Legal Brief: Toxic Torts: Turning Fears to Gold; We Used to Know…; Predatory Attorneys Drive Up Malpractice Insurance Rates

Toxic Torts: Turning Fears to Gold
Public officials in the trendy seaside city of Santa Monica, Calif. have just been taught a bitter lesson: Put your faith in the trial lawyers, and the trial lawyers will take you to the cleaners.

Santa Monica is stuck with a $66 million legal bill courtesy of three law firms it hired in 2000 to go after suppliers, refiners and retailers it says are responsible for contaminating the city’s groundwater with the gasoline additive MTBE. Three oil companies — Shell, ChevronTexaco and ExxonMobil — settled the case and agreed to pay for the removal of MTBE from contaminated city wells. Even though the case never went to trial and entailed relatively little litigation, Santa Monica and its taxpayers have been presented with a whopping $66 million tab.

Santa Monica is now suing the law firms, charging them with having “unreasonably interpreted the legal services agreement” the city made with them. The city says the agreement was designed “to avoid unreasonable attorneys’ fees and windfalls.”

What’s more, Santa Monica officials point out, “a significant portion of the work was actually performed by the attorneys employed in the City Attorney’s Office, not by the defendants.” Santa Monica has asked a court to determine “reasonable compensation” for the firms.

Only now does it seem to have dawned on Santa Monica officials that, by hiring “toxic-tort” attorneys to handle the case, the city had effectively made a pact with the devil. Toxic-tort attorneys are a particular breed of trial lawyers who specialize in prowling the country in search of environmental cases that can be turned into big bucks — especially for themselves.

And when they’re not bilking taxpayers, they’re scaring up new clients by fomenting fear through what are often phony health scares. A favorite tactic is to convince people living near a chemical facility that their health is threatened by emissions from the plant. If they are successful, toxic-tort attorneys will sue the plant’s owner on behalf of local residents. The deeper the owner’s pockets, the bigger the potential pay-off to the toxic-tort lawyers and, if anything’s left over, to the people they represent.

Those responsible for spills, leaks or other environmental damage should, of course, be held accountable for their actions. But toxic torts are mostly about cashing in on fears the trial lawyers themselves, often in league with environmental activists, help put into circulation.

In Plant City, Fla., people living near a recently closed phosphate processing plant owned by Coronet Industries have been complaining about health problems associated with the presence of hazardous materials in their drinking wells. Health officials have confirmed the presence of arsenic, cadmium, lead and other substances in the wells, but say the levels aren’t high enough to cause serious or widespread health problems. Also, officials have not been able to identify the source, or sources, of the materials.

Some of the substances found in the wells occur naturally in the phosphate-rich soil of Central Florida; two abandoned public landfills in the area are another potential source. State health officials say the plant posses no threat to local residents, and cancer rates near the site are below the Florida average. But this hasn’t kept the high-powered California law firm of Masry & Vititoe from filing suit against Coronet on behalf of 700 local residents. The suit seeks compensation for property damage, personal injury and for continuous medical monitoring.

Masry & Vititoe isn’t just any law firm. It employs Erin Brockovich-Ellis, the self-described environmental crusader portrayed by Julia Roberts in the hit movie, “Erin Brockovich.” Brockovich-Ellis’ celebrity status is already attracting attention. This spring, the Sierra Club ran ads on local TV stations erroneously claiming the plant has “been linked to serious health problems.”

And why is a California toxic-tort law firm so interested in a shuttered plant in Central Florida? Coronet, it turns out, is owned by two Japanese firms, one of which is the giant conglomerate, Mitsui & Co. Mitsui has just the kind of deep pockets that make it an irresistible target for toxic-tort attorneys.

With environmental activists prepared to whip up local hysteria, regardless of the facts, the stage is being set to turn the community’s fears into a pot of gold for the practitioners of toxic torts.

-by Bonner Cohen
Bonner Cohen is a senior fellow at The National Center for Public Policy Research

Tort Du Jour: We Used to Know…
“In Texas, a woman dentist who found out that her dentist husband was cheating on her ran him over in a Hilton parking lot. We used to see clearly that it would be wrong in such a case to sue Hilton hotels for negligent training of employees ­ thus for making it too easy for wives to run over their cheating husbands. But that’s what happened.

Speaking of parking lots, the proprietor of one in Framingham, Massachusetts, was sued after a thief broke into the lot, stole a car, drove off at high speed and crashed. Indeed, the family of the thief sued the lot owner for negligently making it too easy to steal a car from the lot. We used to know what was wrong with that, too.”

Source: Walter Olson, “The Threat from Lawyers is No Joke,” Imprimis, Hillsdale College, March 2004

Testimony: Predatory Attorneys Drive Up Malpractice Insurance Rates

“A 2002 Medical Economics survey of 1,800 physicians found that 58% had been the target of a lawsuit. In some areas of the country, such as the border counties of south Texas, predatory attorneys have swarmed in and recruited impoverished im-migrants as claimants. Doctors and hospitals in Hidalgo County got hit with 750 claims between 2000 and 2001, compared with 131 in 1999. The majority of all malpractice suits are weak or bogus, but the huge awards and the millions of dollars required to defend even spurious actions have driven up malpractice insurance rates beyond what many doctors can afford. Between 2000 and 2002, rates typically rose between 30% and 75%, with even larger increases in some crisis states.”

Source: Trial Lawyers, Inc: Medical Malpractice, Center for Legal Policy at the Manhattan Institute, 2003

 Original articles in this edition of Legal Briefs may be reprinted provided source is credited.

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