Lies

This link is to some comments that are, shall we say, less than truthful regarding the legal system. Excuse me while I pick apart some of the more egregious misrepresentations:

As we shall see, the lawsuit industry today is truly a behemoth, but—unlike the major corporations in our regular market economy—it remains financially opaque. Whereas public corporations must disclose their financials in 10-Ks according to SEC regulations, trial lawyers practice in private partnerships that, under the guise of attorney-client privilege, have shielded their financials from public scrutiny.

Gosh, last I checked all privately held companies aren't required to place their financials up for "public scrutiny".

Total tort costs today exceed $200 billion annually, or more than 2% of America’s gross domestic product—a significantly higher percentage than in any other developed nation.

"Total tort costs" is pretty broad. Let's look at some of 2002's highest verdicts:

IGEN International Inc. v. Roche Diagnostics GmbH S.D. (Breach of licensing agreement, unfair competition) - $505 million

Burns v. Prudential (Breach of Fiduciary Duty) - $261 million

Marvin Lumber and Cedar Company v. PPG Industries, Inc. (Breach of Warranty) - $135 million

Atlantic Recording v. Media Group Inc. (Copyright infringement) - $136 million

Just a few big jury verdicts for corporate entities can sure tip the scales.

"While many Americans may understand that the lawsuit industry in America has run amok—most people could quote anecdotal examples of silly cases generated by our “lawsuit culture”—the public tends not to appreciate that the litigation industry is nothing but Big Business."

I agree wholeheartedly. Big business uses lawsuits as a strategic weapon all the time. They sue their competitors. They sue their suppliers. Hell, they even sue their customers from time to time. Of course, their lawsuits are "Strategic" and ours are "frivolous."

"Given that 19% of all tort costs go to plaintiffs’ attorneys, we can imagine a corporation called Trial Lawyers, Inc. which rakes in almost $40 billion per year in revenues—50% more than Microsoft or Intel and twice those of Coca-Cola."

The corrolary is that 81% of tort costs go to defendants, isn't it? Of course, let's look at that $40 billion figure in terms of perspective:

According to the huge ad company Universal McCann, big business spent around $466 billion last year. Dataquest reported corporate software sales in the neighborhood of $80 billion. Enron, that pantheon of corporate responsibility, had about a $50 billion bankruptcy filing. That poor pharmaceutical industry that's always being sued sold around $155 billion in prescription drugs in 2002. The trucking industry took in roughly $587 billion last year. Gosh, $40 billion isn't that big, is it? Especially considering that the other 81% of tort costs is about $160 billion.

Although not centrally organized, the plaintiffs’ bar tends to be dominated by tort kingpins who carve up their markets—a practice that in a non-litigation context would be called collusion, a violation of antitrust law. Just as corporations are organized around different “lines of business,” plaintiffs’ lawyers target different industrial sectors. These include: Traditional profit centers like asbestos, tobacco, pharmaceuticals, and insurance;

I find it extremely ironic that trial lawyers would be villified for purported antitrust violations, and just one sentence later, insurance is mentioned. Why is this ironic? Because of the McCarran-Ferguson Act, the bill that exempts the insurance industry from antitrust law.

"Although the trial bar likes to accuse corporations of having undue influence, the government relations and public relations arms of Trial Lawyers, Inc. are more powerful and focused than those of any other industry."

It's funny about lawyer contributions. According to ecrets.org, 19 out of the top 20 law firms who contributed money to political campaigns are defense firms, like, Skadden Arps, et. al. , a firm that brags about representing 60% of the top 25 companies in the U.S., and 40% of the top 25 global corporations.

One thing I'm left to wonder; If plaintiff's lawyers are so bad, then why do big companies turn to them when they need a competitor sued? Like when Joe Jamail - THE plaintiff's lawyer - got a $10 billion verdict for Pennzoil against Texaco?

Comments

[Truth]

(1) Of course private corporations do not have to comply with SEC reporting requirements, but neither do they have vast regulatory authority through magnet court jurisdictions. And only 2 private companies in the U.S. are as large as Trial Lawyers, Inc. Moreover, as the Report never claims that private companies must disclose, that's a pretty weak "misrepresentation."

(2) Every verdict you cite as constituting tort costs is a non-tort case.

(3) Business vs. business suits are usually in the fields of contract and intellectual property law, not tort.

(4) As shown on page 7 of the report, the majority of all tort costs do not go to defendants. Even if one supported the ends of the system, it is grossly inefficient.

(5) Your assertions on political contributions are simply false. Recheckecrets. In the 2002 political cycle, ATLA and 7 law firms each gave over $1 million to federal campaigns; each firm was a plaintiff's firm; and each of the firms gave 99-100% to Democrats:

1 Assn of Trial Lawyers of America
$4,241,638
91% D 8% R

2 Williams & Bailey
$2,426,400
100% D 0% R

3 Angelos Law Offices/Baltimore Orioles
$1,853,500
100% D 0% R

4 O'Quinn, Laminack & Pirtle
$1,833,250
100% D 0% R

5 Nix, Patterson & Roach
$1,700,500
100% D 0% R

6 Milberg, Weiss et al
$1,651,419
99% D 1% R

7 Provost & Umphrey
$1,177,200
100% D 0% R

8 Baron & Budd
$1,072,420
99% D 1% R

It's sad that one would accuse others of "lies" when playing so fast and loose with the truth...

[Justinian Lane]

1: No, the report doesn't claim private companies must disclose, but the report attempts to cast small law firms in a negative light because they do not disclose. We agree: small companies do not have to disclose their finances, nor should they be judged poorly for "failing" to.

2: Copyright infringement is indeed a tort, absent specific contractual agreements between the parties. The other cases cited may or may not be tort cases, depending upon whether any of the conduct of the defendants was intentional; intentional breach of warranty would be a tort.

3: Tortious interference comes to mind as a type of tort that businesses sue for. Also, punitive damages are frequently involved in even contract cases, such as the Igen case mentioned. Again, why is it OK for businesses to receive millions of dollars in punitive damages for financial injury, but it's not ok for an individual to receive millions of dollars in punitive damages for personal injuries? This question transcends whether the type of suit is tort or not.

4: I do not deny the existing tort system is inefficient. But "reforming" the system by eliminating compensation and/or access to the courts by the injured surely isn't fixing it. What solution do you propose?

5: I was looking at the 2004 political cycle, not the 2002 cycle. If you look at current data, you'll see my assertions are true. However, looking at the 2004 cycle, each firm listed did not give 99-100% to Democrats: #9-20 gave far more money to Republicans than Democrats.

6: My point about the whole article is that it's a blatant mischaracterization to call all trial lawyers "Trial Lawyers, Inc.", as if all firms are grouped together as one powerful group. Some trial lawyers support Republicans. Most trial lawyers aren't suing big tobacco or asbestos. Many trial lawyers don't take medical malpractice cases. If trial lawyers were united as one big group that focused their money and resources on the goal of eliminating tort reform, it probably wouldn't be here. But from my experience, most trial lawyers are arrogant, self-aggrandizing, blowhards who would rather sit around and bitch about Republicans and Bush than actually be productive. They're too jealous of others' successes to unite behind one man or one group, and are generally of the mindset that if they can't be "the one", then no one should.

6: I appreciate your comments, and can tell that you're obviously an educated person. So I ask you, do you agree or disagree with my general assertion that if personal injury suits should be capped, then financial injury suits should be capped? If not, why not?

[Justinian Lane]

Oh, one other thing. I tend to disregard a lot of what comes from the Manhattan Institute because they are so heavily funded by and support Republican interests. For example:

Media Transparency shows that the Manhattan Institute is heavily funded by Richard Scaife and his foundations, and by the John Olin foundation. Here's the link: http://www.mediatransparency.org/search_results/info_on_any_recipient.php?recipientID=198

Richard Scaife is the Republican who gave millions of dollars to try and oust Clinton from office, and is known for using his magazine and newspaper empire to attack those he dislikes. CNN has a nice article about him here: http://www.cnn.com/ALLPOLITICS/1998/04/27/scaife.profile/

The John Olin foundation is described as "spending millions of dollars to support activities that directly challenge the spread of diversity and multiculturalism on campus. Far from promoting objective, dispassionate scholarship, as it claims, the Olin Foundation has an explicit political agenda, with ties to officials in the Republican party." Read more here: http://www.pfaw.org/pfaw/general/default.aspx?oid=2066

Scaife and Olin are just two of the Republican groups who fund the Manhattan Institute and their "impartial" research.

[Dr. Mark]

Very impressive website!!!!
Mark