by Whitney J. Davis
Daily Lobo columnist
Class action lawsuits have become commonplace in U.S. courtrooms. The common denominator among these suits is that they are almost always filed against big business. There are a variety of reasons for this, including morally neutral lawyers and corporate deep pockets - money-hungry people looking for a quick dollar.
The U.S. has become a sue-happy place, which has resulted in serious precaution taken by most businesses. Today, there are warning labels on everything, some of which are just plain ridiculous, such as this warning found on the instruction sheet of a Conair Pro Style 1600 hair dryer: "Do not use in shower. Never use while sleeping."
Lawsuits are often behind such ridiculous warnings. Are all these lawsuits justified, and what effect have they had on business?
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Annoying warning labels aside, there are several effects that these lawsuits have on businesses and consumers. The most obvious is that these lawsuits cost businesses millions of dollars per year, and many times, these costs are passed along to the consumer.
Other effects are more beneficial to the consumer. Many lawsuits have forced companies to change their ways or, at the very least, pay dearly for their misdeeds. Others have forced unsafe products off the market or have forced companies to make good on their promises. This surge in consumer legal action against business has considerably increased consumer power. Now, not only do consumers have buying power, they also possess some sort of legal power. And
corporations are beginning to listen.
However, some may be taking this power too far. Take the most notorious example: Riding on the almighty heels of the tobacco wars, consumers successfully sued big tobacco for the deleterious health effects caused by its product. Warning labels were not enough for this unsatisfied group of consumers - they were out
for blood.
The legal merits of their claim against tobacco giants were doubtful at best; however, to the surprise of many, they won. This was a significant win for consumers, because we gained certain power over corporations. For better or worse, corporations are now forced to take consumer complaints seriously.
The latest addition to this pool is a developing suit blaming Hurricane Katrina on energy companies. This suit seeks damages from a variety of companies whose pollution is the cause for global warming and the increase in hurricane frequency. While this suit may be another long shot, energy firms are taking it seriously.
This surge in lawsuits may be the result of a lack of government interaction with business. While widespread government control of business is problematic, this situation demonstrates a need of consumers, employees and other stakeholders that policymakers are not addressing.
The courts were not designed to be policymakers - that is why we have a legislature. Today, policy is being made through lawsuits more often than through legislative channels. The problem with using lawsuits to regulate and control business is that it is an expensive, uncontrolled system. Lawyers will pursue almost any claim if it has a hope of generating money. The courts are forced to hear these cases no matter how ridiculous, which slows the entire legal system down.
The newest wave of suits is no exception, whether it's suing McDonald's for making people fat, suing cigarette makers for giving people cancer or the newest one, suing polluters for causing hurricanes. This is absurd. What has happened to personal accountability? McDonald's is not guilty of stuffing hamburgers and fries down people's throats without their consent, and it's the same with cigarettes.
No matter how big and bad people think the business world is, people surely don't think that energy companies are plotting to destroy the world one hurricane at a time.
In a world where personal accountability no longer matters, everyone is at risk. Holding businesses responsible for any given aliment does not encourage them to stay in business. If this continues and the risks of running a business begin to outweigh the benefits, then we will be left with a country where only the lawyers can afford to stay in business.
Whitney J. Davis is a UNM master's of business administration student with an emphasis in international business and public policy.
