Stop Regulation Through Litigation
Last year, Robert Reich, President Clinton’s former Secretary of Labor, declared “Regulation is out, litigation is in. The era of big government may be over, but the era of regulation through litigation has just begun.”
Recent developments show that Reich is right, and we all should be concerned. Government attorneys and big money trial lawyers have begun to team up against unpopular industries and companies as a way to pursue political goals that could not be achieved through the traditional political process. Along the way, trial attorneys are reaping huge fees, and state and local governments are getting windfalls.
In November 1998, 46 of the state attorneys general, including Ohio Attorney General Betty Montgomery, signed a $246 billion agreement, settling the states’ suits against the tobacco industry. Ohio is expected to collect $400 million annually over the next 25 years. Separately, private lawyers hired to represent the state of Ohio will receive about $265 million over the next 25 years from the tobacco companies.
Earlier this year, armed with public knowledge of the settlement, a Florida jury hit the tobacco industry with a $145 billion verdict in a class action lawsuit. All this is despite the fact that use of cigarettes and other tobacco-related products remains entirely legal and recent polls indicate that most Americans think smokers bear responsibility for their conduct. The government already collects more in tobacco taxes than it pays in smoking-related medical expenses.
Nineteen state attorneys general, including Montgomery, have joined the federal government in the antitrust suit against Microsoft. Last year, U.S. District Judge Thomas Penfield Jackson ruled against Microsoft, finding it had monopoly power and had engaged in anti-competitive activities. The case is now on appeal. Since Jackson’s ruling, more than 100 class action suits have been filed across the country, including one suit currently pending in Cincinnati, seeking refunds to consumers who were allegedly overcharged when they purchased the Windows operating system.
Some commentators are suggesting that the trial lawyers will turn Microsoft into the “next Philip Morris.” Never mind the fact that polls show the vast majority of Americans support the Microsoft position in the antitrust litigation and the only real beneficiaries from these class action suits would be the lawyers who filed them.
Government officials and private trial attorneys are also targeting gun manufacturers. Last year, the city of Cincinnati sued gun manufacturers for millions of dollars it claims gun manufacturers caused as a result of gun violence. The suit was dismissed by the trial court and the dismissal was upheld on appeal. The city is now seeking to appeal to the Ohio Supreme Court. The city of Cleveland has filed a similar multi-million dollar lawsuit against gun manufacturers in federal court.
Separately, the nation’s largest gun manufacturer recently agreed to, among other things, place trigger locks on newly produced guns to settle a suit brought by the city of Boston. This is a prime example of how the political agenda of gun control advocates is now being enacted through the courts. Certain cities in America are considering lawsuits against lead paint manufacturers. Trial lawyers who have unsuccessfully brought private class action lawsuits on behalf of children who were allegedly harmed by lead paint welcome government attorneys paving the way for future suits. The amazing thing about these potential lawsuits is that lead paint has not been commonly used in homes since the 1950s and was banned by the federal government in 1978. Similar lawsuits might be taken in the near future against latex glove manufacturers and the soft drink beverage industry. Can suits against producers of fatty foods or alcohol beverages be far behind?
Lawsuits by private individuals against so-called “deep pockets” are not entirely new but are troubling when they represent an attempt to shift responsibility for one’s own actions to someone else. When greedy trial lawyers team up with government attorneys to soak “deep pockets,” the stakes are even higher because our representative democracy is at risk. Under our system of government, the citizens have the ultimate check on the government’s intrusion into private activity. When laws or regulations that affect private conduct are proposed, public hearings are held to ensure citizen input. Ultimately, government officials who pass the laws and authorize regulatory action are held accountable to the public through the election process.
These checks, while certainly not perfect, help to ensure that laws and regulations do not become over-bearing. When the plaintiffs’ bar and government attorneys seek to enact their political agendas through courts of law outside the traditional democratic process, these checks are lost. If the trend of “regulation through litigation” continues, the only real winners will be the lawyers and bureaucrats, and it will be at the expense of our representative democracy.
David J. Owsiany is the senior fellow in legal studies for the Buckeye Institute.
