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Introduction
Class action lawsuits
have become a primary means by which the trial bar has been able
to "game" the civil justice system by filing abusive lawsuits in
"magic jurisdictions" on behalf of allegedly-harmed plaintiffs,
thereby generating millions or billions in fees.
Fast Facts
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“Litigation acts as a tax on businesses. How each business reacts
to such a tax is dependent on the market factors facing the
company. These factors determine whether or not a company
can withstand the increased burden of litigation. Some
companies can never recover from the additional costs and
file for bankruptcy. While bankruptcies are costly to the
businesses through filing, accounting, legal, and credit
restructuring costs — estimated to be between $367 million
and $1.92 billion61 — the most obvious consequence of
bankruptcies is the resulting unemployment and lost output
from a closure. Indeed, it is a sad truth that workers are
hurt by asbestos-related bankruptcies. “
(KRC:
Pacific Research Institute, "JACKPOT JUSTICE...”
p.38, citing
Joseph
E. Stiglitz, Jonathan M. Orszag, and Peter R. Orszag, The
Impact of Asbestos Liabilities on Workers in Bankrupt Firms
(Washington, D.C.: Sebago Associates, commissioned by
the American Insurance Association, 2002), p. 40)
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“This reality was clearly shown in 2002 by Nobel laureate economist
Joseph E. Stieglitz, who partnered with Jonathan M. Orszag
and Peter R. Orszag to conduct an independent analysis of
companies that filed for bankruptcy after losing
asbestos-liability lawsuits. They found that
asbestos-related bankruptcies, 61 so far, produced
significant losses to the economy, and that much of the loss
fell on the employees of these businesses. The costs
included the loss of income from job displacements, the loss
in future wages from reduced human capital, and the loss in
benefits from reduced pension portfolios. Taken
cumulatively, these indirect costs are estimated to range
from $111 million to $128 million annually. This is in
addition to direct insured losses from asbestos tort claims
of $5 billion in 2004.” (KRC:
Pacific Research Institute, "JACKPOT JUSTICE...”
p.38, citing
Joseph
E. Stieglitz, Jonathan M. Orszag, and Peter R. Orszag,
The Impact of Asbestos Liabilities on Workers in Bankrupt
Firms (Washington, D.C.: Sebago Associates, commissioned
by the American Insurance Association, 2002), p. 40, and
Tillinghast-Towers Perrin, U.S. Tort Costs and Cross
Border Perspectives, p. 7)
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A
Miami-Dade court this year entered a $24.2 million
compensatory damages award against Honeywell International
in what is believed to be the largest verdict with a single
defendant in Florida asbestos litigation history. The jury
reached its determination after just three hours of
deliberations, though Honeywell itself did not manufacture
products containing asbestos.
(KRC: JH,
Judicial Hellholes,
page 6)
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In
recent years this Chicagoland county has experienced a
substantial surge in asbestos claims, embraced improper
class actions, rendered evidentiary decisions that favored
plaintiffs, hosted excessive awards and otherwise shown an
unwillingness to dismiss claims with little or no connection
to the jurisdiction.
(Pat
Milhizer, Jury Awards $22.5 Million in Death of Road
Worker, Chi. Daily L. Bull., Aug. 28 at 1)
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Reason for optimism, however, may be found in a recent
ruling of the Texas Supreme Court that should stop personal
injury lawyers from importing claims from all over the
country to friendly Texas courts. On December 5, 2008, the
state’s high court ruled in In re General Electric Co.
that the plaintiff, who had lived and worked in Maine
all of his life, could not sue for his asbestos exposure in
Harris County, which handles Texas’s asbestos litigation.
(KRC: JH, Watch
List, page 21)
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Kostal noted the concentration of cases in San Francisco
County and Alameda County in California in which verdicts
are known to be more favorable to plaintiffs and awards are
higher than in other jurisdictions.
(Susan Kostal, “Asbestos They Can? Forging a congressional
Trust Fund Is as Complex as, Well, Asbestos Litigation
Itself,” American Bar Association Journal, Vol. 91,
No. 6 (2005))
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