Crains New York - August 13, 2012 - (Page 10)

OPINION T bloomberg news Legal fees gone wild he last thing a business wants is litigation. Except for law firms, of course. Exhibit A: Torres v. Gristedes Operating Corp. In 2004, Carlos Torres and eventually about 250 other Gristedes employees sued the grocer for not paying extra for overtime. The supermarket chain’s owner, John Catsimatidis, says the company offered to go through employees’ records to make sure they had been properly paid, but the plaintiffs’ law firm rejected that approach, perhaps because its fees would have been minimal. (On the other hand, the suit charges that records were not properly kept.) In any event, the case quickly spun out of control. Gristedes was pulled into the realm of runaway legal fees and a court system that can put process above common sense. The result is that the grocery workers’ lawyers now stand to receive more money than the workers themselves. While the workers agreed to a $3.53 million settlement in 2009, a judge ruled this month that their law firm should receive another $3.86 million from Gristedes. Judge Paul Crotty deemed the amount justified because Gristedes aggressively fought the lawsuit. “Given the defendants’ vigorous approach to litigating this case,” he wrote, “they cannot now complain as to the amount that plaintiffs were forced to expend in response.” Mr. Catsimatidis’ answer is compelling: The workers sought $25 million, far more than they were owed and seven times greater than they ultimately accepted. The company’s only option was to fight. Besides, it had a legal right to do so, and ought to be able to exercise it without paying opposing lawyers much more than their clients ever would. The law firm charged about $250,000 to prepare a motion for class-action status and $490,000 for a motion for summary judgment. It requested hourly pay of up to $650 for partners, $400 for associates, $215 for law clerks and $185 for paralegals and tech-support workers. Partner rates were billed for associates who were not yet partners. The firm even charged for meals that were not out of town. Gristedes got the total reduced by $1.3 million, but had no way to disprove the firm’s claim of 15,094 hours worked. In rejecting the grocer’s argument that lawyers usually get one-third of awards, Judge Crotty cited a $600 case in which a court ruled the attorney deserved more than $200. The system is, in a word, crazy. Law firms specializing in wage cases are hunting for clients, winning large awards and putting some city businesses into bankruptcy. It’s too easy for lawyers to drag out a class action and pump up their fees. We don’t endorse Shakespeare’s proposal to kill all the lawyers, but there’s got to be a fairer way to pay them. CRAIN’S NEW YORK BUSINESS editor in chief Rance Crain publisher, vp Jill R. Kaplan EDITORIAL editor Glenn Coleman deputy managing editors Valerie Block, Erik Ipsen assistant managing editors Erik Engquist, Jeremy Smerd senior producer, news Elisabeth Butler Cordova news producer Lauren Elkies contributing editor Elaine Pofeldt columnists Greg David, Alair Townsend crain’s health pulse editor Barbara Benson senior reporters Theresa Agovino, Aaron Elstein, Lisa Fickenscher, Matthew Flamm, Daniel Massey, Miriam Kreinin Souccar reporters Amanda Fung, Andrew J. 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Masura (313-446-6097) director, audience development Michael O’Connor senior marketing manager Catherine Schutten event producer Courtney Williams reprint sales manager Lauren Melesio production and pre-press director Michael Corsi advertising production manager Suzanne Fleischman Wies TO SUBSCRIBE: For print and digital subscriptions or customer service, e-mail customerservice@crainsnewyork.com or call 877-824-9379 (in the U.S. and Canada) or 313-446-0450 (all other locations). $3.00 a copy for the print edition; or $99.95 one year, $179.95 two years, for print subscriptions with digital access. www.crainsnewyork.com/subscribe TO ADVERTISE: Contact Advertising Director Trish Henry at thenry@crainsnewyork.com or call 212-210-0711. www.crainsnewyork.com/advertise FOR INFORMATION ON OUR EVENTS: Contact Event Producer Courtney Williams at cwilliams@crainsnewyork.com or 212-210-0257. www.crainsnewyork.com/events TO CONTACT THE NEWSROOM: The aggrieved workers’ lawyers received more than the workers CRAIN’S ONLINE POLL COMMENTS Thinking outside the bus ‘NERD BUS’? HOW ABOUT TRYING A ‘TECH TURTLE’? WHY HASN’T MITT ROMNEY RELEASED MORE TAX RETURNS? A. The returns would reveal something shocking, damaging his chances. B. The returns would show he paid low rates many Americans perceive as unfair. C. He’s just guarding his privacy. D. He’s getting bad advice from strategists. E. His dog ate them as payback for having to ride to Canada on the roof of Mr. Romney’s car. Date of poll: Aug. 6 750 votes B 44% A 36% C 13% E D 4% 3% There’s been a lot of talk of a “Tech Triangle” emerging in Brooklyn, most recently when Sen. Charles Schumer sent a letter to the MTA urging an increase in bus service to connect the city’s burgeoning tech centers—an idea quickly dubbed the “nerd bus.” The Tech Triangle is created by the boundaries of Dumbo, the Brooklyn Navy Yard and downtown Brooklyn/MetroTech Center. Hundreds of established and emerging firms are finding fertile ground for starting or growing tech-related businesses, drawn by attractively priced space, public transit and a huge reservoir of intellectual as well as venture capital. But the single biggest impediment to the growth of the triangle area is the lack of a cohesive and convenient method of transiting from the three points of the zone. While downtown Brooklyn and MetroTech enjoy some of the best mass transit options in the city, Dumbo and the Brooklyn Navy Yard are much more challenging to access. A monorail, light-rail or trolley-type plan would be the ideal solution, but I suspect that the whiz kids working in the Tech Triangle will have created personal jet packs before any track is laid for an efficient people mover. My modest proposal for solving the intertriangle transit issue would be to implement an amphibious vehicle route. Imagine boarding a bus-like conveyance at a bus stop in the Brooklyn Navy Yard. It could drive down a ramp, enter the East River and the next stop is Dumbo. Exiting the water— say, by Old Fulton Street—the bus/boat could make a few stops in Dumbo, head into downtown Brooklyn/MetroTech, and after a few strategic stops at transit hubs like Court Street and Atlantic Terminal, it’s a short ride via the streets back to the Navy Yard and then start the water leg of the trip again! As the Cornell tech campus on Roosevelt Island becomes developed, the “Tech Turtle” could expand its route to include other East River stops, including Long Island City and Roosevelt Island as well as Brooklyn Bridge Park. A Dutch-built vehicle called an Amfibus (pictured) is used for public transit and tourism in Montreal, Rotterdam, London and Glasgow. It carries up to 50 people on a bus-like vehicle that uses twin jet drives in the water. It’s a proven example of a hybrid vehicle meeting the travel demands of congested cities. —timothy d. king Managing partner CREX Real Estate Brooklyn 711 Third Ave., New York, NY 10017-4036 editorial phone: 212.210.0277 fax 212.210.0799 Entire contents ©copyright 2012 Crain Communications Inc. All rights reserved. ®CityBusiness is a registered trademark of MCP Inc., used under license agreement. PUBLISHED BY CRAIN COMMUNICATIONS INC. chairman Keith E. Crain president Rance Crain secretary Merrilee Crain treasurer Mary Kay Crain executive vp, operations William Morrow senior vp, group publisher Gloria Scoby group vp, technology, circulation, manufacturing Robert C. Adams vp/production, manufacturing David Kamis chief information officer Paul Dalpiaz founder G.D. Crain Jr. (1885-1973) chairman Mrs. G.D. Crain Jr. (1911-1996) FOR THIS WEEK’S QUESTIONS: Go to www.crainsnewyork.com/poll to have your say. CRAIN’S WELCOMES SUBMISSIONS to its opinion pages. Send letters to letters@crainsnewyork.com. Send columns of 475 words or fewer to opinion@crainsnewyork.com. Please include the writer’s name, company, address and telephone number. 10 | Crain’s New York Business | August 13, 2012 http://www.crainsnewyork.com/subscribe http://www.crainsnewyork.com/advertise http://www.crainsnewyork.com/events http://www.crainsnewyork.com/poll

Table of Contents for the Digital Edition of Crains New York - August 13, 2012

Crains New York - August 13, 2012
Table of Contents
IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
CORPORATE LADDER
OPINION
GREG DAVID
REAL ESTATE DEALS
FROM AROUND THE CITY
REPORT: SMALL BUSINESS
THE LIST
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crains New York - August 13, 2012