When I read the Washington Post story about trial lawyers ”gearing up to mount a major assault on the former makers of lead paint,” with city and state officials around the country as their clients, an Oliver Cromwell quote came to mind.
”You have (been) too long here for any good you have done,” Cromwell told the Rump Parliament in 1653. ”Depart, I say, and let us have done with you. In the name of God, go!”
The entrepreneurial lawyers who have gotten very, very rich by targeting whole industries–first asbestos, breast implants, contraceptives, tobacco; now guns, computers; next paint, HMOs, liquor, food, chemicals–have done some good in their time. The grave health risks posed by asbestos, for example, and the documentation of the vile and devious tactics employed by the tobacco companies as they addicted and poisoned their customers, were exposed in large part by the efforts of trial lawyers.
But as they have become bolder and richer–and especially as they have teamed up with state and local officials in search of easy revenues–the trial lawyers (with the help of judges and juries) have imposed ever-greater costs on us all in lawsuits that bring ever-fewer benefits.
Take the lawyers’ new plans to seek recovery of government money spent to remove lead paint from housing and other costs associated with lead paint poisoning. Any liabilities will be imposed on companies whose current managements have never sold the stuff. (Lead paint was outlawed nationally in 1978 and widely discontinued long before.) And by the time the liabilities have been spread around–through insurance, higher paint prices, and the like–the costs will have little impact on the profits of any corporate malefactors. Rather, they will ripple through the whole economy.
Meanwhile, in this, as in other fields, more than 60 cents of every dollar paid out by defendants and insurers will very likely go not to plaintiffs (here, cities and states) but to their lawyers (who often take 33 percent to 50 percent of litigated judgments and settlements), along with the defense lawyers and other legal costs. Children poisoned by lead paint will get precisely nothing.
In short, the coming lead paint lawsuits, if at all successful, will impose big costs on us all, will enrich lawyers, and will do nothing to accomplish either of the traditional goals of tort liability: deterring harmful conduct and compensating injured people.
Tort liability in this country has been steadily expanding for the past 30 to 50 years, as dozens of doctrines that once made it hard to win lawsuits have been eroded or junked. To a point, this has been good: We may have the safest products and services in the world, and this is in part because companies know that they can be sued into the ground for any injuries they cause. But liability has mushroomed to the point that increasingly companies are sued into the ground, without proof of any misconduct, by lawyers whose clients are not victims of any misconduct.
Advocates of expansive liability capitalize on the naturally popular impulse to take money from corporate malefactors and give it to their victims. But as plaintiffs seek compensation for injuries ever more remote from any fault of the defendants, litigation begins to approximate a tax on society at large, and a very inefficient one at that.
The asbestos litigation, for example, started as a much- needed drive to compensate victims of serious asbestos-caused diseases by imposing liability on companies that had recklessly endangered their victims while concealing the dangers. But this once-limited and reasonably noble cause has gradually become a monster, bankrupting some 15 companies–a few of which had done little or nothing wrong–while clogging the courts with claims by asbestos-exposed plaintiffs who are not yet sick and who may never become sick, leaving thousands who are sick without prompt or adequate compensation and channeling billions of dollars to a relatively small number of lawyers.
Some of these asbestos lawyers looked around for new industries to attack and lit first on tobacco. The luckiest ones signed up as their clients state attorneys general seeking reimbursement for Medicaid spending on tobacco-related illnesses.
Was this a noble cause? Well, let’s see: The great bulk of the $ 246 billion that the tobacco companies agreed last year to pay to the states (over the next 25 years) will not come from the companies’ profits. (That’s why the corporate malefactors bought the deal, which sent their shares soaring.) It will come from higher prices paid by their supposed victims, in what is essentially a new tax on smokers of about 80 cents a pack. The smokers’ money will be transferred indirectly to us nonsmokers– the ultimate beneficiaries of the payments to our states.
There’s not much nobility in that–especially since the average smoker, by dying young, ends up costing the health care system less overall (despite the cost of smoking-related illnesses) than the average nonsmoker. To be sure, there may be one big benefit: a hoped-for reduction in the number of new teenage smokers because of the higher prices and advertising restrictions agreed to by the companies. Less speculative are the benefits that are going right past the states to their contingent-fee lawyers, whose fees are likely to mount to an obscene $ 12 to $ 15 billion over the next 25 years, with some lawyers netting more than $ 100,000 per hour worked. Left in ruins were the ethical and legal obligations of lawyers to charge reasonable fees.
The tobacco settlement represents an end run around representative government. The legal process was used to impose a tax on tens of millions of people, in every state–a tax for which no legislature ever voted. This was done by delegating government functions to contingent-fee lawyers with a financial stake in making this tax as large as possible. And those lawyers were typically chosen by attorneys general without competitive bidding, often from the ranks of their own campaign contributors and cronies, and in at least one state (Texas) amid a strong stench of corruption.
As a matter of law, the states’ claims were weak. So why did the companies settle? Aside from their ability to shift most of the cost to their ”victims,” they knew that juries might be less than impartial when their governments were bringing lawsuits advertised as benefiting them against (mostly) out-of-state defendants.
The lawsuits against gunmakers that have multiplied in recent months–organized by tobacco lawyers and filed by cities claiming damages for public outlays allegedly associated with gun-related violence–pose similar problems. The lawsuits would use made-up law to soak unpopular companies for having sold legal products in compliance with the laws then on the books. They would also require the companies to agree to gun controls of debatable efficacy that have not been voted by any legislature. And they would propel us farther down the slope toward the imposition of potentially ruinous liability on anyone who does anything of which any jury, anywhere, can be persuaded to disapprove.
Indeed, the slope gets even more slippery, and more companies are threatened with sliding down it, all the time. HMOs? Russ M. Herman of New Orleans, a successful veteran of the tobacco litigation, told The New York Times that unless Congress reforms HMOs to the trial lawyers’ satisfaction, ”my guess is that in five years you will see a massive lawsuit brought to destroy and dismember managed care as it currently operates.”
Breast implants? On June 21–after a decade of implant litigation that has sent Dow Corning Corp. into bankruptcy and squeezed $ 7 billion in settlements out of implant companies–The New York Times reported that a prestigious panel of 13 scientists, convened at the request of Congress, had concluded that silicone breast implants do not cause any of the major diseases afflicting the plaintiffs. (They do sometimes cause localized infections and scarring of breast tissue.)
Prepared for the Institute of Medicine of the National Academy of Sciences, this study is consistent with all previous major research projects. There has never been anything but junk science to support the claims that silicone leaking from breast implants causes the major diseases (such as lupus and rheumatoid arthritis) suffered by the plaintiffs–and by similar percentages of women who have not had implants. But manufacturers, besieged by lawsuits so numerous and vast that the companies could win almost every trial and still be ruined, have been bludgeoned into paying billions for claims ever more convincingly discredited by science.
The rule of law has morphed into the rule of lawyers.