This is a post about what is not there. Right here in River City, a federal court jury found in favor of Adidas Corp. on its trade infringement claim against Payless Shoes, finding damages in excess of $300 million.  The Chamber of Commerce and its allies have long shouted out major screeds about the civil justice system, claiming that it is horribly unfair because juries award too much money.

But when a business got a huge award, the Chamber sat silently. I suppose this should come as no surprise, but the Chamber and its friends have nothing on their websites about the Adidas verdict.  Neither does the American Tort Reform Association.

Nope, their attacks on the civil justice system focus on cases brought by injured consumers.  And some–like the magic pants guy–are grounded in half truths. In the assinine case of the judge who sued the drycleaner for his lost pants–the magic pants guy–anyone who follows the whole story learns that the system works just fine.  But that won’t stop the Chamber from parading it as a horrible or the American Tort Reform Association’s ridicule.

So one thing that this deafening silence suggests is that the Chamber and the American Tort Reformers only complain about lawsuits brought by individuals. Another is that their complaints–too much money awarded in civil lawsuits–are really not complaints about the amount of money so much as they are about who gets the money.

I’ve got nothing in the Adidas case. They have a right to enforce the value that they’ve poured into their brands. But let’s be fair. When the Chamber wants the rest of the world to believe that its war on the civil justice system is honest and open, it will call foul when a corporation gets the outsized verdict. Anything else just smells really, really bad.

David Sugerman

The Oregoinian’s Brent Hunsberger reports on this eye-catching honking huge trade infringement verdict handed down in U.S. District Court in Portland yesterday. Looks like the grand total–some $305 million–is a lot of cash for a dispute over whether Payless stores ripped off Adidas by selling knock-off products.

I’ve got no cause to question all this, except that business vs. business disputes leave me yawning and struggling to stay awake. But here’s what’s interesting. We’ve heard for years about how we’re overlawyered, how class actions take too much money from businesses for ripped off consumers, and how people recover too much money in lawsuits. A lot of the drumbeat comes from the Chamber of Commerce. Here’s a window on one of its slick mouthpieces–I mean affiliates–that gives a great snapshot of the Chamber of Commerce’s view of litigation.

So here’s the question that I can’t avoid asking: What’s the Chamber going to say about a verdict where a business recovers $300 million for a claim of trade infringement? What are the going to say over at overlawyered? How about the institute for legal reform? How about the American Tort Reform Association? I’ll be watching. Because I’m sure that they will trumpet this case of a business getting too much money from a jury. I imagine we’ll see screeds about frivolous lawsuits. And there will surely be concerns raised about how lawsuits like these are ruining society. And that it’s too much money. Oh yeah, and the lawyers are behind it all.

Don’t get me wrong. While trade infringement lawsuits don’t get me juiced, I can see the logic and the need. As Mr. Hunsberger’s report makes clear, companies like Adidas’ intellectual property represents the true value of the enterprise.  So they’re aggrieved, and they use our civil justice system to defend themselves. I get that.

But here’s the deal:  I have the sneaking suspicion that all the outrage about big verdicts is really nothing more than class warfare on the middle class. So as you can imagine, I’m grabbing one of those big things of popcorn and settling in for the show.  I can’t wait to hear what the Chamber of Commerce and its friends say about this one.

David Sugerman

The Center for Justice and Democracy compiles fact sheets on a number of civil litigation topics, including case filings, litigation expenses, lawyer fees and the like.

Here’s a nice annotated summary from the Civil for Justice and Democracy of the myths connected with the civil justice system:

http://centerjd.org/MB_2007civil.htm

Two of my favorites:

1) The “frivolous lawsuit malpractice crisis” is shown to be a myth.

From an article in the New England Journal of Medicine:

“A recent Harvard School of Public Health study that closely examined 1452 closed claims concluded that ‘[p]ortraits of a malpractice system that is stricken with frivolous litigation are overblown.’[fn4] The study found that most injuries resulting in claims were caused by medical error, and that those that weren’t were, nevertheless, not “frivolous” claims. [fn5]”

Source: David M. Studdert, Michelle Mello, et al., “Claims, Errors, and Compensation Payments in Medical Malpractice Litigation,” New England Journal of Medicine, May 11, 2006.

2) And then there’s the tidal wave of litigation that is overrunning our courts because too many injured people file lawsuits:

“The number of tort trials concluded in U.S. District Courts declined by 80 percent from 1985 to 2003.”

Source: Bureau of Justice Statistics, U.S. Department of Justice, “Civil Justice Statistics,” found at http://www.ojp.usdoj.gov/bjs/civil.htm

There are all sorts of other topics covered in the CJD reports. If the general importance of the civil justice system matters to you, you might want to peruse their website, www.centerjd.org

David F. Sugerman