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A Quick Response to Ted at Overlawyered
Hi Ted, glad to see you've found my site. I've got a really busy day today, so I don't have time to give your comments the response they deserve. But until I do - Friday, probably - I've got a couple of quick questions I'd love you to answer.
1: You repeatedly state that McDonald's wasn't at fault in Stella's case. But the jury found McDonald's to be 80% at fault. To come to that decision, they sat through a seven or eight day trial and considered reams of evidence. Were you present during the entirety of the trial? If not, why should anyone disregard the jury's liability analysis?
2: With respect to your comments about lawyers driving manufacturers out of business: First, your comment was written as if you're lumping me in with trial lawyers. I'm not, and I'm not connected with any, either. I wasn't sure if you knew that or not.
Second, the majority of that post pointed out the fact that foreign manufacturers don't problems doing business in the U.S. I offered the theory that foreign manufacturers do fine here because their costs back home, labor especially, are cheaper than their American counterparts. Do you disagree? If so, why?
I hope to continue this discussion with you.
Justinian
January 27, 2005 | Permalink
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1. The jury was instructed incorrectly. The case should've been thrown out before it got to the jury. Again, I refer you to McMahon v. Bunn-O-Matic, where the court got it right. I'd link to it, but your site doesn't permit hyperlinks in comments.
The comprehensive Wall Street Journal article on the subject also showed that the jury misunderstood the evidence: a McDonald's expert used the technical term "statistically insignificant", which has a specific mathematical meaning that he was using correctly, and the jury thought that McDonald's was calling the injury insignificant.
As best I can tell, the plaintiff's lawyer made at least one (and probably more) argument(s) that shouldn't have been allowed to have been made because they were irrelevant to the question of liability.
James Surowiecki, no conservative shill he, has a good article in a recent New Yorker discussing the problems of jury evaluation of cost-benefit decisions. Again, I'd link to it, but your site doesn't permit links in comments. I'll have a post on it in a day or so.
2. My answer (addressing solely product liability) doesn't distinguish between foreign and US manufacturers. If a US corporation is large enough, it's on the same footing as a foreign manufacturer, because a certain portion of its sales are international. The tort burden falls heaviest on small businesses. Small businesses have to pay a risk premium because they can't diversify their liability risk and self-insure as many large corporations do; moreover, a small business that sells mainly to US consumers will be at a disadvantage to one that can subsidize its US tort costs by foreign sales.
Of course, to the extent the tort system raises labor costs in the US (and it clearly does that), that hurts American competitiveness. That has additional effects at the margins that I didn't address.
Getting into the differences in global labor costs is beyond the scope of this discussion (and is in any event irrelevant: if American workers are hurt by factor X, the possibility that they are also hurt by factor Y is not a reason to ignore factor X), but I would refer you to Tyler Cowen's blog, Marginal Revolution, or Brad DeLong's blog for general discussion on that issue. Cowen's blog is just fascinating reading on all sorts of issues up to and including globalization; DeLong is a liberal from the Clinton administration who, like most people who have studied and understand the issue, supports free trade.
3. I know you're not a trial lawyer; but you're buying ATLA's message hook, line, and sinker without giving fair consideration to the tort reform position. Not that I blame you: when I was ten, I was reading Consumer Reports cover to cover, held my Marvin Zindler autograph close to my heart, and grew up admiring Ralph Nader. We're inclined to root for plaintiffs, because we like the underdog storyline: from Spartacus, David & Goliath, and Star Wars to Grisham novels, A Civil Action, and Erin Brockovich. (The last two, however, featured bogus environmental claims, not that you'd learn that from the movies.)
If you scour the right places on the Internet, you can probably find posts I made twelve years ago when I was in law school defending the current tort system. It wasn't until I actually started working on products liability and class action cases that I learned first-hand how little the organized plaintiff's bar has to do with consumer safety or protection in the real world.
4. Because there isn't "loser pays" and because damages are, for the most part, untrammelled, the incentive is for lawyers to manufacture long-shot cases and force big corporations to play Russian roulette. Last June, Overlawyered covered a car company that won at least ten consecutive cases alleging a particular kind of defect, but the n-th time, the same theory found a judge that excluded evidence of safety and a jury that was willing to ignore the fault of the drivers involved and awarded over $300 million. The plaintiffs' bar can make a very comfortable living rolling the dice like that, but that doesn't provide equitable compensation to injured people (ten-plus plaintiffs get nothing, one speeder gets a windfall, all after giving up years of their lives to the stress of litigation), and is a wealth transfer from consumers and workers and pensioners to "rent-seeking" lawyers who aren't adding any social value, because there's nothing the corporations can do to prevent liability in these cases other than stop selling cars.
Read overlawyered. Read pointoflaw. My co-authors make them well-written and often entertaining sites, and I just try to keep up with them. What is it that we're saying that's so incorrect?
Posted by: Ted | January 27, 2005 11:34 AM
1. The jury was instructed incorrectly. The case should've been thrown out before it got to the jury. Again, I refer you to McMahon v. Bunn-O-Matic, where the court got it right. I'd link to it, but your site doesn't permit hyperlinks in comments.
The comprehensive Wall Street Journal article on the subject also showed that the jury misunderstood the evidence: a McDonald's expert used the technical term "statistically insignificant", which has a specific mathematical meaning that he was using correctly, and the jury thought that McDonald's was calling the injury insignificant.
As best I can tell, the plaintiff's lawyer made at least one (and probably more) argument(s) that shouldn't have been allowed to have been made because they were irrelevant to the question of liability.
James Surowiecki, no conservative shill he, has a good article in a recent New Yorker discussing the problems of jury evaluation of cost-benefit decisions. Again, I'd link to it, but your site doesn't permit links in comments. I'll have a post on it in a day or so.
2. My answer (addressing solely product liability) doesn't distinguish between foreign and US manufacturers. If a US corporation is large enough, it's on the same footing as a foreign manufacturer, because a certain portion of its sales are international. The tort burden falls heaviest on small businesses. Small businesses have to pay a risk premium because they can't diversify their liability risk and self-insure as many large corporations do; moreover, a small business that sells mainly to US consumers will be at a disadvantage to one that can subsidize its US tort costs by foreign sales.
Of course, to the extent the tort system raises labor costs in the US (and it clearly does that), that hurts American competitiveness. That has additional effects at the margins that I didn't address.
Getting into the differences in global labor costs is beyond the scope of this discussion (and is in any event irrelevant: if American workers are hurt by factor X, the possibility that they are also hurt by factor Y is not a reason to ignore factor X), but I would refer you to Tyler Cowen's blog, Marginal Revolution, or Brad DeLong's blog for general discussion on that issue. Cowen's blog is just fascinating reading on all sorts of issues up to and including globalization; DeLong is a liberal from the Clinton administration who, like most people who have studied and understand the issue, supports free trade.
3. I know you're not a trial lawyer; but you're buying ATLA's message hook, line, and sinker without giving fair consideration to the tort reform position. Not that I blame you: when I was ten, I was reading Consumer Reports cover to cover, held my Marvin Zindler autograph close to my heart, and grew up admiring Ralph Nader. We're inclined to root for plaintiffs, because we like the underdog storyline: from Spartacus, David & Goliath, and Star Wars to Grisham novels, A Civil Action, and Erin Brockovich. (The last two, however, featured bogus environmental claims, not that you'd learn that from the movies.)
If you scour the right places on the Internet, you can probably find posts I made twelve years ago when I was in law school defending the current tort system. It wasn't until I actually started working on products liability and class action cases that I learned first-hand how little the organized plaintiff's bar has to do with consumer safety or protection in the real world.
4. Because there isn't "loser pays" and because damages are, for the most part, untrammelled, the incentive is for lawyers to manufacture long-shot cases and force big corporations to play Russian roulette. Last June, Overlawyered covered a car company that won at least ten consecutive cases alleging a particular kind of defect, but the n-th time, the same theory found a judge that excluded evidence of safety and a jury that was willing to ignore the fault of the drivers involved and awarded over $300 million. The plaintiffs' bar can make a very comfortable living rolling the dice like that, but that doesn't provide equitable compensation to injured people (ten-plus plaintiffs get nothing, one speeder gets a windfall, all after giving up years of their lives to the stress of litigation), and is a wealth transfer from consumers and workers and pensioners to "rent-seeking" lawyers who aren't adding any social value, because there's nothing the corporations can do to prevent liability in these cases other than stop selling cars.
Read overlawyered. Read pointoflaw. My co-authors make them well-written and often entertaining sites, and I just try to keep up with them. What is it that we're saying that's so incorrect?
Posted by: Ted | January 27, 2005 11:35 AM
