Saturday, November 24, 2007

Tort Law in Black and White

There is black and white in the tort law. A test of our legal and governmental institutions is whether a capacity exists to see the black and white and to act in a responsive manner. For a long time the nation's legal profession and its legislatures, regulatory agencies and criminal law apparatus have exhibited an abominable collective failure. This is properly reportable to the citizenry.

What is black and white in the tort law?

It is black and white that a civil society rightfully seeks mechanisms for compensating its members in certain situations when they suffer physical and economic harms.

It is black and white that the body politic also rightfully seeks to regulate the activities of its members to lessen harms they may do to one another and to achieve a deterrent effect by punishing those whose deliberate or negligent actions cause damage to others.

It is black and white that our society has at its disposal a variety of mechanisms for providing compensation to members who experience losses. These include private insurance arrangements, welfare programs, natural disaster relief, charities and a civil law liability system.

It is black and white that our body politic has an extensive governmental regulatory regime and a criminal law system that regulate the activities of society's members to lessen the damage they may do to one another and to punish in the name of deterrence those who deliberately or negligently cause harm.

It is black and white that no payments are "free," and all the payments come out of someone's pocket. The range of sources of the payments includes private insurance premiums, taxes paid to the government, gifts made to charities, and higher prices for goods and services so businesses can cover the liabilities that are imposed on them, or lower wages for employees of the businesses or reduced profits for their owners.

It is black and white that economic resources are scarce, not all losses can be fully compensated to the extent a caring society would wish, and society is confronted with an extraordinarily complex (and frequently heart wrenching) task of deciding who should get compensated how much for what losses and from what source of payment. Examples are innumerable. Soldiers are asked to give up their lives for their country or suffer grievous and lasting injuries and for whom the government must decide how much tax monies should be provided in the way of compensation. Yearly tens of thousands of mothers and fathers die of cancer and other diseases, leaving children deprived of needed financial resources and critical elements of a nurturing family environment; and society must decide what to do about the losses these families suffer. Fifty thousand people are killed annually on the nation’s highways, the extent and cost of disabling injuries can only be guessed at, and society must have ways to provide some remedial compensation. Other losses for which society can well wish to provide compensation result from natural disasters, other accidents, potentially beneficial medical procedures, physical and economic crimes, drug, alcohol and gambling addictions, extreme social and educational deprivation, mental illnesses, and environmental pollution. Society cannot come anywhere close to making everyone entirely whole for all their losses, and a caring society will want to be judicious in allocating the scarce resources that are available among all the potentially deserving recipients of compensatory payments.

Not as black and white, but still quite obvious, is that, when it comes to regulating the activities of society's members and meting out, in the name of deterrence, monetary fines and jail sentences as punishments, society thinks it would be wrong for government regulators and prosecutors to be paid according to how much in fines they collect or how much jail time they get people sentenced for. Also, regulatory fines do not go into private pockets but rather into the government’s coffers and are available for carrying out its regulatory activities.

That is the black and white.

What then are the failings of the legal profession and of legislatures, regulatory agencies and the criminal law system?

The failings are discernable in connection with a civil jury in Hale County, Alabama, awarding $500,000,000 in punitive damages to three plaintiffs who were lied to by Whirlpool Corporation to the effect that the plaintiffs would have to make payments for about three years for a satellite dish, which would total roughly $1000, where in fact the contract called for payments for about 4-1/2 years totalling about $1600, or, in other words the plaintiff was to be cheated out of $600.

There should be no doubt that the job of the legislature of Alabama, the state's regulatory agencies and its criminal law system includes endeavoring to protect Alabama citizens from Whirlpool lying to customers and cheating them out of $600.

Accordingly, one could conclude that, if it is needed for the state of Alabama to resort to a $500,000,000 punitive damage verdict against Whirlpool in order to protect Alabama citizens, there has been an abominable failure of the Alabama legislature, regulatory agencies and criminal law apparatus in doing their job of regulating Whirlpool's activities and imposing fines and jail sentences to deter Whirlpool from doing what it did. A $500,000,000 punitive damages verdict seems preposterous overkill. Before resorting to that, it would behoove the citizens of Alabama first to make a wholesale eviction from office of the incumbent legislature, regulatory agencies, and criminal law apparatus, and replace them with a new set of legislators, regulators, prosecutors and judges to see if the new group could do better in dealing with Whirlpool so that a $500,0000,000 punitive damage verdict can be foregone. Further, if new officials are not successful and it is concluded that such a penalty is ultimately needed, hopefully the new officials would have the sense to arrange for the penalty to be paid into the state's coffers and be available to support regulatory efforts generally for the benefit all Alabama citizens, instead of allowing the penalty to be poured into the pockets of three private plaintiffs and their attorneys.

The possibility needs to be recognized, however, that there has not been such an egregious job failure on the part of the legislature, regulators and criminal law system as is suggested above. Conceivably it is a sham argument that $500,000,000 punitive damage verdicts are needed as a result of failure by the legislature, regulatory agencies and criminal law apparatus in regulating the activities of society's members and meting out punishments for deterrent purposes. The argument may be a pretense to distract from something else that is going on with $500,000,000 punitive damage verdicts. The truth of the matter may be that the civil liability system has been shanghaied by a bunch of greedy lawyers who are running it for the purpose of enriching themselves, and $500,000,000 punitive damage verdicts are reflective only of how successful they have been in achieving their objective, and not at all reflective of a need society has as a result of any egregious and irremediable failure of the regulatory agencies and criminal law apparatus.

The problem is that, if this alternative explanation of things is correct, and the first suggested job failure is not so egregious as suggested, then the legislators, regulators, prosecutors, and judges are guilty of a second failure that would be equally deserving of condemnation. This second failure would be the failure to stand up and defend themselves, and say the truth of the matter, to wit, that the regulatory regime and criminal law apparatus are not so deficient, the argument that they are irremediably deficient to such a degree that $500,000,000 punitive damage verdicts are needed is a sham and subterfuge, a bunch of greedy lawyers has hijacked the civil law liability system for their own enrichment, and that system needs to be reclaimed by and for the people in order for it to serve properly society’s legitimate goals of judiciously providing compensation for losses that citizens suffer.

A further possibility here is that Alabama’s legislators, regulators, prosecutors and judges do not understand sufficiently what is black and white about tort law and may not know of the pretense argument being made by the lawyers who have hijacked the civil liability system. If there is a lack of understanding, a partial excuse would exist for those officials failing to stand up in their own defense and failing to tell the public the truth about what is really going on.

Such a partial excuse would, however, point to a final failing, and perhaps the worst failing, which would be that of the legal profession as a whole. That profession is best trained to know and understand what is black and white in the tort law, to examine whether significant deficiencies in the regulatory and criminal law systems exist, to evaluate whether any inadequacies are so substantial and irremediable that alternative means must be found to regulate and to mete out punishments, to decide whether $500,000,000 punitive damage verdicts are needed, and to reach conclusions about whether the civil liability system has been hijacked by greedy lawyers who are running it to enrich themselves and to the detriment of serving society's purposes. Surely the legal profession's obligations to society at large would include informing the legislatures, regulators, prosecutors and judges about such matters. This would be particularly so if those officials lack an adequate understanding of things, and thus are not able to state their own defense against the hijacking lawyers who would assert that $500,000,000 punitive damage verdicts are needed, and further are not able to find the way to seize back the hijacked civil liability system from those lawyers so that the system can serve the citizens the way it should. For the legal profession not to fulfill such an obligation would seem the worst failing of all those considered here.

There is black and white in the tort law. For a long time an abominable collective failure has occurred on the part of the legal profession and the legislatures, regulatory agencies and criminal law apparatus to recognize the black and white and to act responsively for the citizens they serve. One cannot be entirely optimistic that these parties will sort out anytime soon their respective failings. The legislature in Alabama may be in the process of taking a positive step. The citizens, in all events, should be informed of what is black and white and should know about the collective failure that has gone on for many years.

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