You want to know why giving state attorneys general more authority to pursue consumer product safety complaints (see below) causes serious heartburn? Read today’s editorial in the Wall Street Journal, “Lawsuit Inc.” It paints in disturbing detail Mississippi Attorney General Jim Hood’s practice of hiring trial lawyer firms on contingency to sue companies on behalf of the state.
The documents show Mr. Hood has retained at least 27 firms as outside counsel to pursue at least 20 state lawsuits over five years. The law firms are thus able to employ the full power of the state on their behalf, while Mr. Hood can multiply the number of targets.
Those targets are invariably deep corporate pockets: Eli Lilly, State Farm, Coca-Cola, Merck, Boston Scientific, Vioxx and others. The vast majority of the legal contracts were awarded on a contingency fee basis, meaning the law firm is entitled to a big percentage of any money that it can wring from defendants. The amounts can be rich, such as the $14 million payout that lawyer Joey Langston shared with the Lundy, Davis firm in an MCI/WorldCom settlement.
These firms are only too happy to return the favor to Mr. Hood via campaign contributions. Campaign finance records show that these 27 law firms — or partners in those firms — made $543,000 in itemized campaign contributions to Mr. Hood over the past two election cycles.
The most egregious example of this sort of outsourcing was all the tobacco company litigation that eventually led to the tobacco settlement, a case of trial lawyers effecting public policy through lawsuits and campaign contributions. Do we really want to see that justice-debasing pattern replicated in consumer product litigation, divvied up by AGs to their plaintiff’s bar buddies?
The Journal’s conclusion hits the target, dead center:
The real issue is the way this AG-tort bar mutual financial interest creates perverse incentives that skew the cause of justice. A decision to prosecute is an awesome power, and it ought to be motivated by evidence and the law, not by the profit motives of private tort lawyers and the campaign needs of an ambitious Attorney General. Government is supposed to act on behalf of the public interest, not for the personal profit of trial lawyers. The tort bar-AG cabal deserves to be exposed nationwide.
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