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November 26, 2005

John Stossel on The Rule of Lawyers

A nice endorsement from the ABC broadcaster:

"With plaintiff's lawyers taking away our money and our freedom, I wish more people would read The Rule of Lawyers by Walter Olson; everything Olson writes is important and infuriating."

("Books for Christmas", American Spectator, Dec. 2004/Jan. 2005)

November 23, 2005

Table of Contents, The Excuse Factory



1. Hiring Hell

2. Tenure Track [decline of employment at will]

3. All Protected Now [expansion of discrimination law][related articles]

4. Fear of Flirting [related articles]


5. Mistaken Identity [disabled-rights movement]

6. The Age of Accommodation [related articles]

7. Accommodating Demons [legal protection for alcoholism, drug abuse, mental illness][excerpt: Washington Monthly]

8. Surprise Farewells [age discrimination, retirement and buyouts] [related
article: USA Today


9. The Excuse Factory

10. Dropping the Stretcher [legal assault on employee testing; safety

11. The New Meaning of Competence


12. Kid Gloves and Brass Knuckles [high personal costs of litigation process; retaliation law][related article: Baltimore Sun]

13. Why Business Will Miss Unions

14. Workplace Cleansing ["hostile-environment" prevention, advanced level]


15. Our Scofflaw Bosses [why no one actually complies] [excerpt: Reason]

16. Secure in What?

17. The Terms of Cooperation


The Excuse Factory: review highlights

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Reviews of The Excuse Factory

The Excuse Factory was published by The Free Press, a division of Simon & Schuster, in the summer of 1997. Some review highlights (courtesy, in part, of Writers' Reps):

"Engaging, witty and provocative...a comprehensive examination of the unintended consequences of our ever-expanding network of well-intentioned employment laws....appears destined to have as much impact as his controversial 1991 polemic against plaintiff’s lawyers, The Litigation Explosion." -- Roger Parloff, The American Lawyer

Riveting...The author has shown what is wrong -- and why -- with the American workplace....His book, written in the best traditions of reformist polemic, is studded with one bewildering real-life case after another... Let the book serve as a warning of the way things might become if this country were to drop its guard." -- Tunku Varadarajan, London Times

"Olson shows how the U.S. has created a nightmare of contradictory regulations that would humble Kafka. And he does it with the drama of a detective novel....If [the] winds of freedom ever loosen the government’s ever-tightening grip on America’s employers, The Excuse Factory will surely deserve some of the credit." -- David R. Henderson, Fortune

"Devastating and eloquent...Like his 1991 The Litigation Explosion, the book is a model of clear thinking, thorough research, and judicious understatement." -- Matthew Scully, The American Spectator

"With the publication of his latest book, Walter K. Olson leaves little doubt as to who is the most incisive critic of the American legal system today.... a compelling indictment [that] makes complicated legal issues easily understandable.... hands-down one of the best books available on America’s faltering legal system." -- John J. Miller, Amazon.com (recommended short-list Current Events book)

"To read Walter Olson’s wittily scathing account of modern employment law is to wander through a grotesque workplace wonderland" -- Paul Reidinger, American Bar Association Journal

"Excellent...A devastating criticism of our employment laws, based on thorough research and cogent argument." -- David Gordon, National Review

"Lively, well-documented, thorough and entertaining" -- Roger Clegg, The Weekly Standard

"Engaging -- and slashing...The burden on the economy from litigation and defensive measures by employers may not be precisely quantifiable, but it is certainly enormous." -- Tim Ferguson, Wall Street Journal

"Brings historical perspective, insightful analysis and common sense to a subject mostly lacking all three. This highly readable account deserves a wide audience....captures the Alice in Wonderland quality of the new employment law." -- David Marston, Baltimore Sun

"An important book... Olson is an excellent writer and wades through the morass of employment law in a sure and graceful manner....While even the casual reader will find Olson's book entertaining and lively, if you run a business, work in a human resources office or supervise other workers, this is a book you need to read." -- Martin Morse Wooster, Detroit News

"Walter Olson should take a bow for demonstrating, once again, that America's lawyers are unsafe at any speed." -- Deroy Murdock, MSNBC/Washington Times

Buy The Excuse Factory

Back to The Excuse Factory main page

The Excuse Factory

The Excuse Factory: How Employment Law Is Paralyzing the American Workplace (Free Press, 1997) was the first popular book to take a broad critical look at the revolution in American workplace law that had taken place over the previous generation.

Here's an annotated table of contents.

Review highlights are here. Highlight of the publicity: a three-page profile in People (August 11, 1997). The book won a Sir Antony Fisher Memorial Award, bestowed annually by the Atlas Foundation, and was a main selection at both Laissez-Faire Books and the Conservative Book Club.

Online excerpts from the book or pieces based on it include my Reason magazine cover story on how employers never really succeed in complying with today's employment law; the Cato Policy Report cover story based on a speech I gave before the Cato Institute; a USA Today opinion piece on the surprising effects of age-bias law in discouraging hiring of older workers; and a Washington Monthly excerpt telling the story of how alcoholism became a legally protected category in the workplace like race or religion. (My article on the collision course between the Americans with Disabilities Act and workplace safety is no longer online at the Detroit News.) I've also published articles on the unintended effects of the law in bestowing rights on half-blind pilots, addicted doctors who swipe their patients' narcotics, mentally ill grade-school teachers, aspiring golfers who want the game's rules changed on their behalf, and would-be lawyers with learning disability who demand extra time on the bar exam.

Broadcast and speaking appearances. My speaking tour took me from Harvard to San Diego, Seton Hall to Oklahoma City -- at least two dozen campuses so far and more than fifty professional gatherings, including the annual conventions of both the American Bar Association and Association of Trial Lawyers of America (really).

Buy The Excuse Factory


For further reading:

My Reason column for December 1998 pulled together some of the more amusing employment-law stories there wasn't room to include in the book ("Dial 'O' for Outrage"), while my roundup review of self-help books for disgruntled employees, a genre I got to know quite well while researching The Excuse Factory, appeared in the Baltimore Sun.

For more on employment-law themes, consult this site's directory of online writings by topic where you will find such categories as discrimination law. In the magazine Reason, where I wrote a monthly column for several years beginning in 1997, are columns on the federal government's baffling crusade against "accent discrimination", its abortive attempt to impose safety rules on home offices, its hints that criminal records may in some circumstances count as a protected category against discrimination, and its effort to unleash entrapment-informers -- sorry, the preferred term is "testers"
-- to generate complaints against hapless employers by posing falsely as job applicants.

My websites Point Of Law and Overlawyered both carry a steady stream of commentary on employment law issues. Point of Law has a page dedicated to that topic, while Overlawyered has pages devoted to employment law generally, harassment law and disabled-rights law.

Punch the Clock, Sue the Boss

[Published in the New York Times, March 20, 1998]

Short of appointing Catharine MacKinnon Attorney General, it's hard to know what more Bill Clinton could have done to encourage the current state of harassment law.

He blasted George Bush for questioning the Civil Rights Act of 1991, which turned disputes over sex in the office into big-ticket legal items. As President, Mr. Clinton ignored the concerns of Federal judges when he blithely signed a law forcing men accused of harassment to answer questions about their behavior in instances only distantly related to the complaint at hand. And he has rebuffed litigation reformers who worry that the discovery procedures used in suits before they reach trial encourage lawyers to go on fishing expeditions.

There's a wider paradox, too, behind the current Employment Lawsuit That Ate Washington. You might expect the same politicians and public figures who make a big to-do about reforming private workplaces to be model bosses themselves. But in fact those who specialize in making life rougher for private managers seem to get hit with more than their share of employee complaints.

New York City's Commission on Human Rights, charged with enforcing anti-bias law, was recently found by Federal investigators to have discriminated against two women on its payroll. Last fall a Federal appeals court upheld a $1.5 million jury award against the city's Department for the Aging for -- yes -- age bias.

The list goes on. Which Federal agency has suffered an official outbreak of "sick-building syndrome"? Why, it's the Environmental Protection Agency. Who got sued in January by a staff member alleging pregnancy bias? The same Democratic Congressional Campaign Committee that noisily supported the Family and Medical Leave Act. For its part, the Labor Department settled a bias suit brought by its employees for $5 million, while workplace regulators have been the focus of major sex bias and harassment claims.

The Clinton Justice Department yields to few in its zeal for laws expanding the rights of the disabled. Yet when a Supreme Court vacancy came up, Mr. Clinton was reported to have consulted two doctors to confirm that the future health of a leading prospect looked dicey. He nominated someone else. Had Mr. Clinton been hiring for a private job, he could have been sued and forced to pay damages.

Anti-bias law has lately been stretched to cover obesity-as-disability and speaking with a foreign accent, which made it piquant when the White House's former executive chef testified in a sworn deposition last year that the Clintons had paid him $37,000 to quit his post "because of my accent and the fact that I'm overweight."

The American Bar Association has celebrated Anita Hill and boasts of the role lawyers have played in enforcing the new laws. Yet big firms like Baker & McKenzie have lost a series of notable verdicts and have risked defying age-bias law by ejecting older associates to make way for new faces.

Not all these examples reflect the arrogance of power. Many employee complaints are groundless. Workers whose jobs familiarize them with complaint processes may become unusually litigious. At the same time, given the huge volume of new laws affecting the workplace, it's easy for good managers to slip up. Like so many who have loudly advocated expanding liability for everyone else, President Clinton probably never saw the boomerang coming.

November 22, 2005

Time to Get Off the Tenure Track

Published New York Times, July 8, 1997

Last month The Florida Times-Union of Jacksonville reported on the case of a local teacher who officials said had gotten into repeated book-throwing brawls with her students. In rambling letters, the teacher told the authorities that evil spirits had invaded her students' eyes; later she changed her last name to "God."

Yet under teacher-tenure rules it took three years to get her out of the classroom, by which time children had repeatedly been hurt by flying missiles and were cowering beneath desks. (The newspaper said Ms. God "could not be located for comment.")

For those alarmed by such accounts, there is good news: the National Education Association, the largest teachers' union, is finally softening its hard line on tenure. On Saturday, at its annual meeting in Atlanta, the union voted to drop its opposition to the practice by which teachers help administrators to identify and, potentially, oust incompetent colleagues -- a step widely viewed as making removals more likely. And in interviews, the union's leaders have been taking a new line: maybe tenure is negotiable after all.

Why the shift? The union is said to be trying to control anti-tenure momentum in state capitals. Last week Oregon lawmakers voted to scrap that state's tenure law in favor of renewable contracts of two years for teachers and three years for administrators. Gov. John Kitzhaber, a Democrat, has pledged to sign the bill.

It is also likely that union members have tired of defending the indefensible: the New Haven teacher who got off with a 30-day suspension after helping her class cheat on the state mastery exam; the North Carolina educator who won his case despite yanking students' hair and other rough behavior that "probably would have been ruled child abuse had he done it to his own children at home," to quote a commentary in The Greensboro News & Record.

New York State lags in the trend toward making it easier to remove bad teachers. When an outcry arose in 1994 over a special education administrator who was still drawing a salary while in prison for drug dealing, Albany lawmakers passed the narrowest corrective measure, as if aiming to get the embarrassment off the front page while affecting as few other cases as possible.

But there is a wider problem: all sorts of employees are digging in these days, with or without explicit tenure rules. New employment laws encourage all of us to feel we "own" our jobs, even if higher- ups would rather we leave. Countless executives, doctors and other affluent professionals now dial their lawyers when threatened with dismissal for cause. "Few who are fired do not have some kind of claim," a Washington lawyer cheerfully assured Consumer Reports in 1991.

The side effects of entrenchment are mounting. Just as school districts offer buyouts to teachers to avoid the huge procedural costs and the risks of removal, so buyouts are fast emerging as the standard for removing managers at big private organizations, especially now that employers have lost the right to set automatic retirement at 65. And big employers, like school systems, now often wait for the chance to conduct mass layoffs -- couched as economically motivated -- rather than oust underperformers one at a time.

Meanwhile, disability-rights law is beginning to rival teacher-tenure laws as a font of outrageous cases. A pilot for Northwest Airlines who flew passengers while drunk emerged from prison and got his job back. A Florida man who stole thousands of dollars from co-workers' desks and purses won a ruling that the "chemical imbalance" in his brain was a handicap entitled to accommodation.

Would the Americans With Disabilities Act protect Ms. God? Quite possibly. A skilled lawyer might put the school in a tough spot by offering to have her try medication; when she had a relapse, the lawyer could keep the dispute going by arguing that she deserved the chance to adjust her medication or to try a different one.

The shift by the teachers' union may clear the way for a long overdue rethinking of our teacher-tenure laws. But unless we also rethink the way we've been drifting toward a culture of tenure for "regular" employees under "wrongful firing" legal doctrines and enactments like the disabilities act, we may find that problem educators can simply resort to other legal strategies to hold on -- while children pay the price.


November 7, 2005

Let's Get Lawsuit Mania Off the Docket

[Published in Newsday, April 12, 1991]

After a minor fender-bender, unhurt riders hobble around on crutches for months in hopes of a big settlement . . .

A leading Hollywood studio sues its rivals so often that its chairman boasts of having turned litigation into a profit center . . .

A sane, intelligent couple set out to get a "reasonable" divorce and end, a dozen rounds of litigation later, having annihilated each other's finances . . .

Why do Americans spend so much time, money and sadistic ingenuity beating each other up in court?

The sad answer: because our legal system is actually set up to encourage lawsuits. More than any other country, we make it easy and tempting for people to sue their fellow citizens. The rules are mostly new, many dating back only to the 1970s. And it's time we took a second look at them.

A thousand billboards, matchbook and late-night TV ads symbolize the problem. Accident? Injured? Bored with your spouse? Tired of working overtime to pay off those credit cards? Let us knock some sense into that doctor/boss/hubby/bank of yours!

Other countries discourage the stirring up of lawsuits (as did we, until 1977 when the Supreme Court suddenly legalized lawyers' advertising). Most countries also frown on the contingency fee, where a lawyer takes a share of a client's recovery and can thus become an overnight millionaire by getting a jury mad enough at the opponent.

American litigation, by contrast, is rapidly turning into an industry boldly and openly run for profit. Houston lawyer Joseph Jamail, for example, is said to have pocketed $ 400 million for his win in the Texaco-Pennzoil case.

But the problem goes much deeper. Our legal procedures give lawyers and their clients remarkable powers to tie up opponents and make them spend years and fortunes responding to a flimsy case.

Today's complainant can typically drag an opponent to court with little or no explanation of what he is supposed to have done wrong, then compel him - in what can amount to a gross invasion of privacy - to answer endless, inquisitorial questions and release private memos and documents that may or may not reveal any wrongdoing.

American courts are often willing to admit into evidence the testimony of expert witnesses, hired by one side or the other, who for a fee will swear to scientific theories ranging from the dubious to the downright wacky. In recent years, money has changed hands in American lawsuits on the strength of solemn expert avowals that car crashes cause cancer; that minute levels of pollution in the environment cause ailments from measles to gallstones; that various commonly prescribed drugs, held to be safe by the federal Food and Drug Administration, cause birth defects, and so forth.

Over the last few decades, both courts and legislatures have greatly loosened the rules of the game in litigation. Congress and the Supreme Court cooperated in a series of rule changes in the early 1970s; state lawmakers and judges have followed suit. The idea was always to help those wishing to sue - but one of the effects was always to pile new burdens on those responding to suits.

Defending a lawsuit over a major personal injury, such as paralysis or a birth defect, is now reported to cost between $ 500,000 and $ 2 million. That can provide an overwhelming incentive for defendants to offer a settlement, even when they are convinced of their innocence.

A Harvard study of New York hospitals indicated that in the substantial majority of cases where lawsuits were filed, the doctors had not in fact been negligent. But inevitably many of those cases won sizable out-of-court settlements. According to a report a couple of years back, every neurosurgeon in Washington, D.C., has been sued. So have between 70 and 80 percent of obstetricians.

When disgruntled unionists torched the Dupont Plaza hotel in Puerto Rico, lawyers for fire victims sued not the individual arsonists (who didn't have deep pockets, after all) but hundreds of companies that made flammable items on the scene, from wallpaper to bar stools to carpeting. They even sued the company that made the slot machines in the hotel casino. These target companies, faced with having to pay joint shares of a defense effort running to tens of millions of dollars, had to buy their way out of the suit for sums ranging from $ 250,000 to $ 500,000 on up.

The cost of divorce also has risen steadily, as the techniques of the new litigation - endless discovery probes into bank and business records, blame-mongering about every conceivable issue, the deployment of hired experts to testify in areas ranging from accounting to child psychology - have invaded family law. More lawyers are adopting "bomber" tactics meant to grant no mercy to the other side. One big Texas divorce was last reported headed toward a combined legal-fee total of $ 10 million.

Fear of lawsuits paralyzes whole areas of commerce, medicine, recreation and family life. Frequently sued organizations and persons all too often become bureaucratic and adversarial, having learned to see each new customer as a potential opponent. Surgeons insist on videotaping elaborate "informed-consent" rituals to fend off claims of failure to warn. Employers stop giving candid job references. Owners post country land against hunters and hikers. Parents locked in custody battles feel imprisoned in their jobs and routines, lest the opponent seize on any nonconformity and run to court with it.

Yet things could be different. Other countries recognize that litigation is a destructive, unfortunate thing -- sometimes a necessary evil, but prone to abuse and exaggeration. So they maintain rules and procedures, both in formal law and through self-regulatory efforts by the bar, designed to screen out the lame complaints from those that are well-founded. They try to make litigants think twice before pressing a weak case or defense - most notably, by requiring the losing side to reimburse the winner's legal fees at the end of a case. And they take care to keep law as a profession that tempers the zealous pursuit of courtroom victories with ideals of honor and scrupulous impartiality.

Why don't we?

November 5, 2005

Tobacco Analysts Meet the Plaintiff's Lawyers

[originally published in the Wall Street Journal, August 30, 1995]

Call them the Wall Street Five. Tobacco analysts Marc Cohen of Goldman Sachs, Gary Black of Sanford C. Bernstein, Diana Temple of Salomon Brothers, Roy Burry of Oppenheimer & Co., and Rebecca Barfield of CS First Boston are the latest to discover that when you rain on the parade of the litigation lobby, you'd better pack a legal umbrella of your own.

Reporters rely on all five for what are often the only skeptical comments from outside the tobacco business to balance the opinions of plaintiff's lawyers and anti-smoking activists. This spring Mr. Black predicted that a federal appeals court will torpedo Castano, the much-hyped class action, by vacating an order sweeping tens of millions of smokers into a single class. In June, Mr. Cohen saw "nothing new" in reports of years-old nicotine research that the lawyers were waving about. Ms. Temple and Mr. Burry have told the press they think jurors are tiring of the argument that smokers can't be held responsible for their choices after 25 years of warning labels.

The five must have known such comments wouldn't endear them to the consortium of 40 law firms spearheading the Castano suit. Still, they were apparently unprepared for the subpoena that landed on their desks dated June 28. It came from the Castano lawyers and demanded pretty much everything related to tobacco in their offices save the contents of the ashtrays. Among the demands were for all correspondence they or their firms had received from tobacco companies since April 1 of last year, and all documents from whatever source shedding light on nicotine and the nicotine habit.

That was just for starters. Here's the full text of the profoundly burdensome Request No. 2: "Please produce for inspection and copying each and every document relied upon or reviewed by you, persons employed by you or members of your organization, in the formulation of your opinions with respect to the purchase of stock in any entity listed above. Please list the source of and date of receipt for each document produced in response to this Request."

Most professionals who give opinions for a living have "relied upon or reviewed" an indefinitely high number of documents, many long since discarded, that fill out the overall picture. In this case, an opinion on whether the market is underpricing Philip Morris or RJR Nabisco may derive in part from a gauging of the general cultural climate surrounding tobacco ("Documents 781-863: 'Doonesbury' cartoons tweaking cigarette makers. Source: Daily Bugle. Dates: see attachment.")

Request No. 6 seeks the customer correspondence of the five investment firms -- specifically, "each and every document" that each firm supplied to "persons or other businesses expressing an interest in purchasing shares or making an investment in" any tobacco company -- with names of recipients and dates, of course.

What justification is being offered for this massive invasion of the Wall Street Five's professional privacy -- an invasion that, aside from menacing the confidentiality of their employers' dealings with thousands of individual investors around the country, could inflict millions of dollars of response costs in file searches and lawyers' time? The Castano lawyers haven't proffered any charges of actionable wrongdoing against the Five, and it's hard to imagine how even the most creative lawyer could graft such charges legitimately onto the current suit. Instead they're putting the analysts through the mill as third-party witnesses: their files no doubt contain many documents relevant to Castano's issues, and tobacco executives who've spoken to them over the past year and a half might have made admissions or claims unrecorded elsewhere but preserved in their notes.

Even by the absurdly liberal standards by which American courts now permit pre-trial "discovery", this is a stretch. An oft-heard principle is that burdensome discovery should not be demanded from third parties if the same data could be sought from one's opponent directly, which would seem to apply to much of what is being sought here. Nor is there an established right to cash in on third parties' research skills by forcing them to point out publicly available scientific papers and the like that one's own team might have overlooked. As for the argument that we're entitled to your files because you've been talking to someone we're suing, it's only too easy to see the potential for abuse in harassing third parties who keep up contact with the targets of litigation.

John Coale, spokeslawyer for the Castano suit, seems remarkably unconcerned that the subpoena might be viewed as a way of intimidating the analysts and curtailing their influence on informed opinion. "We're pulling them into the game", he said. "We think the analysts favor the tobacco companies and are consistently trumpeting the industry's position."

If the Wall Street Five want some sympathy, they could talk to researchers who have looked skeptically at the breast-implant scare. Dr. Marcia Angell, executive editor of the New England Journal of Medicine, published an article and editorial rebutting it and has been digging her way out ever since from under subpoenas and document demands filed by incensed plaintiff's lawyers.

Dr. Sherine Gabriel, the Mayo Clinic investigator who wrote the New England Journal study, told the Times that the discovery onslaught "has severely compromised my ability to do research" and has also scared other scientists away from the field, who've told her in so many words that they won't risk being subjected to a similar ordeal.

A standard tactic is to demand confidential patient data. On July 27 Alabama federal judge Sam Pointer refused to quash a massive subpoena seeking patient files from the implant-exonerating Harvard Nurses study. A panel of the American College of Rheumatology found that "rheumatologists who have expressed opinions or published work viewed as contrary to the interests of plaintiffs and plaintiffs' attorneys in implant-related litigation have been subjected to various forms of harassment in the work place or even at their homes. Much of this has been attributed to plaintiffs' attorneys."

Despite a growing outcry, nothing is being done to halt these tactics. Sanctions against litigation abuse have fallen from favor in the federal courts since the previous Congress quietly gutted the main sanctions provision. And although a bill to revive them has passed the new House it's stalled in the Senate along with so many other legal reforms. Even the House Republicans have yet to propose the sort of systematic rollback of litigators' discovery powers that would bring our practice into line with what other countries allow, and help protect the privacy of personal diaries and memos, deleted e-mail and telephone logs. The need for such a rollback grows clearer every day.

November 4, 2005

California Counts the Costs of Lawsuit Mania

[originally published in the Wall Street Journal, June 3, 1992]

Baseball-and-Olympics hero Peter Ueberroth has just pitched a fast one past California's legal sluggers. Those who expected a bland exercise in blue-ribbonism when Gov. Pete Wilson named Mr. Ueberroth to head a bipartisan business/labor group were disabused when the Council on California Competitiveness issued its report April 23.

"Our conclusion is that we are suing ourselves to death," Ueberroth told the San Diego Union-Tribune. "[W]e are legally the most expensive state of the fifty. We add huge costs to our products and we don't add value. That makes us noncompetitive and so we call for tort reform."

Mr. Ueberroth singled out workers' compensation, where avid lawyering and outright fraud have driven a huge wedge between what California businesses must pay and what their workers can expect to receive if seriously hurt on the job. The state is somewhere around "the third to the fifth most expensive in workers' comp in the nation. We are 44th in benefits. What the hell is going on?"

One thing going on is stress claims, available to disgruntled workers from Napa to Needles who suffer psychic trauma when, say, the boss fails to come across with a juicy raise or promotion. Lawyers push stress claims in their ads ("Headaches, stomachaches, or poor sleep?....Sue for money and benefits!") while law-firm "runners" collar prospects as they step into unemployment offices. 1990 payouts in what might be called the Cal-Stress program ran at $450 million a year -- the equivalent in insured losses of an L.A. riot every 15 months.

An appendix in the council's report offers some glimpses of the beleaguered businesspeople behind the numbers. High comp costs are driving California natives Linda and Harry Prod out of the coffee shop business. "We have one restaurant in Monterey Park which maybe we will keep, but otherwise we will not be in California again. We are aware the recession is not just here, but to add insult to injury, California is so against business."

The Prods are lucky compared with Roger and Stephanie Valek of Escondido, who built up an auto body shop over 20 years. More than a decade ago, the council says, they paid an approved disposal company to take about 15 barrels' worth of thinner to a barrel yard in L.A. Liability buffs can guess what came next: the state declared the yard site hazardous, the disposal company went broke, and as next of legal kin the Valeks have been ordered to pay $7.9 million.

To hear the American Bar Association (ABA) tell it, the Prods and the Valeks and everyone like them may be purely imaginary. The venerable bar group, which lately resembles a trade union for people who sue people, keeps churning out tracts pooh-poohing the idea that litigation burdens the economy.

The ABA press office, for example, is at pains to deny that lawyers are too numerous in this country.* The real problem, its handout explains, is that "other countries with large populations have too few". Glad that's settled.

Then there's the great hoo-ha about the estimated costs of tort law. Some legal critics have cited a ballpark figure of $100 billion in direct costs, and much more when indirect effects (behavior changes to duck liability) are counted. Terribly inaccurate, says the ABA: A better estimate would be $29 to $36 billion. The Association of Trial Lawyers of America (ATLA) offers the same number, as does lawyer Joan Claybrook of the Naderite group Public Citizen.

ABA-'n'-ATLA must be kidding. Start with cars. There are 120 million private cars on the road, most insured, and the liability component of those policies runs to $350 or so a year per car. That's at least $35 billion out of consumer wallets right there. Add in trucks and vans and you're over $40 billion, not to mention trains and planes. To that, add estimates for medical malpractice insurance and self-insurance, which start at $10 billion and go up.

We're now well past $50 billion and haven't even counted workers' comp, which the Ueberroth report says eats up $1.5 billion in litigation costs -- not pay-outs, just process costs -- in California alone. Or product liability, environmental suits like the Valeks', litigation against town hall, premises liability or a hundred other profitable legal specialties.

The $100 billion lower boundary for the cost of American injury law comes from a consulting firm named Tillinghast (it's since risen to $117 billion). What the ABA-cadabrists don't say is that the Rand Corporation's Jim Kakalik, who originated the $29 billion-to-$36-billion estimate, says he sees no contradiction between the two studies; they were simply trying to measure different things, that's all.

The latest effort along these lines, in the April ABA Journal, was, if nothing else, ill-timed. It dismissed as "fundamentally false" the idea that lawsuits are inhibiting research and innovation, but arrived on desks within days of a truly grim article in the April 10 Science drawing the opposite conclusion.

A "careful examination" of the state of AIDS-vaccine research, Science said, "shows that liability concerns have had negative effects". Depressing specifics follow: Bristol-Myers Squibb dropped one promising approach, Immune Response Corp. has had to delay human trials because its partners fear being sued, and so forth. After the California Trial Lawyer Association gutted tort reform in Sacramento, Genentech suspended its AIDS vaccine research for a couple of years, then resumed after a favorable court ruling.

What rattles vaccine makers is the prospect of getting sued not just for genuine side effects, but for imaginary ones as well. If a thousand unborn children of drug-abusing mothers are given shots to protect them from HIV, a certain number will be born with brain damage no matter how innocuous the serum. And every one is a potential big-ticket lawsuit.

It's happened before. "Whooping Cough Vaccine Found Not to Be Linked to Brain Damage," the New York Times reported in 1990, but by that point trial lawyers had reaped fortunes saying it was. With huge defense costs, no loser-pays rule in American courts, and a given random factor in jury outcomes (even trial lawyers must doubt their jury-infallibility theory after recent California events), bringing false but plausible-sounding speculations to court can pay good money.

"Is tort reform possible so long as certain lawyer groups exert so much influence over the Legislature?" the San Diego Union-Tribune asked Peter Ueberroth. His reply: "Anything is possible in this country if enough people care about it."

*According to the Ueberroth report, the United States has 281 lawyers per 100,000 population, Germany 111, Britain 82, and Japan 11.

November 3, 2005

Suing Ourselves To Death

[originally published in the Washington Post, April 28, 1991. Excerpted from The Litigation Explosion (E.P. Dutton/Truman Talley Books, 1991)]

Marie and Anthony B. of New Orleans were divorced in 1978 after a 10-year marriage. Marie was awarded custody of their 2-year-old son Terry. Within a year of the divorce decree, Anthony sued her to win custody of the boy but did not get it. He sued again in 1980, and again the next year, each time without success.

In 1983 the child, then 8, visited his father for Christmas. Rather than send him back, Anthony enrolled him in a local school, later claiming this was done with Marie's consent. But a court credited Marie's story that it had happened against her will. When the school year ended, Terry returned to his mother. On his next visit to his father, however, Anthony filed again for custody.

The suit ground its way forward and finally came up for trial. The court found that Marie was highly fit as a parent and that the boy had flourished under her care. End of case? Just the beginning. Under Louisiana's 1977 child custody law, the court explained, it mattered not how fine a home Marie had provided; the only question was whether Anthony might perhaps provide one that was even better. Apparently swayed by a wish to avoid another change of schools, and by the boy's expressed inclination to go on living with his father, the court ruled for Anthony. After two appeals by Marie, the court sent the case back to the trial court. Thus, after courtroom fighting stretching over eight years, no end was in sight for this wretched family.

Custody disputes are as old as Solomon, but the fight between Marie and Anthony was in its own way at ground zero of America's litigation explosion. It shows the effects of distinctive changes in what our courts try to do when they hear lawsuits.

Until not long ago, most American courts resolved custody disputes through "mechanical" rules or presumptions. If the parents had agreed on custody at the time they separated, the agreement stuck. Otherwise, the mother beat the father, at least where the children were of "tender years." Both mother and father beat third parties. Once custody was awarded, it tended to stay put.

These rules of thumb were not the last word, and sometimes the calculations got more complex. But judges could dispose of most cases in a fairly rigid way, with an air of looking up the answers as from a cookbook or logarithm table.

The drawbacks were obvious. By disposing of cases wholesale, the law deliberately turned its gaze from individual equities. Surely, critics urged, every child and parent deserved a searching look at his or her own personal situation, with as much warmth and personal attention as a court could muster.

Through the 1970s and 1980s the mechanical presumptions were weakened, usually with little fanfare. A 1982 case came to symbolize the new approach. In that case, a New York court switched custody to a father on the grounds that while the mother was not at all unfit, the father now appeared more fit -- the "sole criterion" being the "best interests of the child when all applicable factors are considered."

The formula sounded so reasonable that it spread rapidly around the country. The "best interests of the child" standard, it soon became apparent, has three interlocking features. First, it provides what might be called hair-trigger litigability. To get into court, you need not assert that a switch would make the child better off by a mile; a millimeter will do.

The second feature is subjectivity: No two parents, judges or hired experts ever quite agree on the precise content of a child's best interests. Is it better off with a parent who hews to higher moral standards, or one who is more affectionate? With a parent who will spend more time looking after it, or with one who will arrange superior schooling? A lot depends on which judge you draw, and what mood the judge is in this morning.

The third feature is that everything comes to be relevant and nothing, as the lawyers say, dispositive. Does your ex swear? Smoke? Gamble? Watch too many soap operas? Does he roam the beach gathering driftwood? Do the neighbors find her stand-offish? Perhaps none of these peccadillos significantly endangers a child, but all can have some effect and you never know what will tip the balance. So it can't hurt to bring them all up.

As the courts left off trying to be like answer machines, they started to become more like hot-tub discussion groups. ("Tell us _all_ about the relationship.") Civil libertarians were soon expressing unease about custody litigation: parents were feeling pressured toward conformity, and privacy was getting lost in the trample.

The "good-parent" wars turn out to have made surprisingly little difference in custody outcomes. Most children still go to the mother, and the exceptions tend to come in the same old areas. And yet the effects have been profound. To avoid custody battles, for example, many mothers will make major concessions on financial issues. Knowing this, many lawyers for fathers deploy the custody weapon even if their client is not all that keen to take the kids. As for the children, a distinguished battery of psychologists, social workers and sadder-but-wiser judges have by now concluded that the sheer experience of being fought over for years can endanger the emotional health even of a normal child with good parents.

The maternal-preference rule may or may not embody any timeless wisdom about the special bond between mother and child. Actually, as a rule, it is of relatively recent vintage: For a long time, it was the father who got presumptive custody. What is important, almost more than which rule prevails, is that there _be_ a rule, and one as clear, knowable and universal -- as mechanical, in short -- as can be. A good rule is comprehensive, disposing of run-of-the-mill cases so courts can concentrate on the unusual. It is objective, so different judges can hope to rule the same way, and the parties themselves can have some hope of agreeing on how the law will treat their case. And it is clearly spelled out in advance, so everyone can know where they must toe the line.

For a very long time the law in this country, and in England before that, showed an overwhelming preference for fixed rules over fuzzy standards. Some rules have survived more or less intact to our own day. Take the idea of an age of majority. When is someone old enough to get married, or sign a binding contract or order a drink in a bar? If the law were fully alive to human realities, it would entertain much litigation on this subject. Instead it promulgates a no-thinking-required rule -- count the birthdays -- lest it cast perennial suspense over the eligibility of a million bachelors, the validity of a million credit cards and the retention of a million liquor licenses.

How should we behave on the highway? One familiar rule holds that if you bump into the driver ahead of you, you pay for the damage, even if he slammed on his brakes for no obvious reason. If courts tried to work out responsibility on a case-by-case basis, they'd find it hard to distinguish the occasional innocent rear-car driver from all the tailgaters. And the simple rule of thumb provides a generally sound maxim: Pay more attention to the car in front than to the car behind. As a group, drivers benefit. When does a binding contract come into existence if you are negotiating by mail? In principle, perhaps, when there's a "meeting of the minds." But minds are annoyingly inscrutable. Hence the law's "mailbox rule," which provides a fairly objective trigger: You're both locked in when you drop your letter of acceptance into a mailbox.

Of course, no preannounced rule of thumb ever quite fits the perceived merits of all the cases that come in. When the immensely influential group of thinkers known as the Legal Realists came along early in this century, they launched a devastating attack on the effort to maintain clear, knowable-in-advance legal rules. In fact, they said, judges were strongly tugged by their sense of the equities of a case, the policy of society as a whole, and other factors outside the letter of the law; and they had a dozen ways to manipulate cases to make them come out according to these lights.

Language itself, for starters, was slippery: The town elders might think they were being plain enough when they banned vehicles in the park, but did that mean a court had to apply the law to bicycles? Wheelchairs? A statue of the general in his Jeep? There was a malleable quality as well in the way a case's facts were "characterized" among legal categories. Most devastating, there were so many different precedents, maxims and canons of interpretation that by picking and choosing, a judge could steer cases to any desired destination point. Why not be candid? Why not drop the answer-machine pose, and announce openly that the reasons for decisions were not easily pinned down?

Even the traditionalists had resigned themselves to a considerable tincture of indeterminacy in a few areas of the law. The whole concept of "negligence" in injury cases was sadly amorphous, with many outcomes unguessable until a jury came back with a verdict. A dispute over whether someone named in a will exerted "undue influence" over its maker requires a study, by circumstantial evidence, of what commentators have called the psychological world of the dead person. The antitrust laws from early on were vague and open-ended in their commands.

This was not an encouraging sign, since negligence, will-contest and antitrust disputes were all notorious for their expense, vexation and scope for litigious zeal. But the realists carried the day. From the courts' undeniable failure to provide perfect guidance or apply wholly neutral tools of analysis, it was deduced not that they should try harder but that they should stop trying so hard. The basis of the custody-challenge explosion thus turns out, with appropriate substitution of subject matter, to be the basis of most of the rest of the litigation explosion.

Vagueness creeps into the law on the padded feet of words and phrases like fairness, equitableness, good cause, good faith -- pillowy expressions that tend to soften the blow of what is in fact a grant of wide judicial discretion over some area. Consider the splitting up of the property in a divorce. Most states have embraced the "equitable distribution" of property, a nice-sounding phrase that calls for a long fight on everything of conceivable relevance.

Then there's another current favorite, the "balancing test" that instructs future judges to weigh 10, 20 or 30 factors. No method is provided for figuring out which factors should trump which others, or what to do when six factors cut one way and eight the other.

Lawsuits against manufacturers over injuries in the use of products, one of the biggest growth areas in litigation, is handled through one of the most amorphous balancing tests yet invented. Someone hurts himself using a caustic drain cleaner or trying to pull a carving knife out of its original holder. Should the product maker have to pay? The most widely used set of modern guidelines invites the jury to consider at least a dozen factors including the likelihood that users will hurt themselves with the product; the probable seriousness of those injuries; the ability of users to avoid dangers by being careful; the user's likely awareness of the dangers; and the general public's knowledge of the same thing.

Got that figured out? There is much more. The bewildered jury must then consider the product's usefulness; whether it could have been made safer without making it less useful or "too expensive to maintain its utility"; whether other products might serve the same need and not be as unsafe; and on and on. Not surprisingly, many companies have decided to flee the uncertainty by declining to market useful products often found on the scene in injuries, from football helmets to life-saving drugs.

Today's legislators are making things far worse. Federal appeals judge Alex Kozinski writes that it "seems as if legislators now pass statutes because of, not despite, their lack of clarity. By using vague language, legislators can avoid making the difficult political choices that they have to confront when drafting a statute precisely."

Many books could be written on the impossibility of getting clear answers to single questions like, "Is this a legally adequate environmental impact statement?" or "Is this a lawful way to draw the bounds of city council districts?" or "Does this firefighting exam unlawfully discriminate against the handicapped?"

Theory often follows practice, and now some members of the leftish Critical Legal Studies movement have come along to proclaim that indeterminacy is not just a tolerable evil in the discipline of the citizenry but a downright good. Leading C.L.S. light Duncan Kennedy of Harvard, in a well-known article, has suggested that vague standards are preferable to definite rules precisely because they give citizens the sense that the totality of their behavior is under scrutiny by the tribunes of society. But while lofty ideals of jurisprudence can sometimes seem remote from the needs of everyday life, legal determinacy and predictability have the homely as well as the transcendent virtues. They allow us to plan our dealings in times of legal peace. They take on new importance at the first signs of a quarrel, when we want to know whether we have fallen short of our duties, so we can make amends, or stand on firm ground, so we can frame demands. If the quarrel goes to litigation, reliable law encourages a prompt settlement or, if worst comes to worst, cabins the bounds of what is at stake in a trial. Afterward it provides reassurance that the verdict hung on objective factors rather than bias or luck and quells the nagging suggestion that fighting just a bit harder might have turned the outcome.

The surest way to destroy predictability is to tell citizens and judges alike to decide what to do when interests clash by looking into their consciences. Until that happy day on Canaan's shore when all consciences converge, the only result can be a Babel of disagreement. Today's voluminous case reports are filled with lawsuits between respectable citizens whose sense of fairness inevitably differs but who would not for that reason, in an era of clearer law, have had to come to legal blows. Where people of honest intention are suing each other in large numbers, it is because they have been baffled in their efforts to learn in any other way what the law expects of them. "No profound social theory is needed to explain why people are more litigious today than ever before," as Richard Epstein of the University of Chicago puts it. Legal uncertainty "breeds litigation . . . . It's that simple."