Wednesday, March 28, 2012
IN MY OPINION (Column)
On Winnable Versus Unwinnable Cases
By GERT K. HIRSCHBERG
Trial lawyers have long been the envy of other lawyers. That’s because the multi-million dollar verdicts in the slam dunk cases are not really what they purport to be: Huge verdicts in facially unbeatable cases. Not so. Conveniently or accurately, the reading public is frequently deprived of the actual facts of a “slam dunk” case.
Recently, the reading public has been inundated with what appears to be an unexcusable lapse in fiduciary duties. Goldman Sachs, it was alleged, engaged in inexcusable conduct, i.e., pushing the stocks it wished to dump in favor of recommending a promising stock to its clients. Integrity is eroding.
The accusation is not new, but it appears in a different contest. Approximately two years ago, in a documentary movie, “Inside Job”, these revelations were well articulated by Senator Carl Levin of Michigan. Yet the misconduct alleged was so gross that it triggered coverage by the media. A defamation action is all but inevitable. In short, the defamation action is slam dunk. It cannot be lost. No so fast. There is no such thing as an unwinnable (or winnable) case or defense. See People v. O.J. Simpson.
It is also true that Goldman’s reputation lately has been blemished. The firm has more than 30,000 employees and has existed for more than a century. Books have been written. The Wall Street meltdown has not helped its reputation nor have the cuts in huge bonuses to its employees and managers been a major factor. In short, the proceeds of a major defamation is all but money in the bank. Slam dunk is not slam dunk in modern trial lawyers’ concepts. Defamation suits have been traditionally hostile to jurors. The potential defendant, Greg Smith, was a long time employee of Goldman, Sachs. Why did he choose this time to leave his position as a derivative salesman? Why the revelations now? Why no specific examples of misconduct, setting forth dates and names? Unnamed clients in London were referred to as Muppets. Are these terms necessarily defamatory?
In 2010, Goldman paid a $550 million fine to the Securities and Exchange Commission to settle allegations of misrepresentations. It is highly unlikely that these facts are admissible in a present defamation action.
Smith also alleges in his article published in the New York Times that Goldman routinely profits at the expense of customers. That is precisely the raison d’etre for all business.
It is, of course accurate that truth is an absolute defense to a defamation claim. That statement gives no solace to a defamation plaintiff. A jury can, and frequently does evaluate truth or falsity from a litigant’s conduct. In evaluating truth of the allegations, a jury does and can consider the motive of the alleged defamer. It is not just what he says, it is how he says it and why he says it. The road to a windfall verdict is indeed a hazardous one.
This column does not take a position on the viability of a potential defamation action involving a highly visible defendant in an oft articulated controversy in the background of a highly volatile economic landscape. Even if there were such a thing as a slam dunk case, this is not one That, perhaps, is the benefit we all derive from the jury system.
Copyright 2012, Metropolitan News Company