Going after corporations through jury box
Big damage awards spur lawyers to target new industries, from paint firms to HMOs.
The huge damage award in the Florida tobacco trial and other recent big jury verdicts are emboldening activist lawyers in their quest to hold American corporations responsible for the health and safety of their products.
Probably next up: an accelerated fight against gun manufacturers, liquor companies, makers of lead paint, and even HMOs.
While lawyers have been suing corporations for product liability for decades, the trend is now growing in the wake of some jury verdicts favorable to their causes and a cache of money to carry out their crusades.
After making millions off Big Tobacco - including, if it stands, the $145 billion from the class-action suit in Florida - lawyers are reinvesting their profits into a broader range of cases they once thought too risky or unwinnable. One result: Even the most safety-conscious companies are now looking in the rear-view mirror.
"They'd be crazy not to be worried," says Richard Epstein, a law professor at the University of Chicago who has served as a consultant for Philip Morris.
Behind the growing number of suits is more than just an attempt to hold companies accountable for the safety of their products. Through the courts, some activists hope to launch a "preemptive" strike, forcing companies to change how they design their products. One example is the attempt to get gunmakers to put trigger locks on new weapons.
Even more broadly, some advocacy groups believe the suits are helping to do what Congress cannot: regulate "irresponsible" industries. Yet others believe that the idea of lawyers acting as de facto lawmakers, trying to shape corporate behavior, marks a dangerous development.
"This represents a fundamental change in the nature of our government structure," says Lester Brickman, an ethics professor at the Benjamin Cardozo law school at Yeshiva University in New York. "For the courts to be able to create policy cheapens and diminishes our democratic system. If the legislature fails to bring about change, the way to deal with that is to use the power of the ballot."
Let's not wait for legal brief
Still, some companies aren't waiting for lawyers or legislators. The telecommunications industry, for example, announced last week that it will begin requiring cellphone manufacturers to disclose radiation levels produced by their products.
And while officials say the new guidelines have nothing to do with the fear of litigation, the announcement comes without any medical evidence to suggest cellphones cause health problems.
"It's a preemptive strike," says Louis Slesin, editor of Microwave News, a New York group that tracks radiation levels in a variety of products.
Certainly, no industry wants to fight the same battles as tobacco. Few could survive a similar onslaught. Unless the trend is reversed, some say no industry is safe from runaway jury awards.
"Manufacturers are always fearful about being sued for something. But this Florida case is really scary," says Lawrence Fineran of the National Association of Manufacturers in Washington. "Other industries are watching this case for a lot of reasons, not the least of which is the threat by the state attorneys general."
Already, several gun manufacturers have either stopped selling a particular product or gone bankrupt - simply by being named a defendant in a class-action lawsuit. "Gunmakers don't have any money," says Mr. Epstein. "They can't even pay their legal bills. Nobody has the solid sales of tobacco."
Epstein believes tobacco, even more than guns, has been singled out as an industry. "In no other industry is the public out to drive them out of business," he says.
People still want automakers to build cars and the medical industry to provide healthcare. But even in the heavily litigated area of automobiles, lawyers with multimillion-dollar verdicts under their belts are starting to take cases once thought long shots.
For example, rollovers and exploding gas tanks have been big money winners in the past. Now analysts expect to see more automakers being sued for building cars that can far exceed the speed limit - thus contributing to accidents and fatalities.
Lawyers have also traditionally steered cleared of alcohol-related deaths. Not anymore.
"These are hard cases to sell a jury, but you are going to see lawyers try," says Walter Olson, a senior fellow at the Manhattan Institute for Policy Research in New York and author of a book on the "litigation explosion."
He blames this flurry of activity on the ever-increasing jury awards - and the huge profits garnered by lawyers. To him, the recent Florida case is only the most recent example of what's possible. "Manufacturers did not require this jury award to make them petrified of the American judicial system," Mr. Olson says. "Even before the verdict, the climate was pretty intense."
Backlash to big verdicts?
While most agree the damages in the Florida case will be reduced, the amount can't be overlooked. "Once there's a record number on the table, jurors elsewhere want to top it," Olson says.
But that may backfire. A recent poll found that 60 percent of Americans disapprove of the amount of the verdict. A biased judge, unrepresentative jury, and questionable tactics by lawyers have all been cited as reasons.
"This is the first time most people rolled back their eyes and said this is nuts," Epstein says.
(c) Copyright 2000. The Christian Science Publishing Society