In the red-hot days of litigation reform in the 1990s, the trial lawyers got absolutely stomped in public relations by the folks pushing for curbs on lawsuits. Remember the woman who won big bucks from McDonald's for spilling hot coffee in her lap? Of course you do, because the U.S. Chamber of Commerce, the Institute for Legal Reform, and the American Tort Reform Association made her a poster child for unwarranted litigation, even though, as the recent documentary Hot Coffee explained, there was nothing frivolous about her case. The Chamber, ATRA, and their state-based tort reform allies were masters of shaping public opinion: dubbing plaintiff-friendly jurisdictions "litigation hellholes," establishing their own local newspapers in targeted "hellholes" to write about sky-high verdicts, lobbying state legislatures and funding local judicial candidates. "Litigation reform" was an automatic applause line in Republican candidates' stump speeches. By contrast, trial lawyers, via the predecessor to the American Association for Justice, did a great job of lobbying Congress to block most federal tort-reform measures, but fell short in convincing ordinary people (i.e., people to whom they weren't making campaign contributions) that trial lawyers are fighting their battles against Corporate America.
So anyone who likes to see a good fight (a category that definitely includes me) had to be happy to see that the AAJ has mustered some PR mojo in a report issued yesterday. "Do as I say, not as I sue" is a slick 19-page publication identifying the top 10 corporate "hypocrites": companies that advocate for tort reform yet have filed some pretty dubious suits of their own. Just a few examples from the report: FedEx sued a software developer who built a table, chairs, desk, and bed out of FedEx boxes, claiming he was violating FedEx's copyrights, and forcing him to dismantle the furniture. Caterpillar took issue with its portrayal in the Disney movie "George of the Jungle 2," which featured evil industrialists using Caterpillar machinery to mow down virgin territory. GM sued its own employees for overusing their discount on GM cars. Koch Industries has clogged dockets with internecine battles between the brothers who inherited the privately-held company from their father. And Johnson & Johnson notoriously sued the American Red Cross for its use of the red cross symbol.
"However silly these lawsuits may sound," the AAJ report said, "they share one common theme, the company filing the lawsuit had the Constitutional right to do so. What makes their actions shameful and hypocritical is that these companies are members of ILR's board for the sole purpose of denying Americans this same right." (The Institute for Legal Reform, for what it's worth, told me the AAJ report "is neither new nor surprising .... The trial lawyer lobby is working to protect their members' ability to file more lawsuits.")
Meanwhile, on the same day the AAJ put out its Biggest Hypocrites report, the U.S. Chamber and the ILR issued a much more serious-minded document, a NERA Consulting state-by-state study of the supposed cost of tort litigation. According to the NERA working paper (which rests on some assumptions that seem questionable to me, although I'm not an economist), states that haven't enacted drastic curbs on tort litigation are hurting their own employment growth opportunities.
"In the states with the most costly legal environments, improving the legal environment could stimulate private sector employment by 1.0 percent to 2.8 percent," the study asserted. "In New York, for example, improvements to the legal environment could create between 74,000 and 202,000 jobs. ... Changes in the legal environment may be hard to achieve and may only be realized over many years; however, the results of this study show that improving the legal environment would lower tort costs and could materially increase employment."
So there you have it: The answer to America's economic crisis is litigation reform. Or, the answer to America's economic crisis is better-run corporations that don't injure consumers and don't waste shareholder money on their own dopey lawsuits. I guess that's the beauty of the adversary system: It all depends on which side you're on.
(Reporting by Alison Frankel)
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