Posted on 03/12/2002 6:41:17 PM PST by Tumbleweed_Connection
WASHINGTON – Some legal policy analysts have long blamed abusive class-action lawsuits for endangering the economic health of America and for clogging the court system with bogus claims. But recently, some legal experts say even "legitimate" class-action suits subvert political policy-making by legislating new laws.
"I am not saying that every class-action suit is destructive, but there is a large subset of class-action lawsuits that are very destructive to tort law in general," Todd Gaziano, director of Heritage Foundation's Center for Judicial and Legal Studies, told United Press International. "Lawyers are not only undeniably making public policy, but also making money and ripping off their clients."
The often-illegitimate suits, he says, can bankrupt industries, increase insurance rates and consumer costs, and sometimes result in good products being removed from the market.
The issue is a timely one, because the U.S. House of Representatives is expected to consider a bill this week sponsored by Rep. Rick Boucher, D-Va., and Bob Goodlatte, R-Va., that would substantially change the way in which class-action lawsuits are classified as eligible for federal court review. The bill would bump most class-action lawsuits currently filed in state courts into the federal judicial system.
Critics of abusive class-action suits contend this move is needed to place cases that often have nationwide effects into the proper legal context. But supporters of the status quo believe the federal system is not properly equipped to handle the vast majority of such cases.
Supporters of the current system also contend that the bill is a political move, because the majority of federal judges on the bench were appointed by Republican presidents and are therefore more likely to actually follow the law and not legislate from the bench.
Although class-action lawsuits can be an effective legal tool in their intended form, critics say abuses of the system allow lawyers to bring lawsuits with national implications in local and state courts. This raises not only the issue of states' rights, but also questions about the legitimacy of applying one state's laws to a defendant from another state.
With certain local court systems slanted in favor of civil suits against corporations, lawyers bring cases with plaintiffs from multiple states in jurisdictions with judges that are most likely to look favorably on their cases. This is known in the legal industry as venue shopping.
"Certain states with crazy or corrupt tort systems allow plaintiffs' lawyers to bring what amounts to national lawsuits that effect everybody," said Gaziano. "Profit-maximizing plaintiff lawyers will always go to the most crazy or corrupt jurisdiction because that is where they can make the most money."
Jackpot Time
According to Gaziano and several other lawyers on both sides of the debate, two of the best states in which to bring class action suits are Mississippi and Alabama. This is due to their especially lenient civil suit statutes, and to the easily swayed juries and judges in their primarily poor rural districts.
Gaziano said that such jurisdictions might permit defendants with no connection to the state itself, or even lawsuits involving a penny overcharge for 1 million people. These so-called "coupon cases" often result in minor returns for their clients but large fees for the attorneys involved.
Michael J. Horowitz, director of Hudson Institute's Project for Civil Justice Reform, told UPI that because these suits subvert the original intent of the class-action lawsuit, their application often can be unjust.
Extortion of Gun Makers
Such suits, he says, often are no more than a means by lawyers to extort money from corporations, and more recently, by states as they become involved in cases like the recent suit brought against gun manufacturers linking sale of their products to crime.
"Not only are they often overreaching, but increasingly, as the potential liability of the single case or case cluster expands sufficiently to force whole industries to bet the company or bet the industry in single case, they don't serve the interests of justice," said Horowitz. "They have become blackmail operations."
But at a panel discussion last week sponsored by the Federalist Society for Law and Public Policy, Mississippi lawyer Richard Scruggs, best known as one of the primary architects of the suits brought against the nation's major tobacco companies, which by 1999 had resulted in nearly $250 billion in settlements for all the states involved, said that despite abuses of the system, class-action litigation had a proper place at the table.
"I don't think that litigation is a panacea for any social ills, though I think it has a role," said Scruggs.
He argued that although many abuses do exist - such as coupon cases, or the recent suit filed by several cities and states against gun manufacturers - appellate courts usually rectify improper rulings, along with inappropriate damages awarded by lower courts. The tobacco suit alleged damages based upon the cigarette maker's hiding of the health effects of tobacco. Plaintiffs sought financial restitution and states sought funds spent on health care problems associated with smoking. Many credit the suit as being the "patient zero" of civil actions, and the catalyst for the current crop of class-action suits pending in state courts nationwide.
Tobacco Case Backfires
The tobacco case and similar suits are cited by critics as a prime example of what is wrong with the system, because they do not provide the social fix heralded by their supporters. Instead, critics believe the cases have done little more than garner money for state coffers and lawyers' pockets. "The tobacco lawsuits have not stopped smoking; they have provided a windfall for states," said Horowitz. "The tobacco litigation has been a horrible precedent and will continue to be unless it is overturned. This was a bunch of states getting together and enacting a nationwide cartel and restraint of trade."
Horowitz said the settlement plan devised by the plaintiffs' lawyers, anti-smoking activists, states and the tobacco companies amounted to little more than a tax on cigarettes, while cementing the power of the tobacco companies.
"To anyone who has really studied the settlement and its effects, it is breathtaking how ingenious what the industry and attorneys general and the handful of so-called activists came up with," he said.
Under the settlement and subsequent laws adopted by states, all the tobacco companies involved, and even new tobacco firms that come into existence, are liable to pay restitution over time to states for the costs related to cigarette illnesses.
The new company provision, he said, is a powerful disincentive for new corporate development in the tobacco sector, and helps keep the cigarette companies' market shares in place. In addition, there is little incentive for states to limit smoking or make public health-related efforts to stop smoking, because they now benefit from tobacco company sales.
Yet Another Tax on Consumers
The settlement is also a prime example of the "very serious problem" of legislating through litigation, because the suit effectively levies a tax on consumers, Horowitz said.
Scruggs argued that such civil actions generally play a vital role. These suits, he said, often come about essentially by default, when the executive and legislative branches of government fail in their policy-making role, or are slow in responding to societal needs such as those related to cigarettes.
He cited as a prime example of this the new crop of suits against health insurance companies that have resulted because Congress has yet to adopt a "patients' bill of rights," which critics call a lawyer's bill of delights.
"Fundamental issues of national importance are being defaulted to the courts," said Scruggs. "But the court has always provided a safety net for times when the executive and legislative branches of government are failing."
He argued that although many abuses do exist - such as coupon cases, or the recent suit filed by several cities and states against gun manufacturers - appellate courts usually rectify improper rulings, along with inappropriate damages awarded by lower courts.
Yes well he forgets the fact that buy the time it reaches the appellate court the original lawyers have already made thier money
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