The Excesses of Liability Lawsuits

This article originally appeared in the Washington Times.

It turns out that the trial lawyers cango too far even for President Clinton, despite their generouscampaign contributions over the years. The president came outagainst the California initiative (Proposition 211) drafted by theliability bar in order to expand the number and expense ofsecurities lawsuits.

Until now, Mr. Clinton has sat firmly in the collectivepockets of the trial attorneys. Last year, for instance, he vetoedlegislation to rein in abusive securities lawsuits— wherelawyers routinely file class actions against firms when stockprices fall. Congress overrode that veto, and the Californiatrial bar worried that the good times were about to end. So theso‐​called consumer attorneys (they changed the name of theirassociation) placed on the state ballot a measure to make iteasier to threaten companies and extract settlements even whenthere is no evidence of misbehavior.

The California Democratic Party endorsed Proposition 211and everyone assumed that the president was on board. But thenanother set of supposed friends — high‐​tech entrepreneurs andventure capitalists who formed the core of his corporate supportin 1992 — swung into action. If he wanted their money (theyraised $500,000 for the Democrats in one night), he had to givethem an opportunity to make their case. And the president swung theirway. He opposed the initiative.

That the demands of the trial bar, whose chief lobbykicked in about $2 million to the Clinton campaign, have becomeexcessive even for Bill Clinton is good news even if his supporthad to be extracted by equally influential special interests. Butopposition to expanded power for liability lawyers is not enough.Reform to return the system to a standard ofnegligence — where fault has to be proven — is imper​a​tive​.It is especially important when plaints are using junk science towin enormous judgments where proof of causation is absent.

Distinguishing between correlation and causation hasbecome increasingly difficult for the American legal system. Althoughby the early 1990’s silicone breast implants had been on themarket for some 30 years without evidence of harm, some implantrecipients believed that their health problems were the result ofthe procedure. A number of lawsuits resulted, attended by badpublicity.

Never one to lose an opportunity to expand his ownauthority, the ever‐​political David Kessler of the FDA then orderedimplants off the market in 1992. True, he acknowledged, evidenceof harm was lacking, but so what? In his view, the burden ofproof rested on the manufacturers. And women certainly didn’thave the right to choose to voluntarily accept even a small risk,a philosophy which would put into doubt “the whole rationalefor the agency.” The result of his decision, notsurprisingly, was hysteria by women who’d received the implants(who can blame them?) and a deluge of lawsuits, more than 21,000so far.

The result was a financial cornucopia for trialattorneys. They don’t win an of their cases — roughly eightout of 10 verdicts have gone for the defense. But they don’t haveto. The mere prospect of huge damages in multibillion dollarclass actions encourages settlements. And the massive potentialliability has destroyed the silicone breast implant industry. DowCorning has filed for bankruptcy; companies have even become waryof selling other silicone‐​based products, like cardiac pacemakerwires and artificial joints. Dr. Marcia Angell, executive editorof the New England Journal of Medicine, and author of the newbook, “Science on Trial,” points out that “Under theseconditions, a large number of very important medical products maybecome scarce or even unavailable.”

The trial bar disclaims any responsibility for the havocwreaked by is profiteering from junk science in the courtroom.“Plaintiffs’ lawyers profit from breast implant litigationonly when they meet their burden of proof, when juries returnfavorable verdicts that are upheld on appeal,” wrote fourimplant attorneys in response to one critic. But it is preciselythe burden of proof that is at issue, since there is noscientific evidence that breast implants have caused the harmwith which they are charged.

A 1994 Mayo Clinic study found “noassociation” between implants and connective diseases. Ayear later a Harvard review declared that it “did not findan association” between implants and women’s healthproblems. Earlier this year another Harvard study reported no“large hazard” of disease. It said that the data“suggest a small but statistically significant increasedrisk,” but admitted that this might reflect an overreportingof disease because of the massive publicity generated by FDAAdministrator Kessler’s grandstanding and the waves of litigation.The researchers are now reviewing the actual records of women whoreceived breast implants.

Unfortunately, this lack of proof has not deterredplaintiffs, lawyers or juries from blaming breast implant man​u​fac​tur​ers​.As Dr. Anger relates, many women have “developed symptomsthat any woman over 25 could develop,” and have beentold — by government officials, like Dr. Kessler, andespecially the trial bar — that the cause is breast implants.Many jurors have listened, too.

Genuine reform, or “change,” in the parlanceof President Clinton, is needed to end the ongoing abuse of the legalsystem. But such leadership won’t be forthcoming from thepresident, despite his welcome conversion against the Californiasecurities initiative, since his party is the primary beneficiaryof the more than $30 million in campaign largesse from the triallawyers since 1989. That’s more than was donated by the fivelargest labor unions.

People who’ve been injured by the negligence of others deserveredress. But that doesn’t justify the use of liability lawsuitsas search‐​and‐​loot missions directed at the deepest pocketaround, irrespective of fault. The courtrooms certainly shouldn’tbe what they are increasingly becoming today— legallotteries, where neither injury nor fault needs be shown.

Doug Bandow

Doug Bandow is a senior fellow at the Cato Institute. He served as a special assistant to President Reagan.