Fw: Public Citizen Press Release (mentions Class Action lawsuits)

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----- Original Message -----

From: " Myrl Jeffcoat " <myrlj@...>

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Sent: Tuesday, September 10, 2002 6:34 PM

Subject: Public Citizen Press Release (mentions Class Action lawsuits)

> Thank you Pam Dowd for sending us the following. . .

>

> Myrl

>

> ----

>

> Sept. 10, 2002

> Public Citizen Blasts Fraudulent Chamber of Commerce Ads Attacking the

> Legal System

>

> Ad Buy Worth Up to $15 Million Appears Designed to Help Chamber-Backed

> Candidates in Elections and Divert Voters' Attention from Corporate Fraud

>

> WASHINGTON, D.C. - TV and newspaper ads being run by the U.S. Chamber of

> Commerce that attack the legal system are fraudulent, and appear designed

> to provide fodder for Chamber-supported candidates in competitive races

> and divert the attention of voters away from an unprecedented wave of

> corporate fraud, Public Citizen said today. The ad buy could cost as much

> as $15 million this fall, The Wall Street Journal has reported.

>

> Since late August, the Chamber has been running a television ad in

> Alabama, Michigan, New Mexico, South Carolina and Texas that claims

> Americans pay a " lawsuit abuse tax " equal to 2 percent of the price of

> any goods they buy. In a print ad that began running Sept. 6, the

> Chamber asserts that class action lawyers have a " simple formula for

> splitting settlements " that leaves consumers with next to nothing in

> compensation.

>

> " The claims made in the Chamber's ads are about as accurate as WorldCom's

> accounting statement, " said Joan Claybrook, president of Public Citizen.

> " They are as blatant as the lies told by so many corporations now under

> investigation for covering up illegal transactions. The real 'abuse tax'

> is the huge loss foisted on the public by Corporate America through an

> unprecedented wave of corporate fraud and abuse. "

>

> To illustrate what it has labeled the " corporate fraud and abuse tax, "

> Public Citizen also released today an analysis of the stock loss

> experienced by 20 major corporations since government investigations of

> them became public or the companies admitted financial mismanagement

> through restatements or announcements of internal probes. Shareholder

> losses for those companies amounted to $236 billion, most of which

> occurred in the past year.

>

> Public Citizen's critique of the Chamber's two ads follows. The ads,

> along with Public Citizen's critiques of them and the analysis of

> corporate fraud and abuse taxes, are available at

> http://www.citizen.org/congress/civjus/chamber/articles.cfm?ID=8244.

>

> " Lawsuit Abuse Tax " Television Ad

> The ad claims that a " Lawsuit Abuse Tax " caused by " phony lawsuits " costs

> the average family of four $1,900 a year in higher prices for consumer

> goods. The ad claims " phony lawsuits " add $500 to the cost of a car,

> $3.12 to a week's worth of groceries and 70 cents to a pair of blue

> jeans. These misleading calculations are based on an assumption that 2

> percent of the price of any good is due to " phony lawsuits. " According

> to the Chamber's Web site, the 2 percent figure is based on a recent

> White House Council of Economic Advisors study that " calculates " the

> intermediate cost of excessive litigation to be $136 billion a year. The

> Chamber's ad, which essentially suggests that all lawsuits are phony, is

> fraudulent because it is based on two absurd " assumptions " :

>

> § The Council labels $40 billion of the $136 billion of injury costs as

> non-economic damages and says they are excessive because they are

> " random. " In fact, these damages - compensation for pain and suffering,

> disfigurement, loss of fertility and more - are very real. By deeming

> them " excessive, " the Council doesn't count more than half the

> compensation awarded by the tort system. Studies by Duke University, Ohio

> State University and Mc School of Law researchers have found that

> these damage awards are not random but are correlated with the severity

> of injuries.

>

> § The Council's second assumption is that the transaction costs of the

> civil justice system - attorney fees and administrative costs - should be

> at the same level as those of the workers' compensation system. As a

> no-fault system, workers' compensation determines payments by a schedule,

> so a certain amount of money, for example, will be awarded for a

> particular back injury. The workers' compensation system is a payment

> schedule, not an assessment of responsibility that addresses complex

> questions about product safety or corporate fraud and malfeasance, and

> sets minimum standards for consumer protection.

>

> Class Action Print Ad

> The ad suggests that in class action settlements, plaintiffs' lawyers

> make out like bandits while their clients get a coupon worth next to

> nothing. Public Citizen has challenged several dozen class action

> settlements, more than any other organization to ensure that consumers

> get a fair shake when defense and plaintiffs attorneys settle class

> actions. Unfortunately, the Chamber's ad is another example of false

> advertising and is part of a campaign designed to make it harder for

> consumers to prevail in class actions:

>

> § The Chamber ad suggests that it is wrong for attorneys' fees to exceed

> the monetary benefit that a class action award provides to any individual

> consumer. In fact, judges are required to fix reasonable attorneys' fees

> and do so by basing the fee on the entire sum of benefits provided to all

> class members, not the small amount that each class member receives as

> compensation for losses.

>

> § The Chamber ad suggests that it is common for consumers to have to " pay

> money out of their own pockets " to cover class counsel's fees. In fact,

> there is only one such case on record; in almost every class action,

> consumers receive refunds for overcharges, unauthorized fees and other

> scams.

>

> § The Chamber ad trumpets the " Bill of Rights " provisions of H.R. 2341,

> legislation in the U.S. House of Representatives requiring " judicial

> scrutiny of coupon settlements. " The Chamber does not mention that a

> stronger version of the same provision is already due to take effect in

> 2003. Further, this legislation, which is opposed by leading national

> consumer groups, would give businesses a major advantage over consumers

> in class actions cases; the result will be that more corporate fraud and

> other wrongdoing will go unpunished.

>

> " The Chamber appears to have two goals in mind with this ad campaign, "

> said Clemente, director of Public Citizen's Congress Watch. " It is

> providing a huge media buy in key state elections that will create a

> climate favorable to pro-business candidates who want to weaken the tort

> system, and it attempts to divert public attention away from corporate

> fraud and abuse that can be prevented with a strong tort system. "

>

> ###

>

> Public Citizen is a nonprofit consumer advocacy organization based in

> Washington, D.C. For more information, please visit www.citizen.org.

> .

>

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