How the Tort Juggernaut Trolls for Clients

Articles, News | April 3rd, 2015

 

April 2, 2015 http://www.wsj.com/articles/tiger-joyce-how-the-tort-juggernaut-trolls-for-clients-1428016906

 

OPINION

How the Tort Juggernaut Trolls for Clients

Judges and juries have begun to expose the fraud behind many injury claims. The FTC should dig into it too.

 

By TIGER JOYCE

 

It has been more than 15 years since former Supreme Court Justice David Souter referred to asbestos litigation as an “elephantine mass,” the most massive of mass torts in America for decades. Though the U.S. epidemiological peak for mesothelioma—the incurable cancer caused by significant inhalation of asbestos fibers—came and went in the early 1990s, roughly 2,000-3,000 new claims for compensation are filed each year.

Yet recent events have raised serious questions about personal-injury law firms’ aggressive recruitment of asbestos clients and the legitimacy of the claims they file. In 2012, a jury found two Pittsburgh-based plaintiffs’ lawyers liable for fraud in a multimillion-dollar civil racketeering case brought against them by CSX Transportation. The company had alleged that the lawyers had worked with a radiologist to falsify chest X-rays to pursue asbestos-related claims against CSX. (The lawyers appealed, but then settled without admitting wrongdoing.)

Also last year a federal judge presiding over the bankruptcy of Garlock Sealing Technologies, a manufacturer targeted with asbestos suits, found that “manipulation of exposure evidence” had been perpetrated by several plaintiffs’ firms. And former New York state Assembly Speaker Sheldon Silver was arrested and indicted earlier this year for allegedly using his influence in Albany to steer asbestos clients to a law firm that had paid him millions.

With such law firms collectively spending roughly $30 million annually on television advertising alone to recruit asbestos clients, according to analysis by the Silverstein Group, it’s worth asking how the mass marketing of mass torts affects the civil justice system. If there is fierce competition among firms for a finite number of legitimate clients, does the need to recoup marketing expenses create perverse incentives to pursue speculative or even illegitimate claims, for instance, blaming lifelong smokers’ lung cancers on supposed secondhand trace exposures to asbestos dust decades earlier?

Of course, defending against fraudulent claims imposes costs on the customers, employees and shareholders of targeted companies. But it’s also fair to ask whether overwhelmed court dockets put an undue burden on taxpayers, and whether future legitimate claimants will be crowded out if compensation funds are exhausted.

Asbestos isn’t the only mass tort being marketed by the plaintiffs’ bar. Law firms hoping to force gigantic settlements out of makers of surgically implanted pelvic mesh have spent an estimated $52 million last year to troll for clients, according to the Silverstein Group.

Although various physicians consider pelvic mesh to be the best available treatment for many of the millions of women who suffer what are known as pelvic floor disorders, these lawyer campaigns have generated more than 100,000 claims, making this America’s fastest-growing mass tort.

But a defense motion filed in federal multidistrict litigation in January offered extensive evidence of seemingly wholesale fraud in recruiting mesh plaintiffs. Transcripts of recruiters’ cold-calls to unsuspecting women who had not even undergone mesh implants showed brazen invitations to lie to collect “$30,000 to $40,000.” The motion also alleged unlawful invasions of many women’s medical privacy, which raises still more questions about what may be motivating hackers in recent health-care data breaches.

Another would-be mass tort is spreading like a prairie fire throughout the Midwest. Plaintiffs’ lawyers are using television, radio, websites, direct mail and meet-and-greets with corn farmers to market meritless litigation blaming a recent drop in corn prices not on supply and demand but on Syngenta, the developer of a genetically modified, pest-resistant corn seed.

The lawyers’ contrived theory of liability alleges that, despite U.S. regulators’ 2010 approval of the seed, Syngenta should have withheld it until Chinese regulators had approved it, too. China temporarily suspended all U.S. corn imports between November 2013 and December 2014, citing fears of contamination. But this story ignores that corn prices had already dropped 32% before China halted U.S. imports, and that exports to China have never amounted to more than a tiny fraction of U.S. corn sales.

There are many more examples of personal-injury lawyers’ mass marketing of mass torts, and the First Amendment certainly protects lawyers’ truthful commercial speech. But judges must do a better job of weeding out meritless and even fraudulent claims.

Congress, the Federal Trade Commission, state attorneys general and other authorities charged with protecting the public interest should also begin scrutinizing personal-injury lawyers’ marketing as zealously as they scrutinize the marketing of countless other businesses. Though congressional committees rarely hesitate to investigative various industries’ marketing practices, the marketing of law firms has not been subjected to similar examinations. It should be.

In that same spirit of inquiry, the FTC should study and report on mass tort advertising’s impact on consumers, since the litigation costs are invariably passed on in the form of higher prices for goods and services. And finally, unless they wish to risk irrelevance and displacement by government regulation, state bar associations must revoke the law licenses of attorneys who have plainly broken the public trust. Why, for example, have the Pittsburgh attorneys—who a jury ruled had committed fraud—not been disbarred?

Mr. Joyce is president of the American Tort Reform Association based in Washington, D.C., of which Syngenta and CSX are dues-paying members.

 

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The South Carolina Civil Justice Coalition (SCCJC) serves as the united voice for the business community on tort and workers' compensation issues; coordinating lobbying, legal, grassroots and public relations activities.