essays and articles by david g allen


The U. S. Chamber Should Encourage Clarity

 

On March 27th, the Institute for Legal Reform issued this press release:  West Virginia Rates Last in Legal Fairness.  The ILR (a unit of the U. S. Chamber of Commerce) also began running ads showing a man whose mouth is filled with cash.  The caption reads: Please Don’t Feed The Trial Lawyers.

I think this ad and the accompanying survey results that formulate the Chamber’s claim about West Virginia’s legal system are disingenuous at best.  Big businesses’ cheap shot portraying trial lawyers as money-eaters reminded me of a one-time candidate for Harrison County Sheriff named Raymond Richards who answered a reporter’s accusation by saying, “Pot called Kittle, ‘Blackie!’”  

Mr. Richards, one of the dimmer bulbs in the stagelights of political theater, was unsuccessful in his run for sheriff.  But his unique way of saying, “The pot called the kettle black.” has forever been recorded in my collection of West Virginia euphemisms.

In this matter of a legal fairness survey, the Chamber’s Pot is tarnishing the Trial Lawyers Kettle.

I could not have arrived at this conclusion without the aid of our state Supreme Court of appeals.  For on March 29th, the court (split 3-2 as expected) voted against hearing an appeal of the award of legal fees in a Putnam County case involving a defective car.

A Mr. and Mrs. George purchased their 2000 Dodge Intrepid from Nitro Dodge and later claimed there were problems with the car.  To make a long story short, they sued the dealership and the manufacturer, Daimler Chrysler.  Upon hearing the case, the jury awarded the couple $6,950 in damages.  But that was just a small tip of the iceberg.

The George’s attorneys filed a motion to recover legal fees and submitted their bill of $143,026 to the court.  In order to determine the “fairness” of the claim, the judge asked defense counsel to submit its fees for services so that he could make a comparison.   If you think $143,026 is exorbitant, then hold on to your hat—Chrysler’s legal bill was actually higher!

My advice to the Chamber of Commerce is twofold.  First, quit wasting your money on pseudo-scientific surveys about legal fairness.  And second, change the caption of your ad to: Please Don’t Feed The Lawyers—Theirs and Ours.

As for the lawyers involved in this case, I do not fault them for their excessive billable hours.  They played by the court’s rules and billed the parties for $300k.  If big corporations and insurance companies are stupid enough to wage Pyrrhic wars when a can of STP might have fixed the problem, then so be the outcome.

The members of the jury in this case should be applauded.  They decided that the car did have problems but chose not to make the plaintiffs whole by awarding them a new car or a carload of money.  They only awarded the repair bill ($4,500) and some money ($2,450) for the George’s aggravation.  The jury did its job.  And most likely, the jurors felt insulted after listening to five days of courtroom claptrap when they could have been home or at work.

The U. S. Chamber of Commerce wants to make a statement about the high cost of litigation in our nation.  They have quoted a 2004 study that estimates the tort system cost $260 billion or $886 per citizen.  There is a better way to determine the true and actual cost of litigation as well as a better way to give that number real meaning.

The Chamber should push for a change in accounting rules and seek to have product liability costs and claims included in Cost of Goods Sold instead of being classified as General and Administrative expenses.  This change would let Daimler Chrysler shareholders know right away how much the Putnam County litigation has added to the cost of manufacturing each new 2006 Dodge automobile.

When shareholders are given a line item under Cost of Goods Sold that clearly defines product liability litigation costs and product recalls, then management will either respond with better products and better service or the shareholders will change management.  

When consumers and shareholders have accurate information, the marketplace will settle the question of legal fairness faster than any other mechanism.

David G. Allen

Clarksburg, WV

"U. S. Chamber Should Encourage Clarity" appeared in the April 7, 2006 edition of the West Virginia State Journal and in the April 9, 2006 edition of the Clarksburg (WV) Sunday Exponent-Telegram.

 

 

 

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Copyright 1990-2006  David G. Allen