Noted trial lawyer John Uustal addressed the membership of the High IQ Mensa organization at the MENSA National Conference in Ft. Lauderdale on the topic of his book Corporate Serial Killers. Uustal and his legal partner and co-presenter Robert W. Kelley looked at the new legal landscape where companies can make profits before consumer safety decisions and the law has very limited remedies for victims and their families. Corporate greed versus human life value is a deadly calculation done every day in many of America’s best known companies. A startling and shocking presentation from two pros who work on the front lines fighting the worst of corporate malfeasance – companies that kill.
Transcript of John Uustal and Bob Kelley’s MENSA Annual Gathering keynote:
There is now, and what we’re going to talk about is, a corporate license to kill. So, this is the story of how the civil justice system became impotent over the last 10, 15 years against the power of big corporations.
And, basically, what we’re going to talk about is three different changes in the law. The effect has been massive on how corporations conduct business these days. And, it’s happened in three different areas.
Punitive damages, and we’re going to go back to a 2003 U.S. Supreme Court case. And, there have been cases since then, especially in 2008. Mandatory arbitration. A case in 2011. And, campaign finance, especially the financing of electing judges, because for a lot of state courts, judges are elected.
So, if corporations can overwhelmingly finance one judge over another, that has a massive effect on the law.
So, these three areas – changes in punitive damages, mandatory arbitrations, and campaign finance. And, they come, these changes, from the United States Supreme Court. Not disputed or argued over politically. Almost never in the news. Almost never covered at all. Even when those cases were covered, what happened over the next 5, 10, years in corporate board rooms is never covered.
And, that’s why I say this story is not well known.
Bob is going to start with punitive damages.
It was a completely different world when I graduated law school in 1981 as far as our ability to have an impact on the corporate world and their conduct and the way they treated the public, their customers and consumers. It’s completely changed now.
And, as John said, what we want to talk about, today, are these decisions from the United States Supreme Court, which I hope that you will understand by the end of this talk, how your rights, the people in this room, your rights, have been taken away, and the rights of these multi-national corporations have now been engrafted into the United States Constitution by the Supreme Court of the United States to give these entities, these monolithic entities, Constitutional rights at the same time that they’re taking away your Constitutional rights. And, that’s what we’re going to to talk about today.
The first thing is “punitive damages.” We used to be able to control the conduct.
I say We, lawyers who would represent our clients and you, indirectly, to make cars safer, to make pharmaceutical products safer, to make food products safer. We used to be able to control their conduct through punitive damages because they wouldn’t want to be exposed to large damages. That has now changed. We can’t do that.
I’ve seen what these companies do. And, when I see what they do, sometimes, it takes my breath away. It really does. And, you may see it on the news every now and then, or in a movie, a fictional recharacterization of what happened. But, I know what happened because I’ve seen these.
These are my clients. These are my people. I’ve seen the documents. I’ve seen the smoking gun documents.
In the corporate world, well, let’s say in the human world, as John said, “If he were to go out and kill somebody, and he were to fire a real gun,” that’s where the phrase “smoking gun” came from. If you can find the person that’s holding the smoking gun, you got pretty good proof of who did the murder. But, that’s the way it is for real human beings.
But, with corporations, corporations are fictitious entities. They’re created on paper. They can’t go out and actually pull a trigger on a gun, but they do have smoking guns, and they’re usually in the form of internal company memorandums, internal secret company documents.
Have you ever seen the tobacco company documents? You would be shocked.
But, I want to talk about a specific case here, and I want to talk about these clients. They are still my friends to this day. And, what they went through, and what a corporation can do, and why corporations need to be punished.
In this case, John and I, found some smoking gun documents... That’s why the case ended up on “60 Minutes.”
There were high profile lawyers across the country, the biggest law firms, the most prestigious law schools, involved in this coverup, this corporate coverup of these documents.
In fact, at one point in the pre-trial discovery, where we were going back and forth with General Motors, one of their lawyers accidentally gave us, they were under court order, and they were in a rush, they were in a hurry because the judge was going to impose sanctions, they rushed and they complied, and they accidentally delivered to our office some documents that they never wanted us to see.
And, John and I were in Detroit at the time taking depositions, and our paralegal, when she got these documents, she knew about the case too, they took her breath away, and she immediately faxed them up to us. That was in the days of fax machines.
And, we got them, and we’re like, “Whoa.” And, sometimes, you see this stuff, and you’re like, “No. How can this be true?” So, the next day, when General Motors had figured out what they had done, they went to court, emergency hearing, they make us give these documents back because they were, supposedly, accidental.
And, the lawyer who gave them to us told me that he spent that night in his expensive hotel room in Detroit throwing up. And, the next day, he resigned from his law firm for having accidentally given us these documents, after he threw up all night.
Now, I’m under a gag order right now, as is John. And, I can’t tell you what’s in that document. The court ordered us to give that document back. I’m not going to risk it. Because, as you see as this story unfolds, I got the information in other ways. But, we’re under a gag order. Document goes under a name, “Document 233.”
In fact, the lawyers say, “He shouldn’t even be allowed to say ‘Document 233’ in the future.” But, I can. That’s the document number. So, we had to give it back.
So, let me come back to Bob and Connie McGee and their children, Shane and Kelly. This picture was taken 24 hours before the most horrific thing that you could ever imagine happening to a family happen.
So, this picture is the last picture of them all taken together. It’s the end of July. It’s up in North Carolina. They live right here in Fort Lauderdale. They did. School teachers, Bob and Connie, taught in Pembroke Pines for years. Kelly is 11, their daughter on the right. Shane, 13. And, they were leaving on summer vacation. Bob had just bought a new motorhome. They were going on their way to the Great Lakes.
School teachers on summer vacation with their kids. July, a beautiful day like today. Taking off. They stopped in North Carolina. That’s where this picture was taken by a friend. And, that night, went onto Virginia Beach where they camped at a state park.
They woke up the next morning. Shane wanted to go out fishing. He had already met some kids at the state park in Virginia Beach. He was out fishing with them. The plan that day was to go meet Bob’s cousin, Jane, who lived in Virginia Beach. That’s why they were there. So, Jane came to pick them up at the park in her station wagon.
Took everybody to the mall. They went shopping. There was a little mall on the water in Virginia. And, they had a great time. All the kids were cutting up. They got Shane to come with them. And, after lunch, they went back to the parking garage, just like the parking garage across the street, got in their station wagon, and were heading back to Jane’s condo.
Summer vacation. Great family. Look at the joy in their faces.
So, as they were on their way back to the condo, they came to a toll booth on the Virginia Turnpike, and they stopped to wait to go through the toll booth to pay the toll. And, all of a sudden, they felt a little tap, a little bump from behind.
And, that’s all it was. Everybody, all the witnesses that saw this, the people in the car, everyone that was involved, said it was just a little bump, a little tap.
They felt like someone had thrown a softball and hit the back of the station wagon. And, then this happened:
0:09:07.3 (movie clip) There was a passerby who had a video camera.
Obviously, these days, there would probably be a hundred iPhone videos of this. And, this is just a short excerpt of the video that was taken there at the toll booth. And, what I want to do is, I want to read for you, just briefly if I can, because this is what I read to myself every day, every morning, leading up to the start of this trial.
And, every day at the start of the trial, I read this part of Connie McGee’s, the mom, her deposition testimony when she described in detail what went on in that station wagon. So, if you’ll just bear with me for a second, you’ll understand what this family went through.
“And, so, we were just sitting there, waiting to pay the toll, and we felt a little bump, just like a little bump. And, I remember looking back and seeing the whole back of the station wagon was in flames. And, Bob said, ‘Everybody out. Everybody get out.’ And, I saw Bob and Kelly go out the back door.”
I forgot to tell you, Bob and Kelly and Connie were in the back seat of the station wagon. And, their son, Shane, was in the middle of the front seat. There were two other people in Jane, the owner’s, station wagon, and another cousin that was with them. But, Shane was in the front seat in the middle with his seat belt on. So, Bob and Connie and Kelly were all in the back seat.
“So, I saw Bob and Kelly go out the back door and, then, I tried to open my door on my side, but my door wouldn’t open. And, I remember the flames being everywhere, just all around the outside of the car. And, it was very, very hot. And, I remember thinking, ‘I’m doing to die here.’”
And, she realized the button was down on the lock. And, she panicked. And, she unlocked the door and was able to get out. But, at that point, the flames were all over.
“And, I looked to see which way the flames would be better to go through. And, I mean, I couldn’t see through the flames. And, so, I just kind of like held my breath and ran through them, and they were over my head. They were over my head, and I could hear a roaring sound. And, so, I ran out, and I saw Kelly sitting over there against the barrier on the side of the road, and it seemed to me there were people there with her. And, then, Bob came running around, and I don’t know if it was he that said it, or I said it, ‘Where’s Shane? Where’s Shane?’
And, I couldn’t find Shane anywhere. And, so, I started to run back to the car. And, somebody grabbed me from behind, and I saw Bob, and I said, ‘Where’s Shane? Where’s Shane?’ And, then, all of a sudden, Shane came running out of the car, and he was like a torch. He was just burning. And, his hair had little flames coming up like birthday candles on his head. And, he was running with his arms out to me.
And, I started to run towards him, and I couldn’t because the crowd wouldn’t let me go. And, Shane’s clothes were on fire. And, his shoes, I had taken him a couple days before, he wanted new Keds. And, the shoes and the tops had come loose from the bottoms, and they were flapping as he was trying to run to me, because the rubber was melting on his shoes.
And, then, some people came, and I guess they were paramedics or something. I don’t know where they came from. I didn’t hear everything. It was like, everything was silent. And, I remember, I kept hearing myself screaming, ‘My baby is dead.’ And, they came up, and they put a blanket around him to smother the flames. And, they laid him down on the road.
And, it was very hot. It was very hot. And, they told him to lay back. And, he opened his mouth, and blood came out of his mouth. And, it was so hot, it was steaming. And, you could see steam coming off of his body. And, his eyes were red from the inside.
And, I started to faint. And, then, I wasn’t going to faint. I was going to stay so I could see what happened to my baby. And, so, they took him, and they put him in a helicopter, and I never saw him again.”
Shane lived. He had 3rd degree burns over 98% of his body. That’s full thickness burns, like a charred hot dog, over 98% of his body. And, he lived for a couple of hours. And, according to the testimony of the medical people that took care of him, he was alert, he was aware of what had happened.
They gave him morphine. They told him, the doctor testified, this was something that upset everyone at trial that the doctors told him, “You’re going to die. There’s nothing we can do to save you. We’re just trying to make you comfortable. But, you’re going to die.”
And, he did.
And, Connie, they airlifted her to another burn unit. She had 3rd degree burns over 52% of her body. She was in the Burn Unit for months. They did skin grafts where they peeled off the dead skin, dunked her in chlorine tanks, did skin grafts.
She has horrible scars all over her body. She and Bob and Kelly survived. Shane died. And, the young girl who was driving the station wagon, she also passed away. She lived a couple of days.
Horrific, horrific accident, from a bump from behind. So, how does something like that happen?
And, so, we did some investigation, and on the right there – your left, I guess – you can see, this is a picture of the back of the station wagon. And, what we saw was that that fuel tank, which is painted yellow, hangs down right below the bumper, right in the back of the vehicle, completely and totally unprotected.
Now, if you were to go on the showroom floor and buy this vehicle, of course, that would be spray painted black, and it would just blend in with the whole bottom of the vehicle, and you’d never notice it as you were walking around. And, you’d never think to ask about it.
But, so the jury can see, and so you all can see, we painted the tank a bright yellow. And, so, when you see it like that, you get the impression, right away you should get the impression, “Whoa. That doesn’t look very safe.”
So, we sent out written questions, notice interrogatories. We sent out written questions to these companies.
And, the question was simple, “Did you ever consider protecting this fuel tank? Did you ever consider putting a tub or a shield or something around it to protect it?” And, so, we went back and forth, back and forth. Five, six, hearings. They wouldn’t answer the question. Blah, blah, blah.
They would answer all these questions, but they would never say would they ever consider putting a shield around the fuel tank. They wouldn’t answer it.
And, finally, the judge said, “I’m going to strike your pleadings. I’m going to sanction you guys if you don’t answer the question.” These were long, two, three, page answers. But, they never answered, “Did they consider putting a shield around the fuel tank?”
Well, just as the judge was about to strike their pleadings, my brilliant, young associate, who’s now my law partner at my law firm, was a very young guy, but a very bright guy. And, he had taken off in an airplane and started flying around the country to other lawyers that had been involved in other cases, other fire cases against General Motors, and other places, to see if we could find this information on our own.
And, sure enough, we found it in Alabama, if I’m not mistaken. Alabama. We found the document on the right.
Oh, by the way, at the very end, when the judge said, “I’m going to sanction you if you don’t give a direct answer, ‘Did you ever consider putting a shield around a fuel tank?’” They lied. They said, “No, we never considered it.”
At that point, I already knew because it was like a day earlier he had flown back in with the drawings, and I was just waiting to see if they would tell the truth or not. And, of course, they didn’t. They said, “No, we never considered it.” But, John had just flown in from Alabama where he had found the design drawing.
This is the actual design drawing for that vehicle for a plastic tub. It’s an encapsulated steel tank. Goes right around the tub to protect it from impact. So, yeah, they thought about it. And, yeah, they did design drawings for it. So, they obviously considered it. But, they didn’t put it on the shield, on the fuel tank. Why not?
Turns out, we found out, and this was later on down the road, that General Motors had done a value analysis, just like Ford had.
You’ve all heard of the Ford Pinto case where Ford had done a similar thing. General Motors, another corporation, friendly General Motors, had done the same exact thing. One of their engineers in the Advanced Design Department did a calculation where he determined how much it would cost the company to pay the claims for these people that would burn alive in these accidents.
“How many of them are we going to have on average per year? How much is it going to cost us for each family that we got to pay to settle the lawsuit?” And, he came up with a number, and they said, “Well, how much is it going to cost us to protect these cars so that these fires don’t happen?” The number happened to be $2.00.
They said, “This analysis indicates that to General Motors, it would be worth approximately $2.20 per new model auto to prevent a fuel-fed fire in all accidents.” So, for $2.20, and this is an actual memo. As a lawyer when you’re thinking, “Really?! $2.20?” But, if you multiply it across the product line, that adds up to a lot of money.
And the question is, “Well, how much are you going to have to pay in lawsuits versus how much it’s going to cost you to make these cars safe?”
So, we have this memo. So, you would think, “Well, that’s it. They’re guilty as charged? They’re obviously guilty. They have this memo. They got the drawings they lied about.” Okay. But, that’s not the end of the story. But, you would think, “That’s the end of the story.” Right? You’ve got the memo. You got them cold. They did the analysis. But, no, what we found out was that this memo had come out about 15 years ago...
Actually, it was another hurried production in California in a case, and they accidentally, General Motors’ lawyers, gave it to a lawyer in California, 15 years before our case.
And, so, once it came out, all these other lawyers across the country, Texas, Pennsylvania, New Hampshire, South Carolina, all these other lawyers where people were burning alive in these cars, wanted to take Ivey’s deposition because of the memo. And, so, Ivey, he had to show up. Obviously, he had some information that was relevant to the cases.
But, he testified in every one of those cases, “I don’t know why I wrote it. I don’t remember. I just wrote it on my own. I know that. No one in management ever asked me to do this, and nobody ever saw it.” That’s what he testified to. For 15 years. And, so, those lawyers, like the lawyer in Virginia, couldn’t get it into evidence.
The judge would say, “What’s the relevance? Ivey did it on his own. General Motors didn’t even know about it. How can you hold it against the company?” And, so, for 15 years, in these cases where these children and families’ members burned alive in these cars, they were turned away by juries.
General Motors was not responsible. Not responsible. Because, they never got to see this analysis. It was kept out of evidence.
But, we found that there might be another document out there that was related to that memo. And, so, we came back, and we asked them to produce it. And, again, it was hearing after hearing. Wouldn’t produce. Wouldn’t produce.
And, again, the judge, just like the fuel tank tub, the judge said, “If you don’t answer it, produce the document, one way or the other, either you got it, or you don’t. I’m striking your pleadings. I’m going to sanction you.” And, so, again, under hurried production. John and I were in Detroit. Under hurried circumstances, they had the documents delivered, and that was the result.
And, then, that document, which I’m not allowed to talk about, and neither is John to this day, we saw, we read, and we saw the truth. We saw the truth about his 15 years of testimony across the United States.
Well, I had to give that document back, and I’m not allowed to talk about what happened. But, what I did do, once I saw that document which I’m not allowed to talk about, was that I realized there were even more documents that General Motors was hiding and lying about.
And, so, we subpoenaed them to bring those documents to trial, because this is like a month before trial when the judge made us give back the Document 233 that I’m not allowed to talk about. So, we subpoenaed it to bring other documents to trial. And, then, fortunately, we got a new judge for the trial.
This was a six-month trial, by the way. This trial lasted for six months right here in Hollywood, Florida. A six-month trial. And, in the middle of the trial, at this point, Judge Franza, who was the judge, knew what was at stake. He knew what the case was about. He was a patient man.
He was actually a retired judge, and he was completely focused on what was going on in this case. And, he made them produce additional documents, which I cannot talk to you about. These are the ones that came out of the document I’m not allowed to talk about.
So, he ordered them to produce the documents. And, that night, we got a call from General Motors’ lawyer, because our demand and mediation before the trial started was $50 million to settle the case. That’s what we were to settle for. They never offered a nickel through the whole trial.
And, the night before they were supposed to produce the documents, they called and said, “$50 million?” And, our answer was, “That demand is off the table. We want to see the documents.”
That’s how great my clients were. That’s how great the McGee family is, because they were not in it for the money. Remember, they’re not the kind of people that believe in lawsuits, but they wanted to see what happened to their son. Why did this happen? And, why are they hiding all these documents?
And, so, we got them. And, what did we learn? This is what we learned. These are excerpts from the document. It said that this was done. This is an attorney who interviewed Ivey about it. And, this document said that Ivey characterized the nature of his analysis submitted to Mutty who was his supervisor, who was in charge of Oldsmobile, who was in charge of the station wagon that was the one that burned in this case.
But, his analysis was submitted to them and others to assist them in trying to figure out how much they could spend on fuel systems. He agreed that they did not like the sound of the study, and he admitted that they were very cautious with distribution of the copies due to the nature of the subject matter.
The lawyer concluded at the end of this memo, he said,
“Obviously, Ivey is not an individual whom we would ever, in any conceivable situation, want to be identified to the plaintiffs in a post-collision fuel-fed fire case. And, the documents he generated are undoubtedly some of the potentially most horrible and most damaging were they ever to be produced.” So, I mean, he was right. And, so, that’s why they fought tooth and nail to keep all this stuff secret.
This is what corporations do. That’s what I’m trying to tell you. That’s the whole point of this. And, they are getting Constitutional rights, and yours are being taken away. That’s the real point of this talk.
But, what I’m trying to show you is what they do. Because, you would never believe that people would actually do this, but they do. They do.
I’ve seen it in automotive cases.
I’ve seen it in pharmaceutical cases.
I’ve seen it in tobacco cases.
Company after company putting your lives, your children’s lives, on the balance sheet. They do it. It’s not made up. It’s not pretend. So, let me turn this over to John for just a second. He’s going to talk about what’s happening with your right to a jury trial.
Let me see if I can give you the context. This can’t happen anymore. This is a post-collision fuel-fed fire. The take away from this, to me, is people don’t... People don’t burn alive anymore in post-collision fuel-fed fires.
This case and others made them change the design of those vehicles. And, I’m going to show you how we know that in a second.
SUV’s don’t roll over just because you steer them in a certain way on the highway anymore.
There was litigation for two decades done. Some people call it the “rollover wars.” The short version of that is, SUV’s were insanely lucrative vehicles. And, there was a rush to market once the first ones started selling so well. Companies would take a pickup truck like the Ford Ranger, slap a roof on it, put some seats in the back, and sell them at crazy markups for cheap vehicles.
And, they were making so much money, it didn’t matter that they were paying a lot in lawsuits.
It doesn’t happen anymore.
So, how did the law change how vehicles were designed?
Car designs have changed because of lawsuits.
I want to tell you about a case, a document. The short version of how we got this document. Every one of these documents was produced in a crazy way. Why don’t they destroy the documents? The only internal document of General Motors we have is the Ivey report which was produced by mistake initially. That came out in our trial. So, the documents we have are only the documents the lawyers made. But, you saw the truth was from what the lawyers made. That’s where documents were all destroyed.
In this Nissan rollover case that Bob and I did, we, at a deposition, a former Nissan employee told us that there is a document inside Nissan that analyzed how lawsuits changed the design of vehicles.
We wanted that, obviously. We requested it. They said it didn’t exist.
That is almost always the end of the story. You go into court. You say, “Judge...” The judge says, “What do you want me to do?”
What can he do? They said it doesn’t exist.
Well, in this case, that happened.
It was Judge Jeffrey Streitfeld. He was relatively tough. A lot of lawyers were afraid of him. They sent a young lawyer there which was a mistake. They thought it was just going to be, he was going to say, “It doesn’t exist.”
They didn’t know I was going to say, “I know it exists. A Nissan employee told me after a deposition.”
That young lawyer didn’t know how to respond to it. The judge pressed him. He was afraid of the judge. And, he said, “That document isn’t authentic.” That kind of admits that, it does admit it. There is a document that exists. And, as soon as Judge Streitfeld heard it, he started cross examining that lawyer who got more and more flustered until he took out a folder and started looking at something.
The judge said, “Is that the document?” He said, “Yes.” The judge took it from him. We were in chambers at a table. He took it from him and gave it to me and said, “I’m ordering it produced.”
You don’t understand how crazy that is. The normal course of it would have been, they deny it, and that’s the end.
Even if we find out that it exists and the judge orders it produced, then, there’s an appellate court that many times steps in and says, “No, it’s a trade secret,” or some privilege or something else. And, then, even if it’s ordered produced, they offer $50 million, and that document never sees the light of day.
But, he just handed it to me, and that young lawyer, he didn’t go back to his office and tell anyone. The reason we know that is, because when we got to trial, we put it in evidence, the Nissan trial lawyers were shocked that we had it.
That’s too long a story just to tell you that Nissan did an analysis of all the other car companies and found out that, just like them, there’s three reasons why car designs are changed in regard to safety – a large number of lawsuits about a given part, cost of defense now increases...
It’s all about the math. What costs more? Fixing a defect or paying the victims? The cost of defense, if there’s so many lawsuits, and that’s what happened in the rollover, can be high enough that they have to change the design.
Two, it’s found defective by a jury, and the verdict was publicized. Without that, there’s no financial bottom line effect because the publicity can affect sales.
Or, three, there’s a high settlement cost for big verdicts. So, that’s why they change designs.
There’s more on that document that’s very interesting. But, anyway, now you know the math, how they decide whether to change designs. You know why people don’t burn alive from post-collision fuel-fed fires anymore, why sport utility vehicles don’t roll over just from the steering input on a flat-level, dry road.
That can’t happen anymore because of Supreme Court decisions starting in 2003.
So, I want you to imagine General Motors making a billion dollars in profit every month, a billion dollars in profit, not revenue, every month.
And, I want you to think about the testimony in the McGee case. The best fix for that problem cost $30. It cost them $200,000 on average per lawsuit. That adds up to $2.20 per car. That’s all it’s worth to them. Hopefully, our lawsuit changed that math. It did. Ours and others, and that’s why they fixed the problem. Thirty-three million cars at issue. $30.
It’s almost a billion dollars that they saved by not fixing that problem.
So, imagine a company that makes a billion dollars in profit a month, that saves a billion dollars by not fixing a defect even though hundreds of people are going to die. If each one of those people have a case, $2 million, $3 million, per death, compensatory damages like we talked about.
The Supreme Court is now saying, “The punitive damages are limited. It doesn’t matter how much money they make.” That’s why this is rich corporations who have this license.
And, it doesn’t matter how much money they saved by the fraud or by not fixing the product, you have to base the punishment, the fine, the only punishment available, on how much the compensatory damages are. And, normally, it should be one to one.
So, if it’s a $2 million verdict for the family, another $2 million. That’s it. A hundred people, $200 million.
But, they saved a billion. Now, you can’t change the math. That’s the change in the law on punitive damages, and that’s why lawsuits aren’t going to change and make cars safer anymore.
The second area that we were going to talk about is mandatory arbitration.
Starting in 2011, there have been massive changes in the law in arbitration. But, this is how it used to work with financial fraud. Five years ago, the lawsuit concluded against banks, because what banks would do...
Imagine someone who lives paycheck to paycheck. And, the biggest bill they have is rent - $1,000. And, they wait until the last minute to give that rent check because their direct deposit on their paycheck, or their paycheck they’re depositing it, and they’re hoping the money comes in before that rent check goes out.
But, it doesn’t. So, they bounce a check, one check.
All the major banks would take that check and move it up, hold all the last 10 checks, take that big check, and put it 10 checks earlier, so now they could charge $40 times 10. Imagine that. It’s just pure theft. And, all the major banks were doing it.
The courts stopped them. “No, you can’t do that,” in class action lawsuits against the banks. To the tune of billions of dollars they were stealing over many years. The courts stopped them. That can’t happen today.
In response to that, almost every major bank has put into their account agreements an arbitration clause.
You all have them, but now you can’t sue your bank. You have to go to an arbitrator.
Well, what’s so wrong with that? First of all, let me say, the law assumes this fiction, that in order to give this corporate rights, the big corporations to force you to arbitration, to give up the right that’s actually written in the United States Constitution which says, “You, as a person, we, the people in the Constitution, you have the right to go to a jury of your peers to have civil disputes decided.”
But, no, corporations now, according to these cases, have a greater right to force you to arbitration. The law assumes a fiction that you have a choice. You can’t get a cell phone if you wouldn’t sign an arbitration agreement. I tried to buy a car two years ago because car dealers, used car dealers, they love to take advantage of people. They loved not to get sued. I couldn’t find a single dealer that would sell me a car. I said, “I’m here to buy. Just cross that out.” They wouldn’t do it. Not a single one.
So, you can’t get services in this country today if you’re not willing to sign an arbitration agreement. Well, what’s so bad about that? Consumers win 20% of the time on average. They get 12 cents on the dollar in arbitration. Corporations receive 98 cents on every dollar claimed and almost always win. Verizon, Time Warner, Sprint, with 200 million customers, over five years, so over a billion customer years, faced 75, only 75 arbitrations. Why?
You have to understand, they’re writing arbitration agreements.
They pick the arbitrators. So, you’re going to lose. Even worse, you can’t bring a class action. So, who’s going to spend $50,000, $100,000, to get $300 back in an arbitration context. Because, you still need to hire a lawyer.
You all are just as bad as these people (unintelligible)
Here’s the problem. I want to talk about that exactly. Because, wait, there’s a lot of truth in what he just said.
What did he just say?
He said I’m a scumbag.
And, everybody in my profession is greedy, and there’s ambulance chasers.
Look, I want to talk specifically about that because there’s truth in it.
But, what you’re saying has nothing to do with intentional misconduct by corporations that kill people.
It’s not an excuse to say, “There’s frivolous lawsuits, so let’s put a cap on righteous lawsuits where someone did something really wrong intentionally that hurt someone or killed someone.”
It’s not fair to say, “There’s ambulance chasers on billboards so, therefore, corporations should not be responsible for their misconduct.” Those are real problems. I’m not disagreeing. I agree.
I don’t like it when I go in the court room and the jury’s thinking about those people on the billboards. And, there is a problem with people bringing lawsuits when they’re not hurt that are fraudulent. And frivolous lawsuits and ridiculous lawsuits.
But, what I want to talk to you about the end is, the confusion of that issue with what we’re talking about today is why corporations get away with it, and it’s not a mistake that people confuse those issues.
The worst thing about this is, the United States Constitution specifically says in black and white in easy to read language that anyone can understand that a human being, a citizen of this country, has the right to trial by jury in a civil dispute. And, yet, it’s gone, with the fiction, because these corporate rights, somewhere in the Constitution that I can’t find, it says that you can only award punitive damages with a single digit multiplier of the compensatory.
That takes precedence. And, it’s not in there. You can’t find it, if it’s been read in there.
The right of corporations to have arbitration agreements, it’s not in there, but, somehow, it’s been read in there, and not only read in there but superior to your right as a person to have a jury trial.
So, campaign finance just talks... Listen, if corporations get to pour money in and elect the judges who make decisions on their cases, which is specifically happening, the Mississippi example, obviously, that affects what happens in those cases.
So, this is the end, and I’m going to specifically talk about what you said. Let me start with, to me, the future looks bleak. I don’t see how any of this is going to be reversed.
Initially, these new corporate rights were granted by deeply divided courts – five to four decisions. But, now, just in 2017, recently, it was seven to one. So, it’s gone from a deeply divided court to almost unanimous.
So, I’m very pessimistic that courts can solve this.
However, I would point out Thurgood Marshall from the 1930’s, obviously, faced a bleak situation, and he used to say he believed in the civil justice system. And, it took decades, but there was a change. “There’s only one good way to handle that bunch,” he’d say, “Take them to court.” And, so, that’s what me and Bob are going to continue to do. But, I don’t think this can be changed in the court in the end.
Just like the Civil Rights Movement, it’s got to be changed, because people think differently about this.
There’s a well-funded propaganda effort, and I’m using that word specifically, well-funded, intentional propaganda effort by big companies, because there’s massive amounts of money at stake, to make people confused, fraudulent cases, which is a real problem.
But, what does it have to do with someone who’s harmed by the intentional wrongdoing of a company? To confuse ridiculous lawsuits.
To use them to discredit punitive damages, which are only for intentional or egregious wrongdoing, not fraudulent or ridiculous lawsuits.
And, the ambulance chaser advertising, which I hate, which is horrible, when they show the billboards with the people like, “I got money” with a smile, I’ll tell you, not one of my clients was ever happy at the end of the lawsuit no matter how much money they got. I can’t stand those people smiling. But, the civil justice system is the only thing standing between us and the corporations doing whatever they want.
So, let me end with a quick story. This will be under a minute.
There is a lawyer, she was a law clerk in our law firm, and now she’s a lawyer, not at our law firm. But, she knows more than most people about what we’re talking about. And, she was driving on the highway, on 595 West, and an alligator, believe it or not, ran out. She hit the alligator, and the car flipped. And, she was telling me that story. It flipped like six times. It’s a very serious crash. Highway speeds.
And, at the end of that story, she said, “That car saved my life.”
I was thinking, because I served in those rollover wars, I saw why the design... And, just real quick about that.
Part of the rollover litigation was whether the roofs used to crush. And, again, the engineering, there was no reason for that. They just had to make them a little stronger. When the roofs crush, someone gets paralyzed or dies. That roof didn’t crush in her car, and I knew, I saw how the designs changed. I saw the time it took. I saw why it changed. And, so, what I wanted to say to her was, “Yeah, the car saved your life, but lawyers, judges, juries, and righteous lawsuits saved your life.”
The civil justice system saved her life, or at least stopped her from being paralyzed. And, until people understand that, not just lawyers, but people everywhere understand that, this is never going to change. It’s not going to be changed in the court room.
What can We do?
That’s a really good question. I think, my opinion is, it’s going to take a Constitutional Amendment, another Constitutional Amendment to the United States Constitution, to limit money, the corporate money that can go into political races because I think, as long as they have unfettered access to our politicians and, therefore, the judges, that you’re going to have a hard time changing the law and bringing it back to a fair balance between everyday people and these multi-national corporations.
To amend the United States Constitution is a huge undertaking. And, you’ve probably seen those entities out there trying to get it going right now.
But, I think that’s a very important place to start, and we need a leader in this country that really wants to give the rights back to the people. And, so far, we haven’t seen that in any of our recent Presidents – any of them, Democrat or Republican.
And, I would add, too, you could start with, in your own mind, not confusing the real problems we have with the civil justice system with other things that let big companies get away with intentionally hurting people.
Those are two different issues.
And, when you hear people confuse them, because you’ll hear it all the time, there’s a discussion about frivolous lawsuits that turns into a discussion about caps, somehow, on righteous lawsuits. Keep that in mind. Understand the distinction. And, talk about it with people.