There Ought To Be a Law….

A disturbing line in yesterday’s Washington Post article about a trademark infringement case brought by clothing company Patagonia against a drag queen named Pattie Gonia. The line read: “The apparel company is suing her for $1 for alleged trademark infringement, although experts say legal fees could easily surpass $1 million.”

I don’t have any idea who Pattie Gonia is, and I don’t depend on Patagonia for my clothes. That isn’t the point. But what kind of a legal system do we have when a large company can (and does) sue an individual for $1 (that is, not seeking any compensation for a measured loss) but expect her to have to expend up to $1,000,000 on lawyers and legal costs. Somehow, this should not be permitted.

Of course, it is not only Patagonia. It is also the Trump administration, which spends so much energy bringing actions against political enemies. Think John Bolton. Now, I am not a fan of John Bolton’s view of international affairs. The allegation was that Bolton retained some classified documents when he left his White House post. We don’t know the details, but apparently Bolton did not take any documents, but retained some on his computer and shared some with his wife. How many? On purpose or by accident? We don’t know. What we do know is that Bolton settled the case, in order to avoid jail time, by paying a fine of over $2 million. And of course this would be in addition to whatever Bolton has already paid his lawyer, Abbe Lowell, and will continue to pay him until the settlement is ratified by the court, presumably later this month. Had Bolton not reached this deal, he may have had to pay a considerably larger fine, and considerably more in penalties or fines, as well as having the risk of jail time.

And then there are cases like Trump’s case against CBS/Paramount for the “alteration” of an interview with Kamala Harris. I know of no one who believes this case had any merit, yet Paramount settled the case for $16,000,000 (which they say will go Trump’s future Presidential Library, if you believe that). This is another case where there was no admission of guilt (there undoubtedly was no guilt), but where the settlement of a case for an outrageous amount of money was deemed a better result than seeing the case move forward (in this situation, not only legal fees, but the entire future business of the defendant was at stake).

And of course, this is how the legal system works time and time again in even routine criminal cases. You are accused, you cannot afford a trial (and/or don’t trust the results), so you pay a large fine to end the case. Anyone with a deep pocket, be it the United States government, Donald Trump himself, Patagonia – yes, anyone – can use their financial strength to wrest money and a change of behavior from the economically weaker.

Of course, there is nothing new here, but things have reached an extreme not reached before, it appears.

And the focus should not only be on the ability of a well-heeled plaintiff to bring a lawsuit, but on the costs of defending that law suit. The focus on the plaintiff is related to ethics or morality. This is in fact the focus on the defense costs as well. Take Abbe Lowell, as an example. Lowell (whom I worked with years ago on at least one complex matter) apparently charged over $1500 per hour for his time as a partner last year at Winston & Strawn (he has since left that firm and formed his own, smaller firm). Associates at that firm charge between $450 per hour to over $1,000 per hour (all these numbers come from sites on the internet). You can see how these add up. And judges, who are interested in giving all parties as much opportunities to make their cases before the court as possible, generally do not give consideration to legal costs as they set their court’s schedules or briefing or discovery requirements.

Winston and Strawn had gross revenue of about $1.4 billion last year, and the profits per partner was over $4 million. The average partner (average…..not the highest paid) made over $2 million. Is this necessary? Is this ethical?

Let’s go back to the start. Pattie Gonia is being sued for $1 by Patagonia for trademark infringement. If she pays $1 and changes her name (and pays whatever her lawyer has charged her to date), all will be well (except for the career that she had put together and is identified with her name). If she decides to defend the case, she will pay up to $1 million in legal fees and court costs which will allow (if she uses a major firm) her lawyers to earn more than that per year. Either way, she is a victim unless she defends the suit, wins the suit and gambles even more legal fees in an attempt to have the court assess her legal fees to Patagonia. That can happen, sure. But it is a gamble that most would not take.

The entire system needs a good rethinking. But it isn’t going to happen any time soon. You know why? It is because everything, absolutely everything, needs a good rethinking.


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