Bear this in mind as the Bush administration starts to make its push for tort “reform”.
WASHINGTON (Reuters) – It was the anecdote that politically seemed too good to be true. And it was. Treasury Secretary John Snow was set to say on Friday that “frivolous lawsuits” had caused the U.S. ladder industry to fold.
“There is not a single company left in the United States that makes ladders. The lawsuits got to be too much for the ladder industry,” read comments Snow prepared for a conference sponsored by the Small Business Administration.
But when the department discovered there were some 11 producers selling $850 million worth of ladders in the United States, those words were left unspoken and deleted from a speech text posted later on the department’s Web site.
A Treasury official said the statement was in error.
“The buck stops with me,” said Treasury spokesman Rob Nichols on Monday. “That is my error. That is a factual inaccuracy that I missed during the fact-checking process.”
The Bush administration has been urging Congress to pass measure to curb lawsuits against businesses. Tort reform is part of President Bush’s preelection economic plan.
“I’m really disappointed,” said Ron Pietrzak, executive director of the Chicago-based American Ladder Institute, which includes 11 domestic ladder makers and has a Web site at: www.americanladderinstitute.org.
The group said the U.S. ladder industry generates sales of more than $850 million annually.
At least this time, they didn’t decide that an inconvenient fact shouldn’t kill a good story and run with it anyway. I’ll give them credit for that much. Via Trivial Pursuits.
If they wanted a better, *real* example, they could have used the lawsuits filed by Jean Carnahan against Parker Hannifin, the makers of the vacuum pump she (and her lawyers) claim was responsible the crash killing her husband Mel and her son Randy (who was the pilot).
Despite NTSB findings that the pumps weren’t malfunctioning and that the primary cause of the crash was pilot error, an activist jury incredulously awarded millions to Carnahan despite no evidence that the vacuum pump malfunctioned. The liability issue forced Parker Hannifin out of that business.
Incidentally, based on Mrs. Carnahan’s quotes relating to the suit, it’s obvious that the primary purpose of the lawsuits is to take blame away from her son for the crash. She clearly refuses to accept that her son was largely to blame for the crash.
This is a real-life example of runaway litigation that cripples a legitimate industry. And the abuse comes from a former U.S. Senator.
And now that I think about it, there’s *another* way they deserve credit. At least Mr. Nichols accepted the blame for the misinformation. After all, he could have blamed it on faulty British intelligence. 🙂
I was all psyched when I saw the headline about lies.
But I got all through the post, and found no lies, just a correction and an admission of bad facts.
That pesky Bush Treasury Department, correcting themselves publicly and ruining an otherwise titillating headline!
The whole concept is pretty stupid – Even if there were no ladder manufacturers remaining in the US, that wouldn’t say anything about product liability or “frivolous lawsuits”. Product liability laws don’t discriminate between US and foreign manufacturers.
The only way the argument makes any sense at all is if there are no ladders being sold in the US.
Kevin,
That’s one way to look at it. Yet another way to look at it is that these “bad facts” are in fact a pervasive element of the entire tort reform platform, that, for all the moaning and hand-wringing, frivolous and huge jury verdicts have a negligble effect on business. This is certainly true in the medical malpractice sphere.
The Treasury Secretary’s assertion of a point that is utterly belied by the facts underscores this perspective. I’ve been arguing that tort reform is a sham for some time now (bear in mind I am a civil defense attorney, not a plaintiff’s lawyer), and the fact that the Treasury Secretary blustered to an opposite conclusion where the actual facts completely contradicted his point suggests that some aspects of the tort reform agenda are much, much, much more about politics than any actual substantive need for such “reform.”
Following up on what Chabo said, not only are foreign manufacturers liable, but in Texas for sure and I believe in general under products liability law in general sellers are liable for harm caused by defective products sold. The seller usually has recourse against the manufacturer. Last I looked Home Depo and Lowes both sold ladders. So at a minimum they were not to worried about the exposure to such suits and the possibility they would not get indemnified by foreign companies who do not have insurance or whose assets are not readily accessible.
With regard to the Parker Hannifin suit, it also seems to be a poor poster child for tort reform. According to this article: http://www.bizjournals.com/kansascity/stories/2004/01/12/daily61.html
the verdict was for four million dollars. Given that it was a case involving the death case of two people and multiple plaintiffs claiming a loss, this amount is hardling out of the ordinary. In fact, reading between the lines, it sounds like Parker Hannifin was quite pleased it was this low.
The case does not appear to be frivolous, the jury heard the results of the NTSB report, but such a report is not dispositive. The jury also heard evidence that “Randy Carnahan reported a malfunctioning primary attitude indicator, or artificial horizon, which is powered by the pumps.” I suspect that there was ALOT of other evidence that the jury considered on both sides of the issue. All things considered it looks like the jury did its job by considering all the evidence and deciding the plaintiffs had carried their burden.
To the extent they got out of the vacuum pump business, I suspect it was not this case. Parker Hannifin is a Six Billion dollar company, my only question is whether this case even got out of their self insured retention. On the other hand I suspect they got out of the vacuum business because of this:
“During the trial, the family showed reports of 20 airplane crashes blamed on the failure of vacuum pump systems involving Parker Hannifin equipment.”
Maybe their pump just sucked. Are others not making such pumps?
Aha another article explains slightly differently why Parker Hannifin got out of the business of vacuum pumps:
“In his closing arguments, the attorney for Parker Hannifin, Mitchel Kallet, said the company had sent out warning letters suggesting that pilots have a backup system, and had frequently asked the Federal Aviation Administration to require backup systems. But he said the FAA consistently refused to take that action, even after the Carnahan crash.
He said that is what led Parker Hannifin to quit manufacturing the vacuum pumps.”
http://www.thekansascitychannel.com/news/2761220/detail.html
Quite clearly this case had nothing to do with them getting out of the business.
Actually the more I read about this case, the more it looks to me that Parker Hannifin won this case and in fact got lucky. Shall I decry the jury for being too conservative because I based on a news a couple of news articles disagree with what they spent two months considering?
Antinome:
You can look for whatever you want in the Carnahan/Parker Hannifin fiasco. But the NTSB said in *this case*, there was no evidence that the pump had anything to do with the crash.
To suggest you can use *other incidents* to assign guilt without proof in the current case being considered is no different than saying that a promiscuous woman can’t be raped, because “past history” says that she’ll do anyone, anywhere, and at any time, no matter how much she may have resisted in this case.
No, I totally stand by what I said. Have you read the NTSB report? I make no claim as to other cases. But the NTSB was clear in this one. Unless you think, of course, that the NTSB is conspiring with Big Business to screw The People. In which case I have some aliens in Area 51 to sell you.
I have not read the NTSB report, nor did I listen to anything else presented during the two months of testimony in the case. As I said before the NTSB report is some evidence, it is not dispositive evidence. Having not heard all the testimony, I think it would be foolish for me to assume I knew more than the jury, whose job it was to listen and weigh all the evidence. The plaintiffs clearly had evidence that disputed the NTSB report’s findings as well as the defense’s experts. The plaintiffs evidence was apparently sufficient to get passed the inevitable motion for summary judgment (though I have no idea what the particular burdens in this court for prevailing on such a motion would be) I suspect that the plaintiffs’ experts got past extensive Daubert style challenges to their testimony. It is the jury’s job to weigh the evidence it heard. It did so.
Are you proposing a rule of evidence that government reports cannot be challenged as being just plain wrong?
Do juries make mistakes, sure. I can rant for quite a while about at least two cases I tried where I think the jury was completely and utterly wrong. Of course I am not completely unbiased in those instances 🙂 One was as a defendant where the jury awarded more money than anyone, including the plaitiffs ever expected and placed liability on a questionable theory. The other was as a plaintiff where the jury did not find liability even though when I asked them later they told me they believed the events happened as I said. People who gnash their teeth about “runaway juries” don’t seeem to consider that juries in fact err both ways. Sometimes they award too few damages or find no liability where there should be. Juries are not in any way perfect, that being said I would rather in general have 12 jurors than a judge. You can’t voir dire a judge.
Althoiugh there are still half as many ladder manufacturers as there were 20 years ago, the frivolous lawsuits certainly have had an impact. When a drunk plumber falls off a ladder and is then allowed to sue the manufacturer, or a preacher falls off a ladder because he is standing on the top and over reaches, and sues because he “lost his faith”, it forces the manufacturer to expend scarce resorces to defend themselves, and then pass those costs on to the consumer. It is criminal that ambulance chasing attorneys are allowed to to bleed business at the expense of the consumer.