A Lawsuit a Day Keeps Innovation at Bay

CSE has attended more than 150 presidential campaign events in Iowa, New Hampshire, Michigan and South Carolina. Our staff and activists have directly asked the candidates more than 200 questions. We know voters are passionate about the need to end lawsuit abuse and have appreciated the willingness of candidates to answer specific questions.

Trial lawyers are abusing a legal tool called the class action to rob decent, honest Americans of their money, trust, freedom and peace of mind. A class action allows the claims of hundreds or even thousands of individuals to be ruled upon in one court case. Used for their intended purpose, class actions can be a positive device. It can save time and money.

But plaintiffs’ lawyers, like the ones we see on TV are abusing class actions on the state level. Many times these lawyers file class actions and make millions in legal fees, while the injured parties they’re supposed to represent receive coupons or pennies or actually end up paying. For instance:

The Chicago Tribune reported that a class-action settlement allowed for an $8.5 million payment to the class lawyers, while members of the class actually had their mortgage accounts debited by $93.

An editorial in the San Diego Union-Tribune bemoaned a class settlement where the lawyers received $140,000, while each class member received 93 cents.

Most recently, a trial lawyer feeding frenzy has begun in the wake of the Justice Department’s pursuit of Microsoft. 105 class-action lawsuits were filed against Microsoft in just 105 days! Ultimately, the message sent to entrepreneurs by these trial lawyers is that a class-action lawsuit is the reward for providing a new product at a lower price than your competitors. This is a policy for failure and consumer frustration.

Before Saturday’s primary, the candidates should answer the following question:

Gov. Bush/Sen. McCain: “During this campaign you have discussed the issue of lawsuit abuse – how trial lawyers are exploiting our legal system. Additionally, you have talked about how lawsuit abuse drives innovation and investment away from the high-tech sector. In the past 105 days we have seen a trial lawyer feeding frenzy targeted directly at the high tech sector. 105 class-action lawsuits have been filed against Microsoft in 105 days in 29 different states. A lawsuit a day keeps innovation at bay. What would you do as president to stop lawsuit abuse and how what priority would you place on class action lawsuit reform at the federal level?