A Class Action Lawsuit Benefitting Only Lawyers

By May 22, 2008Briefly Legal, Trade

The National Journal’s legal columnist, Stuart Taylor, eviscerates the plaintiff’s lawyers in American Isuzu Motors v. Ntsebeza, the class-action lawsuit against corporations that did business with apartheid-era South Africa consistent with U.S. laws and foreign policy. This is the lawsuit that the U.S. Supreme Court could not deal with because it lacked a quorum after justices recused themselves. The entire column, “Lawsuits that Benefit Only Lawyers,” is worth reading, but two points grabbed our attention:

The lawsuits will do victims little or no good. The more than 20 million surviving blacks who lived under apartheid are unlikely to get more than a couple of quarters apiece, if anything. The $400 billion claim is frivolous. Even the most fecklessly PC judges are not going to order a vast reparations program for 20 million South Africans at the expense of (mostly) U.S. consumers. And even if Hausfeld and Hoffman succeed in using burdensome court-approved fishing expeditions and inflammatory publicity to extort nuisance settlements of, say, $20 million, that would come to about 50 cents for each “plaintiff,” assuming that legal fees and costs consume the usual 30 to 60 percent.

Hausfeld and Hoffman are Michael Hausfeld of Washington, D.C., and Paul Hoffman of Los Angeles, the lawyers who have accused the comapanies of aiding and abetting the South African regime. And…

The money comes from us all. The companies’ defense costs and any damage payments would not come from corporate big shots. Rather, in the aggregate such costs are spread to us all in the form of higher prices and insurance premiums; of downward pressure on the stockholdings of the big pension funds and tens of millions individual investors; and of lost jobs, when companies are hit really hard or bankrupted, as more than 60 have been by the asbestos-litigation scam.

The lawsuit represents just self-interested wealth distribution.

Leave a Reply