Legal Reform - January/February 2004 Michigan Forward

The Seven Myths of Highly Effective Plaintiff's Lawyers

By Steven B. Hantler

To understand the genesis of America's legal crisis, we must look beyond the $2 million car paint jobs and cups of spilled coffee. We must examine the deeper currents of American culture in which lawsuits have become our society's principal drama, the way Westerns once were.

America's culture - saturated in the drama of the law - is in danger of forsaking the rule of law. To understand why, we need to address seven fictions the trial bar uses to change our culture and exploit the law. These are The Seven Myths of Highly Effective Plaintiff's Lawyers.

The 1^st Myth is that corporations put profits ahead of safety and honesty, and large damage awards are the only way to get corporations to act responsibly.

The truth is that most corporations care deeply about the safety of their customers. That is the only way to do business in the modern world. But do profits and costs enter into manufacturing decisions? Of course they do.

Consider the auto industry. The truth is we could make a vehicle impervious to just about any kind of accident. In fact, such a vehicle is available. It is called an Abrams tank-it weighs close to 70 tons, and costs more than $4 million. The consumer, however, does not want tanks.

The 2^nd Myth is that the so-called "liability crisis" is an invention of corporations to limit their liability for wrongdoing.

A Tillinghast Towers-Perrin study reveals the U.S. tort system cost $205 billion in 2001. This amounts to $721 for every man, woman and child in the country and is an astonishing 14 percent increase in tort costs since 2000. The President's Council of Economic Advisors reported that the cost of lawsuits is "far more than enough money to solve Social Security's long-term financing crisis."

The 3^rd Myth is that punitive damages are rarely awarded or are always reduced on appeal.

If awards were so rare, why would plaintiff's lawyers waste their time pleading them in every case? Why would they fight reasonable limits on punitive awards?

The answer: Settlement leverage. As Yale Law School Professor George Priest has observed, "the availability of unlimited punitive damages affects 95 percent to 98 percent of cases that settle out of court prior to trial. It is obvious and indisputable that a punitive damage claim increases the magnitude of the ultimate settlement and, increases likelihood of litigation."

The 4^th Myth is that class action lawsuits serve the public good by marrying efficiency with justice.

A Florida judge wrote of one lawsuit that it "appears to be the class litigation equivalent of the 'squeegee boys' who used to frequent major urban intersections and who would run up to a stopped car, splash soapy water on its perfectly clean windshield and expect payment for the uninvited service of wiping it off." While some judges are now starting to reject these suits, it only takes one judge to bring a defendant to its knees.

The 5^th Myth is that litigation protects consumers when regulators fail to act.

In the federal regulatory process, safety policy is developed by a balanced, expert-led investigation of risks. Federal auto safety investigators and scientists want to know all the pertinent facts affecting vehicle safety. In the tort process, the investigative process is anything but scientific. In 29 states, for example, juries are not allowed to hear that an injured plaintiff failed to wear a seatbelt. Incredibly, the fact that the driver at fault was drunk or drove through a red light is not admissible in many courts.

The 6^th Myth is closest to my everyday practice - the myth that corporations settle lawsuits to cover up their wrongdoing.

I don't need to spend a lot of time responding to this Myth. Plaintiff's lawyer Dick Scruggs actually provides the best response:

"The trial lawyers have established relationships with the judges that are elected ... They've got large populations of voters who are in on the deal ... and it's almost impossible to get a fair trial if you're a defendant in some of these places."

The 7^th and Final Myth of Highly Effective Plaintiff's Lawyers is that like David-against-Goliath, the trial lawyers are outgunned by powerful and resourceful corporations.

This is the most cherished trial lawyer myth, perpetuated in countless movies, that there are a few Robin Hoods out there struggling against the armed might of the powerful Sheriff. But Robin Hood, after all, gave to the poor. Six trial lawyers and their firms took more than $5 billion as fees for their firms from tobacco litigation - monies that many believe belong in state treasuries for health care and education.

If you want to dig deeper into the legal crisis, the full text of this speech is available on the Michigan Chamber's website at www.michamber.com.

Steven B. Hantler is Assistant General Counsel for Government and Regulation for DaimlerChrysler Corporation and is a member of the Board of Directors of the Michigan Chamber of Commerce.