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A Response to "A Response to 'End Open-Ended Litigation'"

Fascinatingly, WashingtonPost.com's "Think Tank Town" column, for what I believe is the first time in its history, gave up its space for a lobbyist, Jon Haber of ATLA, to "respond" to a column—my column—written by a think tank fellow. That would be an interesting choice in and of itself if the response were actually a response, but it's not: it's a collection of ad hominems and insults and non sequiturs. Let's match up one set:

Me: "In New Jersey, a judge certified a class action lawsuit against Merck over Vioxx—but not for the reason you think. The plaintiffs do not claim to have suffered personal injury from using Vioxx; nor do they even claim that the drug failed to aid the users' arthritis. Yet they seek billions of dollars (triple what Merck sold Vioxx for) on a theory that an overbroad "consumer fraud" statute does not require plaintiffs to show that they were actually defrauded or that anyone was injured. Such injury-free theories of class actions threaten businesses every day and have resulted in billions of dollars of payout."

ATLA: "And then Frank defends Merck, his former client, which sold an anti-inflammation drug called Vioxx, all while hiding from doctors the fact that the drug was unsafe. Even though one FDA official said Vioxx led to as many as 55,000 deaths, Frank wants to limit the right of Americans to hold liable wrong-doers like Merck."

Let's put aside for the moment that the "55,000" number is completely invented, and that Merck never hid anything from doctors that it knew itself; let's even assume arguendo that Haber is right about both these points. How is Haber responding to the argument I actually made? Is Haber proposing that I be permitted to sue Merck because I cut myself with a knife or because my girlfriend's cat broke his hip-bone? Or does even Haber acknowledge that there should be some "limit [on] the right of Americans to hold" Merck liable?

I presume Haber doesn't support the silliest of the lawsuits I suggested, so the question isn't whether the right should be limited (since we would agree that it should), but under what circumstances it should be limited. I suggest that consumers who have suffered no injury not be permitted to sue under "consumer fraud" statutes. Haber has no response to this. At no point does Haber specifically defend the lawsuits I actually criticize.

Another one:

Me: "Almost every home-owners insurance policy in the United States has a clause excluding coverage for flood damage. (A government-subsidized flood insurance program makes it uneconomic for private insurance companies to include flood insurance in homeowners' policies. Insurers thus only offer the government policy.) Every insurance holder in America benefits from these exclusions by being able to receive affordable insurance for non-flood risks, because the price of the policy reflects the level of risk incurred by the insurer. Nevertheless, trial lawyers�egged on by Mississippi's state attorney general, Jim Hood�seek to retroactively rewrite the policies by suing insurers to force them to pay money for a risk they did not agree to assume."

ATLA: "Yet Frank decides to criticize victims of Hurricane Katrina for pressuring insurance companies to pay what they feel is owed under their homeowners policy. Gulf Coast residents certainly have a legitimate claim when they say damage to their homes was caused by the storm, covered under their policies, rather than flooding, which is not. Frank sounds like he'd have them ejected from the courthouse."

Note the dishonest change of subject: at no point does Haber defend the lawsuits I actually criticize.

There are other jaw-dropping parts: an argument that concludes "So much for clogging the courts" (I never said that court congestion is a problem, though the statistic that Haber uses—number of trials—just as easily suggests the opposite of his conclusion); that I am "defending large corporations" because of my employer (I am defending a principle, and criticized a large corporation in the op-ed that violated the principle). Haber's response purports to be responding to me, but is in fact responding to a fictional straw-man. Here's the most important part of my op-ed, and Haber's response:

Me: "One of the fundamental rules of fairness, from the kindergarten playgrounds to corporate boardrooms, is that a deal is a deal. But more and more, trial lawyers are trying to undo this concept retroactively in lawsuits that posit that a deal isn't a deal if it can be rewritten in a way to provide benefits to yesterday's consumers (and, not incidentally, their attorneys). Such lawsuits are not only unfair and unjust; in the long run, they end up hurting future consumers.... If businessmen and entrepreneurs—be they insurers, manufacturers of lifesaving pharmaceuticals, or the small businesses that deliver your packages—have to account for the risk that their contractual arrangements will be disregarded by courts, they have to raise prices to account for that risk. Such increased prices mean fewer contracts are signed and fewer businesses are started. Consumers are worse off, not just because they now have fewer options, but because the economy is smaller as jobs and opportunities are lost. The only beneficiaries are the lawyers."

ATLA: ""



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.