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Speaker's Resource: 2. Lawsuit Abuse, p1

 

 

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Chapter 2:

Lawsuit Abuse

 

 

Introduction

Lawsuit abuse – the deliberate filing of frivolous litigation – has made a travesty of the American civil justice system.  It’s not called “Jackpot Justice” and the “Litigation Lottery” for nothing:  plaintiffs’ lawyers file lawsuits for the sole purpose of obtaining large settlements or judgments from defendants whose actions, products or services have not caused any real harm to defendants; and in many cases, plaintiffs receive none or only a negligible portion of the actual award, while plaintiffs’ counsel are paid millions, and in some cases, billions of dollars even though they frequently expend very little effort or expense on the case.

Fast Facts

  • “People are increasingly using lawsuits as a means to pass blame onto someone else. Our civil justice system should not be a player in the ‘Blame Game’. Instead, our courts should be used to provide justice and fair compensation for those who were truly wronged – not for those who simply do not want to accept responsibility for their actions or as a means to get rich quick or to get something for nothing” (California Citizens Against Lawsuit Abuse website (www.cala.com) , “Take Responsibility – Stop Lawsuit Abuse”)

  • “Our runaway tort system is a genuine problem that is causing economic harm, and far more important, is distorting the cause of Justice.  American politics typically responds to such problems, but in this case the power of the tort bar (personal injury lawyers) centered on the Democratic Senators has blocked even the most modest fixes.” (California Citizens Against Lawsuit Abuse website (www.cala.com) quoting The Wall Street Journal, July 8, 2004)

  • “In a typical year (2002) more than 16 million lawsuits are filed in state courts – that’s one about every 2 seconds”.  (CFA, Fast Facts on the Litigation Lottery, 2005, p. 2)

  • At least 6,000 of the 8,000 plus lawsuits filed against the drug company, Bayer, when it withdrew its widely-used cholesterol drug from the market, were filed by plaintiffs who did not suffer any side effects from the medication. (www.sickoflawsuits.org, citing Scott Gotlieb, M.D., The New York Times, February 26, 2003)

  • “The top 10 jury awards in 2002 totaled $32.7 billion; in 1999 the top 10 awards totaled $9 billion”. (Institute for Legal Reform website, www.instituteforlegalreform.com, “Facts & Figures”, citing National Law Journal, 2003)

Unwarranted Claims

  • The prospect of striking it rich, often with very little effort, by filing frivolous lawsuits to gain multi-million dollar fees motivates some plaintiffs’ attorney to assault one company after another with little or no regard for the merits of the claims.  (Comments by the editor.)

  • Frivolous claims allege some type of harm when in fact little or none has occurred. They require minimal time, effort and expense to file, yet hold out the possibility of significant rewards, a substantial portion of which will be paid to the plaintiffs’ lawyers. Although frivolous claims have no real basis in fact or law, defendants often settle them – a kind of “legal extortion” – because it costs less to settle these claims than to defend them. (KRC:  Schwartz, “Why the Lawsuit Reduction Act …”)

  • “The threat of a lawsuit and the related media damage can present a no-win situation for companies: either settle a false claim to end the bad publicity or fight on the facts but get tarnished in public anyway. Often the damage to a company's reputation and sales exceeds the legal risk it wants to avoid”.  (KRC:  Hantler, “Minimizing the Damage from Lawsuits, PRWeek”,  June 27, 2005)

  • In 1999, the court ruled that those who may have been exposed to a dangerous substance can get a cash award even if they have no symptoms of illness.  (Bower v. Westinghouse, 522 S.E. 2d 424 (W. Va. 1999))

  • Yet West Virginia’s speculative law allows thousands of plaintiffs to sue for future injuries and receive awards that can then be used to buy cars, vacation getaways or anything else they choose.  A $381 million verdict including medical monitoring claims against DuPont is currently on appeal to the state’s high court.  (KRC: JH, Judicial Hellholes 2008/2009, page 3)

  • Summing up: Patron drank before going to the restaurant, likely driving drunk to get there; the restaurant did not sell alcohol to the driver. So, why is the restaurant subject to liability for the drunk driving accident? What does this say for the notion of personal responsibility in some areas of New Jersey?  (Assoc. Press, Court Expands Bar Owners’ Responsibility, The Record (N.J.), Mar. 20, 2008, at http://www.northjersey.com/business/news/Court_expands_bar_owners_responsibility.html.)

  • 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)

Why Do Lawyers Pursue Unwarranted Litigation?

For the Money!

  • A class action was filed against a local Hooter’s restaurant chain in Georgia for violating a federal law when it purchased advertising space in 6 unsolicited “blast faxes” sent to over a thousand people. An $11.9 million verdict was returned against the restaurant which then declared bankruptcy.  Plaintiff’s counsel was awarded $4 million in legal fees. (KRC: Olson, The Rule of Lawyers, pp.87)  

  • In another egregious example, the members of a class action lawsuit against Toshiba sued over obscure and hard-to-trigger problems in laptop computers and collected between $100 and $443 each in cash and coupons from the company, while the attorneys who represented them collected $148 million in fees. (KRC: Olson, The Rule of Lawyers, pp. 89-91)

  • A South Florida attorney, Curtis Wolfe, has started a new Web site, “WhoCanISue.com.” But have no fear. Despite its name, Wolfe claims his site is only an attorney referral service, not a means by which to identify potential defendants for litigious individuals in plaintiff-biased South Florida.  (Bridget Carey, Lawsuits Made Simple? Website Makes the Claim, Miami Herald, Aug. 7 2008 C1)

 

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