America's civil legal system is too frequently abused by trial lawyers filing lawsuits in hopes of extracting quick settlements no matter the defendants' guilt or innocence. Worse, these same lawyers often become wealthy through such litigation while the purported victims of wrongdoing ultimately get only token compensation. Most Americans understand this, but how many of them realize their state and local governments may also be promoting this crooked system?
In the 1990s, the landmark tobacco settlement made multimillionaires out of a small group of trial lawyers who were permitted to represent individual states. It has since become increasingly common for state, county and municipal governments to lend their legal authority to private lawyers working on a contingency basis.
Such outsourcing supposedly lets state governments pursue cases they might not otherwise. But this is also part of the argument against it. The practice allows litigious mercenaries, cloaked in a borrowed mantle of government authority, to advance novel legal theories designed not to redress wrongs, but rather to enrich themselves and set precedents for future litigation. A decade ago, for example, some of them sued gun manufacturers for the mere act of manufacturing guns that worked properly. Congress prevented this, but trial lawyers have since pursued similar silliness in other areas.
Take lead paint, for example, the manufacturing of which was forbidden in 1978 and generally phased out of interior use decades earlier. Trial lawyers typically aren’t interested in modest settlements with negligent landlords who have exposed their tenants. But by suing on behalf of a state, these aggressive attorneys can profit handsomely from deep-pocketed paint manufacturers (and their successor companies) while collecting a percentage of the fortunes required to remove all the lead paint throughout a state. This is why a few politically influential lawyers — heavy donors to opportunistic attorneys general — are increasingly cooking up “public nuisance” lawsuits in hopes of doing just that.
Despite losing lead paint cases in other states, trial lawyers won a $1.1 billion verdict in California in December. If not overturned, it will make multiple trial lawyers there wealthy (they stand to share about $200 million) and reward negligent slumlords by fixing their properties at paint companies' expense.
The next legal fad, according to a report last October from the U.S. Chamber Institute for Legal Reform, may be to rent out government authority to sue the makers of allegedly unhealthy foods. In addition to corrupting case law, the legal mercenary system gives politicians an opportunity to reward donors with no-bid contracts. In many states, legal services are not subject to competitive bidding laws. As the ILR report noted, trial lawyer “firms have become adept at exploiting this exception by developing theories for litigation and then shopping them to [attorneys general], rather than AGs identifying unlawful or harmful activity through their own independent investigations.”
An executive order from the George W. Bush era, still in force, forbids the federal government from using private lawyers on a contingency basis. States, cities and counties should adopt the same policy. All that stops them from doing so now are fat campaign checks from trial lawyers.