Shakedown: How Corporations, Government, and Trial Lawyers Abuse the Judicial Process

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Shakedown: How Corporations, Government, and Trial Lawyers Abuse the Judicial Process by Robert A. Levy Cato Institute * 2004 * 224 pages * $22.95

If you want money, one way of getting it is to produce and trade with others who desire what you have to sell. Sociologist Franz Oppenheimer famously called that the "economic means" of obtaining what one wants. Alas, many people prefer another way of getting money, namely, the use of force and/or threats to compel others to hand over some of theirs. Oppenheimer called that the "political means."

Criminals use the political means. So do government officials (over and above the regular pillage known as taxation), as well as many lawyers and business executives. In Shakedown, Cato Institute legal scholar Robert Levy demonstrates how those groups have figured out how to manipulate the legal system to achieve through the respectable, bloodless process of litigation results that would leave the greatest of criminals gasping in awe at the size of the take. When it comes to rip-offs, the most successful thieves are minor leaguers compared to today's shakedown experts.

The book has two parts. In the first, "Tort Law as Litigation Tyranny," Levy explains in detail how the tort bar in the United States has honed to perfection its weapons of legal extortion to extract great amounts of wealth from businesses and their shareholders.Trial lawyers used to play that game on a small scale, but in the 1980s they started to go for much larger jackpots, suing not just for millions, but hundreds of millions and even billions. The really big scores, Levy writes, are apt to occur when three tactics are combined under government auspices: parallel litigation (simultaneous lawsuits in several jurisdictions to stretch the defendant's resources to the breaking point); the use of private attorneys working for government on a contingency-fee basis; and the misuse of the judiciary as quasi-lawmakers.

That was the game plan for the assault on the tobacco industry. Up until the mid-1990s the industry had won every lawsuit brought against it on the grounds that smokers had known and voluntarily assumed the risks of their tobacco use. A cabal of state attorneys general then came up with a stupendous plan to break the tobacco companies-they would claim that their states needed to recoup the cost of Medicaid expenses incurred due to smoking, unleashing a swarm of private lawyers to sue, while getting their legislative allies to change the legal rules so as to wipe out the industry's ability to defend itself. …