Here’s something I’ve noticed upon returning to the U.S. after 25 years abroad.
- Everything good that happens to us is because of our hard work.
- Everything bad that happens is someone else’s fault.
And in America when something bad happens you can sue someone for it!
What Explains This Uniquely American Outlook?
I chalk it up to three factors: we have more lawyers per capita than any other country, the First Amendment means attorneys are allowed to advertise for business, and we allow class action lawsuits.
1. Lots of lawyers mean lots of litigation
According to statistics from the American Bar Association, we have over 1.3 million lawyers, the majority of whom are in private practice in small firms.
They are working for themselves, the original hustlers looking to make a living. Sure, lawyers earn some money by charging hourly rates for routine work, but they earn potentially BIG money by taking clients on a contingency basis.
A contingency arrangement just means the lawyer bears the cost of bringing a case, and in return, they get a percentage of any amounts they recover for their clients. How much? Anywhere from 33% in cases that settle to 40% for cases that go to trial.
Clients love it because they have no downside risk. They pay nothing, and their lawyer’s interests are aligned with their interests. Lawyers love it because they can earn a lot while getting their clients a recovery.
2. Lawyers advertise to find new clients
The U.S. Constitution is a wonderful thing, but it has some unanticipated side effects. The Second Amendment right to bear arms means that we have more guns than citizens and a disproportionate amount of gun violence.
The First Amendment right to freedom of speech means lawyers can advertise for clients. They do so on the radio, on TV, on billboards, and online. The constant message Americans see is this:
- If you have been injured, you may be entitled to compensation
- Someone else is responsible for your suffering
- I can get you money at no cost to you
This is an attractive message. People want to believe someone else is responsible for the bad things that happen to them. It is often true.
3. Class actions are the grandaddy of lawsuits
Lawyers make a lot of money in personal injury cases. That’s because society values people highly. When a person suffers an injury at someone else’s expense, making it right is costly.
If one person getting injured is a potential payday, many people getting injured can be like hitting the jackpot, at least for personal injury lawyers. Particularly if those people were injured in a similar fashion giving rise to similar questions of law and fact.
Think of people exposed to a harmful substance like asbestos. Or people who were sold a harmful product like cigarettes or a drug treatment that turns out to have dangerous side effects.
In all these cases, enterprising lawyers seek to file a class action claim on behalf of many injured persons. If you can identify thousands or millions of affected people, each of whom suffered an injury, the damages can easily reach hundreds of millions or even billions.
It’s not just private attorneys who file such cases. The biggest settlements in recent years were brought by State Attorneys General whose citizens were harmed by corporate actions:
- Tobacco settlements for $200+ billion, involving payments to cover medical costs for smoking-related illnesses.
- Gulf of Mexico oil spill for $50+ billion.
The Tobacco Settlements Hint at What May Come
The States suing the tobacco companies argued that tobacco products imposed a significant burden on public health systems because they caused cancer.
Tobacco companies had previously avoided liability to individual smokers by arguing smokers assumed the risk by choosing to smoke. States circumvented the personal responsibility defense by targeting public health system costs associated with tobacco illnesses.
The Mississippi Attorney General who announced the case said “This lawsuit is premised on a simple notion: you caused the health crisis; you pay for it.”
The recent lawsuits and settlements relating to opioids suggest that State Attorneys General are expanding their ambitions. They’ve successfully pursued not just the manufacturers of opioids, but also pharmacies that distributed them, and consultants who helped market them.
Obesity Causes Significant Public Health Costs
The CDC says obesity costs the U.S. healthcare system some $170 billion a year, while the Harvard School of Public Health notes estimates of $190 billion. And a more recent study puts the aggregate national cost at $260 billion.
Whatever the ultimate figure, it’s clear that obesity is driving massive public health costs in the United States.
Who and what is causing our obesity epidemic?
Well, we know it’s not us individuals or our eating habits. Or even it we do play a role, it’s not our fault.
It must be the people who are producing food and selling it to us! Conveniently, there are a handful of large food and beverage companies and restaurants that are worth hundreds of billions of dollars.
True, not everyone who drinks soda, scarfs down burgers, or lives on packaged foods gets fat and unhealthy. But neither does everyone who smokes get lung cancer.
I cannot predict when the food lawsuits will happen or exactly what form they will take. But the conditions for an epic lawsuit are present:
- Large and growing public health costs
- A country filled with people who want to be told it’s not their fault
- A pool of deep-pocketed companies
- Plenty of hungry lawyers
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