For those of us working as New York injury lawyers, we are used to reading media accounts that are critical of lawsuits on behalf of injured New Yorkers. Most of the time, we just quietly accept these negative articles as we know that our opponents– large corporations, insurance companies– are spending millions of dollars waging a media war against injury lawyers.

But now and then, someone takes the time to provide a thoughtful response to these attacks. Below is a response by Michael Palmer, a lawyer but NOT a trial lawyer, that I just loved:

On November 17, 2007, Joe Nocera, a business columnist for the NY Times, published a lengthy column on the Merck case that repeats many of the standard slurs against trial lawyers. (It is available at http://www.nytimes.com/2007/11/17/business/17nocera.html?pagewanted=1&n=Top/News/Business/Columns/Joe%20Nocera.)

I could not resist sending him the remarks reproduced below.

All the best,

Michael Palmer, J.D., Ph.D.
Ethics By Design
PO Box 528
Middlebury VT 05753
V: 802 462 3373
www.EthicsByDesign.com

Dear Mr. Nocera,

Unfortunately, your November 17 column on products liability litigation contains some canards and mischaracterizations that the insurance industry has spent millions of dollars to disseminate over the past 15-20 years. As an avid reader of your column and great admirer of your work, I would not have expected that you would have passed them on so uncritically.

Let me highlight just a few.

“[Products liability suits] often make lawyers rich while the people who say they were hurt wind up with very little.”

It would be helpful to have at least one example in which this is the case. “Often?” No way. You may be thinking of class action lawsuits in which the legal fees, which are always subject to court scrutiny and approval, can sometimes be large while the actual recovery for individual class members may be small because the damage to the individual class members was small. Such cases serve the function of correcting and deterring wrongful behavior-i.e., a regulatory function-and are, therefore, generally helpful in economic terms. But they are not the norm, and they certainly do not represent the typical products liability case.

In the standard products liability case, like personal injury cases in general, the lawyer fronts all the expense money (which as you observe can be in the millions of dollars) and receives between 25 and 40% of the recovery, it is not the case that the “people who say they were hurt wind up with very little.” The lawyer does not do well unless the client does. And the lawyer not only risks not getting paid for her time and expertise in the event of a defendant’s verdict, but also risks losing the out-of-pocket expenses.

It is a curious development when exceedingly wealthy captains of industry imply that lawyers should work for free or a pittance in such high-risk endeavors while it is fully appropriate that they be compensated in the hundreds of millions of dollars for succeeding in uncertain enterprises.

Lawyers perform a valuable economic and social service, which space and time do not permit me to elaborate appropriately. It should be enough to say that several brave trial lawyers labored for well over a decade without success to get a jury verdict against tobacco companies for the harm cigarettes and cigarette companies caused to individuals and our society. The successful tobacco litigation that led to an enormous recovery for many states was developed on top of the efforts of often bankrupt attorneys much like soldiers climbing over the wall of a castle step on the backs of their fallen comrades. (Litigation “kit,” indeed.) I know of no state that was willing to invest the millions and millions of dollars necessary to prosecute that litigation. All were willing to sign contingent fee agreements with the lawyers who did in order to reap the eventual settlement amounts.

Why is it that I am thinking of the Little Red Hen? Everyone likes to eat the bread. But few like to plant, weed, water, harvest, mill, and bake.

Lawyers who take on products liability cases are every bit as much entrepreneurs as Tom Perkins and his partners. Yet no one on the business pages excoriates him for being successful.

Which leads me to another misconception contained in your article:

“. . . it scarcely matters anymore whether the facts are on the plaintiffs’ side – not when a thousand lawyers are armed with those kits.”

The implication is that all one needs is a “kit” and one can bludgeon a corporate giant into submission and extort gigantic settlements even though the claim has no legal or factual basis.

That has never been true. If you followed real lawyers around for a year or so in real courtrooms (as Jonathan Harr did in gathering the facts for A Civil Action), you would see a different reality.

It does happen that some defendants pay money to get rid of a lawsuit that they believe has no merit because it is less expensive to pay than to go to court. But the amount paid is seldom very much, and it is a rare case when a sophisticated corporate defendant or insurance company does so.

And almost all the horror stories that achieve urban legend status are either wholly untrue or gross mischaracterizations of the facts. The most famous of these, of course, is the McDonald’s coffee burn case. Those who express shock or outrage at the large verdict-most of which consisted of punitive damages-react with a comment such as “oh, I didn’t know that,” when they learn that the plaintiff’s medical expenses exceeded $27,000, that she initially asked McDonald’s merely to reimburse her for medical expenses, that McDonald’s adamantly refused to pay a penny, that McDonald’s intentionally heated the coffee to a scalding temperature in order to use a cheaper grade of coffee whose inferior quality could not be detected at extra high temperatures, and that McDonald’s refused to lower the temperature even though numerous other McDonald’s customers had been scalded as well.

Members of the press should ask themselves: Is it likely that a jury composed of average Americans would return an absurd verdict? It seldom happens. And when there is a runaway jury, either the trial judge or an appellate court corrects the damage by ordering a new trial or by imposing a remittitur (i.e., reducing the award).

Another misconception is that correcting a mistake can be used to establish liability. You write:

“If Merck’s first mistake was overselling the drug, its last mistake was withdrawing it entirely. The company says it did so because it was putting patient safety first, but from a litigation standpoint, it was like walking into a bullring dressed in red.”

The implication is that the plaintiffs’ attorneys were able to use Merck’s withdrawal of the drug as evidence that it was harmful. But that completely misunderstands the law of evidence, which in every American jurisdiction excludes any evidence that the defendant has corrected the alleged problem or defect. The policy behind that rule is to encourage potential defendants to take remedial action without worrying that doing so would be used against them. (I understand that Michigan now has a rule that precluded the use of a physician’s apology as evidence that she blundered.)

I suspect that Merck withdrew the drug in order to limit the extent of the damage for which it might ultimately be held liable. Perhaps some executives thought it was the right thing to do in any event.

Finally,

The suggestion that Merck paid out $4.85 million to rid itself of nuisance suits is patently ridiculous. Invested at 10%, $4.85 million generates $485 million per year. Merck was always money ahead paying defense lawyers tens of millions of dollars a year to delay the ultimate day of reckoning. Insurance companies routinely make that kind of calculation in large cases and pay lawyers comparatively small amounts of money to buy them 2-5 years of time during which they can use or invest the money that they rightfully owe plaintiffs (some of whom are their own insureds). (Speaking of fairness, does this practice strike you as fair?)

Merck could have continued paying tens of millions of dollars, even several hundred million, to retain hundreds of lawyers to defend these cases for decades and been money ahead had it not faced the real prospect of losing many thousands of the cases by large amounts. There is no way to lose thousands of purely speculative or frivolous cases. And if causation were truly unprovable as you claim, the ranks of the plaintiffs’ lawyers would have been decimated by bankruptcies long before Merck’s defense funds could have been exhausted.

Too many corporate executives make cynical cost-benefit analyses as a result of which they put dangerous products into the stream of commerce (as happened with the Ford Pinto) or fail to provide timely warnings (as appears to have been the case with Guidant Corporation’s failure to inform physicians about its defective implantable cardioverter defibrillator, as reported by the New York Times). We have no federal law that makes such immoral behavior a crime. Until such time as it is, the threat of large punitive damage awards is one of the few deterrents around.

By the way, I am not a trial lawyer, but I have great admiration for the courageous and hard-working men and women whose work has been critical in improving the safety of products, the workplace, medical care, and other aspects of American life. Were it not for them, our automobiles might still by “unsafe at any speed.” And without them, our economy would not function nearly as well as it does. (I’ll supply the rationale for that statement at another time if you like.)

I also like good reporters and perceptive columnists!

All the best,

Mike Palmer

All I can say is “Go Get Them Mike!!”

Thanks for reading!

Jim Reed, New York Accident Lawyer