Lawyer-huckster Peter Angelos is in the news this week. A Wall Street Journal editorial notes that Angelos’s asbestos lawsuit racket is rapidly losing its credibility.
Early in this century, I did a piece for the Freeman on how lawyers and politicians (such as Andrew Cuomo and Eliot Spitzer) were in cahoots to wreck industry after industry. Unfortunately, such rascality has yet to go out of fashion.
The Freeman, APRIL 2001 by JAMES BOVARD
James Bovard is the author of Feeling Your Pain: The Explosion and Abuse of Government Power in the Clinton-Gore Years (St. Martin’s Press).
Law is no longer an impediment to legalized robbery. In area after area, lawyers have achieved court rulings that subvert due process and the rule of law. Unfortunately, while this trend has been derided for more than a decade, legal juggernauts continue to pick up steam.
Entire industries are on the verge of being turned into indentured servants of the political-legal class. Public policy is being made by one legal feeding frenzy after another—and with no reason to expect that the recent jackpots will instill temperance among the legal profession.
The late Clinton administration partnered with trial lawyers to achieve court victories or settlements in cases that portend far greater arbitrary power down the road. That administration was heavily bankrolled by the trial lawyers and fought every proposal to curb the abuses of tort litigation.
In July 2000 a jury decided that tobacco companies must pay $145 billion to people harmed by cigarettes. Legal writer Walter Olson, whose Web site, www.overlawyered.com, offers a wealth of cases of lawyers’ abuses, observed, “The size of the verdict came as little surprise to those who’d followed trial judge Robert Kaye’s relentlessly anti-defense rulings. For example, Judge Kaye ruled that in calculating a basis for punitive damages there was no reason jurors should feel obliged to stop at a sum representing the tobacco companies’ net worth. The judge ruled that it was proper to place before the jury the companies’ capacity to borrow.” Clinton spokesman Joe Lockhart hailed the verdict: “We have always believed that the tobacco industry is responsible for the way they have marketed and produced their products.”
The verdict was widely denounced as irrational and excessive. The tobacco companies appealed the decision to a federal court—which refused even to consider their case. It ended up back in Judge Kaye’s courtroom, where the judge again berated the companies and sought to expedite them to financial hell.
The Florida verdict is the next-largest hit on tobacco after the $246 billion settlement by tobacco companies of state government Medicaid lawsuits in 1998. At that time, the tobacco companies thought they had bought themselves peace. However, the concessions the companies made at that time have proven to be simply blood in the water drawing more legal sharks. Early this year, a class-action lawsuit went to trial in West Virginia that took tobacco nonsense to a new level. Lawyers demanded that the tobacco companies pay up to $500 million for regular medical checkups for healthy people who choose to continue smoking. An R. J. Reynolds attorney told the Associated Press: “This is an extremely unique case—to have uninjured plaintiffs who have knowingly and voluntarily exposed themselves to the most widely known risk in our society, and who are not sick.” On the other side of the battle line, a lawyer for the smokers declared that “West Virginians are entitled to obtain monitoring as a result of their exposure to a very toxic group of substances.” It would be difficult to imagine a lawsuit that showed greater contempt for individual responsibility. Luckily, it was dismissed.
In earlier times in America, ruinous lawsuits against industries were deterred in part because judges and juries considered the role of a plaintiff’s conduct in the harm he suffered. Cigarettes, for instance, were commonly referred to as “coffin nails” 80 years ago; popular folk wisdom recognized that perpetually filling one’s lungs with smoke could have dire results. But in recent decades tort law has practically assumed that every citizen is a helpless victim—and that regardless of how stupid or irresponsible a person may be, somebody else must be forced to compensate him for the damage he does to himself. Courts have also become far more welcoming of class-action lawsuits based on sometimes wildly extrapolated harms—which justify looting the nearest “deep pocket.”
The legal onslaught against tobacco continues in part because lawyers have discovered that—with enough campaign contributions—state legislators will rewrite laws to guarantee windfall profits for litigators. But the tobacco companies’ will to resist was broken in part because of audacious retroactive rule changes in Maryland and Florida.
In early 1998, a Baltimore judge rejected a state government lawsuit against the tobacco industry to compel it to pay the Medicaid costs for Maryland low-income smokers’ health problems. The lawsuit failed because the state could not come within a country mile of providing sufficient evidence under the common law to hold the companies liable, that is, to show clear evidence that specific plaintiffs could have had no reasonable knowledge or awareness of the risks of the product they were using. Every pack of cigarettes sold since the mid-1960s has featured a government-mandated health warning, a fact most bothersome to trial lawyers’ attempts to prove that tobacco companies suppressed all evidence of cigarettes’ risks.
After the trial lawyers handling the case for the Maryland government promised the legislators the lion’s share of the booty, the legislators “fixed” the law. As the Washington Post summarized: “Lawmakers . . . rewrote the law to permit Maryland to seek compensation for huge sums paid for smoking-related illnesses without having to produce individual victims in court. They also barred cigarette makers from claiming that smokers caused their own illnesses by choosing to smoke.”
With this, the tobacco companies’ situation appeared hopeless. Maryland Attorney General Joseph Curran bragged that his state’s action could have a domino effect: “Other states can now look to Maryland as having had a full, open and complete debate” leading to the conviction of tobacco companies.
The Florida legislature also endeared themselves to trial lawyers by passing legislation that retroactively changed the rules against the tobacco industry. The legislation—which should have been scandalous—was, naturally, upheld by the Florida Supreme Court.
The Florida and Maryland lawsuits were the straws that broke the camel’s back. The state legislatures’ actions paved the way for the 1998 nationwide settlement that will result in state governments’ siphoning off $246 billion from tobacco company revenues over the next 20 years. The settlement was premised on the fact that tobacco companies had wrongfully imposed great burdens on taxpayers because of the cigarettes’ role in causing lung cancer, heart disease, and other ailments. But studies by the Congressional Research Service and the Rand Corporation concluded that smokers, by dying early, actually reduce government health-care outlays.
The grand settlement was little more than a political farce. As economist Robert Samuelson observed: “The 40 attorneys general who sued the cigarette companies served mainly as fronts for the anti-tobacco private lawyers. It was the private lawyers who agreed to conduct the cases and pay the costs in return, typically, for hefty contingency fees (up to 25 percent of any award) . . . . The settlement mainly reflects private greed and political ambition. The National Association of Attorneys General is often called ‘The National Association of Aspiring Governors.’” While the settlement was portrayed as a heavy exaction on tobacco companies, in reality it is operating simply as a surtax on cigarette smokers, a group that tends to have lower-than-average incomes.
Beginning in 1998, 28 city governments sued firearms manufacturers, seeking huge settlements for the damage that guns had allegedly caused within their domains. In the tobacco cases lawyers and politicians had at least asserted that tobacco companies had deceived the public about the dangers of smoking. But gun manufacturers had never encouraged Americans to believe that getting shot is good for you. These lawsuits failed the laugh test again and again: judges tossed numerous cases out as without merit.
But the Clinton administration was determined to demonize firearms, weaken the firearms industry, and use tort law to torpedo the Second Amendment. The administration sought to blame gun makers for all the violence in public housing projects—which is like blaming microphones for all the lies that politicians tell. The Department of Housing and Urban Development (HUD) is renowned for doing a poor job of policing its projects, Former Secretary Andrew Cuomo was happy to have a scapegoat and an excuse to get his name back in the news. The administration worked tirelessly to create the political atmosphere and consensus that would allow trial lawyers to bludgeon gun makers.
On March 17, 2000, Clinton announced that Smith and Wesson, the nation’s largest gun manufacturer, had agreed to sweeping new controls over its gun designs and marketing, and new restrictions on gun buyers. Smith and Wesson had been in a precarious financial position, and the British-owned company decided it could not afford to fight multiple court attacks around the nation and from Washington.
The settlement exemplifies how trial lawyers and politicians abuse tort law to attempt to seize absolute power over an industry and all its customers. The settlement also illustrates how political operatives use the coercion of bogus litigation to achieve “concessions” from corporate targets that could never make it through the legislative process.
Cuomo, the prime architect of the deal, declared of the new specifications for firearms: “This is a product that did not exist last week . . . . This will do to the [gun] industry what FedEx did to the [delivery] industry. This is a better mousetrap.” For the Clinton administration, the more difficult a gun is to fire, the safer it is. This is the Rosetta Stone that is necessary to understand Clintonite claims that the “agreement” improves gun safety.
The administration pressured Smith and Wesson and other gun manufacturers to sign a “code of conduct” that apparently originated in anti-gun hell. Jeff Reh, general counsel for Beretta (which provides the standard sidearm for the U.S. military), noted that “the ‘code of conduct’ bans almost all semiautomatic pistols . . . and the manufacture of all small handguns.” The code also allows the possibility for sweeping recalls of previously made guns.
According to a HUD press release on the settlement, “Within 12 months, handguns will be designed so they cannot be readily operated by a child under 6.” Unfortunately, the federal government has not yet been able to persuade the National Association of Home Burglars to sign a side agreement giving an extra five minutes’ warning—time for residents to remove trigger guards—before they break into people’s homes.
The agreement requires Smith and Wesson to “not market guns in any manner designed to appeal to juveniles or criminals.” HUD had no evidence that Smith and Wesson had been running advertisements in prison magazines, but the provision aided the Clinton administration’s efforts to cast an aura of illegitimacy around firearms.
Smith and Wesson is also required to “refrain from selling any modified/sporterized semiautomatic pistol of the type that cannot be imported into U.S.” This illustrates how the Clinton administration used each new restriction to leapfrog toward broader firearms bans. When Clinton banned imports of certain semiautomatics in 1997, he justified it by claiming the guns violated the “spirit” of the 1994 assault weapons ban (even though such guns could be legally sold under existing federal law).
The Smith and Wesson settlement created an “Oversight Commission . . . empowered to oversee implementation of the Agreement. The Commission will have five members selected as follows: one by manufacturers; two by city and county parties; one by state parties; one by ATF.” Four government officials and one private representative was the Clinton administration’s idea of fairness. This commission gives government officials practically unlimited power in perpetuity over the nation’s largest gun manufacturer. As Beretta’s Reh notes, “If the Oversight Commission decides that an ad showing a father and son hunting together makes the firearm shown ‘particularly appealing to juveniles,’ it can ban the ad.” Reh also noted that the creation of the commission “surrenders firearm design and distribution to antigun politicians.”
The Clinton administration abused tort law to seek far more power over gun makers than either the Constitution or Congress would allow. But—because few people realize the nature of the extortion—the administration could brag that the settlement was not achieved with an iron fist. And most of the nation’s media has swallowed the fraud; a Wall Street Journal article noted that Smith and Wesson “has unilaterally volunteered to require new restrictions on how retailers sell its weapons.”
On the bright side, the settlement may be fatal for Smith and Wesson, which was widely denounced by other gun makers for trying to cut a sweetheart deal with the feds. Consumers have boycotted their products, and many gun dealers have refused to accept the onerous new restrictions that the company seeks to impose on them. It recently announced layoffs of its manufacturing employees, and its prospects are darker than they were before the “deal.” Smith and Wesson, along with other gun makers, continues to be sued by city governments that refuse to abandon their opportunity to plunder its remaining assets.
Tort attacks on gun makers continue in many cities across the country. New York Attorney General Eliot Spitzer bragged: “We have the capacity to squeeze manufacturers like a pincers and hurt them in the marketplace.” This is a grim warning, since many politicians will not be satisfied until they have destroyed the sources of private gun ownership, all the while creating exemptions (as did the Smith and Wesson agreement) to continue providing high-powered weapons to law enforcement.
Yet in late 2000, a federal judge dismissed the lawsuit brought against gun manufacturers by the city of Philadelphia. The judge concluded that the suit was not allowable under Pennsylvania law and that the allegations were unfounded that the gun companies were guilty of creating a public nuisance. Suits have also been dismissed in Ohio, Connecticut, Florida, New Jersey, and Illinois.
Cigarettes and guns are only the lead targets in the continuing assault by trial lawyers on the American way of life. Other recent targets are HMOs, paint makers, and breast-implant producers. In each case, the standards of proof for conviction are slim and none; instead, trial lawyers fixate on some public-relations strategy (such as hyping the dangers of lead paint) and then proceed to try to bludgeon the industry into submission. Given the ability of trial lawyers to stack juries, the only limit on their extortion is their ability to get a half dozen politically correct citizens installed in a jury and to find a judge who believes that practically any corporation deserves a death sentence.
Ironically, many government agencies could be destroyed by the same methods that politicians and judges sanction for use against private enterprises. Who would want to defend the Food and Drug Administration if it could be held responsible for all the people who died while it dallied for years before approving new life-saving drugs and medical devices? What if public schools could be held liable for all the false promises they make to children and parents? But because the government has sovereign immunity, the bureaucrats can continue wreaking far more damage on Americans than do the corporations that increasingly face destruction in government courts.