surprise.  Stop watching TeeVee and thinking that way.  Real life ain't like that.

You have to marshal your facts, your documents, your evidence, and have foundation to enter them.  Otherwise, you will get creamed.  Moral outrage rarely carries the day.  In fact, it never does.