Class-Action Lawsuits (by Tim Cox)

I generally don’t watch much television, but I always make an exception during the NCAA tournament: I truly enjoy watching the West Virginia’s and Davidson’s knocking off the Duke’s and Georgetown’s while rooting for my Longhorns. On the down side, while watching, I am once again shocked and dismayed at not only the advertisements of ambulance chasing lawyers but also the ridiculous disclaimers that are now required in our society.

The little blue pill advertisement warns us of almost every ailment known to man, including the risk of going blind. A law firm (Lieff Cabraser) actually addressed an advertisement to those who have suffered or died from bleeding after heart surgery. A quick look at their site listed dozens of other class-action lawsuits including those against chain saw, nail gun, power drill and power saw manufacturers, as well as lawsuits against scores of others. The Reclast ad took ten seconds to talk about the benefits and twenty to warn you about side effects. Who really wins in all these lawsuits?

Alita Ditkowsky was part of a class-action suit against a company that made faulty televisions. When the case was settled in Madison County, Illinois, Alita's lawyer took home $22 million while she got a $50 rebate on another TV, built by the same company that had ruined the first TV. That is a small class-action suit.

Cobell v. Kempthorne is a big one, and you and I are going to pay for it. “Lawmakers are proposing an $8 billion conclusion to a decade-long class-action lawsuit that pits an estimated half-million American Indians against the federal government (i.e. you and me)… who allege longstanding Interior Department mismanagement of royalties collected from oil, coal and timber operations on Indian-owned lands the government holds in trust.” Lawyers representing the plaintiffs were seeking $27.5 billion. In 2002 it was estimated there were about 4.3 million American Indians and Alaskan Natives. I’m not sure which tribes are included in this particular lawsuit, but if it is anywhere close to all of them, then each native will get about $1,000. If it only applies to the 500,000 that have signed up so far, they’ll each get $8,000. Assuming they settle for $8 billion, the lawyers will take home just under $3 billion. Who really wins?

Ruiz v. Estelle was one of the longest running class-action lawsuits in Texas. It was filed on behalf of the prisoners in the Texas system for the way they were being treated. A prisoner suing the State for improper treatment feels oxymoronic to me. That is not the way I want to spend my tax dollars. I recently received an invitation in the mail to a join a class-action lawsuit against Honda, maker of my recently sold four-door Civic. I was promised the opportunity to have my warranty extended by up to 5,000 miles on a car that was already 16,000 miles past the limit. The lawyers stand to make tens of millions of dollars on this case.

President Bush, in a February 2005 speech said, “Class-actions can also be manipulated for personal gain. Lawyers who represent plaintiffs from multiple states can shop around for the state court where they expect to win the most money. A few weeks ago, I visited Madison County, Illinois, where juries have earned a reputation for awarding large verdicts. The number of class-actions filed in Madison County has gone from two in 1998 to 82 in 2004… Trial lawyers have already filed 24 class-actions in Madison County this year. We're in February, including 20 in the past week -- after Congress made it clear their chance to exploit the class-action system would soon be gone.”

The results: Two years later, in 2007, Madison County had risen from last to 4th from last according to the Judicial Hellhole report from the American Tort Reform Association. Looks like our government really showed them. Or did they just push the cases to a different locale?

If that’s not bad enough, look at the law suits brought by our own government. The Equal Employment Opportunity Commission (EEOC) was established to enforce provisions of Title VII of the Civil Rights Act of 1964. “Anyone who feels that he or she has suffered workplace discrimination because of his or her race, age, physical disability, religion, sex, or national origin is eligible to file a complaint with the EEOC… and they manage over 75,000 charges annually.” “Approximately, one out of every three lawsuits filed by the EEOC is a class action. In 2004, the EEOC filed 143 class suits on behalf of multiple alleged victims of discrimination. One such high profile lawsuit that settled in 2004 was against one of Wall Street’s premier investment banking and brokerage firms for $54 million…”

People often wonder why I have such a dislike for lawyers and the legal system. Has the American way become a synonym for the legal way? Is this what we want our country to be?