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The Excesses of Liability Lawsuits

by Doug Bandow

This article originally appeared in the Washington Times.

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It turns out that the trial lawyers can go too far even for President Clinton, despite their generous campaign contributions over the years. The president came out against the California initiative (Proposition 211) drafted by the liability bar in order to expand the number and expense of securities lawsuits.

Until now, Mr. Clinton has sat firmly in the collective pockets of the trial attorneys. Last year, for instance, he vetoed legislation to rein in abusive securities lawsuits— where lawyers routinely file class actions against firms when stock prices fall. Congress overrode that veto, and the California trial bar worried that the good times were about to end. So the so-called consumer attorneys (they changed the name of their association) placed on the state ballot a measure to make it easier to threaten companies and extract settlements even when there is no evidence of misbehavior.

The California Democratic Party endorsed Proposition 211 and everyone assumed that the president was on board. But then another set of supposed friends—high-tech entrepreneurs and venture capitalists who formed the core of his corporate support in 1992—swung into action. If he wanted their money (they raised $500,000 for the Democrats in one night), he had to give them an opportunity to make their case. And the president swung their way. He opposed the initiative.

That the demands of the trial bar, whose chief lobby kicked in about $2 million to the Clinton campaign, have become excessive even for Bill Clinton is good news even if his support had to be extracted by equally influential special interests. But opposition to expanded power for liability lawyers is not enough. Reform to return the system to a standard of negligence—where fault has to be proven—is imperative. It is especially important when plaints are using junk science to win enormous judgments where proof of causation is absent.

Distinguishing between correlation and causation has become increasingly difficult for the American legal system. Although by the early 1990's silicone breast implants had been on the market for some 30 years without evidence of harm, some implant recipients believed that their health problems were the result of the procedure. A number of lawsuits resulted, attended by bad publicity.

Never one to lose an opportunity to expand his own authority, the ever-political David Kessler of the FDA then ordered implants off the market in 1992. True, he acknowledged, evidence of harm was lacking, but so what? In his view, the burden of proof rested on the manufacturers. And women certainly didn't have the right to choose to voluntarily accept even a small risk, a philosophy which would put into doubt "the whole rationale for the agency." The result of his decision, not surprisingly, was hysteria by women who'd received the implants (who can blame them?) and a deluge of lawsuits, more than 21,000 so far.

The result was a financial cornucopia for trial attorneys. They don't win an of their cases—roughly eight out of 10 verdicts have gone for the defense. But they don't have to. The mere prospect of huge damages in multibillion dollar class actions encourages settlements. And the massive potential liability has destroyed the silicone breast implant industry. Dow Corning has filed for bankruptcy; companies have even become wary of selling other silicone-based products, like cardiac pacemaker wires and artificial joints. Dr. Marcia Angell, executive editor of the New England Journal of Medicine, and author of the new book, "Science on Trial," points out that "Under these conditions, a large number of very important medical products may become scarce or even unavailable."

The trial bar disclaims any responsibility for the havoc wreaked by is profiteering from junk science in the courtroom. "Plaintiffs' lawyers profit from breast implant litigation only when they meet their burden of proof, when juries return favorable verdicts that are upheld on appeal," wrote four implant attorneys in response to one critic. But it is precisely the burden of proof that is at issue, since there is no scientific evidence that breast implants have caused the harm with which they are charged.

A 1994 Mayo Clinic study found "no association" between implants and connective diseases. A year later a Harvard review declared that it "did not find an association" between implants and women’s health problems. Earlier this year another Harvard study reported no "large hazard" of disease. It said that the data "suggest a small but statistically significant increased risk," but admitted that this might reflect an overreporting of disease because of the massive publicity generated by FDA Administrator Kessler’s grandstanding and the waves of litigation. The researchers are now reviewing the actual records of women who received breast implants.

Unfortunately, this lack of proof has not deterred plaintiffs, lawyers or juries from blaming breast implant manufacturers. As Dr. Anger relates, many women have "developed symptoms that any woman over 25 could develop," and have been told—by government officials, like Dr. Kessler, and especially the trial bar—that the cause is breast implants. Many jurors have listened, too.

Genuine reform, or "change," in the parlance of President Clinton, is needed to end the ongoing abuse of the legal system. But such leadership won't be forthcoming from the president, despite his welcome conversion against the California securities initiative, since his party is the primary beneficiary of the more than $30 million in campaign largesse from the trial lawyers since 1989. That’s more than was donated by the five largest labor unions.

People who've been injured by the negligence of others deserve redress. But that doesn't justify the use of liability lawsuits as search-and-loot missions directed at the deepest pocket around, irrespective of fault. The courtrooms certainly shouldn't be what they are increasingly becoming today— legal lotteries, where neither injury nor fault needs be shown.