It takes a skillful mind to sort out the hypocrisy of corporate America and their moguls when it comes to lawsuits. Take billionaire oil tycoon T. Boone Pickens, for example, one of the largest donors to the biggest special-interest PAC in Texas, dedicated to "slamming courtroom doors" in the face consumers hurt or defrauded by Texas companies. Pickens doesn't exactly practice what he preaches, however. As Texans for Public Justice reported last year, Pickens ran straight to a Manhattan courthouse when he believed bankrupt Lehman Brothers owed him money, filing a $60 million lawsuit for failing to pay over some derivative contracts.
Medical societies in Texas are another good example. Over the weekend, the Texas Medical Association announced its opposition to the Senate health care bill because it doesn't go far enough to take away the legal rights of patients injured by grossly negligent medical care. Yet just a few years ago, the TMA joined with several other state medical societies and sued the country's largest health insurance companies for delaying payments and keeping money from doctors.
In other words, corporate America and organized medicine believe that the courts should be theirs alone, reserved exclusively for them to recover money from anyone who rips them off, whether trademark violations, contract breaches, patent infringements, property damage, lost goods, unpaid bills or fraud. Sometimes they sue simply to browbeat small businesses or individuals into submission. While calling attorneys for the little guy "greedy" and insensitive to the importance of keeping companies "litigation free," their own corporate and insurance lawyers sue often at the smallest provocation.
I was interested to see the New York Times cover an aspect of this phenomenon with a front page story in Sunday's paper. It seems lots of companies are now running to court against competitors over advertisements, all in an effort to retain market share. The Times writes, for example, "Pantene has attacked Dove's claim that its conditioner 'repairs' hair better, and Iams has been challenged on one of its lines, 'No other dog food stacks up like Iams.'"
Sound silly? Not in the freewheeling world of corporate litigation. Federal Express once sued a man who operated a 12-foot coffee cart in a suburban Oregon shopping center because the man had called his cart "Federal Espresso." It also sued a Syracuse, NY coffee shop and its three owners for using the names "Federal Espresso" and later, "Ex-Federal Espresso." They settled.
Then there's the trademark infringement suit by Amazon.com against Von Eric Lerner Kalaydjian and his little company, Amazon Cosmetics and Tan Products, for using the word "Amazon" to sell his beauty products. (The case was dismissed on procedural grounds.) Or how about the suit by Apple against Juan Gutierrez, an employee who had posted pictures of new Apple products on the Internet under the pseudonym "worker bee." Apple and Gutierrez settled the case.
The fact is that companies and doctors have never lost their rights under the guise of so-called "tort reform" because these laws never limit the rights of corporations or professionals to sue to recover money. Unfortunately for most of the rest of us, our rights to go to court have been severely weakened - if not eliminated - against reckless companies, fraudulent misconduct or grossly negligent professionals.
In 1995, for example, Texas limited governmental and professional liability, decimated Texas' Deceptive Claims Practices Act and severely limited punitive damages for companies whose misconduct is especially bad. Over the next decade, Texas went on to make it nearly impossible for patients injured by medical malpractice to get into court, laws so unfair that the state constitution had to be changed to allow it. At the same time, the Texas Medical Association was running to court to make sure managed care companies paid their doctors.
Then there's the story of companies that force consumers to sign away their rights to go to court through mandatory binding arbitration clauses, until now standard business practice in credit card and real estate contracts, applications for bank loans and leasing cars, employment contracts and even HMO policies. Yet studies show that companies almost never impose such agreements on themselves.
Banks are now being forced to stop using these clauses in credit card contracts, but only because of lawsuits against them for anti-trust violations, and efforts by some great state Attorneys General who are looking out for consumers in their states. But the problems are still pervasive.
No one likes a hypocrite. But when groups advocate severe compensation "caps" for the little guy while running to court suing for millions of dollars because they feel they've been ripped off, what else can you call it?