When One Door Closes, Another Opens to Extortionate Litigation
Prodded by the President, Congress belatedly moved to curb abusive class-action lawsuits through the Class Action Fairness Act of 2005. But when one door to extortionate lawsuits closes, another opens. Trial lawyers are circumventing the new limits on class actions by getting state attorneys general (who have received millions of dollars in political donations from wealthy lawyers) to sue instead in the name of the “public” at large. These lawsuits, known as parens patriae suits, were used by extract billions of dollars from consumers and shareholders through tobacco lawsuits in the 1990s, leading to tobacco settlements worth untold billions of dollars after lawsuits by state attorneys general in Mississippi,Texas, Minnesota, and Florida. Trial lawyers hired by the state attorneys general to bring those lawsuits received billions of dollars, sometimes just for bringing copycat lawsuits. CEI described this phenomenon, and a litany of unethical and economically destructive conduct by state attorneys general, in The Nation’s Top Ten Worst State Attorneys General. The National Law Journal describes some strategies that defendants can use to defend themselves against state AG lawsuits.