Breaking With the Bar

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun
The New York Sun
NEW YORK SUN CONTRIBUTOR

“This bill is an affront to every injured family in America and a Christmas present to every wrongdoing corporation,” the spokesman for the Association of Trial Lawyers of America, Carlton Carl, said of the Class Action Fairness Act, which is currently before the Senate. If that isn’t a sufficient endorsement of the bill — from the perspective of those who are tired of trial lawyers costing the American economy billions of dollars a year — we don’t know what is.

Others, still, may be heartened to learn that the bill has at least one unlikely ally, Senator Schumer. Despite the fact that the trial-lawyer lobby is one of the biggest donors to Mr. Schumer’s Democratic Party, he has strongly endorsed the goal of reforming abuses of class actions. While he and three other Democrats are holding out for some adjustments to the bill at hand and voted against it originally, it looks like Mr. Schumer may help bring about long-awaited curbs on abusive lawsuits.

It’s about time. The Manhattan Institute was onto something in September when it released a report comparing the trial-lawyer industry to a corporation, “Trial Lawyers Inc.” This business costs the American economy $200 billion a year, by the institute’s reckoning, and makes a profit of about $40 billion a year — 50% more than Microsoft or Intel and twice the revenue of Coca-Cola. This money is raked in through a number of means. One is by “forum shopping” cases to so-called “magic jurisdictions,” such as Madison County, Ill., famous for granting large verdicts. The king of the tobacco lawyers, Richard Scruggs, described these jurisdictions as ones where “the judiciary is elected with verdict money” and “it’s almost impossible to get a fair trial if you’re a defendant.” Another tool of the trial lawyers is the coupon settlement, where, for instance, airline passengers get some frequent flyer miles to compensate for some minor airline wrongdoing. The plaintiffs’ lawyers, then, walk away with millions of dollars in attorneys’ fees.

The Class Action Fairness Act would allow class-action suits to be moved out of state court and into federal court if at least $5 million in total damages were at stake and would require judges to review settlements where class members are left with tokens and lawyers with the real prizes.”I very much want to get a bill,”Mr. Schumer told The New York Sun recently. “I think the vast majority of these cases belong in federal court and I dislike forum-shopping.” In a letter to Senate Majority Leader Frist, Mr. Schumer — along with Senators Dodd, Landrieu, and Bingaman — stated that: “We believe it is imperative to include stronger provisions that tie attorney’s fees to the actual coupons redeemed.”

This is an encouraging move from Mr. Schumer, particularly because the Democratic Party is basically an operating subsidiary of the trial lawyers. So it’ll be worthwhile to keep an eye on the senator to see whether he sticks with the fight. It may also be that on this issue sanity is starting to gain ground.

The New York Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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