‘Munger!’ The man behind ‘loser pays’ to bar the courthouse door to litigants

Posted by AzBlueMeanie:

I posted the other day about how the former Chair of the Arizona Republican Party, John Munger, like the Wizard of Oz, is the man behind the curtain of the Rio Nuevo District Board. The GOP 'troika' behind Rio Nuevo:

On the Jerry Seinfeld show, Jerry would always say "Newman!" in a sneering dismissive tone whenever his neighbor Newman was mentioned. Whenever you hear Rio Nuevo your first thought should be "Munger!" in a sneering dismissive tone.

Well, here's another "Munger!" moment. Munger is the man behind a bill by Rep. Ted Vogt (R-Tucson), the "younger smarter brother" of The Phisher King (Tyler Vogt), deceptively promoted as tort reform for what is "loser pays." The Arizona Capitol Times (subscription required) reports the Bill would allow judges to make losers pay more often:

Rep. Ted Vogt said he expects to scale down next year’s version of his “loser pays” tort reform bill, SB1404, which stalled in the House Committee of the Whole this year.

The loser pays concept has broad opposition in the legal community.

* * *

Vogt said the resistance is to loser pays in its purist form, where a judge is allowed to award attorney fees to the winner in any contested lawsuit, which is what SB1404 proposed. He said that makes negotiating fairer and discourages frivolous lawsuits.

* * *

Arizona’s Rules of Civil Procedure and state statute already allow a judge to award attorney fees if he or she finds upon clear and convincing evidence, the second-highest standard of proof, that a claim or defense was frivolous.

Vogt said he’s considering a bill that would lower the standard of proof.

“There’s no reason why it needs to be clear and convincing,” said Vogt, who passed the State Bar of Arizona exam in June.

Just great. A wet-behind-the-ears newbee grad who has never tried a case deems to dictate to the legal community. Apparently this wet-behind-the-ears newbee never learned about Rule 11 in his Rules of Civil Procedure class, which already provides the Court with discretion to impose a version of "loser pays" as well as sanction attorneys for bringing a frivolous lawsuit. (Arizona law already provides for an award of attorneys fees and costs in contract matters). Vogt wants to take away the discretion of the court and make "loser pays" mandatory. And where did he get this idea?

You guessed it, "Munger!"

John Munger, a former chairman of the Arizona Republican Party, said loser pays has worked in contract disputes in Arizona for years and he has seen it at work in his own practice.

Munger, a proponent of the concept who worked with Vogt on the failed bill last session, said plaintiffs always think twice before proceeding to court after he advises them they might be on the hook for attorney fees if they lose.

“They think, wow, I might have some skin in the game,” Munger said.

Munger said it’s time for Arizona to go loser pays, pointing to Texas, which this year adopted its own version.

Bill Jones, a partner with Jones Skelton and Hochuli, a lawyer for whom I have professional respect, begs to differ. 'What Texas did, and that’s the one they keep waving in our face, is something we’ve had for 20 years or more,” Jones said. “The whole idea Texas did something and called it loser pays doesn’t mean we need to go do something that hasn’t worked anywhere it has been tried in the North American continent.'”

“'You’ve got the plaintiffs bar and the defense bar walking down the aisles of the Capitol arm in arm singing Kumbayah, you’ve got to believe you’re dealing with something that is probably not in anybody’s best interest and that’s what’s happening here,' said Jones."

I will give you an example. Employment discrimination claims under Title VII of the Civil Rights Act and the Arizona Civil Rights Act provide for an award of attorneys fees and costs to a successful plaintiff, but only in a "clear and convincing" case of a frivolous claim may the Defendant employer recover attorneys fees and costs as the successful litigant.

The public policy reason behind this is straightforward: an employee who has been discriminated against at work, already at risk of termination, will suffer a "chilling effect" of bringing a claim to enforce their legal rights under the law if they are also at risk of having to pay the attorneys fees and costs of their employer if they are unsuccessful. Their legal rights exist in name only as they are effectively barred from the curthouse door as litigants by the risk of "loser pays" for attorneys fees and costs.

Which is why corporations and insurers advocate for this idea. Imagine an employee of Wal-Mart suing their employer for employmwnt discrimination at the risk of having to pay the legal fees milked by a team of over-priced corporate lawyers defending the lawsuit. That employee risks losing everything they own with an adverse judgment. They will not sue. And the employer will be free to go on violating their legal rights.

There are many laws designed to award attorneys fees and costs to successful plaintiffs, but not automatically to successful defendants for this public policy reason. The law that Munger is promoting would be in conflict with numerous federal laws, including the aforementioned Title VII of the Civil Rights Act.

If this "loser pays" rule is limited to state law claims, it will also have an adverse effect on the legal rights of litigants. It forces plaintiffs to frame their claim as a federal law claim and go to federal court, where the federal courts are already overwhelmed by the caseload. It creates inefficiencies and denies a speedy remedy and justice to litigants.

By the way, I see that Munger Chadwick, P.L.C. is advertising for attorney positions at its new Phoenix office in the Arizona Attorney. Has Rep. Ted Vogt perchance been offered a position with Munger Chadwick now that he passed the State Bar? This would add another layer to this story.