Nightmare in D.C.

August 6, 2007

Wearing a bright green protest button on a recent summer evening, American Tort Reform Association president Sherman “Tiger” Joyce joined small business advocates in denouncing the now notorious multimillion-dollar lawsuit, Pearson v. Chung, brought by an administrative law judge against a Washington, D.C. dry cleaner in connection with a misplaced pair of suit pants. Joyce spoke at a fundraising reception, co-hosted by ATRA and the U.S. Chamber of Commerce Institute for Legal Reform, benefiting the defendants, Jin and Soo Chung, the owners of Customs Cleaners in Northeast Washington, D.C.

According to Joyce, this two-year legal nightmare that rudely interrupted the Chungs’ American Dream continues to cost them a small fortune in legal bills and business losses.

And even though the trial judge in June ruled in favor of the defendants, the plaintiff is expected to appeal.

The fundraiser was primarily an effort to help the family pay off some of the legal fees and losses.

But Joyce fully acknowledged that the D.C. couple’s plight also presented a tort reform advocacy opportunity to “speak out on behalf of small business owners just like the Chungs who are regularly targeted by personal injury lawyers because, unlike large companies, they often don’t have the resources to defend themselves.”

The Chungs were sued under D.C.’s Consumer Protection and Procedures Act, which Joyce says is like laws in other states that are “particularly attractive” to plaintiffs’ lawyers because they typically provide for minimum statutory damages or the tripling of actual damages, and for an award of attorneys’ fees.

“Some judges also have begun interpreting these laws rather loosely, wherein plaintiffs don’t even need to claim an injury or loss, much less knowledge of or reliance on the allegedly ‘unfair or deceptive’ commercial practice,” he told the crowd.

Joyce urged D.C. Mayor Adrian Fenty, Council Chair Vincent Gray and other City Council members to change the law by requiring plaintiffs to prove that they actually relied on a supposedly fraudulent or deceptive advertisement or representation.

“After all, Roy Pearson’s claim against Custom Cleaners alleged that the display of a basic ‘Satisfaction Guaranteed’ sign somehow constituted a willful fraud punishable by a mind-boggling, potentially bankrupting civil damages award,” he explained.

The ATRA leader also recommended that policymakers limit plaintiffs’ claims for damages to out-of-pocket costs, except in cases when it can be proved that a defendant’s actions were knowingly and willfully fraudulent or deceptive.

If Pearson had limited his claim against the Chungs to the cost of a new suit, alterations and legal expenses, the case would not have become internationally infamous.

But Pearson did not display any restraint and so Joyce ended up spending a summer evening trying to help right a wrong against an American family and trying to advance the cause of tort reform.

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Insurance Journal West August 6, 2007
August 6, 2007
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