Looking for a virus jackpot
Not everyone is suffering job loss, income declines and financial devastation from the coronavirus pandemic. Some people are looking to get rich off the tragedy. Trial lawyers see COVID19 casualties and images of asbestos and tobacco lawsuits dancing in their heads. They are drooling over the prospects of a $100 billion COVID-19 jackpot. The Democrats in Congress who the trial bar has spent years buying and paying can't wait to help in the grand heist.
They aren't wasting any time. The Wall Street Journal reports, “Employers across the country are being sued by the families of workers who contend their loved ones contracted lethal cases of Covid-19 on the job, a new legal front that shows the risks of reopening workplaces.” Who's in the bull's-eye? So far, the deep pockets include Walmart Inc., Safeway Inc., Tyson Foods Inc., nursing homes and hospitals. They are seeking millions for gross negligence or wrongful death, and the cases are mounting. So far, the number of lawsuits is approaching 5,000. The Journal reports, “Employees' loved ones contend the companies failed to protect workers from the deadly virus and should compensate their family.”
In past class-action suits, such as asbestos, trial lawyers have won judgments of more than $40 million per case with about 40% of the awards going to the legal counsel.
No one disputes that when a worker or customer is harmed because of negligent behavior by the business, the victims deserve compensation. That's necessary and proper to contain reckless behavior by businesses. But now employers are getting sued for random illnesses by workers or customers. The problem is that workers bear a big cost of this roulette-wheel justice. Many smallbusiness owners are now saying they are reluctant to bring on new workers when any illness can result in a million-dollar lawsuit.
If we want to get jobs back in a hurry as we enter the economic recovery stage, these nuisance lawsuits need to go away.
A new study that I did with Donald Kochan, a law professor at the Antonin Scalia Law School at George Mason University, calculates that trial lawyers could file 100,000 lawsuits in the next two years, and this would wipe out up to 1 million jobs. Wages could fall by $50 billion.
But there are other costs of sham lawsuits. The big corporations like Walmart have insurance funds for these cases and will settle most of these lawsuits rather than going to court. Thousands of nursing homes, hospitals, restaurants, bars and movie theaters could go bankrupt as a result of these suits. Where will seniors go for the assisted care they need? How is closing down rural hospitals in the public interest?
In the phase-four “stimulus” negotiations, Republican Senate Majority Leader Mitch McConnell has included a provision that moves the legal standard for such suits to negligence. Sick employees or customers will have to show that the business was directly responsible for the illness or death. This makes sense and is clearly in the public interest. But House Speaker Nancy Pelosi will have none of it because it may cause the steady flow of trial bar contributions to slow down. Bloomberg reports that in the 2018 midterm elections, “Nearly 80 percent of a record $160 million in estimated lawyer and law firm-connected donations to campaigns and parties ahead of congressional midterms went to Democrats.”
It was evidently a good investment, even if their haul in the next 12 months is only a fraction of the $100 billion that is projected. The trial lawyers are the bottom feeders in the swamp that President Trump has promised to drain.
The trial bar portrays the McConnell bill as a gift to corporate America. In reality, the victims of baseless lawsuits are workers, consumers and the elderly.
No one disputes that when a worker or customer is harmed because of negligent behavior by the business, the victims deserve compensation. That's necessary and proper to contain reckless behavior by businesses.