Any enumeration of surviving pterodactyls in op-eddom would have to accord a high perch to The New York Times's Bob Herbert, whose form of class-warfare rhetoric was already wearing thin in the days of Harry Truman. "The Republican jihad against the poor, the young and the helpless rolls on," wrote Herbert in February 1995. "The United States has entered a nightmare period in which the overwhelming might of the Federal Government is being used to deliberately inflict harm on the least powerful people in the nation."
Having wrongly forecast that NAFTA would be the ruin of American workers, Herbert at the end of 1994 saw disaster ahead for the nation's cities as well: "When the next Congress is sworn in the Republicans will resume their war on urban America with a vengeance.... `You will see that this will be a dark time for the cities,' said a high-ranking national Democrat, who asked not to be identified," which was in retrospect prudent of that high-ranking personage, since American cities were about to enter their biggest renaissance in decades.
Usually the only surprise in a Herbert column is that his editors once again failed to tone down the vehemence, but one of his columns this October did deserve wider notice. It showed the beginnings of a new skepticism on the important subject of lawsuits as a vehicle for social change.
In the familiar model of such a suit, ideologue-lawyers line up a sympathetic client and sue a government agency or other institution with the aim of securing new legal doctrine that will apply in many other cases--in effect, aiming a lobbying campaign at judges rather than legislators. What is "particularly perverse" about this process, Herbert now writes, is that "the case is argued from first to last by representatives of the plaintiff and the institution." Other persons whose rights and obligations will be profoundly affected by the case's outcome have "absolutely no say," being "shut out of the proceedings."
Moreover, a well-organized offensive team can pick and choose its issues and where and when to sue, while the sued defendants scramble to react. "Often they are lawyers representing government agencies, school boards or universities. Their cases are not coordinated and there is no overall strategy. And when they lose, they often appeal willy-nilly, without due consideration of their likelihood of success, or of the much wider effect that an adverse higher court ruling can have." To make matters worse, the lawyers defending the institutions "are not necessarily strong believers...themselves" in the policies under attack. In short, social-reform lawsuits are neither a fair nor a neutral way of obtaining sweeping changes in policy.
What accounts for Herbert's hard-won wisdom? Funny you should ask. It turns out he has come up with this critique in reaction to the success of conservative and libertarian opponents of affirmative action who've been challenging racial preferences in cases like Taxman v. Piscataway. He says nothing about applying the same critique to 30 years of liberal reformist lawsuits demanding system-wide school busing and school-finance equalization, judicial takeovers of prison systems and social-service agencies, or even suits in which a single New Mexico jury second-guesses the temperature at which McDonald's coffee can be served in every other state. When Herbert next writes about those topics, we can expect him to show new concern for the bystanders in litigation--students in schools deemed "too good" in so-called Robin Hood funding cases, shopkeepers robbed by prisoners freed pursuant to overcrowding orders, buyers of January New Hampshire take-out coffee who'd rather get it hot and take their chances. Right?
Whether or not that happens, when even Bob Herbert begins to express doubts about the ideology of Better Living Through Litigation, you know it's in trouble.
Social-reform litigation is thriving these days in Egypt, of all places, but it emanates from an unexpected quarter. According to a Wall Street Journal news account, a cadre of Islamic-militant lawyers have "filed countless lawsuits against Egypt's government ministries and leading cultural and intellectual figures to get sharia, or Islamic law, implemented."
In one of the best-known such lawsuits, militants invoked the right to sue on behalf of "God's rights"--an officially recognized concept in Egyptian law analogous to the progressive American law notion of "citizen standing"--and secured a ruling branding Professor Nasr Hamid Abu-Zaid a heretic on account of his "perverse," "atheistic" view that some Koranic passages were best interpreted metaphorically. The court proceeded to order Abu-Zaid to divorce his wife, who wished to remain married to him; the couple fled to the Netherlands. Other suits have succeeded in restoring the controversial practice of female genital mutilation/circumcision (choose your own term) and in securing bans on numerous movies and books deemed insufficiently respectful of Islam. "We have no guns, no bombs, no knives. We have only pen, paper, the law and the courts," one activist told the Journal. "Look what we've done with them." Indeed. We could compare notes.
Another Journal news account the same month suggests (at first glance) that the cause of legal reform may have picked up its most surprising convert yet: the Clinton administration. The story reports that the Clinton people are outraged that American companies have been victimized by excessive and arbitrary multimillion-dollar liability awards, many far out of line with the magnitude of the transactions being sued over, and, even more disturbing, based on retroactive application of law not on the books at the time the companies acted. Companies victimized in this manner have included Colgate-Palmolive, DuPont, and Procter & Gamble.
Could this be Janet Reno's Justice Department, which has stoutly defended our litigation lottery year after year? Of course not: It was the State Department, going to the mat with Ecuador over a series of what it saw as unfair laws and lawsuits in that small South American nation. Speaking with much candor, U.S. Ambassador to Ecuador Lesley Alexander referred to the widespread perception of corruption in the country's judiciary and said that a law retroactively curbing the termination of local distributorships "has been used to terrorize and extort foreign companies." Following complaints by many American companies, the U.S. Trade Representative's office proceeded to place Ecuador on its so-called priority list, and a threat of outright sanctions followed. The mini-crisis ended only when the Ecuadoran Congress, perhaps sensing that it could not hope to win this kind of fight, voted to repeal the offending law.
And yet one doesn't have to look as far south as the Andes to find examples of courts willing to soak foreign companies, often through the use of novel or retroactive law. In Mississippi not long ago a trial lawyer demagoguing against rich foreign companies got a jury to vote $500 million against a Vancouver-based funeral home chain in a routine commercial dispute; the Loewen Corporation later settled for more than $100 million. A North Carolina jury recently mulcted the Meineke muffler chain for an estimated $400 million to $600 million, more than the annual profits of its large British parent company, after a lawyer invited jurors to "send a message to foreign companies." This September a New Jersey court ruled in favor of class-action lawyers suing Thorn PLC (formerly half of the Thorn EMI music group), the British parent of the Rent-a-Center chain, in a case that Thorn says might cost it $120 million. In 1995 a Texas court awarded $488 million damages, later settled for $36 million, in an anti-competitive practices case against British-owned ICI Explosives USA, the same company Johnnie Cochran tried to sue over the Oklahoma City bombing. The Germans at BMW headquarters must have scratched their heads over the Alabama paint-job debacle, while British-American Tobacco is among the potential corporate kindling in the retroactive bonfire known as cigarette liability. American trial lawyers casually busted Lloyd's of London, no easy feat, by getting retroactive changes in asbestos and environmental liability.
The Canadian press buzzed with indignation for months over what happened to Loewen, just as the British press has over British-company cases. Britain's Commercial Lawyer magazine says the Meineke case signifies that in America plaintiffs can "successfully argue that the contract requires the opposite of what it states."
"The U.S. has, without comparison in the developed world, the
highest degree of systemic risk posed by frequently arbitrary,
severe and unquantifiable litigation," says Thorn PLC's bond
manager. "Some investment bankers claim these legal hazards have
become a powerful deterrent to smaller companies contemplating U.S.
expansion," reports London's Financial Times. "Companies
will pull back from a deal rather than trust the U.S. courts," says
one merchant banker. Americans wind
up paying the price. "The abrupt slide in Thorn bonds has prompted investors to question whether they are taking sufficient account of the risk of lawsuits when they invest in companies with exposure to litigation-mad America," reports London's Evening Standard. "The Thorn case may well encourage investors to demand higher coupons [interest rates] from corporations with large U.S. interests." Translation: a higher cost of capital for companies operating here, and a discouragement of investment in this country.
No word yet, though, on whether Britain or Canada will back up their outrage with threats to aim trade sanctions at us if the mega-verdicts continue, the way we successfully did with Ecuador.