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Corporate hypocrites suing away

Businesses, not people, file most of the lawsuits in Arkansas and elsewhere. Business litigation is more likely to be frivolous too.

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President Bush and his corporate contributors rant against trial lawyers, accusing them of “clogging the courts” with “frivolous lawsuits” by individuals against corporations. But a new survey of court filings in Arkansas, Mississippi, Cook County, Ill., and Philadelphia, Pa., shows that businesses file four times as many lawsuits as individuals. And a related survey of federal court decisions nationwide shows that businesses are far more likely than individual tort plaintiffs to be sanctioned for frivolous litigation. The study was done by Public Citizen, a public-interest group based in Washington. It used data from the Arkansas Administrative Office of the Courts to report on court filings in the state in the years 1998 through 2002. In 2002, businesses filed 22,605 suits in Arkansas courts. “Debt — Open Account” was the largest category, accounting for 9,203 filings. “Other Contracts” was second at 3,522. That same year, individuals filed 5,100 lawsuits. “Negligence: Motor Vehicle” was the biggest category — 2,970. “Other Negligence” was next at 945. The numbers were similar in all five years and all four court jurisdictions. In Cook County (Chicago), Ill., for another example, individual filings in 2002 totaled 13,643. Business filings totaled 141,517. The average ratio of business lawsuits to individual lawsuits was 3.3 to 1 in Philadelphia, 4.4 to 1 in Arkansas, 5.3 to 1 in Cook County, Ill., and 5.8 to 1 in Mississippi. Mississippi is often singled out for criticism from corporations, who say that its court system has run amuck in favor of consumers. On the question of frivolity, Public Citizen listed some the lawsuits that businesses have filed against each other in recent years: • Potato chip manufacturer Jay’s sued rival Frito-Lay demanding that it stop immediately all its advertising claiming that “Chicago Prefers the Taste of Lay’s Over Jay’s.” Jay’s lawyer said the ads were technically incorrect because the taste tests on which the ads were based took place in suburban malls, and the test takers might have been tourists rather than Chicagoans. “They could have been from Tuscaloosa,” he told the judge. • Georgia-Pacific and Procter & Gamble engaged in a dispute over ads implying that P & G’s Bounty paper towels won’t drip while cleaning up spills. • The vacuum-cleaner manufacturer Electrolux accused rival Oreck of filing a “frivolous” lawsuit against Electrolux, after Oreck alleged that Electrolux infringed on Oreck’s trademark by using bowling balls to demonstrate the suction of Electrolux machines. In the ensuing court battle, the two companies argued over which had performed the bowling ball stunt first. • Mattel Inc., maker of the Barbie Doll, filed a federal lawsuit against MCA Records, charging trademark infringement after MCA released the song parody “Barbie Girl” by the Danish group Aqua. MCA countersued Mattel for defamation after the toymaker likened the record firm to a bank robber. Both claims were rejected. • Fox News Network sued comedian Al Franken for parodying FNN’s motto, “Fair and Balanced.” The suit was summarily dismissed. The report also listed a number of questionable lawsuits filed by physicians. Like corporations, doctors claim they are being harassed and their insurance costs driven up by “frivolous lawsuits.” Public Citizen surveyed the 100 most recent federal court decisions imposing sanctions on attorneys or parties for dilatory or abusive litigation tactics, including the filing of frivolous claims or defenses. The survey found that businesses and their attorneys were 69 percent more likely than individual tort plaintiffs and their attorneys to be sanctioned for engaging in frivolous litigation. The full Public Citizen report is available on the group’s website, www.citizen.org. The 2003 Arkansas legislature approved “tort reform” legislation restricting the rights of individuals to sue and win large judgments. Approval came at the insistence of doctors, insurance companies, and other corporate interests, including the Arkansas State Chamber of Commerce and the Arkansas Farm Bureau Federation. The legislation was opposed by trial lawyers and consumer groups, including Public Citizen, whose president, Joan Claybrook, came to Little Rock and testified against the bill. The state Insurance Department recently issued a report saying that “tort reform” has not produced lower insurance premiums so far. President Bush wants even more “tort reform” at the federal level. He and the chief executive officer of Home Depot, Robert Nardelli, took turns bashing trial lawyers and their clients at a White House gathering Dec. 15. The Atlanta Business Journal says that Home Depot reported 185 customer injuries a week in 1998 and has since refused to answer media inquiries into its safety record. The federal government “has recorded nine worker deaths in the past four years at Home Depot stores” and, in 2002, recorded a “45 percent jump” in workplace safety violations, according to the Journal.

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