Lawsuit Abuse Fortnightly #3-6

Published June 21, 2004

Loony Warning Label of the Month

On a bottle of drain cleaner: “If you do not understand, or cannot read, all directions, cautions and warnings, do not use this product.” From Michigan Lawsuit Abuse Watch

Dead Mouse Hoax Nabs Extortionist

A Virginia woman and her son were charged with attempted extortion and conspiracy to commit a felony after her claim that she found a dead mouse in her soup at a Cracker Barrel restaurant in Newport News was exposed as a hoax. The furor over her allegation prompted Cracker Barrel to stop serving vegetable soup at all of its 497 stores nationwide. The woman threatened to sue and demanded $500,000 from the company, but she was arrested when she arrived to collect the check. Seems a detailed laboratory analysis of the small, black mouse showed it had not drowned, and was not cooked. It did not have any soup in its internal system and had, in fact, died of a skull fracture. Also, the soup-making process would have made it impossible for the rodent to have ended up in the soup in one piece. From The Hampton Roads Daily Press

Lawyers Paid More than All Clients Combined

We’ve often railed at the outrageous fees class-action trial lawyers are paid for their efforts while their clients individually receive only a pittance. Now comes a case where the lawyers made more money than all their clients combined. Seems a Colorado protein supplement manufacturer mislabeled one of its products. No one was injured, but the company nonetheless settled for $3 million, to be paid out at $2,000-plus for each of an estimated 10,000 class-action members. The lawyers were awarded $350,000 (they had asked for a lot more). Problem is, only 117 people came forward to claim their money within the time allotted, so the actual amount paid out was only $240,000 $110,000 less than the lawyers got. The company got back what was left over. From The Rocky Mountain News

Governator Wants Big Slice of Punitive Pie

California Governor Arnold Schwarzenegger (R) has proposed a new law that would give the state 75 percent of any punitive damages awarded to plaintiffs by juries. He claims this would produce $450 million a year in new revenue for the financially starved state. Although lawyers would still get a cut of the punitive damages pie, they are hostile to the proposal since, they claim, it would reduce a major incentive for filing lawsuits. A similar law in Georgia has indeed sharply reduced the number of lawsuits filed in that state, but most experts believe lawyers have merely found ways to shift their cases to more plaintiff-friendly nearby states. From Alameda Times-Star, The Mercury News, and Tort Reform Archives

Rollover Accident Costs Ford $369 Million

A San Diego jury has whacked Ford Motor Company with $123 million in compensatory and $246 million in punitive damages for a rollover accident involving a Ford Explorer, in which the woman driver was paralyzed from the waist down. The accident occurred when she swerved to avoid a large object that had fallen off the car in front of her. The jury found the Explorer was defective both from stability and crash-worthiness standpoints. Ford plans to appeal, saying it was prevented from introducing evidence in the trial comparing the vehicle’s safety record favorably with other SUVs. Ford had previously won 10 consecutive Explorer rollover jury trials. From The San-Diego Union-Tribune, The Detroit News, and Reuters

Movie Maker Brings McDonald’s to its Knees … or So He Claims

The new movie “Super Size Me” is getting rave reviews from the anti-obesity, anti-fast food crowd and the lawyers who are rooting them on. In it, the movie’s director and star gorges himself solely on standard McDonald’s fare and ends up gaining 25 pounds in a McSecond, turns his liver into paté, and declares Ronald McDonald the food equivalent of Joe Camel. Not content with that, he goes on to claim credit for McDonald’s change of heart in beginning to offer salads and other less-fattening goodies. Not true. People are demanding a greater variety in their fast food and McDonald’s is simply giving consumers what they want. Also, the threat of continued obesity-related litigation, stimulated anew by “Super Size Me,” is keeping many a fast food CEO tossing and turning all night. From The Boston Globe and USA Today

Lawyers Tops in Campaign Contributions

We’ll be keeping a close eye on this as the Presidential election campaign wears on … but at the moment it appears the legal profession will garner the blue ribbon for contributing the most money this year to keep their buddies in office. As of March 1, when the latest Federal Election Commission figures were available, the legal profession had contributed more than $65 million to federal campaigns since January 1, 2003, when the current campaign cycle is considered to have started. If this keeps up, lawyers will top their 2000 Presidential election year contributions of $112 million, more than any other industry including health care, insurance, and pharmaceuticals. And that’s just federal election contributions! From American Bar Association Journal

Frivolous Litigation Hampering Job Growth

A new study by the U.S. Chamber of Commerce Institute for Legal Reform calculates the annual cost of the tort system to American businesses both large and small amounts to $129 billion a year. Astonishingly, 68 percent of that cost $88 billion is borne by small businesses, i.e. those with $10 million or less in revenue. This represents roughly $150,000 a year for each small business. Since small businesses account for about 75 percent of the new jobs created in the country each year, the negative impact of frivolous litigation is severely hampering our ability to grow the economy. From a press release from the U.S. Chamber of Commerce Institute for Legal Reform

Lawsuit Abuse Fortnightly

Published by The Heartland Institute (312/377-4000), a nonprofit 501(c)3 organization founded in 1984. The full text of this newsletter is also available in Adobe Acrobat’s PDF format; click here.
Phone 312/377-4000, fax 312/377-5000
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Publisher: Joseph L. Bast
Editors: Diane Carol Bast, Paul Fisher, Dan Hales

Information on lawsuit abuse can be found on these Web sites:

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Chicago, Illinois 60603