Are Lawyers Running America?

MARK RICHARDS FOR TIME
FRED FURTH: When he isn't winning antitrust cases, he's making wine at his 1,200-acre Chalk Hill vineyard in Sonoma County, Calif.

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ANDREW KAUFMAN--CONTACT FOR TIME

FRED LEVIN: A key player in Florida's tobacco litigation, he gave enough to the University of Florida to get its law school named after him

Guns are already being touted as "the next tobacco." The breakthrough lawsuit came last year, when a jury in Brooklyn, N.Y., held 15 gun manufacturers liable for negligently distributing handguns that were later used in crimes. At least 30 cities and counties have filed lawsuits against gun manufacturers, and the industry is running scared. Smith & Wesson, the oldest and largest handgun manufacturer in the U.S., agreed last month to adopt several kinds of safety measures--among them installing "smart-gun technology" on all its guns within three years in exchange for being dropped from numerous lawsuits. Colt has stopped making most of its guns for sale to individuals, focusing on the police and military markets instead.

And trial lawyers are finding new targets. Angelos, the Baltimore trial lawyer, is going after paint companies. He has filed a lawsuit on behalf of Maryland children whose lead poisoning was caused in part, he says, by lead paint in their homes. The Rhode Island attorney general has filed a similar lawsuit on behalf of victims in that state. As the government's antitrust lawsuit against Microsoft heads into the remedy phase, more than 100 individual lawsuits have already been filed by trial lawyers on behalf of computer and software buyers.

Other lawyers are considering suits against the alcoholic-beverage industry, which they would hold responsible for drunk-driving deaths and other alcohol-related losses, using the same "negligent marketing" allegations that have been lodged against gunmakers. What could be next? Suits against burger chains for selling foods they know are unhealthy? Suits blaming sellers of gore-drenched video games for outbreaks of youth violence? Already, in one of his more expansive moments, Scruggs has mused that Wal-Mart would be a good target because it puts so many mom-and-pop stores out of business.

But is this any way to run a country? Critics of law-by-trial-lawyer say it's an undemocratic way for a nation to decide its approach to controversial issues like handgun and tobacco regulation. The key players--the lawyers and often the judges--are unelected, and most of the critical decisions in litigation are made in secret. "The settlements are hammered out in back rooms," says Olsen. "There are going to be losers who aren't part of the negotiations."

And they say lawyers can't always be counted on to put their clients' interests ahead of their own. There have been a few notorious cases, such as a class action against the Bank of Boston for alleged improprieties involving escrow fees. The lawyers were awarded $8.5 million in fees, which was taken directly from customers' bank accounts. One class-action member discovered that $91.33 in legal fees had been deducted from his account--although he received only $2.19 in interest from the settlement award. Even in more traditional fee arrangements, the sheer size of some damage awards can mean that lawyers end up pocketing gargantuan amounts. Fees in nationwide tobacco litigation, for example, could top $30 billion. That's money that could be going to address the underlying problems at which the lawsuits were aimed.

Critics offer a solution: tort reform. They have been pushing for years for restrictions that would make it harder for trial lawyers to collect large punitive-damage awards, which often far exceed the actual damages. Forty-five states have enacted civil-justice-reforms laws that limit such awards; and the Republican-backed Litigation Fairness Act, which is pending in the Senate, would make lawsuits filed by the government subject to the same procedures and laws that apply to injured persons.

Supporters of tort reform complain that trial lawyers are fighting it by contributing millions of dollars to the campaign coffers of sympathetic elected officials and judges. Last year trial lawyers gave $2.7 million in soft money to the national Democratic Party. Angelos personally gave $400,000. In fact, most of this trial-lawyer money went to Democratic candidates for Congress--the group that has been most instrumental in holding the line against national tort reform.

Trial lawyers insist that the role they play is a vital one. The ability to sue for injuries is a basic American right, they say, one that supporters of tort reform are scheming to take away. "[Tort reform] is no more than a code to close the courthouse down to poor and middle-class people," says Jamail. "You don't see these corporations being tentative or bashful about running to the courthouse against each other or against individuals who don't pay their bills."