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In the Land of the Free, the Legal Eagle is King

For The Observer/Guardian UK
There are 200 million guns in civilian hands in the United States. That works out at 200 per lawyer. Wade through the foaming websites of the anti-semites, weekend militiamen and Republicans, and it becomes clear that many among America’s well-armed citizenry have performed the same calculation. Because if there is any hope of the ceasefire that they fear, it will come out of the barrel of a law suit.
First, the score. Gunshot deaths in the US are way down – to only 88 a day. Around 87,000 lucky Americans were treated for bullet wounds last year; 32,436 unlucky ones died, including a dozen policemen by their own weapons. In one typical case, a young man, Steven Fox, described feeling pieces of his brain fly from his skull after a mugger shot him. He is permanently paralysed.
But, hey, that’s business for you. And what a business it is. Guns, ammo and accessories are a $6bn-a-year honey pot for several corporations: Browning, Smith & Wesson, Colt and others.
Britain loves stories of gun lust in the US. It is an opportunity for snooty comparisons with America’s crude and lawless society. This drives Elisa Barnes crazy.
Barnes is the lawyer who recently brought a groundbreaking law suit against handgun manufacturers, which were found negligent in the shooting of Fox. “You [European] guys are so smug. Glock, Browning, Beretta have these refined European owners. Smith & Wesson is the number one seller of killer guns – and it’s owned by Tomkins plc, of England.”
Armed crime is traditionally viewed as a social problem, but Barnes thought it was too convenient for gun makers to blame the criminal alone. Through investigation and statistical analysis she concluded that sales to criminals are a much-valued – if unpublicised – market segment sought out and provisioned by these upstanding manufacturers.
Her calculations are compelling. Gun companies dumped several million weapons into outlets in states with few curbs on purchases, super-saturating the legal market so that excess would flow up the “Iron Pipeline” to meet black market demand in New York and other big cities.
Like the company that sells cigarette rolling papers in quantities far outstripping sales of legal tobacco, gun manufacturers have a nod-and-wink understanding of where their products end up. Their market models cannot account for half the gun sales in loose-law states such as Georgia.
Nor can industry executives fail to have noticed the requests – more than 800,000 of them – to manufacturers from the Alcohol, Tobacco and Firearms agency to trace guns captured by police after use in crimes .
The Fox case jury found a dozen gun makers guilty of negligent distribution. The shooter’s gun was never found. Unable to determine which company made the gun that fired the bullet into Fox’s head, the jury ordered all the makers of .25 calibre weapons in the case to pony up $5m for Fox’s care and pain.
Fox’s victory burst the dam. Several hundred lawyers – including the Costanza group, the combine of firms that mangled the tobacco industry – filed suits to make sure the gun industry feels our pain. New Orleans is the first of dozens of cities in court demanding that gun purveyors pay the cost of gathering the wounded off the streets, and the cost of arming the municipal police force in self-defence. The legal profession may finally accomplish what a cowering Congress dare not consider: shutting down firearms sales at source.
The civil rights group NAACP has weighed in with a massive class-action suit on behalf of thousands of the wounded and dead, based on yet another theory: product liability. I spoke to one of their counsel, Mike Hausfeld, just after he returned from beating Hitler in a US courtroom. Fifty years after the war, Hausfeld’s firm brought a suit against Mercedes-Benz, Siemens, BASF and others who used slave labour from concentration and prison camps under the Nazi regime. The defendants have agreed to create a $1.2bn compensation fund.
Hausfeld concedes that the companies were acting under orders of the Reich, but points out: “Contemporary industrial empires were made from those profits. In 1938 Henry Ford received a medal from the Furhrer, and his German plants continued to provide Ford income through 1942. Those profits belong to the victims.”
I started with guns, but my real topic is America, Home of the Brave Lawsuit. The open courthouse is the best of US democracy, where Davids may sling their rocks at corporate Goliaths. That is sufficient reason for the powers-that-be to malign the US system of civil justice with frightful images of OJ Simpson and Louise Woodward where – they imply – juries ran amok.
Corporate Europe has good reason to fear US law. Consider other Hausfeld cases. His firm took part in securing $1bn from Hoffman LaRoche and other pharmaceuticals giants to compensate victims of their worldwide conspiracy to fix the price of vitamins.
The action, brought in the US, has so far benefited American victims only. European governments can collect fines, but victims of the cartel are effectively out of luck under European Union and British law, even under the supposedly tough new rules.
Hausfeld was also one of the legion of lawyers who whacked Exxon for $5bn in punitive damages for the Exxon Valdez spill. While the Wall Street Journal excoriated the courts for vacuuming Exxon’s deep pockets, the $5bn hit seems to have focused the oil shipper’s attention. Grudg ingly, Exxon-Mobil now spends billions on double-hulled tankers, escort vessels and new safety equipment when operating in the lawyer-infested waters of Alaska.
By contrast, the French are still picking dead birds out of the TotalFina oil slick. I can’t help thinking that disaster, whatever its technical cause, was a product of the Civil Liability Convention (which Britain joined after the Valdez disaster) – limiting shippers’ responsibility for spill damage in European waters to roughly $127m. At that price, as far as shippers are concerned, an oil spill is a bargain compared with the cost of prevention.
That brings us to Hausfeld’s suit against Monsanto, filed last month. Europe’s Greens flatter themselves that they forced the company to retreat from its aggressive promotion of genetically modified grains. But it is difficult to imagine Monsanto’s chief executive, Robert Shapiro, frightened by a salvo of well-drafted leaflets. Rumblings of a lawsuit, however, had to disturb his repose, and added to the pressure to seek a haven through merger.
After all, every US chemical company executive is schooled in the story of how half the asbestos industry was forced into bankruptcy court to settle several hundred thousand lawsuits that found companies culpable because they claimed the mineral was harmless.
Alan Simpson, a British Labour MP, has drafted a law that would make GM food and seed sellers liable to legal action for any medical or environmental damage they may cause, more in line with US law. Simpson suspects that Monsanto, AstraZeneca and their ilk would be less cavalier about seeds with tweaked DNA if the companies knew they would reap what they sow.
Where will America’s lawsuit-crazed lawyers strike next? General Augusto Pinochet has shopped at Harrods in London, but has never been to Macy’s in New York. In fact, since his coup in 1973, the general has not set foot in the US. Of course not, says Hausfeld, “We’d sue him.”
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Gregory Palast’s other investigative reports can be found at
Gregory Palast’s column “Inside Corporate America” appears fortnightly in the Observer’s Business section. Nominated Business Writer of the Year (UK Press Association – 2000), Investigative Story of the Year (Industrial. Society – 1999), Financial Times David Thomas Prize (1998).

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