ANALYSIS BY JACK CRISSDBJ Executive Editor

The following is an updated version of an article which was originally published in 1995
Many eyes in the legal profession are now on Mississippi. What the state is being watched for, however, is not the type of issue the Chamber of Commerce can be proud of, unless attracting trial lawyers is our main goal.
As first mentioned in the June 2001 Delta Business Journal (“A legal black eye for Mississippi” by Scott Coopwood, “From The Publisher”), Mississippi is now becoming known as the nation’s haven for outlandish lawsuits with huge judgments, especially in poorer, rural counties. Whereas Alabama was once referred to by Time magazine as “Tort Hell”, Mississippi has now moved into the lead in terms of multiple-plaintiff lawsuits directed at companies and corporations seen as having deep (and guilt laden) pockets.
Tort reform became a reality in Alabama in 1999, however, and trial lawyers have now moved West to set up shop. As an example of their influence, there are now more plaintiffs in Jefferson County than residents because of the filing of these multiple-plaintiff lawsuits.
What follows is an attempt to decipher the motives that drive such frivolous lawsuits and produces the socio-political climate in which they can thrive. It is in the best interests of Mississippi businesses to be aware of these motives and to try and protect themselves from them. Any business could be next.

A disturbing trend can currently be discerned in our nation’s courtrooms. Trial lawyers, spouting class-warfare and egalitarian rhetoric, are running amok in the U.S., feeding off and further inculcating a detrimental anti-business environment. The result has been disastrous for businesses and consumers alike, with many millions of dollars of punitive damages awarded by juries over the past several years throughout the country. Either a lot of businesses are committing an awful lot of wrongdoings, or plaintiffs lawyers are taking advantage of the populist, irrational distrust and resentment of big business. All evidence, historical, philosophical, and that of the individual cases themselves, point convincingly to the latter explanation. Historically, “punitive damages” were used as a type of retaliation, issued to make an example of, and penalize, the alleged wrongdoer. However, as noted years ago in Forbes magazine, “(This) kind of punishment used to be reserved primarily for makers of products and for reckless actions that killed or maimed people. Now courts and juries ‘punish’ companies that involve not a scratch.”
A tort is a claim that someone caused harm by breaking a law or social policy. (Editor’s note: definition, from The Scribner-Bantam English Dictionary, 1991: “in law, any wrong, injury, or damage, not including breach of contract, for which a civil suit can be brought.”) Now, as the aforementioned Forbes article notes, “A tort is also nearly any behavior a judge and jury don’t like.” (Italics mine). In the same article, Ellis Horvitz, an Encino, CA appellate lawyer, is quoted as saying, “Fraud, for example, is a traditional tort. What’s new, and this is happening in many states, is that plaintiffs’ lawyers are demonizing corporate defendants and persuading unsophisticated jurors that reasonable and legitimate business practices are fraudulent and should be punished.” (Janet Novack, “Torture by tort”, Forbes magazine, November 6, 1995).
On top of the costs incurred by businesses in defending these tort claims can be added a tax by the name of tort liability, collected and disbursed though litigation. As Peter Huber describes in his pathbreaking book, Liability: The Legal Revolution and Its Consequences: “The tort tax is a recent innovation...unlike better known taxes, this one was never put to a legislative or a public referendum...debated...or approved...And although the tax ostensibly is collected for the public benefit, lawyers and other middlemen pocket more than half the take.”
Huber goes to note that “The tax directly costs American individuals, businesses, municipalities, and other government bodies at least $80 billion a year, a figure that equals the total profits of the country’s top 200 corporations.”
Huber correctly identifies the nature of the fairly recent phenomenon of tort law, which out of thin air proclaimed new rights to sue. He says, “...the revolution (lawyers and judges) made could never have taken place had it not a component of idealism as well. Tort law, as it is widely and passionately believed, is a public-spirited undertaking designed for the protection of the ordinary consumer and worker, the hapless accident victim, the ‘little guy.’ Tort law as we know it is a particularly American institution. No other country in the world administers anything remotely like it.”
Since a tort can be defined in the most capricious manner, how does a business know in advance what is within the law and what is not, i.e., what is objective law? How does a business even know that a law, once defined, may not be ignored, subverted, or twisted by the whims of a jury or judge? Obviously, they cannot know. Businesses are victims of subjective, legal positivism in motion: torts now come and go in a steady, active flux, ever changing, keeping businesses either second-guessing every move and product, or simply giving up. Until recently, Alabama, because of their legal environment prior to tort reform, witnessed a mass exodus of many businesses, including over ten insurance providers. Political pull now takes the place of objectivity (as witnessed by the millions of dollars trial lawyers are pouring into political races) and juror ignorance, gullibility and envy taking the place of justice. Arbitrary punitive damages, often in the millions of dollars, can be forcibly yanked from the business person’s hat for almost any and every reason today, while the former standard of objective, clearly defined laws has been replaced by the feelings of the jury.
A fundamental, and ominous, idea is apparent when these lawsuits are looked at closely and scrutinized. It is the populist view that big business is, by nature, exploitative, and that the “little guy” is at the mercy of the greed and callousness of the almighty corporation.The false equation of wealth and power is usually the rhetorical line the juries’ buy.
Contrary to this type of erroneous thinking, as noted by philosopher Leonard Peikoff, in a free market system, every man must pay his own way. He can claim from others only what he has earned, in Peikoff’s words, “as judged by the parties’ mutual, uncoerced evaluations. As to the non-earners and non-traders, the system is fully as ‘cruel’ (i.e., as just) as its enemies say: it offers people no alibis, no welfare workers, no booty. Under capitalism, no man’s achievements or troubles, whatever their nature or source, are assets or liabilities belonging to other men.”
In a market economy, which this country is tenuously clinging to in spite of massive over-regulation, the assets of a given business are, in fact, determined by the consumer. In effect, every dollar is a vote, and one has numerous options in the marketplace. Incredibly, some in this country, due to media and academic influence, still believe the old Marxist homily that prosperity is gained only at the expense of the sweat of others. This economic myth has been exploded time and time again by such thinkers as Ludwig von Mises, Ayn Rand and Henry Hazlitt, to name but a few. But the ideological premise behind this myth still remains firmly entrenched in our culture. The premise is that of envy.
Author Robert Sheaffer, in his 1988 book Resentment Against Achievement, notes that resentment, or envy, is a peculiar form of hatred felt by those who fail against those who succeed, by the unproductive against the capable, but is rarely acknowledged as such so explicitly. Rather, as Sheaffer points out, resentment must wear the mask of protecting the nebulous “public good” when it appears in public. Quoting Sheaffer, “(Resentment) is sometimes disguised as the pursuit of ‘social justice’ or the ‘class struggle’, or perhaps ‘divine morality’—all lofty sounding terms invented to mask the ugly reality of a mob outraged by the wealth earned by others.”
Also implicit in many of these cases is the idea that luck, or getting even, is the best path to success, as opposed to hard work, talent and responsibility. The lottery mentality is in abundant evidence all around us, especially in the personal-injury lawyers commercials that crowd the television screen during the daytime. The late author William A. Henry, III, (a lifelong Democrat, ironically), recounts in his book, In Defense of Elitism, a story that exemplifies this type of mindset: “Friends who have sat as jurors in personal injury cases have described to me the efforts of their fellows—especially the unemployed, housewives and others without secure earned income—to vote lottery-size verdicts for piddling events. One recalls hearing a non-working wife say, ‘We could change this person’s whole life.’ That was the speaker’s rationale for urging a two million dollar award to someone who had lost a single joint of the little finger in the hand he doesn’t even write with.”
(Ironically, when businesses are forced to raise prices to cover and protect themselves from litigation costs, or make layoffs due to excessive settlements, the economically ignorant and envious screech even louder denunciations).
Another serious result of the litigation boon could be the erosion of contractual agreement, a major basis for any business transaction. As Judge Alex Kozinski of the U.S. District Court of Appeals for the Ninth Circuit has noted, “I worry a great deal that it is almost impossible to enter into a transaction without a serious risk of litigation. There’s no deal that’s litigation proof...I believe punitive damages should be rare and unusual things, not means for letting the jury give you more than you deserve. (Litigation) diverts resources away from productive activities.”
With the type of punitive damages now being awarded almost randomly, somebody has to pay. The costs either have to be passed on to the consumer or good and decent people have to lose jobs because their employers cannot afford to do business in, say, Jefferson County, Mississippi.
It is also apparent in the litigation explosion that the concept of egalitarianism plays a major role in the logic of the plaintiff’s attorneys. As a philosophical position, egalitarianism maintains that, as a matter of social justice, no one, or no group, has any business being better off than anyone else unless their being in this better position serves to benefit the least advantaged group. This theory was given its most visible exposition by Harvard philosopher John Rawls in his famous 1971 work, A Theory of Justice. Don’t be fooled into thinking this is just mumbo-jumbo, ivory tower babbling. It’s not much more than that, yet the theory is highly influential as evidenced by the ascendancy of the welfare state and in the rulings of juries against businesses. Moreover, Rawls is hailed in most major colleges and universities as a brilliant theorist, although his theories have been discredited often, most notably by Robert Nozick and Ayn Rand.
Juries punish many outstanding businesses each year, businesses that provide thousands of jobs and services, for instances where no laws were broken and no harm was inflicted. Still, many such companies have become sacrificial victims at the altars of insatiable egalitarianism and envy. Add to these altars the current widespread mentality of “something for nothing” and a deadly combination is injected into our culture, establishing a dangerous legal precedent. It is not enough to fight for legal and tort reform, though this is certainly necessary. A battle much also ensue in our boardrooms and classrooms, combating the illogical notions of egalitarianism, envy, subjectivism and legal positivism that morally disarm the producers and elevates the non-producers to the status of entitled, victimized saints.
Creators, business people and producers have made the United States the most prosperous nation in world history. A concomitant ethic of pride and worthiness, and a philosophical underpinning of reason and objectivity must accompany the genius of innovation in this country if we are to survive and compete into the 21st Century. Businesses must not come to fear the very legal system that is supposed to be neutral and protective of everyone’s rights. DBJ