US Chamber Institute for Legal Reform Comments on Ralph Nader’s Article in Harper’s Magazine

Articles, News | April 26th, 2016

Ralph Nader, Apologist for a System Abused by his Allies

April 21, 2016

In a long and meandering piece for Harper’s Magazine, self-proclaimed consumer advocate, sometime-presidential candidate and “Tort Law Museum” founder Ralph Nader offers up his defense of the American tort law system with the sub-header, “Your lawsuits are good for America.”

While Mr. Nader would no doubt agree with us on the simple fact that America has the greatest legal system in the world, he fails to acknowledge (and, in fact, tacitly shows approval for) the fact that our courts have been hijacked by players who abuse the system.

As is to be expected, Nader’s view of the legal system is one in which it should be wielded as a Robin Hood-esque club to fight against what he sees as a system stacked in favor of American businesses.

This jaded view ignores the history of massive plaintiffs’ bar abuses that stack the deck in favor of a select group of opportunistic plaintiffs’ attorneys, while shortchanging taxpayers, consumers, and sometimes even the supposed victims these attorneys allege to represent.

Why, we wonder, does Mr. Nader refuse to mention the well-documented cases of fraud and abuse that have plagued the system of asbestos bankruptcy trusts in America? Those trusts were created in the wake of more than 100 asbestos-lawsuit related bankruptcies to ensure compensation to deserving victims.

They control more than $30 billion, but that number is fast dwindling due to plaintiffs’ lawyers abusing the system by “double dipping” from the trusts.

“In asbestos litigation, the civil justice system is facing a real crisis,” former Delaware Superior Court Judge Peggy L. Abelman recently testified at a U.S. Senate Judiciary Committee Hearing.  “For too long, our courts have been manipulated by the withholding of vital evidence from judges and from juries.”

Abelman was testifying in favor of the FACT Act, a bill to provide greater transparency in the asbestos compensation system to prevent fraudulent “double dipping.”

Mr. Nader and his allies in the plaintiffs’ bar, unfortunately, oppose this reform.

Of course, there is a host of high-profile abuses by notorious plaintiffs’ attorneys that Nader fails to mention:

  • In 2005, U.S. District Judge Janis Jack released a landmark ruling that exposed massive fraud in asbestos litigation citing “great red flags of fraud.”
  • In 2008, securities class action plaintiffs’ attorney Mel Weiss pleaded guilty to charges he made illegal client kickbacks.
  • In 2008, famed tobacco-settlement plaintiffs’ attorney Dick Scruggs pleaded guilty in federal court following an indictment over charges involving the attempted bribery of a judge over Hurricane Katrina-related litigation.
  • In 2014, plaintiffs’ attorney Stanley Chesley (known as the “Master of Disaster” for his lawsuits over airplane crashes) was ordered by a judge to pay $42 million in a scandal over fen-phen litigation. The previous year, Chesley had lost his law licenses in Kentucky and Ohio after being found guilty of participating in a scheme to defraud clients in lawsuits over the diet drug.
  • The settlement fund set up following the BP Gulf oil spill disaster is rife with questionable and allegedly fraudulent claims. Ads from plaintiffs’ firms troll for new claims, informing potential clients that they don’t even have to prove income was lost due to the BP spill in order to receive a payout.  Questionable claims include a $173,000 payout to an adult escort service and $23.1 million paid to an alligator farm that earned profits the year of the spill after two previous years of losses. Thus far, there have been 264 reported fraud oil spill claim cases leading to criminal charges, and 187 reported fraud cases leading to criminal convictions.
  • Earlier this year, former New York Assembly Speaker Sheldon Silver was convicted over charges he steered state grant money to a doctor whose asbestos research center then referred patients to a law firm, resulting in millions in fees for Silver.

The list of abuses and convictions goes on and on. Nader chooses to ignore them.

He even chose to join the New York Times in throwing some gratuitous jabs at consumer arbitration. Mr. Nader believes such arbitration is stacked in favor (of course) of U.S. businesses and is more costly to consumers.

This ignores a trove of empirical and anecdotal evidence that shows otherwise.

For example, a recent study of claims against long-term health care facilities found that such claims “resolved under arbitration agreements have a 7% lower cost and are finalized three months earlier than claims resolved without arbitration.”

As ILR’s Senior Vice President of Legal Reform Policy, Matt Webb recently told the Los Angeles Times, there is a simple reason plaintiffs’ attorneys oppose arbitration.

“Arbitration offers a simpler, fairer and faster way to resolve disputes than going to court,” said Webb. “On the other hand, class-action lawsuits are often driven by plaintiffs’ lawyers who stand to gain millions of dollars from them while members of the class receive little or nothing.”

The bottom line is that Ralph Nader whitewashes a well-documented history of abuse by a select group of plaintiffs’ attorneys in favor of a fantasy utopia in which our country is regulated into perfect order through a wave of litigation.

No nation can sue its way to prosperity. We have seen and lived Nader’s vision for America, and it doesn’t bode well for consumers, businesses, workers, or taxpayers.

And we’ll continue to fight for a civil justice system based on the rule of law, rather than the whims of activists like Nader, or plaintiffs’ lawyers seeking to fix the system in their favor.