Weekend Update: Consumer Arbitration on Life Support and Comments on Balducci Deposition
This is my first update in a week due to an ongoing trial in federal court in Jackson. I have another busy week ahead and will return to more regular blogging next week. Usually July is very slow in the legal world, but this year has been a notable exception. A huge story this week was the NAF completely pulling out of consumer arbitrations and the AAA pulling out of credit card consumer arbitrations. There is a clear indication that mandatory consumer arbitration will be dead soon. Other commentators who say that it's too early to tell are wrong. They remind me of people who go to the beach when a hurricane is about to hit to make sure it's for real. I saw the arbitration backlash coming several years ago, but it is arriving years before I expected. It appears that the NAF, and perhaps AAA, fear criminal investigations regarding the administration of arbitration claims. I expect there to be a lot more to come out about crooked arbitrations and people to go to jaiI.
I give mandatory arbitration less than a year before Congress shuts it down. Mandatory arbitration is not popular with judges--even judges who enforce arbitration clauses. So don't expect the judiciary to rule that a Congressional ban on arbitration is unconstitutional. Any plaintiff lawyers with unfiled cases with arbitration clauses should sit on the cases as long as possible in order to allow arbitration's final demise.
On another subject, despite my trial I stayed up late one night this week reading Tim Balducci's deposition taken in Eaton v. Frisby. Balducci's deposition was fascinating. Chase Bryan at Forman Perry took the deposition and I do not think that was a coincidence. Bryan has been described as local counsel on the case for a Philadelphia firm and is below Alan Perry at Forman Perry in the defense pecking order. But Bryan and Balducci were law school classmates at Ole Miss in the early 90's and I could sense their familiarity in the deposition. One example is that Balducci repeatedly referred to Bryan as "Chase", but referred to Eaton lawyer Mike Wallace as "Mr. Wallace." It is rare for local counsel to receive such a marquee assignment and the move was a smart one. Bryan did a good job taking the deposition.
As for the deposition itself, I believe that Balducci was literally crying when he described his conduct as the biggest moral and ethical failure of his life. Two things lead to this conclusion: (1) the clearly emotional testimony and (2) the fact that Bryan immediately said "lets take a break." It is customary in depositions to take a break to let a witness in tears compose themselves.
Balducci basically described himself as the brains of the operation in the Wilson v. Scruggs case. He made Joey Langston sound somewhat buffoonish. I don't completely buy the image of Balducci that he seems to have for himself. I get the impression that Balducci believes that he fell off the tracks morally when he got involved in the Wilson case. But I can't understand what he was doing working as an associate for Joey Langston at the time. Before going to Langston's firm Balducci had his own practice with Kent Smith for years. The two had been joined at the hip since law school and I've never heard an explanation for what led to their separation. Balducci apparently went back to work for Langston thinking that it would lead to a full partnership. If that was the case, Balducci should have known better.
Wealthy lawyers like Langston rarely ever cut someone in with a large piece of their practice. The state is littered with plaintiff lawyers who started working for a prominent plaintiff lawyer only to eventually go out on their own when partnership promises never materialized. Unlike in defense firms, it's extremely rare to see the same core group of lawyers at a plaintiff firm for years. Merkel and Cocke in Clarksdale is a notable exception.
Balducci testified that he was the source of the $50,000 in cash that Langston first paid to Peters. What in the world was Balducci doing with $50,000 in cash sitting around the house? Keeping that much cash around is a bad idea for many reasons and wreaks of tax fraud.
As to the impact of Balducci's testimony on Eaton v. Frisby and the DeLaughter trial, it's hard to say. The vast majority of Balducci's testimony was based on hearsay that would not be admissible at trial. Mike Wallace skillfully established this point near the end of the deposition. But if Balducci's testimony is corroborated by Ed Peters, then I do not see how DeLaughter can be acquitted. And even if DeLaughter somehow escapes conviction, I don't see any path for his to return to the bench. It looks like the best case scenario for him is that he exercised terrible judgment in communicating with Ed Peters and was unwittingly used as a pawn by Peters, who he fawned over in his book It's Never Too Late.
As for Frisby, Balducci didn't know anything about it or the lawyers in the case who he was asked about: Mike Allred, Rueben Anderson and Fred Banks. It's unclear what Judge Yerger is going to do in the case, but the longer he goes without dismissing the case for attorney misconduct the less likely that it will be dismissed.
