PUNITIVE DAMAGES IN CIVIL RIGHTS SUITS

It is often misunderstood that all damages awarded in civil rights suits against cities and/or towns must be paid by the taxpayers if there is not enough insurance coverage avaialbe.  While this could be true in certain circumstances (such as where there is simply too little insurance coverage), there is usually no taxpayer exposure to PUNITIVE DAMAGES. 

PUNITIVE DAMAGES are awarded to punish or even "make an example" of a public official whose conduct is beyond all bounds of decency or is criminal.  This usually means that the official went out of their way to intend harm to another person or persons.  And in the absence of an agreement by the Town or City to fully indemnify the official for everything (punitive damages included), it is the responsibility of the individual defendant to pay any portion of an award based on PUNITIVE DAMAGES.

So if an individual defendant tries to claim that the insurance company hasn't enough coverage and that a suit against him or her will potentially cost the taxpayers a lot of money this may be nothing more than a scare tactic to seek public support in hopes that an election can be won despite the suit or that there will be pressure to end the lawsuit and that this will help the person against whom PUNITIVE DAMAGES are claimed from being exposed to pay this type of damages personally.

Hopefully, whenever this transparent red herring argument is made, the public will see right through it and the real reason that this "issue" is being raised. We invite your questions and comments. www.lawyers-online.us

As a service to the public and to lawyers not familiar with the Rhode Island "pro hac vice" procedure, we furnish the following link to a summary (written by Paul Crowell with John Reilly) on our main website.  We hope that you will find it to be informative and useful.

www.lawyers-online.us/docs/pro_hac_vice.pdf

Traditionally, courts automatically stopped ("stayed" in legal jargon) people who sued their insurance companies from obtaining copies of claims files, procedural guidelines and other such documents until they first prevailed on their basic, "contract" claim.  In cases bearing the earmarks of true "bad faith" this could ultimately require the parties and the courts to hold 2 trials, usually with different juries at greater time and expense to all involved.

 Federal courts are not bound to follow the procedure established by state courts and in one of our present cases we noted that a growing trend among federal courts is now changing the time-honored state procedure and, on a case-by-case basis (depending on the facts) simultaneous discovery of "bad faith" issues is being allowed.  We brought these cases and the trend that they seem to be establishing to the attention of a United States District Court Judge (William Smith) in Rhode Island and he, in a thoughtful decision, has agreed with the newer federal approach and held that stopping or "staying" discovery of bad faith issues should no longer occur automatically.  Rather, he points out several criteria to be considered and held that this issue should be determined on and in view of the facts and type of each individual case. 

 John Reilly & Associates is pleased to have received this ruling on behalf of one of our valued clients and the full text of the order appears below.  Visit us at www.lawyers-online.us for more interesting news and cases.

 Full text of order respecting stay of "bad faith" discovery in PDF format.

     We would like to hope that, for example, property or money forfeited from a criminal gang or enterprise would be used to help the victims of the criminals.  In some instances that does occur, but on the other hand it often turns out that the forfeited funds are used to supplement the operating budgets of law enforcement or other agencies, not for health, rehabilitation or other such truly benevolent purposes.  Of course, the use of forfeited cash or property by the government can help bolster its efforts to detect and bring more criminals to justice.  But with that there is the danger that seeking more forfeiture opportunities becomes just as important as bringing crime to an end.  This may be especially true in tough economic times such as those we are presently experiencing.

There is no "easy answer" to how forfeiture proceeds should be handled, but whenever possible it would seem best to apportion a healthy percentage of such money or property to or for the benefit of victims or for education, rehabilitation and many other worthy ways.

As a final thought, we offer the following message given Justice Department personnel in 1990 (produced by specific request in a forfeiture case - complete memo available - visit us at www.lawyers-online.us):

     "On July 18, 1990, William P. Barr, Deputy Attorney General, advised all United States Attorneys and other Department of Justice officials that the President's budget for FY 1990 projects forfeiture deposits of $470 million.  Through the first nine months of the year, deposits total $314 million.  We must significantly increase production to reach our budget target.....

      "....Failure to achieve the $470 million projection would expose the Department's forfeiture program to criticism and undermine confidence in our budget projections.  Every effort must be made to increase forfeiture income furing the remaining three months of FY 1990."

      We have not studied or obtained current figures, but get the sense that there is a fairly substantial amount of money being derived (at combined state and federal levels) from forfeiture proceedings.  Hopefully, it will increasingly benefit victims and other programs aimed at curing the roots of the problems that generate the forfeited funds or property in the first place.  As citizens we should not overlook how these funds are allocated.

It works like this: Someone who doesn't like an applicant or petitioner is very friendly or may even have power over one or two board members.  This person will then either sit in on a hearing or meeting concerning the application (generally out of the way and toward the back) or watch on public access television (if available).  They then use "text" messages to communicate their thoughts, suggestions, etc. to their pal(s) on the board - all in an effort to help delay or defeat the applicant (or cause the applicant to have to spend more and more time and money until they give up). 

The motivation for doing this varies from jealousy to self-interest to just plain opposing anything and everything.  But regardless of motive, it is distressing to be hearing from board members that they look to their left or right and see a fellow board member reading text messages, look out at their friend and nod slightly, then deliver a stinging remark or ridiculous proposal to please their "pal".

So, the next time you are on a board or see board members looking down at laptop computers, "Blackberries", or other texting devices, think how it might be a good idea to ban them from use during these sessions.  Let their devious pals go back to giving signals like third base coaches in baseball.  Or better yet, report this type activity and help restore clean, honest government in our cities and towns.

And to all those who have been doing this, be forewarned that people are aware of these little "tricks" and someday you may have to explain why you did this before a judge and jury.

The vast majority of the SIU professionals are well-meaning and (in my experience) conduct themselves in a professional and courteous manner at all times (even when faced with irate claimants or witnesses).  Unfortunately, there are those who "cross the line".  When this happens, it often amounts to "bad faith" and can get an insurance company in serious trouble.

Eavesdropping (illegally intercepting telephone calls and other communications) is one example of "crossing the line" and "bad faith".  While not a common occurrence, I have had more than one experience with this unsavory tactic.

The first time that I heard about this was when a professional SIU examiner whose company was short on staff and used outside, private "investigators" was asked to interview some of these firms to see whether they should receive work.  He asked my opinion about several of the "candidates".  One of them really stuck out because they candidly BOASTED that they would sit outside the homes of claimants and intercept their wireless telephone communications to determine where these people were going, what they were doing, etc.  They then BOASTED that nobody would ever find out because their reports would say that any information they received from this illegal electronic eavesdropping would be attributed to unidentified "reliable sources".  This firm was NOT hired.

Another instance of this was when we accidently discovered an insurance company's internal notes, showing that one of its employed investigators had used a similar device (purchased at Radio Shack) to intercept calls of our client (a lawyer) while sitting in a car outside the client's home.  This SIU investigator never expected that his notes would have to be produced in discovery.  The result was a BIG EMBARASSMENT to his employer.  Our client decided to accept a confidential settlement that was paid over two years, but this incident reinforced the point that activities of this type are (unfortunately) more common than we would all like to believe.

One recommendation to help thwart the possibility of this type activity is to purchase and use a digital spread spectrum telephone if you use a wireless phone at home.  Another is to get a competent, bulldog attorney if your plans are described and attributed to a "confidential informant" in a report of the type we are discussing today.  There are other measures that can be taken, but these would expand this into a very lengthy article.  We would rather hear your thoughts (directly as most people do or in response to this blog).  Good luck and may your calls remain private.

At John Reilly & Associates we have begun our "blog" in the spirit of offering you the public and our clients (as well as the many lawyers who also seem to visit our site) free copies of articles and documents that are (hopefully) useful and informative.  These are fairly detailed and do not seem to lead to many comments.  We'd like to hear from you, our readers, about what type of issues or further articles or types of documents you'd like to see us post (remember, however, that we hope these will be of general interest - you can always contact us directly with questions about your own, personal issues).  We look forward to your comments and thank you for visiting our blog and our website.

Exhibit to the settlement agreement in PDF Format