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| Frivolous
Lawsuits In
the American lexicon, “frivolous lawsuit” is rapidly becoming the
term of choice for any civil dispute that ends up in court.
There are claims with merit and those without. But if you believe the political rhetoric, they
are all frivolous. Personally,
I don’t want to see claims without merit filed, and I don’t know anyone
who does. Based
on my informal research, most people know about the topic, but very
few really care. When pressed for specifics, people most often recall
the case of a woman who spilled coffee and received a multimillion
dollar verdict. At least, that’s the legend. In
reality, that’s only half the story.
Stella Liebeck suffered third-degree burns over 6 percent of her
body, including her genital and groin area, when she spilled a cup
of coffee. She was hospitalized
and her injuries required painful skin grafts and debridement. Evidence
indicates that McDonald’s was well-aware that its coffee caused burns: Company documents showed more than 700 claims
by customers who had been burned by the coffee over a ten-year period. Some of those burns were substantially similar
to Liebeck’s. McDonald’s
policy specifically required that coffee be kept at 180 to 190 degrees
Fahrenheit, and the company’s quality assurance manager testified
that the company knew a burn hazard existed with any food substance
served over 140 degrees. He
admitted that when the coffee was poured it was not fit for consumption
because it would burn the mouth and throat.
Nevertheless, he said, McDonald’s had no intention of reducing
the temperature of its coffee. Many
people focus on the size of the award: $2.86 million including $2.7
million in punitive damages. The
punitive award, which equaled about two days of McDonald’s coffee
sales, was subsequently reduced to $480,000 and later settled for
an undisclosed amount. But the misconception remains that millions
were paid for a “frivolous claim.” Are
greedy lawyers running rampant in the courts filing nonmeritorious
claims? Many lawyers handle
cases on a contingent fee and don’t get paid unless recovery is achieved. Cases without merit are dismissed; the lawyers
will lose time and expenses involved in preparation and may be assessed
sanctions. There is also a
financial disincentive: the contingent fee acts to screen out frivolous
matters. Are
judges not being effective gatekeepers?
Judges don’t want the court’s docket clogged with junk lawsuits. They monitor cases filed in their courts at
every step and they can — and do — dismiss baseless claims. Does
the profession see a major problem here?
Normally, the Perhaps
the concern is not about the judicial system, whose currency is ideas,
but rather about political campaigns, whose currency is — currency. Contributors buy advertising to influence elections.
More money means greater influence, and the donors want a return
on investment. Their concern
is to quantify damages as a risk of doing business and conduct their
affairs without fear of destabilizing losses. The
political fix for the generous contributor is a proposal for sweeping
statutory modification of the common law, which developed with the
wisdom and experience of hundreds of years.
Proposed changes focus on methods of reducing economic damages
for those who willfully or unintentionally cause harm.
Major proposals call for limiting punitive damages and noneconomic
damages. It
has been suggested that punitive damages be limited to $250,000, but
real world examples illustrate the unfairness of the proposition.
The government of Similarly,
the reason for limiting noneconomic loss
is difficult to explain. Medical
bills are economic loss, while pain and suffering are noneconomic. If one loses one’s eye, the surgeon’s bill is
economic, while blindness is noneconomic. Limiting those damages is extremely attractive
to the insurance industry, but punishes those with the greatest loss. No rational person would give up their sight,
limbs, or hearing in return for a set price.
Nor will anyone sell their health; but when it is taken from
them, there is a forced sale. Limits
are unconstitutional in land condemnation cases because dirt has great
value; but if one values health, it is considered sentimental. The suggested constraints on noneconomic loss are not very complimentary to the value of
human life. The
bottom line is that those who take risks with others’ well-being want
limited damages and they need cover from politicians.
No one wants “frivolous lawsuits” and the campaign against
them is a smoke screen that hides the real issue.
Limiting damages for Enron executives and other wrongdoers
doesn’t sell. We need to clear away the smoke screen. If limits are necessary to save the corporate
bottom line, a $250,000 cap on executive pay may be a more appropriate
solution. |
