The Coastal Post - February 2000

Ambulance Chasing On The Info Superhighway

By Thomas A. Schatz

When Judge Thomas Penfield Jackson released his findings of fact in the Microsoft anti-trust suit in November, he opened the door to civil litigation against the software manufacturer. Yet despite Jackson's findings against the house that Gates built, few everyday consumers have been rushing to the courthouse demanding redress. Instead, class action lawyer are engineering these baseless lawsuits-suits that have little to do with justice and everything to do with greed.

Of course, it's no secret that most Americans consider class action attorneys the bottom-feeders of society. After all, when class action lawyers want to become millionaires, they don't make guest appearances on a Regis Philbin game show. Instead, they squeeze big name companies into multi-million dollar settlements that leave the plaintiffs with table scraps while the lawyers run off with millions in attorney's fees. And, adding expense to injury, those huge cash settlements often wind up being passed on to consumers as higher prices.

So it came as no surprise that, even before the ink was dry on Judge Jackson's 207-page findings of fact, trial lawyers smelled the money. Proclaiming themselves the protectors of computer users everywhere, attorneys were lining up at courthouse doors throughout the country, waiting to file class action lawsuits and gouge Microsoft. To date, cases have been filed in Alabama, California, Florida, Louisiana, Ohio and New York, tying up the courts at taxpayer's expense.

Despite the lawyers' claims to the contrary, plaintiffs rarely garner much benefit from class action suits. A perfect example is the 1997 settlement in the case of People v. Acer Peripherals, Inc., et al. In that suit, which involved the size of computer screens, the class action lawyers received $5.8 million in attorney's fees and up to $250,000 for their expenses. In stark contrast, plaintiffs in the suit were offered a measly $13 rebate for a new monitor or $6 cash-if they waited three years.

Another illustration of the greed inherent in many class action lawsuits is the trial bar's opposition to a bill in Congress that would establish a process to resolve more than 200,000 pending lawsuits on behalf of plaintiffs who have been exposed to asbestos. The size and complexity of the various cases have resulted in enormous attorneys' fees and overhead costs-so large, in fact, that they consume 61 cents of every settlement dollar, leaving a mere 39 cents for the victims. Thus, people who are suffering from asbestos-related diseases are victimized twice-once by their illness and again by the current dysfunctional system.

In some instances, class action lawyers don't even have a genuine plaintiff. Instead , they use straw men (or women) to get their suits into the courtroom, and then solicit the public to join in on the fun. For example, the attorney who filed the class action suit against Microsoft in federal court in New Orleans, La., used another attorney in his state as well as a paralegal from another state to legitimize his filing. Another firm, this one in Coral Gables, Fla., had the audacity to file a suit that named a secretary at the firm as its plaintiff. These baseless suits beg the question: Where is the outcry from the public for redress?

In the suits against Microsoft, the lack of real consumers claiming harm isn't the only hurdle facing rapacious trial attorneys. The suits themselves run counter to prevailing public opinion. In a Gallup poll taken after the findings were released, 68 percent of Americans indicated that they have a favorable view of Microsoft. Among computer users, that figure was even higher, with 78 percent viewing the company favorably. No wonder the class action attorneys can't find any real plaintiffs!

In addition, the trial lawyers are jumping the gun. Any filings based on the findings of fact are ridiculously premature. Civil suits are usually based on conclusions of law in anti-trust cases. If Microsoft settles the case before that stage of the lawsuit, the findings have no legal relevance.

In a news release issued as part of its suit against a class action firm, Daimler-Chrysler recently remarked, "For too long, trial lawyers have been exploiting class actions, turning these lawsuits into a form of legalized blackmail." The automobile manufacturer hit the nail right on the head. Class action attorneys know that companies, eager to avoid negative publicity, will often agree to settle even the most frivolous lawsuits. And whether these suits are against the Microsoft Corporation, Daimler-Chrysler or any number of asbestos manufacturers, the results will always be the same: higher prices for consumers, minimal return for the plaintiffs, and riches galore for trial attorneys run amok.

Thomas A. Schatz is President of Citizens Against Government Waste (CAGW, a 600,000 member nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.

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