Courtroom trends against businesses discussed at Summit

John O'Brien Oct. 24, 2007, 6:58am

Chris Manning

Thomas Gottschalk

WASHINGTON, D.C. -- Leading off a Legal Reform Summit sponsored by the U.S. Chamber of Commerce's Institute for Legal Reform, attorney Chris Manning offered a few images and asked a simple question -- which one of them didn't belong.

Pictures were shown of Kentucky Fried Chicken, chili from Wendy's, a pack of Starburst, coffee from McDonald's and a pair of pants.

The answer? None of them. They were all the subject of what Manning feels are frivolous lawsuits.

"There is an incentive to sue on the part of consumers," Manning said. "Small businesses are very vulnerable to these types of lawsuits."

At the eighth-annual Summit going on this week, Manning, a partner at Manning and Sossamon, said remedies are needed to put both sides of a consumer protection lawsuit on equal ground.

Currently, the no-risk high-reward possibilities favor the plaintiff, Manning said. And he's seen it firsthand.

He defended a South Korean couple who owned a dry cleaners business in D.C. against Roy Pearson's claims that they misplaced his pants. He sought $54 million.

The Chungs were successful in the courtroom but have had to close their business, "due, in large part," to defense costs, Manning said.

Consumers claim KFC misled consumers about the amount of trans fat in its chicken. Another found a finger in her chili and filed suit.

A Michigan woman says Starburst's excessive chewiness damaged her jaw, and another consumer said McDonald's coffee was too hot.

The solution to such suits, according to Manning, is exploring vagaries in law. He used four examples:

-Requiring the plaintiff's interpretation of the business' claim to be reasonable. Pearson sued because the Chungs hung a "Satisfaction Guaranteed" sign in their shop, and he felt that his satisfaction was lacking.

-Having the courts approve if a plaintiff has standing to bring suit before it can progress;

-Pass measures in state and federal legislatures, like the elimination of punitive damages; and

-Having courts use common sense. Too often, Manning said, judges and justices get caught up in case law and statutes and forget to use their judgment.

Doing this, he said, will help "make sure a tragedy like the dry cleaners' case never happens again."

After Manning, Thomas Gottschalk of Kirkland and Ellis spoke about litigation resulting from global warming and, specifically, three recent cases.

"One out of three is good in baseball, but it's not good in litigation," Gottschalk said.

The one win for businesses came in federal court in California, where a suit started by former California Attorney General Bill Lockyer's public nuisance suit against automobile makers was booted.

"The Court is left without guidance in determining what is an unreasonable contribution to the sum of carbon dioxide in the earth's atmosphere, or in determining who should bear the costs associated with the global climate change that admittedly result from multiple sources around the globe," Judge Martin Jenkins wrote in the dismissal.

Another case had 12 states, led by Massachusetts and state Attorney General Martha Coakley, successfully arguing that the Environmental Protection Agency's current restrictions on carbon dioxide put the country at risk.

The court's ruling in that case, Gottschalk said, provided "a very broad definition of an air pollutant."

Vermont and state Attorney General William Sorrell also successfully led the coalition of 12 states in federal court, winning a case that allows states to put tighter restrictions on greenhouse gases than those provided by the EPA.

All the state needs to do is adopt California's restrictions.

"I'm sure that decision is going to appeal," Gottschalk said.

He added that a state court has yet to significantly chime in on the subject. State courts may eventually award damages like those sought unsuccessfully by Lockyer.

"A key in my mind is going to be the continued efforts of Chamber of Commerce and other groups to watch the quality of state judiciaries," Gottschalk said. "We need to be mindful of getting on the bench respectful of these doctrines."

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