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Tuesday, December 26, 2000
Section: Part A
Growing Use of Private Judges Raises Questions of Fairness
Court: The system was designed to speed up civil suits. But the hefty fees
hurt poor litigants, critics say.
By: TED ROHRLICH
An ultrasound technician, Rushing was suing the Lancaster clinic where he worked, charging racial discrimination and wrongful termination. He had hired an attorney, signing a customary agreement to pay her 40% of whatever he won and reimburse her for costs she would advance for expert witnesses and the like.
Then the judge to whom his lawsuit was assigned announced those costs were going to go way up. Superior Court Judge Victor E. Chavez said he didn't have time to hear all aspects of Rushing's case. If Rushing wanted his day in court, he'd have to have part of his case shifted from the public courts to a private judge--and split the private judge's $275-an-hour fee with the multimillion-dollar clinic he was suing.
Private judging is a big business nationally, but nowhere more so than in California, where more than 500 former public judges, including six former justices of the state Supreme Court, are listed in directories as seeking private judging assignments. California's public judges have transferred thousands of cases to private judges in recent years over the objections of litigants, some of whom, like Rushing, have said they cannot afford to pay. The transfers are made only for the discovery phases of lawsuits, during which judges make critical determinations about what information each side must disclose. In those instances, private judges recommend rulings to public judges and frequently rack up bills of tens of thousands of dollars.
"We are moving away from a truly free public court system that I used to think was a basic part of our constitutional form of government," said Robert Hinerfeld, a business litigator with the politically active Los Angeles law firm of Manatt, Phelps and Phillips.
Private judging began to develop as an industry more than 20 years ago as an alternative to crowded public courts such as those in Los Angeles, where it took five years for a civil lawsuit to reach trial. Although cases now get to trial in only one or two years, resolving disputes in private forums remains an attractive, efficient alternative for many litigants. They hire former judges, lawyers or other experts to preside at mediations, arbitrations or even full-fledged private trials.
Critics assail the private forums as justice for the rich. Going rates for private judges range from $250 to $600 per hour.
Sending discovery disputes in public cases to private judges gives Superior Court judges several advantages. They can shunt off disputes that are generally regarded as tedious scut work, help former colleagues financially and encourage the private judging industry, which some of them may someday want to join.
Appellate courts have tried repeatedly to rein them in, ruling that some judges have been too quick to put their own interests ahead of the public's. Appellate courts have held that the law allows Superior Court judges to refer only exceptionally complicated, time-consuming discovery disputes to private judges and that public judges cannot put hard-pressed litigants such as Rushing in the position of perhaps giving up their day in court because they cannot afford to pay.
In unusual displays of resistance, however, some Superior Court judges have balked at following those legally binding rulings. Appeals courts have found it necessary to restate them--as they did in Rushing's case, with evident dismay. "In the three years since [an earlier ruling]," an appellate panel noted in his case, "our colleagues' plea for vigilance has been generally ignored." System Started Changing in 1981
Until 1981, resolving discovery disputes was an inescapable part of the job of being a public judge. It was, therefore, free.
Then, about the same time the private judging industry was taking off, the California Judges Assn. said public court judges were too busy to handle all discovery disputes. The association asked the Legislature to empower it to refer the quarrels to private judges when it was "necessary" and when it could be done in a way that was "fair and reasonable" financially.
The new law created a "very tempting practice, because no judges like to deal with discovery disputes," said Craig Riemer, president of the Riverside County Bar Assn.
It also created a tactical advantage for wealthy litigants. Bruce Brusavich, a former president of the Consumer Attorneys Assn. of Los Angeles, said that corporate defendants, in particular, learned that just by objecting, defendants could make it "very, very expensive for the plaintiff to get the information."
As referrals of discovery disputes to private judges accelerated in the late 1980s and early 1990s, lawyers complained about the expenses and about the tendency of some judges to throw work to private judges who were their friends.
Robert W. Parkin, who served as Los Angeles County's presiding Superior Court judge in 1997 and 1998 and is now a private judge, said he was helpless to do anything about those cronyism allegations because no lawyers would tell him which judges they were talking about. They said they were afraid of retaliation, he said.
Some judges also ignored the California court rule that required them to let lawyers have a say in which private judges were assigned. Lawyer Hinerfeld was given no chance to suggest a name when he was representing a secretary suing a large corporation for wrongful discharge. "We were told, 'This is where you go,' " he said.
Hinerfeld said he was directed to hire retired Superior Court Judge Henry P. Nelson, once rated by the Los Angeles County Bar Assn. as unqualified to serve on the public bench. He said the experience was "about as bad as I've ever heard or seen."
Nelson charged $275 per hour for his time in California and $375 per hour for his time out of state, running up a $60,000 bill by insisting, over the objections of both sides, that he attend at least 15 out-of-state depositions, Hinerfeld told a state hearing panel. He said Nelson also improperly met privately with defense representatives, then made a suggestion to the judge who appointed him that would have crippled the plaintiff's case.
Nelson did not respond to requests for comment. First Appellate Ruling in 1993
The first appellate attempt to rein in such practices came in 1993. Three elderly women, represented by volunteer attorneys, had been ordered to hire a private judge to resolve a discovery dispute in their lawsuit against a business. They said the business had tried to trick them and other seniors into signing with it for medical care.
Los Angeles County Superior Court Judge John H. Major appointed former appellate court Justice L. Thaxton Hanson as the private judge. The women objected, saying they could not afford to pay Hanson's $300-per-hour fees. But Major said: "Fees are not going to be waived. If you are going to litigate, you are going to pay."
The women appealed, arguing that such high fees would effectively deny them access to court. They already had been formally declared paupers--which meant that even administrative fees, such as the $192 it costs to file even the most complex lawsuit--had been waived in their case. How could the same court system that declared them paupers justify ordering them to pay hundreds of dollars per hour in private judge fees?
The Court of Appeal ruled that it could not. The appeals court said trial courts cannot impose fees for private judges on paupers and should try to avoid imposing them on people "of modest means."
"The justice system not only must be fair to all litigants," said an opinion by Justice Joan D. Klein, "it must also appear to be so. The increasingly common practice of referring discovery matters, without regard to the financial burdens imposed on litigants, threatens to undermine both of these goals."
Other appeals panels ruled similarly. Then came the ruling in Rushing's lawsuit.
He contended that a boss told him it did not look good to have an African American man such as Rushing performing intimate examinations on white women. The boss later fired Rushing, who had spent a year training for his $13.50 per hour job, and Rushing said he fell into unemployment and despair.
Lawyers representing the clinic had asked Superior Court Judge Chavez to name a discovery referee and, over Rushing's objection, Chavez named Nelson.
Chavez said in an interview that he decided to bring in a private judge because the attorneys "were having a great deal of trouble getting along." He said he chose Nelson because he believed him to be a fair-minded jurist who had been mislabeled by the bar association for "political" reasons that Chavez declined to articulate. Chavez said he was drawn to Nelson because Nelson, like Rushing and Rushing's lawyer, is an African American. Chavez said he thought that, given the racial accusation at the heart of the case, a common heritage might make Rushing and his lawyer more "comfortable."
He said he did not recall being aware of the court rule that required litigants to be given a say in the identity of the private judge. But he said he had no ulterior motives, noting that he neither socialized with Nelson nor had any desire to become a private judge himself.
Nelson attended all depositions, driving up costs, Rushing's lawyer said. His bill was $42,000, but he later acknowledged that it should actually have been only $30,000 because he had double-billed 11 times. His secretary said in a court declaration that the double bills were her fault.
When Rushing settled his case with the clinic, his former employers agreed to pay him $210,000. But Rushing did not pay Nelson, and Chavez ordered Rushing's attorney, Shelly D. McMillan, to pay instead.
She appealed, citing legal language that says that only "the parties" to a lawsuit, not their attorneys, can be held liable.
The Court of Appeal agreed with her, finding that she was not responsible for the debt and that, because of errors made by Chavez, neither was Rushing.
The Court of Appeal took the opportunity to blast private judges in general, declaring that they are part of a separate system of private civil justice for the well-to-do and, in this instance, were being used by the Legislature to avoid dealing with a need for more public judges.
"Litigants are [being] given the privilege of paying twice--first through taxation, then again through a user's fee disguised as payment for a referee. . . . ," wrote Justice Miriam A. Vogel in an opinion in which Justices Reuben A. Ortega and William A. Masterson concurred. Declaring that the Legislature should act, she wrote, "To leave things as they are is to slam the courthouse doors in the face of the poor."
Private judges objected to the ruling. Calling it "a polemic against private judging," six of them, including retired California Supreme Court Justice David N. Eagleson, wrote to the California Supreme Court, asking it to keep other courts from having to treat the Rushing decision as binding precedent. Without explanation, the Supreme Court agreed. Legislature Enacts Some Limitations
Use of private judges in discovery matters continued.
Last year, Marcus M. Hood, a 71-year-old Los Angeles attorney representing himself, was ordered to split the costs of a private judge with a department store chain he was suing.
Hood filed a sworn statement that he could not afford to pay. But Superior Court Judge Ann Kough refused, without explanation, to take his word for it.
Hood speculated that other litigants, without his legal knowledge, might have given up at that stage.
Instead, Hood prepared his own appeal, citing all of the appellate rulings that had gone before.
His case was assigned to Justice Vogel, who criticized Kough both for not explaining her decision and for insisting that a "quite ordinary" dispute be resolved by a private judge. "Any judge could resolve this discovery 'dispute' in about five minutes," Vogel wrote. Kough, through a court spokesman, declined to comment, noting that Hood's lawsuit is still pending.
Faced with such evidence that some Superior Court judges were not complying with appellate rulings, leaders of the state's judiciary finally turned for help to the two other branches of California's government.
California Chief Justice Ronald M. George had appointed a committee that included Vogel as well as some private judges to look into private judging in general. Its main recommendation was to try to rein in the use of private judges in discovery disputes.
This year, at the request of the policymaking arm of the state Supreme Court, the Legislature passed and the governor signed a statute that will continue to allow public judges to refer discovery disputes to private judges over the objections of litigants.
But it will incorporate the limitations that appellate courts tried to impose.
The burden will be on litigants to prove they cannot afford to pay.
Opinions are split on the extent to which it will prompt trial judges to slow down.
H. Jay Folberg, dean of the University of San Francisco law school and chairman of the panel that recommended it, was optimistic. "I believe this should effectively resolve most of the concerns," he said.
But one of his colleagues on the same panel, Santa Clara University law professor Gerald Uelmen, predicted: "The problem is still going to be overuse."
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