Why Attorneys General Should Be Relentless - Even if Somebody Else Already Has Been

It's critical that the state, and not just private law firms, stand up for the rights of consumers.

If you read the newspapers this week, you would have seen an excellent example of this practice. Last week, more than thirty State Attorneys General filed a class action lawsuit against a consortium of technology manufacturers that engaged in an international conspiracy to artificially inflate and control prices in the computer chip industry (NY also filed a separate suit).

This class action lawsuit seeks to recoup the money spent by state entities, as well as by each state's own citizens, on the inflated prices of the computers containing these chips. The case was launched on the heels of the DOJ criminal investigation, prosecution, and subsequent attainment of guilty pleas from several defendants.

Some estimates put the increased costs to consumers as high as hundreds of millions of dollars. You'd be surprised to read that such well-known corporations as Samsung (at least in Attorney General Spitzer's separately filed suit) are there with the rest of the defendants (in the suits of the other states they are excluded pending settlement negotiations). The scope of the conspiracy is international, involving collaboration by almost 70% of the market share, and crosses numerous international boundaries.

This lawsuit is a great example of exactly what our states should be doing. I don't really know a much better use of the portion of our tax dollars earmarked for our Attorney General than filing suits against international conspiracies to increase prices (by the way, what always bothers me is how free market defenders -  as these companies likely are  -  are willing to engage in such anti-competitive and decidedly un-free monopoly behavior - but I digress).

Ironically, some "tort reform" organizations (click here for an overview of the tort reform movement) are attacking state attorneys general for exactly this kind of aggressive pursuit of consumer fairness.

The website AGAgenda Watch describes itself as "a project of the American Tort Reform Association to monitor the litigation and political agenda of state attorneys general."

As you may or may not know, the "American Tort Reform Association" is not really about creatively reforming our civil justice system, but is focused on dismantling it.

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The Tort Liability Index: Another Reason Why You Should Feel Free to Ignore It

Crossposted from DMI Blog

As I discussed in my recent post "The Tort Liability Index: Why You Should Feel Free to Ignore It," the Pacific Research Institute recently published a misleading report titled "Tort Liability Index: 2006."This report purports to show that "a [robust] civil-justice system lowers the standard of living for ordinary citizens" and that "meaningful legal reform on the other hand pays dividends in the form of stronger economic growth and higher personal income." The index then ranks states from 1-50 according to their anti-civil justice reforms and purported litigiousness.

My previous posting goes into detail about - bluntly - why you should ignore the index. In short, the index uses misleading numbers and data to the extent that it even refuses to release them for peer review. I guess this means that we should just trust their own internal fact checking - just because. The authors of the primary research on which the index bases its primary findings have also plainly admitted that "the costs tabulated in this study are not a reflection of the legal system,"even though they have attempted to portray their data as reflecting exactly that.

However, in looking at a different civil justice issue, I was forced to disregard my own mantra, and re-check the report's assertions in order to figure out the best way to explain why it was wrong.

Luckily, in revisiting the report that I told you all to ignore, I uncovered - and no surprises here - yet another reason why you should feel free to ignore it.

The primary thrust of the index's argument is that a robust civil justice system that results in judgments against corporations hurts a state's businesses, which ultimately hurts employees, which ultimately drives businesses to other states.

Looking at the index I thought to myself: could it be that there's an even more obvious reason than those I've already given to ignore this index?

Indeed there is.

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Abuse of the State Secrets Privilege: Keeping Your Grandmother's Apple Pie Recipe Classified

Unknown to most Americans, their right to access the courts is being significantly curtailed by the current administration's overuse of something called the state secrets privilege.  When the government decides to use this defense in court, it means that the judge must dismiss the case regardless of its merits, and regardless of the seriousness of the injury.

You're a civilian traveling on a government military plane. The plane crashes and you die. Your widow sues and asks for the accident report during the trial. The government responds that the report is a state secret. You can't sue the government, your case is thrown out, you can't do anything (click here for full story).

You work for the FBI as a translator working on communications. You realize that some of the translators working in Guantanamo Bay and on transcripts of Osama Bin Laden conversations do not even speak the language they claim to be translating. You also realize that some of the people being investigated for spying are having their communications translated by their own friends and associates. You blow the whistle, you are fired. When you take the FBI to court, the government states that the issue you have brought would expose state secrets. You can't sue the government, your case is thrown out, you can't do anything (click here for full story).

You are a Canadian citizen traveling through JFK airport on a layover on your way home. You are detained, interrogated for nine days without a lawyer, and then flown to Syria to be tortured. You are later released by Syrian authorities who publicly state that you had no connection to terrorism and that you had been held at the request of the United States. You are never charged with any crime. You sue the United States, but they claim that the case would reveal state secrets You can't sue the government, your case is thrown out, you can't do anything (click here for full story).

You are a German citizen traveling from Germany to Macedonia on vacation. You are grabbed from your bus, and then held by Macedonia police in a small hotel room for two weeks at the direction of the US where you are questioned and roughed up. You are then flown to a secret detention center in Afghanistan where you are held by Afghani and American agents after which your captors realize that you are not who they thought you were. A full six months after they realize the mix-up, they fly you to Albania and leave you on a hillside on the country's border. You sue the United States, but they claim that the case would reveal state secrets. You can't sue the government, your case is thrown out, you can't do anything (click here for full story).

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Florida Supreme Court Finds Cigarettes Kill - But Take a Number and Get in Line to Get Money

Crossposted from DMI Blog

On Wednesday, the Florida State Supreme Court threw out the punitive damages award of $145 billion previously granted by a lower court to a class of approximately 700,000 Floridian plaintiffs suing cigarette companies for their medical injuries from smoking in Florida.

If you saw the newspaper articles or online commentaries you'd think that the decision is an overwhelming victory for tobacco companies.

The reality is that, although it is a victory for tobacco companies, it is not an absolute one.

The Florida State Supreme Court also found that:

1.    Smoking cigarettes causes aortic aneurysm, bladder cancer, cerebrovascular disease, cervical cancer, chronic obstructive pulmonary disease, coronary heart disease, esophageal cancer, kidney cancer, laryngeal cancer, lung cancer (specifically, adenocarinoma, large cell carcinoma, small cell carcinoma, and squamous cell carcinoma), complications of pregnancy, oral cavity/tongue cancer, pancreatic cancer, peripheral vascular disease, pharyngeal cancer, and stomach cancer)

2.    Nicotine in cigarettes is addictive.

3.    The defendants placed cigarettes on the market that were defective and unreasonably dangerous.

4.    The defendants concealed or omitted material information not otherwise.
known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both.

5.    All of the defendants agreed to misrepresent information relating to the health effects of cigarettes or the addictive nature of cigarettes with the intention that smokers and the public would rely on this information to their detriment.

6.    The defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers and the public would rely on this information to their detriment.

7.    All of the defendants sold or supplied cigarettes that were defective.

8.    All of the defendants were negligent.

Although some might say that this is all somewhat obvious, this was the first time a court found these facts during a class action lawsuit that went to trial.

This ruling means that every one of the approximately 700,000 original class action plaintiffs can re-file and sue as individuals with the support of the findings of the court which means they now must only prove that they actually individually suffered injuries (as opposed to having to prove that cigarettes can actually injure).

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The Check is Not in the Mail: Watching Your Medical Costs Go Up

Crossposted from DMI Blog.

Anybody who missed it should read the May 25, 2006 N.Y. Times Article "The Check is Not in the Mail." The article describes the common practice of delay and foot-dragging by medical insurance providers in the payment of the bills doctors send them. The article quotes the Chief Executive of the California Medical Association as stating that this

"Tardiness or refusal to pay what doctors consider legitimate medical claims may add as much as 15-20% in overhead costs for physicians, forcing them to pursue those claims or pass along the costs to other patients."

The next time you hear somebody talking at a dinner party about how medical malpractice lawsuits drive up the cost of medicine and insurance premiums, be sure to ask them how much they think delay of payment by medical insurers to doctors drives up costs.

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