Post-Katrina (still?!) formaldehyde exposure is at the center of this Congressional dust-up. It seems that Our Congress is debating whether the manufacturers or the government should shoulder responsibility for the dangerous condition of FEMA trailers provided to people displaced by Katrina.

I can’t help but think there’s a more basic question that isn’t getting asked.  Exactly why are people still living in dangerous post-Katrina trailers?  It’s tempting to go all caustic here and wonder about race and class and poverty. But I won’t.

One of the political ironies is that the Republicans want to blame the government for failing to have formaldehyde standards. Interesting. They are now wanting more regulation? But of course, neither side gets all the blame or all the credit. You have to wonder whether the Democrats can’t find a more expedient approach to solving the underlying problem.

As for the legal side, it’s pretty simple. A manufacturer that sells a dangerous product bears responsibility for the harms and losses caused by the product. That would include toxic trailers.

Manufacturers don’t get to blame the government. The government didn’t make or sell the trailers. The government didn’t make hundreds of millions of dollars selling the trailers.  Since they made and sold the goods, the manufacturers have to take the bitter with the sweet. If the product that they sold is dangerous, they pay what is necessary to cover the harms and losses caused by the dangerous product. Simple rule.

But of course, the whole discussion is sickening, in that the first priority has to be prevention of injury by getting people out of toxic buildings.

David Sugerman

The legal term “preemption” is one of those boring sounding words that makes eyes glaze over and starts the snoozefest. Seems like the Bush administration is counting on that reaction in its latest threat to consumer safety.

Preemption is a concept that provides that federal law can trump or overrule state standards when Congress passes a law and intends that its law displaces inconsistent state law. Like I said, it’s a yawner. But in this era of anything goes, hands-off deregulation, the ability to thwart state law claims means a lot to powerful corporate interests that don’t want to face juries.

And that’s how consumers get hurt.

The latest story is that now federal agencies are trying to grab power and extend preemption, claiming the right to do so. So when–for example–the FDA passes a rule that only federal standards regulate medical devices, the agency is grabbing power to claim preemption. Here is a more detailed account of how it’s being done.

What a sad and cynical world. At some point you have to conclude that this is just about greed. If you want to deregulate the world, then you have to have a means of giving injured consumers the ability to obtain compensation for their harms and losses. Or alternatively, you could create a truly effective safety scheme. But this current administration wants none of it. No regulations. No way for injured consumers to cover their harms and losses. No answering to a jury in court.

There’s that popular culture thingy–not really a saying, so much as a signifier, “Don’t worry; I’ve got your back.” It almost applies here, but you have to edit or tweak it just a tad to achieve accuracy. I worked on it some. Took some thought, actually. With a little re-working, it applies beautifully here. I’ve edited down to, “Worry.”

David Sugerman

Thanks to Jen for sending this powerful piece explaining the need for seat belts. It’s probably the best I’ve seen or heard.

Jen posted it as a comment on an old post, so I wanted to add it here for those who only look at our current entries. Kudos as well to the Montana Department of Transportation for an excellent video. And to Jeremy’sfamily: maybe your horrible tragedy takes on some meaning if this gets wide distribution. Our thoughts are with you on this.

So here’s our small part from Oregon.

David Sugerman

One of the criticisms of class actions is that often they lead to little real benefit for consumers. Often, that criticism isn’t very accurate because consumers who suffer small economic injuries aren’t going to see much benefit individually. But taking money from the wrongdoer penalizes them for misconduct and restores the money lost–even small amounts–to consumers.

But one of the problem areas is coupon settlements. In a coupon settlement, consumers who are part of a class receive a discount on future goods or services as part of a settlement. Sometimes that’s an okay outcome when, for example, the rip off is done on low-cost commonly used goods, like–say–gasoline. Or if the coupon can be redeemed for cash, then that’s fine, too.

But when the coupon gives a discount on a high cost item, that’s generally bad. And that takes us to the recently announced Ford Explorer settlement in California. In that class action, consumers who bought Ford Explorers can receive a coupon for $500 for future purchases of Ford Explorers.

While I don’t have all the details on the settlement and have no first-hand knowlege of the case, that seems like a lousy outcome. If the coupons are redeemable for cash or if they can be sold, that’s not so bad. But if they can only be used by buying a new Ford Explorer, that’s one of those class settlements that doesn’t do consumers a lot of good.

There are times when coupon settlements make sense. And maybe more information would lead me to think differently about this. Still, it’s got a kind of smell to it.

David Sugerman

ps-I’ll be out of town next week, so things may slow on Davids’ blog for the week. Though I guess they have an internet in that town, too.

If you read fiction about trial lawyers, you know there are some pretty inventive plot lines out there. John Grisham thrillers and Phil Margolin crime novels always have neat plot twists.  But I don’t think any lawyer/author working in fiction could conjure up a story this bizzare.

The angels at Public Justice filed a class action lawsuit today to stop the marketing of a kids toy set based on CBS TV’s popular CSI series. The toy contains asbestos.  According to Public Justice, the toy’s fingerprinting powder is laced with a deadly form of asbestos, and kids’ normal use of the product will lead to inhalation of this toxic compound.

Hard to imagine that this kind of thing can happen. Worse than that, it apparently takes a lawsuit to get this irresponsible manufacturer’s attention.

David Sugerman

Good article today online in the New York Times about how consumer safety is threatened by the Bush administration’s push for greater federal preemption. The article explains how in this new era, the Federal Drug Administration claims that injury lawsuits arising from a claim that a drug is dangerous should be barred because the FDA’s safety standards will take care of the problem.

Amazing. This is the same agency that admits that it can’t force manufacturers to issue warnings about unsafe drugs. It is the same federal agency that has seen a run of failures in protecting consumers from unsafe or ineffective drugs, including Zyprexia, Vioxx, and Rezulin to name just a few of the recent problems. And then let’s not get started on Vytorin.

The problem is that the FDA is not fully funded. It often doesn’t independently test drugs. In fact, it has in the past acknowledged that civil lawsuits aid it in its mission.

The goal is, of course, to provide safe and effective drugs to consumers. Seems like we have two clear choices. If we really want to eliminate lawsuits, we simply have to fully fund the FDA and tightly regulate drug manufacturers. That approach is completely at odds with the drum beat for less regulation. So if we’re not going to do that, seems that the only choice is to have a functioning civil justice system so that consumers injured by less-than-tight regulation will not be straddled with the harms and losses caused by unsafe products.

David Sugerman

In its current session, U.S. Supreme Court issued a number of pro-business rulings including this one about federal preemption. “Federal preemption” is a legal term that means that federal law trumps or displaces state laws and claims based on the laws of the state.

The theory behind federal preemption is that when the federal government regulates in a uniform way, allowing state law rules or even state law claims would undermine the ability to enforce federal standards. Sounds reasonable in theory, I suppose. But in practice it’s a killer.

Here’s a good example. The FDA faces serious questions about its failure to inspect tainted Heparin. Patient deaths have resulted from import of tainted Heparin from China. Lax FDA enforcement is the best argument against preemption. If we can’t count on our federal agencies to protect us from unsafe products, consumers must have access to the courts. Otherwise, we’re all at the mercy of a market place that puts profits first.

The fact of the matter is that product safety lawsuits protect consumers. If the government won’t take oversight seriously, the Court must stand aside.

David F. Sugerman