Sept. 19, 2007— -- The owners of a dry cleaning store, sued for $54 million over a lost pair of pants, have been forced to close their store because of the financial and emotional toll of the lawsuit, their lawyer said Wednesday.
Korean immigrants Jin and Soo Chung have closed down Custom Cleaners, which they ran since 2000, said their lawyer Christopher Manning. They still own another dry cleaning shop in Washington, D.C., called Happy Cleaners.
The Chungs were sued by Roy Pearson, a D.C. administrative law judge, over a lost pair of prized pants that he planned to wear on his first day of work as a judge. Pearson initially asked for $67 million, but later reduced the requested compensation to $54 million. He lost his case, but is appealing, and that's expected to be heard next year.
"This is a truly tragic example of how devastating frivolous litigation can be to the American people, and to small businesses," Manning said. "This family had poured its heart and soul into their dry cleaning stores, only to have their dreams crushed by Roy Pearson's lawsuit."
Lawyers Call Suit a 'Nightmare'
The strange case exploded into the headlines in the spring and outraged several legal groups, prompting fundraisers and an online legal defense fund for the Chungs.
The American Tort Reform Association raised about $70,000 for the couple's defense. In a statement, the group decried the suit as a "nightmare" that it felt compelled to speak out on "on behalf of all small business owners just like the Chungs who are regularly targeted by personal injury lawyers because, unlike large companies, they often don't have the resources to defend themselves."
A spokesman for the American Association of Justice, the largest trial lawyers organization in the nation, told ABC News the case was "outrageous and shameful." The group filed a complaint with the District of Columbia bar.
Tearful Testimony, Internet Fundraising
ABC News looked into the case and covered the story extensively and was the first news outlet to interview the Chungs. Online response was so strongly in favor of the couple that a defense fund was set up on the Internet by the Chungs' lawyer, Chris Manning, who has repeatedly declined to say how much money has been raised.
The trial proved nearly as dramatic and unusual as the plaintiff's claims. On the witness stand, Pearson broke down in tears while testifying about his experience with the missing trousers. Because he served as his own lawyer, Pearson wept during a question-and-answer session with himself.
In his opening statement, Pearson came out swinging, telling the court, "Never before in recorded history have a group of defendants engaged in such misleading and unfair business practices."
Repeatedly referring to himself as "we," Pearson sought to present himself as the leader of a class of tens of thousands, if not a half-million people, consisting of local residents he believes are at risk of falling for such insidious business practices as posting "Satisfaction Guaranteed" and "Same Day Service" signs. Pearson said at one point in court filings that he planned to call 63 witnesses.
But Judge Judith Bartnoff, who presided over the trial, made every attempt to thwart his efforts.
"Mr. Pearson, you are not we. You are an I," Bartnoff told him.
As Pearson explained the details of the missing pants, he struggled to get through his hour and a half of testimony, most of which concerned his credentials and his background.
He became visibly emotional when he recounted a confrontation with Soo Chung.
"These are not my pants," he said he told her. "I have in my adult life, with one exception, never worn pants with cuffs."
Pearson testified that Chung insisted, saying, "These are your pants."
Pearson then rushed from the courtroom, overcome with emotion.
From $10.50 to $67 Million for Pants
The bad blood between the customer and store dates back to 2002, when Pearson claimed a first pair of pants had disappeared from the dry cleaners.
The Chungs gave Pearson a $150 check for a new pair of pants and Pearson was banned from the store, defense attorney Manning said in court.
Manning said Pearson pleaded with the Chungs to let him back into the store because he didn't have a car and they were the only dry cleaners in the neighborhood.
Three years later, Pearson said he returned to Custom Cleaners and, like some real-life Groundhog Day nightmare, another pair of trousers went missing.
It was May 2005 and Pearson was about to begin his new job as an administrative judge. He said in court filings he wanted to wear a nice outfit to his first day of work. He tried on five Hickey Freeman suits from his closet, but found them all to be "too tight," according to the Post, which first reported the story.
Pearson said he brought one pair of pants in for alterations and they disappeared — gray trousers with what Pearson described in court papers as blue and red stripes on them. The dry cleaning bill was $10.50.
First, Pearson demanded $1,150 for a new suit. Lawyers were hired, legal wrangling ensued and eventually the Chungs offered Pearson $3,000 in compensation. Then they offered him $4,600. Finally, they offered $12,000 for the missing gray trousers with the red and blue stripes.
Pearson refused every offer. With neither satisfaction nor his prized gray pants, Pearson upped the ante considerably. He went to the lawbooks. Citing the District of Columbia's consumer protection laws, he said he was entitled to $1,500 per violation — each day that the "Satisfaction Guaranteed" and "Same Day Service" signs were up in the store. It had been more than 1,200 days.
He multiplied each violation by three because he sued Jin and Soo Chung and their son. With an additional $1 million for emotional damages and more for legal fees, that brought Pearson to $67 million, though he later amended his filings to ask for only $54 million.
Before the end of the trial, the Chungs told ABC News that they had spent thousands of dollars defending themselves against Pearson's lawsuit.
"It's not humorous, not funny and nobody would have thought that something like this would have happened," Soo Chung told ABC News through an interpreter. Her husband agreed.
"It's affecting us first of all financially, because of all the lawyers' fees," Jin Chung said. "For two years, we've been paying lawyer fees and we've gotten bad credit as well, and secondly, it's been difficult mentally and physically because of the level of stress."
Soo Chung later broke down in tears.
"I would have never thought it would have dragged on this long," she said. "I don't want to live here anymore. It's been so difficult. I just want to go home, go back to Korea."
"I've been in the dry-cleaning business for 14 years, but this has never ever happened before. If anything happened to our customers' clothing, we would always compensate them accordingly and fairly," Jin Chung said through a translator.
The ABC News Law & Justice Unit has calculated that for $67 million Pearson could buy 83,750 new pairs of pants at the $800 value he placed on the missing trousers in court documents.