February 20, 1998|By Lawrence W. Schonbrun
IF YOU dreamed that you could be a winner in a class-action lawsuit, consider the fate of the airline flight attendants who sued the tobacco industry, claiming that exposure to cigarette smoke during flights caused lung cancer and other diseases.
The lawsuit was originally filed as a class action to save the flight attendants and the judicial system from a multiplicity of individual lawsuits. A judge recently approved a settlement in the landmark case, however, that requires each class member to file an individual lawsuit to get any financial compensation.
The case was allowed to proceed as a class action because the appellate court determined that the defendant cigarette companies had identical defenses to the plaintiffs' claims, which could be efficiently and economically resolved in one lawsuit.
Yet not one penny of the $349 million settlement (which works out to be between $5,000 and $50,000 per class member, depending on the size of the class) will go to flight attendants. Rather, the money will go to establish a foundation to study the effects of secondhand smoke. Ironically, this was the issue that the plaintiffs' lawyers supposedly resolved before filing the lawsuit and seeking to go to trial in the first place.
"I started with a goal and a mission. This hasn't been about money," said the lead plaintiff, Norma Broin, a 42-year-old American Airlines flight attendant from Stafford, Va., who was diagnosed with lung cancer in 1989. The same can't be said for her attorneys, who have negotiated a $49 million fee for themselves.
The fate of the flight attendants is hardly unique. Indeed, token relief for class members and riches for their lawyers is a trend in class actions, not an aberration.
In recent years, much energy has been expended in national and state legislatures to control frivolous litigation and arbitrary jury awards because, as a society, we are beginning to understand the price we pay for too many lawsuits. But as the flight attendants' story suggests, another victim in America's litigation-happy society is the class-action plaintiffs.
Money machines
In many cases, particularly in very large class-action lawsuits, plaintiffs serve as little more than a vehicle for lawyers to generate huge contingency fees. Plaintiffs' law firms are going to extraordinary lengths to cash in on the class "action."
A May report by the Rand Institute for Civil Justice says some plaintiffs' attorneys "routinely scan electronic databases in the press to find reports of product recalls, safety warnings, regulatory actions and other consumer complaints that can provide the basis for class actions."
The goal of these lawsuits is to sue on behalf of as many individuals as possible so that the threat of a plaintiffs' judgment will be so astronomical as to force corporate defendants to settle. Once settled, the reward all too often is millions and even tens of millions of dollars for lawyers, but peanuts for their clients.
In a class-action lawsuit recently settled against manufacturers of computer monitors for misrepresenting the size of monitor screen, each class member received a $13 rebate toward the purchase of $250 in new computer equipment, or the right to a $6 cash rebate in the year 2000. The attorneys negotiated a $5.8 million legal fee for themselves.
In the celebrated airline antitrust price-fixing lawsuit, class members got $25 coupons (redeemable with difficulty) for future flights, while lawyers took home a $14 million fee.
In a case involving the Bank of Boston, a class member "won" a settlement of $2.19, only to find he'd been assessed court costs of more than $90.
The next time you dream of getting in America's jackpot justice system, envision yourself as a lawyer, not a victim the lawyer is supposedly representing.
Lawrence W. Schonbrun, a Berkeley, Calif., lawyer, writes extensively on class-action lawsuit abuse.
Pub Date: 2/20/98
