Cheney Wants Corporate Regulation... of
October 29, 2004
By Jeff Milchen
think lawsuit abuse is a serious problem in this country," proclaimed
Dick Cheney while debating John Edwards in early October. That "runaway
lawsuits" theme is repeated at almost every Bush/Cheney campaign
Knowing the record of his own company, I can't help wondering
whether Cheney is like an alcoholic seeking help, for during his
five-year reign as CEO, Halliburton and its subsidiaries filed more
than 150 separate court actions (documented by Halliburton
Watch). Those lawsuits pursued injunctions, evictions, and attempted
to collect alleged debts from other corporations and individuals,
sometimes for as little as $1,500.
But Halliburton is just part of a larger pattern. A recent
study by Public Citizen indicates that U.S. businesses file
four times as many lawsuits as individual citizens - and
there are 281 million Americans and only 7 million U.S. corporations.
The study covered the only four U.S. jurisdictions that require
records with enough detail to distinguish corporate-initiated lawsuits
from those filed on behalf of individuals: Mississippi, Arkansas,
Philadelphia and Cook County (Chicago and vicinity).
And what about the "frivolous lawsuits" we hear about constantly?
The same Public Citizen study noted, "businesses and their attorneys
were 69 percent more likely than individual tort plaintiffs and
their attorneys to be sanctioned by federal judges for filing frivolous
claims or defenses."
Scrolling down big business' hit list, next up is "runaway awards."
Here again, if large awards are a serious problem, corporations
seem to be the primary cause. Last November, National Law Journal
reported that eight of the year's 10 largest awards to date involved
corporations suing each other.
And while Cheney blamed frivolous lawsuits for their "devastating
impact" on health-care costs during the VP debate, perhaps he should
focus on suits filed by pharmaceutical corporations, rather than
In 2001, a federal court ruled that Bristol-Myers Squibb (BMS)
filed frivolous patent-infringement lawsuits to block the introduction
of generic competition for its lucrative anti-anxiety drug, BuSpar.
Despite "losing" the claim, BMS delayed competition for four months,
during which it gouged Americans for about four times the price
it could charge in a competitive market. BMS's actions were so egregious
that the Federal Trade Commission ordered the company to halt "any
fraudulent or objectively baseless claim or otherwise engage in
Again, this is an example of systemic abuse. As Merrill Goozner
documents in his exhaustively-researched book, The $800 Million
Pill, baseless claims to extend patent monopolies are routine
practice for BMS and other drug manufacturers.
Of course, the corporate lobbyists behind calls for "tort reform"
aren't so concerned by these cases. Class-action lawsuits - which
help average citizens harmed by corporate negligence or malevolence
to gain compensation and punish the offender - are their target.
So while Congress considers capping class-action punitive damages
(awards in such cases have not increased over the past decade) at
$250,000, the bill wouldn't touch frivolous suits like those filed
I've worked for years organizing and advocating for independent
business owners, and learned there are indeed a few unscrupulous
lawyers filing sleazy lawsuits. Since large corporations generally
will fight any questionable lawsuit, small businesses that can't
afford the time or risk of fighting are the usual targets.
We should strive to eliminate such suits and rid the legal profession
of those who file them, but a $250,000 cap on punitive damages would
do little to discourage the offenders. Their aim is to coerce smaller
out-of-court settlements, not go to trial.
That cap on damages, however, would endanger every American, because
the amount is inadequate to deter or change criminal practices at
large companies. Consider that BMS voluntarily paid more than $500
million to victims of its fraudulent patent claim, and you quickly
see that a $250,000 punishment is insufficient to deter large corporate
When asked during the debate if he thought Senator Edwards, a
former trial lawyer, was part of the lawsuit problem, Cheney responded,
"I'm not familiar with his cases." (As if Bush campaign staffers
didn't scrutinize every lawsuit the man ever filed). But as The
Washington Post noted, Edwards' previous political opponents
seeking dirt "came away frustrated because Edwards' clients were
almost universally sympathetic figures." Like most trial lawyers,
he helped genuine victims get justified compensation and deter wrongdoers
from harming others.
The attack on trial lawyers is really an attack on citizens' ability
to sue corporations, and it goes far beyond this election cycle;
it's part of a long-term assault on the rights of citizens and small
business owners to hold corporations accountable via the courts.
Having successfully undermined or dismantled regulations on big
business in many realms, the next corporate agenda item is to regulate
us - to strip citizens of our right to punish corporate crime
We can and should find ways to curb groundless lawsuits, including
disbarring lawyers deemed by judges and peers to have repeatedly
filed unjustified lawsuits (and nobody despises unscrupulous attorneys
more than honest ones). Genuine improvements, however, must work
narrowly to discourage the small fraction of suits that truly are
frivolous, not shield giant corporations from one of our few functioning
tools to hold them accountable.
Jeff Milchen directs ReclaimDemocracy.org,
a non-profit organization devoted to restoring citizen authority
over corporations. The organization recently launched several local
chapters and created a new online
forum for strategizing on corporate power and democracy issues.