It’s been nearly 35 years since then-Vice President Dan Quayle delivered a speech in which he decried the costs of hyper-litigiousness on the American economy. His speech would not require much surgery to make it as relevant today as it was then, nor to spur the same howls of discontent from the American Bar Association.
The costs of litigation are baked into the overhead of doing business in America. Virtually no industry or business type is immune to the ravages of the evolving lawsuit machinery, and the only winners are the trial lawyers who feed its ravenous appetite.
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Among the more pernicious mutations are the advent of third-party litigation funders — including foreign governments seeking a strategic leg up through American courts — and multidistrict litigation, which accounts for roughly 70% of all federal civil actions, a neat twist on the class-action lawsuit model that offers local governments a handy new revenue stream to sidestep budget constraints.
THE $35 BILLION SHADOW OVER AMERICA’S COURTROOMS
Last year, for instance, the City of La Crosse, Wisconsin, filed suit against a handful of fire truck manufacturers, claiming they were conspiring to keep fire truck prices high. Several other municipalities have been convinced to join the suit, likely for one of two reasons: First, a number of those jurisdictions, including La Crosse, Augusta, Maine, and Philadelphia, are facing budget issues and are accordingly chomping at the bit to get their own crack at the $5 million-per-claimant in damages. Second, that number itself is a juicy enticement for the trial lawyers to recruit more claimants.
This lawsuit is one of many in an accumulating pile of mass tort claims being heaped on American manufacturers, who are viewed as deep-pocketed targets of opportunity by trial lawyers eager to wrench “nuclear verdicts” — those which award payouts of over $10 million — out of the system. For those paydays, $10 million is just a starting number that can effortlessly drift into the billions. Mass tort claims against Roundup weedkiller, for instance, have resulted in settlements exceeding $7 billion.
Similarly, litigation around “forever chemicals” (per- and polyfluoroalkyl substances used as a water- and flame repellent in thousands of commercial and emergency products) is already generating settlements nearing $20 billion, a number which could eventually exceed $100 billion as this “forever litigation” drags on into the decades to come. And should that well ever run dry, future generations of trial lawyers could always round up plaintiffs to sue companies for not using fire-retardant PFAS, thereby sanctioning fiery deaths.
The central issue is the cost to the American economy of all this suing. According to the U.S. Chamber of Commerce, the overhead attributed to mass tort litigation came out to $529 billion — more than 2% of the nation’s GDP — in 2022. That was four years ago. In another four years, that cost is expected to be $900 billion. A 2025 study translates this into an annual cost per household of $2,437. Health insurance, according to this analysis, is 2.7% higher due to tort costs. Prescription drugs, over 9% more.
These exorbitant figures are testimony to the insatiable appetite of the plaintiffs’ bar and to the inability of Congress to effectively tackle tort reform. Good proposals are out there. The Litigation Funding Transparency Act, which was recently introduced by Senate Judiciary Committee Chairman Chuck Grassley (R-IA) and fellow Republican Sens. Thom Tillis (R-NC), John Kennedy (R-LA), and John Cornyn (R-TX), will, if passed, require disclosure of third-party litigation funders (including foreign actors) and bar them from influencing litigation strategy.
At the state level, Georgia did the Lord’s work last year by passing a pair of tort reform bills, one of which requires similar third-party disclosures, the other of which takes action to arrest the proliferation of those extravagantly priced “nuclear verdicts.”
Good stuff, but the ultimate, and most useful reform — adopting the English rule of loser pays — remains elusive. It is largely a political calculation: Everyone recognizes that there is too much litigation going on in this country. But reducing the amount of litigation, or putting curbs on its execution, reduces what keeps trial attorneys occupied and paid.
WHY ARE REPUBLICAN SENATORS PROTECTING WOKE CORPORATIONS FROM LAWSUITS?
And the plaintiffs’ bar — via the American Association for Justice and dozens of state-level trial lawyers associations — donates an awful lot of money, especially directed to progressive politicians, to keep effective tort reform at a safe viewing distance.
The economic costs may soon eclipse the political ones, catalyzing meaningful remedies. But how much damage will be done by then?
Kelly Sloan (@KVSloan25) is a Denver-based public affairs consultant and columnist.
