-Caveat Lector-
Vol. 15, No. 41 --
November 8, 1999
Published Date October 15, 1999, in Washington,
D.C. http://www.insightmag.com
Shark Zone
By Gayle M.B. Hanson
Leading trial lawyers are
raking in the money in
class-action lawsuits against
corporations. But
critics say that the trend is
not helping individual
consumers and may be ruining
the judicial
system.
ig fish eat little fish,
and in the shark tank that is the
American civil-justice
system a handful of lawyers who
brokered the
multibillion-dollar tobacco settlement now
are in a feeding frenzy as
they prepare to take on
health-maintenance
organizations, or HMOs.
. . . . "The first thing to
recognize is that these lawyers can bring
resources to the table that
are unavailable to other attorneys
simply because of their
wealth," says Sherman Joyce, president
of the Americans for Tort
Reform Association. "Look at
Richard Scruggs. He was the
guy at the center of the tobacco
litigation. He's now getting
ready to move on to the HMOs."
. . . . That story, first
reported in the Wall Street Journal,
comes at a time when the
nation's civil-justice system is
undergoing massive tremors
from having been called upon both
to adjudicate and legislate.
. . . . The House has just
passed a bill that would make it even
easier to sue health-care
providers, and a flood of class-action
lawsuits against HMOs is
expected to hit the courts within a
few months. These lawsuits --
filed by the same guys who
brought you the
multibillion-dollar tobacco settlement, say their
detractors -- could have an
extremely negative effect on the
ability of insurers to
provide low-cost coverage as they move
to shore up their resources
against the high cost of litigation and
fear of huge punitive cash
awards.
. . . . Passage of the
Bipartisan Consensus Managed Care
Improvement Act will cripple
the nation's employer-based
health-insurance systems, say
insurance-industry
representatives. "Passage of
the 'Dingwood' bill shows that the
entrepreneurial plaintiffs'
bar and their political soul mates in the
House of Representatives are
interested in advancing their own
financial and political
interests over the needs of consumers,"
says Chip Kahn, president of
the Health Insurance Association
of America. "If this bill
becomes law, it will reduce consumers'
choice of health plans and
expose employers to the prospect of
crippling lawsuits."
. . . . And, according to a
Rand report, the threat of litigation
may not accomplish any
significant benefit to consumers. "The
threat of litigation may
cause health plans to make better
decisions, i.e., to approve
more medically necessary care,"
says the report, titled The
Effectiveness of the Legal System in
Deterring Wrongful Practices.
However, the report goes on to
say, "Decisions that cause
injury may be deterred, but not all
the time or in all cases; at
the same time, health plans may react
defensively by approving
unnecessary care" and raising
premiums dramatically.
. . . . Class-action
lawsuits, conceived as a way to empower
groups of people who have
suffered a common injury to
receive redress, have had an
enormous and chilling impact on
our economic climate, say
critics. They have done little for
most individual plaintiffs
and may not be effective in deterring
wrongful behavior. If in some
instances they address real
grievances, the question
remains as to how they should travel
through the legal system.
. . . . And if Scruggs, who
could not be reached for comment,
is successful in leading the
charge of millions of consumers
against a select group of
targeted HMOs, the class of people
likely to benefit most from
such a lawsuit may consist of
Scruggs and his lawyer
cohorts. As for the HMO members,
judging by other cases, they
likely will get little more than a
boost in premiums and a
further failure of the system and
eventually be turned over to
the greater problems of
government medicine. In
addition, civil libertarians argue, unless
serious tort reform is
enacted there likely will be other
increasingly bizarre
applications of the law.
. . . . "We are getting
further and further from the traditional
notions of tort law in which
you had to be injured in order to
receive damages," says Joyce.
"Now we have a situation in the
case of American Home
Products where the courts have
decided that the company must
provide a financial settlement to
people who have not yet even
been injured."
. . . . The case, which
pitted hundreds of thousands of litigants
against the maker of the
popular diet drug fen-phen, reached a
$1 billion settlement that
will provide a cash award to hundreds
of thousands people who have
yet to (and may never) get sick.
The idea behind the award is
that the plaintiffs will use the lump
sum during the course of
their lifetimes to pay for screening of
possible medical conditions
that might arise from their onetime
use of the drug. "I know that
if someone handed me $20,000
to use to monitor my health
care I'd probably use it to pay my
child's college tuition or
give it to my broker," says Joyce.
. . . . Even as individual
Americans continue to use the courts to
advance ever more imaginative
ways to wrench a few bucks
out of the system, Americans
have watched the emergence of
trial lawyers as pop-culture
commentators on cable TV. While
flashy trial lawyers do like
to beam in the warm glow of the
klieg lights and a salivating
Geraldo Rivera, there's nothing like
that cold, hard cash on the
bottom line. Johnnie Cochran, who
was Soul Brother No. 1 for
Court TV with his sign-off advice
to viewers to "keep the
faith," has decided to switch his
ministering to the field of
personal-injury law where the real
money is.
. . . . Looking for someone
to advance your case, and fearing
that the likes of Cochran
might be out of your price range, one
need only go to
www.greedylawyers.com to be reassured that
the only lawyer worth having
is one who is out to line his own
pockets.
. . . . But if our
civil-justice system is rife with plaintiffs seeking
redress for imagined damages,
it is in the burgeoning field of
class-action litigation where
tort reform is most needed, say
some civil libertarians. "I
think there is one remedy that is
available and would be
appropriate and that is to change the
rules about how a case is
removed to federal court," says Bob
Levy, a senior fellow at the
libertarian Cato Institute in
Washington. "Right now, the
way the law is written, it allows
lawyers to shop for
jurisdictions. Legislation passed the House
this month that would say
that if any of the plaintiffs reside in a
different state from the
defendant the case would automatically
be removed to federal court."
. . . . Removing class-action
lawsuits from state courts to the
federal arena would subject
them to stronger criteria, says
Levy. "The rules on class
certification are far more rigorous in
federal court than at the
state level. We've seen cases in the
state court where classes are
being certified notwithstanding the
fact that there is neither
commonality nor injury. Look at
tobacco, where you've got
people smoking different brands for
different lengths of time and
some may get a cough, some may
get heart disease -- these
are neither common exposures nor
common injuries. But
attorneys are able to shop such suits
around for a state in which
the climate is congenial and
less-rigorous rules apply.
When the state politicians are in on
the game, it gets worse."
. . . . Yet Levy and others
don't believe that the Senate will
pass the bill containing the
House restriction or that President
Clinton would sign it. "Let's
face it, Clinton is in bed with the
trial lawyers and there is no
way he is going to allow something
like this to go through.
Frankly, my only real complaint here is
when trial lawyers are in bed
with politicians. The government
should not be using
contingency-fee lawyers to attack
politically incorrect but
legal industries. As much as I don't like
to see some of the actions
private plaintiffs are bringing, if
private parties want to use
contingency-fee lawyers so be it."
. . . . Such civil
libertarians see government as the problem.
Levy insists the use of
contingency-fee lawyers by the
government is a recipe for
abuse of power: "We can't have
state attorneys general being
paid for each criminal they corral
and state troopers getting
paid for each speeding ticket they
write. But in the use of
contingency-fee attorneys taking action
on behalf of states, you have
the state as lawmaker, enforcer
and adjudicator."
. . . . And, say tort-reform
advocates, this sort of litigation is
costing American taxpayers
billions in lost economic growth,
even as the trial lawyers
have been providing Clinton and the
Democratic Party with almost
as much in contributions as
China and its friends.
Meanwhile, according to the 1995
Tillinghaust-Towers analysis,
Tort Costs Trends: An
International Perspective,
the U.S. tort system is the most
expensive in the
industrialized world, costing 2.2 percent of the
gross domestic product
annually. In 1994, that cost was $152
billion, having increased 125
percent in 10 years. At the same
time the nation's tort system
returns less than 50 cents on the
dollar and less than 25 cents
for actual economic loss to
claimants.
. . . . According to the Rand
report the media contribute
mightily to the litigious
feeding frenzy, forgetting the huge fees
going to the lawyers while
throwing the prospect of
billion-dollar awards into
the water like so much chum. "Media
attention, lawyer advertising
and social networks facilitate
dissemination of information
about the availability of remedies,"
says the report. "We expect
that the high level of media
attention to managed-care
issues, coupled with consumer
health-care advocacy, would
promote interest and willingness
to bring legal claims against
health plans."
. . . . In fact the Internet
hums with the proliferation of Websites
devoted to class-action
lawsuits, and lawyers by the hundreds
are trolling for the
opportunity to represent anybody and
everybody with a sob story
and a one-third contingency fee.
. . . . Are all class-action
lawsuits bad? No. Civil libertarians
tell Insight that
class-action litigation has been a powerful
defender in the battle to
preserve property rights. Conservative
public-interest efforts, such
as Judicial Watch, the Pacific Legal
Foundation, the Mountain
States Legal Foundation and others,
have moved strongly in
class-action lawsuits to fight injustice
and ensure constitutionally
guaranteed rights.
. . . . But critics say the
growing field of class-action lawsuits,
with Armani-suited attorneys
running up the billable hours to
line their own pockets with
outrageous sums of cash in the
name of politically correct
causes, threatens to reduce the
judicial branch of the U.S.
government to the status of
pop-culture cash cow. As the
saying goes, "It's all about the
money," and in class-action
lawsuits the only real winners have
been the lawyers.
. . . .
. . . .
Oh, Those Wacky Plaintiffs!.
. . .
. . . .
. . . . Here are some
real-life judicial horror stories drawn from
professional journals.
Ned Searight sued the
state of New Jersey, claiming that
while in a state eye,
ear and speech clinic he was
injected in the left eye
with a radium electric beam and,
because of this, someone
now talks to him from inside
his brain. He asked for
$12 million in damages. The
judge dismissed the case
but in passing noted that if the
facts were true the
voices would be "unlicensed radio
communications," which
would be under the jurisdiction
of the Federal
Communications Commission. The court
helpfully suggested that
"Mr. Searight could have
blocked the broadcast to
the antenna in his brain by
grounding it, for
example by pinning a chain of paper
clips to the back of his
pants leg that made contact with
the ground."
In May 1994, the
Michigan Court of Appeals affirmed a
lower-court decision
dismissing Richard Overton's
$10,000 lawsuit against
Anheuser-Busch for false
advertising. In the 1991
lawsuit, Overton had said he
suffered physical and
mental injury and emotional
distress because the
implicit promises in the company's
advertisements,
especially of success with women, did
not materialize for him
when he drank its product.
Besides that, Overton
contended, he sometimes got sick
when he drank.
A New York appeals court
rejected a woman's lawsuit
against the company that
makes the device called "The
Clapper," which
activates selected electrical appliances
on the sound of a clap.
She claimed she hurt her hands
because she had to clap
too hard when she needed to
turn on her appliances:
"I couldn't peel potatoes [when
my hands hurt]. I was in
pain." However, the judge said
she merely had failed to
adjust the sensitivity controls.
John Carter, a New
Jersey man, sued McDonald's for
injuries he sustained in
an auto accident with one of their
customers. He claimed
that the customer who hit him did
so after spilling the
contents of his chocolate shake
(which he purchased from
McDonald's) onto his lap
while reaching for his
fries. He alleged that McDonald's
sold their customer food
knowing he would consume it
while driving and
without announcing or affixing a
warning to the effect of
"Don't eat and drive." The court
concluded that
McDonald's had no duty to warn
customers of obvious
things which they should expect to
know, but refused
McDonald's request for attorney's
fees, stating that the
plaintiff's attorney was "creative,
imaginative and he
shouldn't be penalized for that." This
case was in the court
system for three years, underwent
appellate-court review
and cost McDonald's more than
$100,000.
. . . . This last story is
unsubstantiated, since Insight can't
confirm the source, but it is
reported here on the grounds that it
is too awful to be false:
. . . . A Charlotte, N.C.,
man purchased a box of 24 rare and
very expensive cigars and
insured them against ... fire. Within a
month, having smoked every
one, and having yet to make a
single premium payment on the
policy, the smoker filed a claim
against the insurance
company. In his claim, he stated that he
had lost the cigars in "a
series of small fires." The insurance
company refused to pay,
responding that the client had
consumed the cigars in a
normal fashion. The man sued and
won.
. . . . In delivering his
ruling, the judge stated that the plaintiff
held a policy from the
company in which it was warranted that
the cigars were insurable.
The company, in the policy,
guaranteed that it would
insure the cigars against fire, without
defining what it considered
to be "unacceptable fire," and so
the company was obligated to
compensate the insured for his
loss. Rather than endure a
lengthy and costly appeal process,
the insurance company
accepted the judge's ruling and paid the
man $15,000.
. . . . However, shortly
after the culprit cashed his check, the
insurance company had him
arrested on 24 counts of arson.
With his own insurance claim
and testimony from the previous
case the man was convicted of
intentionally burning the rare
cigars and sentenced to 24
consecutive one-year prison terms,
which just happened to be the
likely penalty for insurance
fraud.
http://www.insightmag.com/articles/story1.html
Bard
We don't need a 3rd Party; we need a 2nd Party!
DECLARATION & DISCLAIMER
==========
CTRL is a discussion and informational exchange list. Proselyzting propagandic
screeds are not allowed. Substance�not soapboxing! These are sordid matters
and 'conspiracy theory', with its many half-truths, misdirections and outright
frauds is used politically by different groups with major and minor effects
spread throughout the spectrum of time and thought. That being said, CTRL
gives no endorsement to the validity of posts, and always suggests to readers;
be wary of what you read. CTRL gives no credeence to Holocaust denial and
nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://home.ease.lsoft.com/archives/CTRL.html
http:[EMAIL PROTECTED]/
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
