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 analysis came from my good friend, Oregon trial lawyer Robert Neuberger. As I was heading down toward a full-on rant over the Bear Stearns rescue, Robert pointed out that we’ve arrived in an era of Wall Street vs. Main Street.

Today’s news couldn’t make the point any better. For full ironic effect, you have to go old school and look at today’s (April 4, 2008) Oregonian (that would be a newspaper with newsprint) D-2. Two articles sit one above the other, and the headlines highlight the Neubergarian point that it’s Wall Street vs. Main Street.

Top article, entitled “Fed chief defends Bear Stearns rescue” is an account of Federal Reserve Chair Bernanke’s appearance in front of the Senate Banking Committee. Just below is “Homeowner aid provision dies,” an account of how the mortgage relief act provides $25 billion in tax relief to businesses but will not give homeowners the ability to restructure mortgages in bankruptcy.

Bear Stearns, we’re told, had to be rescued or we would face grave consequences. Fair enough. So we went with the old government supported bailout. Not necessarily a bad play, given the stakes. But consumers are left to their own devices and will lose their homes to foreclosure.

In the trenches, I hear all the time about choices that consumers made when they signed agreements, when they opted to borrow money, when they took on obligations. No one will rescue the consumer, and it looks like Congress and the current administration isn’t about to start.

My beef with all of this is very simple. If you are going to give corporate welfare to the rich, then consumers should get like-kind relief.

Using cold contract logic, Bear Stearns and its investors made choices and they should suffer the consequences. That’s a little absurd, in that it reduces very complex problems to black and white platitudes. But the same is true of consumers who signed up for horrible mortgages on a wing and a prayer. The deals were bad, but you cannot and should not shove cold contract logic down the throats of consumers if you are unwilling to do the same thing to Bear Stearns and Wall Street.

David Sugerman