Tag Archives: Punitive Damages

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Opening Argument – When Punitive Damages Make No Sense

by Stuart Taylor, Jr.

National Journal

Two controversies shed light on some of the idiocies of our lawsuit culture, and on the anti-corporate populist delusions and political influence-peddling that help explain why the law is so often an ass. The first involves a $2.5 billion award of punitive damages against ExxonMobil, $484 million of which would go to the plaintiffs’ attorneys. The second involves countless billions of dollars in "privacy" claims against telecommunications companies for helping the government seek to prevent terrorist attacks through arguably illegal wiretaps.

The Supreme Court is poised to decide whether to hear an ExxonMobil subsidiary’s petition for relief from the $2.5 billion punitive award that a federal Appeals Court approved in one of the cases arising out of the catastrophic oil spill after the tanker Exxon Valdez hit a reef off the coast of Alaska 18 years ago.

That would be $2.5 billion on top of the $3.4 billion that the company has already paid to clean up the environmental damage, to compensate all injured fishermen and other parties, and to pay fines and settle claims with Alaska and the U.S. government.

The legal explanation for why Exxon should not pay a dime in punitive damages, let alone $2.5 billion, is complicated. But the fundamental folly underlying this and many other huge awards is pretty simple, in my opinion:

This punitive award would not punish any human being who had anything to do with the oil spill. (The ship’s captain has already been assessed $5,000 in punitive damages.) It would enrich only lawyers and Alaskans who have already been fully compensated for losses caused by the oil spill. And it would deter no future corporate misconduct, prevent no accidents, and serve no public interest of any kind, in any way.

This sort of award is, in other words, pure waste. And ultimately such awards come out of your pockets and mine.

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Opening Argument – John Edwards: The Lawsuit Industry Puts Its Best Face Forward

by Stuart Taylor, Jr.

National Journal

Sen. John Edwards of North Carolina, the charismatic personal-injury lawyer who would be president — or, perhaps, vice president — has done wonders for the image of the lawsuit industry. In more than a decade as his state’s most talented trial lawyer, Edwards won an estimated $150 million in jury awards and settlements for powerless people who had been horribly injured by reckless and negligent (and, perhaps, not so negligent) corporations and doctors. He cared passionately for his clients, believed deeply in his cases, and was apparently untainted by the ethical sleaze exhibited by some of the lawyers who have so lavishly financed his campaign. And his extraordinary ability to connect with ordinary Americans works magic on the campaign trail as well as in the courtroom.

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Legal Affairs – How 9/11 Shines a Spotlight on Litigation Lottery

by Stuart Taylor, Jr.

National Journal

It was obvious to almost everybody after the twin towers came down that the foreseeable plague of lawsuits against the airline industry and the owners of the destroyed World Trade Center-as well as its architects, engineers, builders, insulation suppliers, and every other solvent company that had anything to do with the place, not to mention Boeing Co. and the City of New York-would be a repugnant spectacle.

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Legal Affairs – Tobacco Lawsuits: Taxing the Victims To Enrich Their Lawyers

by Stuart Taylor, Jr.

National Journal

After slamming big tobacco with an unprecedented $145 billion in punitive damages in a class action brought on behalf of sick smokers in Florida, jurors said their goal had been to punish the industry for its sins and "send a strong message for all companies in America that they can’t fraudulently represent anything to the public," in the words of the foreman, Leighton Finegan. He added: "For the past 50 years these companies have lied, hidden information, and burned documents, and that makes me angry."

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Legal – How I Hit The Class Action Jackpot

by Stuart Taylor, Jr.

National Journal

As the lucky co-owner of a Toshiba laptop computer, I should be tickled pink: I apparently qualify for a cash rebate of $309.90. This thanks to an Oct. 29 settlement in which Toshiba agreed to spend at least $1 billion to end a class action lawsuit–the first of a wave now being filed against computer-makers–claiming that it has sold more than 5 million defective laptops in the United States since 1987. Once the settlement receives final judicial approval, owners of laptops purchased since March 5, 1998, can claim cash rebates ranging from $210.00 to $443.21. Both they and owners of older Toshiba computers will also get discount coupons of up to $225 for future purchases of Toshiba products.

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Smashing Undercover Journalism

by Stuart Taylor, Jr.

Did you hear about the big civil rights organization that sent two undercover "testers" to work as a meat-wrapper and a deli clerk in a huge supermarket chain, after being tipped off by union activists about racial bias there?

Using fake resumes and concealing their true identities to get jobs, the testers carried hidden cameras and microphones to document a pattern of crude racial epithets and other racial harassment by supervisors and fellow workers.

When confronted with the evidence, the supermarket chain counterattacked by hitting the civil rights organization with a $7.5 billion lawsuit in the chain’s home state of North Carolina, with claims for racketeering, mail fraud, common law fraud, and trespass, among others. The trial judge let some of these claims go to a jury, which slammed the civil rights group with $5.5 million in punitive damages for using fraudulent tactics to obtain evidence.

Actually, I made the case up. But the facts closely track those leading to the Jan. 22 jury award of $5.5 million in punitive damages against ABC for the 1992 hidden-camera expose" of Food Lion Inc. by "PrimeTime Live." The main differences are that ABC broadcast some of the hidden-camera tapes-in a program the truthfulness of which Food Lion chose not to challenge in court-and that ABC was not exposing racism, but the alleged mislabeling and selling of out-of-date foods, including spoiled meat and fish that had been bleached and food rescued (at management’s direction) from garbage dumpsters. Food Lion says the broadcast was inaccurate and unfair.

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Making Litigation Not Pay

by Stuart Taylor, Jr.

Republican rule on Capitol Hill has put new wind in the sails of some dubious proposals for striking at the very real problem of wasteful and abusive litigation tactics.

"Reforms" like the English "loser pays" rule and numerical caps on damages, which are in the House Republicans’ Contract With America, would surely stop some unwarranted suits, but they would also thwart many injured people with legitimate claims.

There are some better ideas in the hopper-ideas aimed at slashing billions in wasteful litigation costs rather than shielding business from liability to injured individuals. One of the most intriguing, endorsed by an impressive array of legal luminaries, seems well-designed to help deserving plaintiffs get swifter, surer compensation and to ease the litigation burden on business (as well as on plaintiffs)-and all without limiting any plaintiff’s right to seek full redress.

What’s the trick? You guessed it: Take it out of the lawyers’ hide.

But this proposal is not the kind of crude, probably counterproductive fee cap that some states have passed. It is an ingenious, largely self-executing mechanism aimed at restricting contingent fees to cases in which lawyers really earn them, while promoting early settlements in the many cases in which liability is easy to establish.

Here’s how it would work:

Any plaintiffs lawyer seeking a contingent fee in a personal-injury case would have to notify each defendant of the claim and provide routinely discoverable information about the plaintiff’s injuries, medical costs, and the like. The defendant could then make a settlement offer within 60 days, also accompanied by relevant discoverable information.

If such an early offer were made and accepted, the plaintiffs lawyer-having done little work-would be limited to hourly fees, capped at 10 percent of recoveries up to $100,000 and 5 percent of any additional amount.

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If O.J. Did It, Lock Him Up Forever

by Stuart Taylor, Jr.

Americans have a lamentable tendency to be overly punitive toward relatively minor criminals, like small-time drug couriers, and overly indulgent toward moneyed murderers with psychobabble sob stories, like the parricidal Menendez brothers.

Will O.J. Simpson be a beneficiary of the latter tendency, opening a new celebrity chapter in the how-to-get-away-with-murder’book? Or might his case mark a salutary turn toward taking death seriously, by locking killers up for the rest of their natural lives?

It must be stipulated that not quite enough evidence has so far been disclosed (or tested by the rigors of trial) to be certain that Simpson wielded the knife that so savagely tore into his ex-wife and the male friend whose body fell next to hers. The presumption of innocence has its claims-even though I have trouble imagining why a man who thought that someone else had just killed the woman he loved would be acting the way Simpson has been acting. (Example: His self-regarding "suicide" note, which says that "if we had a problem, it’s because I loved her so much" and that "[a]t times I have felt like a battered husband or boyfriend.")

But if the evidence does prove that Simpson killed Nicole Brown Simpson and Ronald Goldman, he should spend the rest of his life’ behind bars. The law needs to teach people a lesson that it has not been teaching in recent decades: If you murder another human being, you will be put away forever. No excuses. No parole. Period.

(I’m against the death penalty, but that’s another column.)

Anything like a 10-years-for-manslaughter outcome in Simpson’s case would further entrench our law’s longstanding bad habit of trivializing the battery and murder of women by their husbands and lovers. It would also advance the pernicious new trend toward letting killers avoid serious punishment by combining appeals for sympathy with deterministic explanations of their criminal behavior.

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Prosecutors Playing a Broken Record

by Stuart Taylor, Jr.

What do former CIA official Clair George, the four Los Angeles cops who beat up Rodney King, Clark Clifford, his co-defendant Robert Altman, and E. Robert Wallach have in common?

Each is threatened with multiple criminal trials on essentially the same charges. That may be legal, under various judge-made loopholes in the double-jeopardy clause. But it’s not fair. And it illustrates pervasive prosecutorial disregard for the spirit of the constitutional guarantee.

Prosecutors, armed with the awesome machinery of the criminal law, should be satisfied with one clean shot at a defendant, even if they miss. But more and more we see them forcing their quarry to spend years of their lives and millions of dollars to defend themselves even after winning acquittals, or near-acquittals.

Many in the press seem to see double-jeopardy rules as mere technicalities to be circumvented when they get in the way of a good show. And even the American Civil Liberties Union, understandably loath to let police brutality go unpunished, is waffling on its opposition to successive state and federal prosecutions.

But as the Supreme Court said in 1957, in Green v. United States, successive prosecutions undermine liberty by subjecting the defendant to "a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent he may be found guilty."

The potential for oppression by multiple prosecution is all the more apparent in white-collar and other complex cases. With trials grinding on for weeks or months, the million-dollar defense has become a routine necessity, leaving even acquitted defendants in financial ruin after a single trial, let alone two.