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

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

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

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

Synopsis

Shakedown tells a two-part tale of government-sponsored extortion using the courts. Levy uncovers the worst of the abuses and advises to lawmakers what to do about them.

Excerpt

Shakedown is a two-part tale of government-sponsored extortion using the courts. Part One—Tort Law as Litigation Tyranny—began when dozens of states sued the cigarette giants to recover Medicaid outlays for tobacco-related illnesses. Later, cities, counties, and states adopted similar legal strategies to go after gun and lead paint makers. Now those strategies are being refined to fleece fast food, beer, and liquor distributors.

Tort abuse, under government auspices, has three distinguishing characteristics: First, parallel litigation in multiple jurisdictions to ratchet up the cost of a legal defense, thus forcing a settlement. Second, employment of private lawyers who receive a contingency fee based on the quantum of punishment they can mete out on behalf of their government clients. Third, misuse of the judiciary as quasi lawmakers, thereby circumventing legislatures that have been unwilling to enact a tort regime more congenial to plaintiffs.

Interestingly, Part Two of the Shakedown model—Antitrust Law as Corporate Welfare for Market Losers—does not share those three characteristics. For example, the government's antitrust case against Microsoft was consolidated before a single federal court in Washington, D.C. Some private lawyers were hired by the Justice Department, but they were paid on an hourly rather than contingency basis. And the underlying legal framework was the Sherman Antitrust Act, not judge-made law.

The distinguishing mark of antitrust abuse was quite different. High-tech companies, foiled by the marketplace in their crusade against Microsoft, enlisted government help to tilt the playing field. In effect, Microsoft's rivals used antitrust as a crutch, substituting cronyism in the political arena for the rigors of competition.

The dual goals of this book are to unmask the exploitation of our tort and antitrust systems, and to suggest how those systems can be fixed. Part One begins its examination of the tort system with an introductory chapter summarizing the themes, arguments, and . . .

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