Alex's Outlook

Sunday, November 02, 2003

On Trial Lawyers and Runaway Juries

Recently I watched a nauseatingly moralizing adaptation of the John Grisham novel Runaway Jury, featuring a star-studded cast (John Cusack, Rachel Weisz, Gene Hackman and Dustin Hoffman) and a brisk and intriguing plot. The movie’s premise is this: a depressed stockbroker buys a powerful pistol, walks into the office of his former employer (who just fired him), and guns down 11 people before committing suicide. Hoffman represents the widow of one of the shootout victims, who is suing the manufacturer of the killer’s gun because she thinks it’s at fault for her husband’s death. Hoffman faces off in court against a villainous cabal of gun manufacturers represented by Gene Hackman. In ridiculing the gun distributors as cynical morons and showing (again and again and again) the desperate, pitiable sadness of the widow, Runaway Jury’s producers try to convince their jury (the audience) of the justice of the anti-gun crusade. By the climax of the movie, when – *spoiler alert* – Vicksburg Firearms gets slapped with a $111 million verdict, I think I was the only member of the audience who was even half-rooting for the gun industry; everybody else was clapping.

The audience’s reaction got me thinking. As much as the movie’s producers tried to turn Hoffman into a selfless soldier for justice, real-life American trial lawyers have left a far darker legacy.

Asbestos has been ubiquitous in modern society for nearly a century. By the mid-1960’s, some four million tons of asbestos were produced worldwide every year. It was not until the late 1960’s, however, that asbestos’s devastating impact on the lungs became generally known. Lawsuits were initially confined to the manufacturers of asbestos themselves, who had some inkling of asbestos’s corrosive effects. Soon, however, the lawsuits spread to companies that had no connection with the asbestos manufacturers. As of today, 67 major companies have gone bankrupt due to asbestos lawsuits, most of which never manufactured or installed asbestos. Dozens more companies are lined up for the chopping block. Fifty-four billion dollars – $54,000,000,000 – have been appropriated by pro-plaintiff juries. In just one all-too-typically-egregious example, six former employees of a railroad in Lexington, Mississippi, were awarded $25 million each in punitive damages, even though not one of them had shown any asbestos-related disease whatsoever.

Has justice been served? Yes, if you ask Trial Lawyers, Inc. If you asked the thousands of stockholders in the companies victimized by the asbestos rampage, I suspect you would hear a resounding “No.”

With asbestos cases logjammed in court, the trail lawyers next turned their guns on the tobacco industry. America’s fifty tax-strapped states joined in the carnage. The tobacco’s settlement with the states alone amounted to hundreds of billions of dollars ($100,000,000,000’s) to be paid over a period of thirty years. Several Miami plaintiffs won $145 billion, although that was trimmed down on appeal. A man in California won $27 billion; it was reduced to $27 million on appeal. Considering that smoking’s harmful effects have been common knowledge for at least a quarter-century, I can only wonder why the plaintiff won a single dime, much less a fortune that even many of “the rich” can only dream of.

The result of all this litigation is that tobacco corporations, weighed down by runaway jury verdicts and new taxes, have ratcheted up the price of cigarettes. The tort bar has claimed that it is defending the public interest by mauling “Big Tobacco.” But the fact is that cigarettes are much more expensive today than they were before the flood of anti-Big Tobacco litigation, and the poor who comprise the vast majority of smokers are paying that difference.

Having all but ruined the tobacco industry, the tort bar is now eroding greener pastures. Mississippi is a low-tax southern state, but its litigation environment makes its business climate the very worst in the nation, even worse than the tax-and-spend crazies who ran California until recently. Trial lawyers in Mississippi have zeroed in on high-risk medical procedures where failure is a significant probability, no matter how proficient the doctor. Neurosurgeons and ob-gyns have thus evacuated the state en masse because their malpractice insurance premiums have reached six figures. But Mississippi was not alone. Doctors in West Virginia, Pennsylvania and Illinois also went on strike. Sky-high malpractice costs – verdicts engineered by the tort bar – made it impossible for doctors to continue their work. As Bill Clinton’s Secretary of Labor said, “The era of big government may be over, but the era of regulation through litigation has just begun.”

Although the stock market has tanked for the past couple of years, Trial Lawyers, Inc. has been posting double-digit growth every year; in 2001, the nation’s new predator class hauled in 14.3% more than in 2000. Tort costs consume over $205 billion annually in the United States, equivalent to Russia’s entire economy. The UK, which ranks number 2 on the tort-cost list, spends about 8 percent on litigation compared to the U.S. And Trial Lawyers, Inc. sees enormous growth potential ahead. At its current rate of growth, tort costs will eclipse the value of the 2001 and 2003 Bush tax cuts combined. Currently, Americans pay an average of $721 per person for tort costs, or about $3000 per family.

There is no reason why the tort bar can’t continue to play juries’ heartstrings with stories about how Philip Morris destroyed X’s lungs. Or how McDonald’s made Y morbidly obese. Or how Z’s husband died in the WTC attack, so the government owes her millions on top of the $3 million she already received from the 9-11 compensation fund. (Lisa Beamer, call your office.) With tort reform in the U.S. Senate unanimously blocked by the Democrats, there is no reason why the $3000-a-year tort tax will not continue to soak the paycheck of every hard-working American.
As we saw with the case of the six Lexington, Miss. verdict-shoppers, sometimes the jury doesn’t even need a reason to hand out someone else’s hard-earned money like so much confetti. The jurors exposed class-action tort litigation for what it really is: the legally sanctioned rape of American industry.

At one point in Runaway Jury, Gene Hackman’s character says contemptuously, “Trials are too important to be left up to juries.” I couldn’t agree with you more, Rankin Fitch!


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