Archive for June, 2007

Pants are Worthless

June 25, 2007

The Associated Press reported today that a judge ruled Monday in favor of a dry cleaner that was sued for $54 million over a missing pair of pants.  This was a ridiculous lawsuit which terrorized Korean immigrants, and the ruling today illustrates how justice is usually served in our courts.


Flood Car Fraud

June 20, 2007

Is a Flood Car Coming to a Town Near You?

 Reprinted from


Hurricanes have done major devastation to the southern coastline, and the clean up project will likely take years to return things to some what normal. What I am concerned about is the potentially HUGE number of vehicles that will soon come on the market to be sold as used cars. The problem is not that the vehicle is used, but that it is potentially a casualty of the hurricanes and high water. These used cars are generally known in the business as “flood cars.”Now I know what you are thinking, “I don’t live in these Southern areas, so I am not at risk of unknowingly purchasing one of these flood cars.” Sorry, but you are dead wrong…actually the farther away you live from the hurricane damage, the greater you are at risk for being scammed into buying one of these cars.Why are you more at risk? Think about it. The flood damage took place in New Orleans, don’t you think that the residents there know that used cars on the market in that area have a HUGE potential to be flood cars? You bet they know that.But do you think the used car buyers in Arizona would suspect flood cars were brought into their area? Probably not, and the scam artists behind these flood cars know this. I would suspect these cars will be on the used car market for about a year…maybe more. This issue is huge and will hurt many people who make the mistake and purchase one of these vehicles.What is the big deal about a car that got water inside it if it seems to run just fine? Great question…even if I made it up myself. The engine itself might be fine, and long term engine damage might not have occurred, but there are many other components of the vehicle that can seem to be working normally now, but can deteriorate in the near future.Electrical components and wiring are usually affected most. There is a ton of complex wiring under the hood, in the dashboard, and under the carpeting of the vehicle. Water gets inside the vehicle from underneath from holes in the frame and body and around the door openings. If the carpet gets wet, so does the vast network of wiring under the carpet. The carpet can easily be replaced, but the wiring under the vehicle is usually too complex and therefore too expensive to replace, so new carpet is laid on top of them, concealing potential damage.So what if the wires get wet? Rust my dear friend. Rust is your enemy, and rust you will soon have. These wires will now slowly begin to break down and rust will form on any part of the wire that is not protected. When the electricity traveling inside these wires makes contact with this rust, it will make a ground, and the electricity will stop traveling. Whatever component the electricity was traveling to, a fuel pump for instance, will soon stop working. Finding the trouble spot in the miles of wire is not an easy task. The carpets and seat will probably have to be removed and hours of diagnostic time will probably be accumulated as the mechanic tries to find the trouble spot. In most cars, the onboard computer system is located in the lower part of the passenger dashboard area, just inches above the carpeting. Some Japanese vehicles have the computer located under the passenger seat, on top of the carpet! If the computer system gets wet, not only will it need to be replaced, but it can damage many other electrical components as well.The computer can be replaced now, and all might seem well, but the rust will soon make its way to these other electrical components and a domino effect will probably start to happen. One sensor after another will fail, intermittent electrical problems will begin to happen, and your pocketbook will soon start to feel the ill effects of multiple monthly mechanic visits. I consider rust the cancer of automobiles, you have to keep cutting and cutting and cutting to stop its growth.Transmissions are another big ticket item that can be affected by water and not show symptoms for some time. When moisture enters the transmission, the normally light pink fluid becomes a light white/pinkish frothy mix, like a strawberry milkshake. The entire workings of the transmission are extremely complex and full of wires, sensors, and lots of rubber seals and O-rings. The water will cause the rubber parts to swell and leak, and the sensors and electrical components will soon succumb to rust and water damage as well.So what can you do to protect yourself from buying a flooded time bomb?

  • Be cautious of every used car on the market.
  • Take your time inspecting and test driving. A good deal today is usually a good deal tomorrow too, so don’t succumb to pushy sales people.
  • Inspect under the driver and passenger seats for obvious signs of rust on the seat tracks and metal seat frame.
  • Look at the headliner (the fabric on the roof inside the car). Once wet, the glue that holds this fabric in place will begin to weaken, and the fabric will begin to fall down completely, or will fall in small sections that will look like bubbles.
  • Inspect the undercarriage and the exhaust system for signs of large scale rust. I would expect a small amount of rust as being normal; ask your mechanic if you have questions.
  • Use your nose. If the inside of the vehicle smells damp and moldy, or feels damp to your skin…run!
  • Remove the wheels and inspect the brakes. This should be done anyway if you are inspecting a used car, but rust damage will really show itself on the brake components.
  • Inspect all under-hood fluids for water contamination. Oil and water will look like a chocolate milkshake, oil and transmission or power steering fluid will look like a strawberry milkshake.
  • Get the dealership or the seller to give you a written statement that to the best of their knowledge that 1) the car has not been in a flood, and 2) the car was not involved in any type of insurance claim that might have resulted in the original owner selling the vehicle to their insurance company as a “total loss.”
  • Get a CarFax report. These reports can provide very valuable information about the car, but I would not rely solely on them. CarFax may not have complete or updated information critical to your decision.

My website provides one of the best used car checklists I have been able to find. I highly recommend a would-be-buyer to print it out and follow the step-by-step guide. If you aren’t in the market for a used car yourself, be sure to pass this e-mail and checklist information on to your co-workers, friends, and family who are. Blessings, Austin C. Davis,
The Honest Mechanic

The Titanic – Where were the Trial Lawyers?

June 18, 2007

How it was in the good old days – before “greedy trial lawyers” ruined America (reprinted from

The problem with trial lawyers is that they think they have the right to tell business owners how best to run their businesses.  With the benefit of 20/20 hindsight, trial lawyers point the finger of blame whenever an unfortunate business makes a prudent, but incorrect decision.

“Greedy trial lawyers” meddle in virtually every industry and drive up the prices of all our products and services.  Every business decision made has to take into consideration the predatory litigation lobby, and not what’s best for the business.  No wonder so many businesses are driven into bankruptcy!

The situation is only as bad as it is because activist judges and politicians in the wallet of the trial bar extended tort doctrines to dubious causes of action.  It didn’t used to be this way.  There once was a time when corporations were free to run their businesses as they saw fit, and when entrepreneurs weren’t held hostage by trial lawyers. 

If only we had meaningful tort reform, we could return to a time of fairness and efficiency in commerce.  A time perhaps best exemplified by the manner in which White Star Lines handled the tragic loss of the Titanic.  Thanks to a common-sense attitude towards compensating the victims, the management of White Star saved the company from ruin.  Were an identical tragedy to occur today, the company would surely be devoured by ravenous trial lawyers and greedy family members unwilling to accept reasonable compensation.

Let’s take a trip back to the good old days and see how White Star Lines handled the crisis:

In 2002, new evidence surfaced, revealing that the Titanic’s owners expected, and in fact demanded fees for the return of bodies.White Star was the Enron of its day; a succession of callous acts without end. Through letters that still survive, historians have long known that Ismay’s line notified the widows of the Titanic’s bandsmen (notwithstanding the fact that their husbands did much to prevent panic on the port side by playing cheery ragtime music) that 75% of the money owed them was being withheld, based on the premise that their husbands had entertained passengers only halfway through one leg of what was to have been a two-way trip. Furthermore, White Star judged that it was only fair to warn the widows that there would be little left over from the remaining 25% because they would have to “settle a bill” for the loss of their husbands’ uniforms.

In February 2002, documentary film-maker Rip Mackenzie sent a dispatch describing a letter demonstrating once and for all time that there was probably no subterranean marsh into which White Star was unwilling to descend.

Written on White Star stationary and dated two weeks after the sinking, the letter was addressed to Sarah Gill of Somerset, England, in reply to her inquiry about the fate of second class passenger John Gill, her childhood sweetheart and husband of two months.

The owners of the Titanic demanded of Sarah a fee of 20 pounds ($1400 in year 2002 dollars), or her husband’s body would “regrettably” have to be buried in Halifax. White Star used this letter as an opportunity to stress that the sinking of the Royal Mail Steamer Titanic was no one’s responsibility . . . as if driving a ship full speed ahead into the night, toward an ice field about which the bridge had been repeatedly warned . . as if . . .


“The sinking was an unfortunate accident, [for which] we cannot be held responsible. We regret that we do not see our way to bring home the bodies of those recovered free of expense, and in cases where it is desired for this to be done, it can be carried out only if the body was in a fit state to be returned, and upon receiving a deposit of 20 pounds on account of the expenses.”


Given the precedent of how White Star treated with widows of Wallace Hartley, Jock Hume, and the other bandsmen (whose families found settlement of the “uniform account” doubly difficult after corporate lawyers declared violinists and cellists “not crew, but officially passengers, therefore not covered under the Workmen’s Compensation Act”), the Sarah Gill discovery should bring no sense of surprise. The behavior of J. Bruce Ismay and his legal team at White Star begins to look increasingly analogous to a car thief who manages to get away with billing his victims for the labor of dismantling their cars and selling the parts.

Source: Charles Pellegrino Web Site

Remember White Star Lines the next time some corporate sock puppet tells you we need tort reform.  If it weren’t for “greedy trial lawyers” it’s entirely possible that airlines would bill the families of dead captains for the cost of their uniforms. 

Raining Business

June 12, 2007

Alabama may be in the midst of a severe drought as far as rain, but new businesses are raining down on our State.  Notwithstanding the claims of some organizations, lawsuits do not seem to be preventing corporations from locating new plants in Alabama.

On May 11, 2007, ThyssenKrupp approved a proposed $3.7 billion, 2,700-worker steel finishing complex in Mobile County. On June 12, 2007, the Birmingham News reported that Magna International Inc. is looking at a northwest Alabama site for a North American vehicle assembly plant.  Hardly the kind of activity you would expect to see from companies fearing the litigation explosion, or is there really such an explosion?

According to Department of Justice statistics, the number of civil trials dropped by 47 percent and tort cases dropped by 31 percent between 1992 and 2001.  However, as reported in the Birmingham News Sunday, June 10, 2007, CEO compensation has seen a dramatic rise during this time.  Of the companies listed in the Standard & Poor’s 500, the CEO’s received a combined $4.16 BILLION in 2006.  If the minimum wage had increased at the same pace as CEO pay since 1990, the minimum wage would be $22.61/hour. 

So, business is up, CEO pay is up, minimum wage is stagnant, and tort cases have dropped. Hmmm, it does seem like there is a problem here.

CEO Income on the Rise

June 11, 2007

Trial lawyers are ruining our economy.  Businesses cannot make it in this legal quagmire we are in.  How can businesses survive with all of the frivolous lawsuits?  We need caps on damages so businesses won’t go to other states.

This is some of the rhetoric we hear from the U.S. Chamber of Commerce and its members.  Well, we call bull on that one!  It was reported by the Associated Press in the Birmingham News on Sunday, June 10 that over half of the CEO’s studied make more than $8.3 million.  In fact, of the companies listed in the Standard & Poor’s 500, the CEO’s received a combined $4.16 BILLION in 2006.  Yes, $4.16 BILLION.  That doesn’t sound like tort hell to me.

While it has become more and more difficult for individuals to obtain justice in this country due to tort reform measures, CEO pay has increased exponentially.  According to the article, if the minimum wage had increased at the same pace as CEO pay since 1990, the minimum wage would be $22.61/hour.  Contrast that to the increase passed by Congress this year – a whole $5.85/hour.  Wow, it sure seems like there is a lawsuit abuse problem out there. 

Top Ten in Compensation for 2006:

1.  Terry Semel     Yahoo     $71.7 million
2.  Bob Simpson    XTO Energy     $59.5 million
3.  Ray R. Irani     Occidental Patroleum     $52.8 million
4.  E. Stanley O’Neal     Merrill Lynch     $46.4 million
5.  H. Lawrence Culp Jr.     DanaherCorp.     $46.2 million
6.  Angelo Mozilo     Countrywide Financial   $43.0 million
7.  Alan Mulally     Ford Motor    $39.1 million
8.  Todd Nelson     Apollo Group  $32.6 million
9.  Edward E. Whitacre   AT&T   $31.8 million
10. Louis Camilleri    Altria Group    $31.7 million

Hilton’s Incarceration

June 10, 2007

Well, Paris Hilton’s “medical condition” was not enough to get her to house arrest.  Did she almost get a break because she is a celebrity, or did she receive too much punishment because she is a celebrity?  Do we really care?  It seems as though we put celebrities and athletes on pedestals in this country.  So much so that they make more money than almost any other industry.  What does that show?  We like to be entertained.  If the public didn’t watch and pay for these movies and events, television networks would not pay so much to air them, and advertisers would not pay so much to the networks for advertising. 

This affinity for entertainment seems to put our societal values out of whack.  Shouldn’t professions such as doctors, teachers, military personnel, and engineers be paid enormous salaries for what they do?  Doctors save lives and prolong life.  Isn’t that more important than the value of entertainment?  Teachers teach our children (and entertain them I might add), and yet, teachers are some of the lowest paid professionals.  Could there be a more important profession than teaching our children?  Our soldiers are helping to protect our freedom and putting their lives at greater risk in that effort.  Engineers help invent new and better methods for living our lives be it in building and construction, computers, biology, etc. 

Yet, notwithstanding these noble professions, we continue to be obsessed with athletes and entertainers.  Do we really care whether Paris Hilton spends 3 days in jail or 23 days?  Are we concerned that it reflects the unfairness of our justice system?  Or, does it take our mind off the realities of life:  war, poverty, starvation, work, etc.?  It is probably the sum of all of those things.  It is also probably a function of the fact that we have many new media outlets and too many news stations competing for news.  There are many stories we follow on news stations today that wouldn’t have made national news 20 years ago because the communication of such stories was not as easy 20 years ago.  Do we really care about a lot of these news stories?  No, but it’s entertaining, and we like to be entertained.

Justice Wealth

June 10, 2007

According to the Associated Press, many of the U.S. Supreme Court Justices are millionaires, but Justices Clarence Thomas and Anthony Kennedy are not among them.  According to the annual financial disclosure, Clarence Thomas’ annual salary is $203,000.00 with a $25,000.00 supplement from a Drake University seminar and a teaching gig at the University of Georgia.  Kennedy added to his salary by $24,500.00 with a teaching position at the University of Pacific law school.

On the other side of the leger, Antonin Scalia has assets worth between $1.2 million and $2.8 million.  Justices David Souter and Ruth Bader Ginsburg have holdings that exceed $5 million and could go as high as $25 million.  Figures such as these may not be very relevant, but they are interesting nevertheless.

Gambling on Alabama

June 10, 2007

Gambling.  What is it?  Is it good or bad?  Is it entertainment?  Recently, Spencer Bachus, Congressman from Alabama, and Barney Frank, Congressman from Massachusetts, debated internet gambling in a hearing on a bill proposed by Rep. Frank to once again legalize internet gambling.  According to Rep. Bachus, internet gambling brings the casino into the home and can lead to addiction, debt, and family strife. 

What can’t?  Should we outlaw credit cards?  Is that not a form of addiction which can lead to debt and family strife?  Yet, our government lets credit card companies run over individuals who are not financially literate (and even those who are).  Should we return to prohibition?  Alcohol can be addictive and lead to family strife.  Is this just another form of the religious right asserting its will on the rest of the public?

Alabama attempted to bring a lottery to the State when Governor Siegelman was in office, but it was voted down for similar reasons as those Bachus presented at the hearing.  It seems as though Georgia, Florida, Tennessee, and Mississippi citizens are doing just fine with their lotteries and casinos.  In fact, Georgia has done so well that many students have been able to obtain free college degrees, and the school has become very difficult to get into from out-of-state.  European countries seem to be okay with gambling.  What is it about America that we think certain activities are immoral?  What is it about America that we think we cannot let individuals regulate themselves?

What isn’t gambling?  When we go drive a car, we are gambling someone else won’t hit us.  When we invest in the stock market, we are gambling that companies or mutual funds will increase in value.  Life is a gamble, and the government should not be able to tell us what entertainment activities are moral or immoral.  As long as a certain activity does not interfere with the lives of others, we should be able to engage in those activities.  In fact, Rep. Frank argued, “I have no quarrel with people who think gambling is wrong.  My quarrel is with people who, in thinking gambling is wrong, want to prevent other people from doing it,” and that is the real problem – people imposing their moral values or religious beliefs on others. 

Caps Needed – Not in Alabama

June 1, 2007

In a recent study conducted by the Kaiser Family Foundation, a nonprofit health-policy research institute in California and Washington D.C., it was found that Alabama was tied for 50th with regard to medical malpractice claims paid per 1,000 active physicians.  The study found that Alabama had a total of 41 claims paid through judgment or settlement in 2006.  This figure equates to 3.7 claims paid per 1,000 active physicians in the State.  The national average was 13.3.  The 41 claims paid ranked Alabama 41st among the states.  Finally, the total payout for these 41 claims was $15,867,500.00 which ranked Alabama 38th nationally.

This study should debunk the myth that there are too many frivolous lawsuits against physicians.  Contrary to President Bush’s rantings about this “problem” a few years ago, the fact of the matter is these cases are too difficult and expensive to win for a lawyer to take on a frivolous claim on a contingent basis.  What attorney wants to invest $50,000.00 or $100,000.00 in a frivolous claim?  That attorney would have more fun taking his money to Las Vegas.