FIGHTING FOR CELL PHONE USERS OR JUST FOR LEGAL FEES? Why The Cell Phone Class Actions Are Misguided
By BARTON ARONSON
|Monday, May. 07, 2001|
Possibly in an effort to distract Baltimore Orioles fans from a so-far abysmal season, team owner Peter Angelos has filed four class action lawsuits. Their purpose? To force cell phone manufacturers to provide cell phone users with headsets. Their certain result? To generate legal fees.
Discerning merit in the suits is not difficult it is impossible. Angelos's lawsuits are only the latest in a long and dishonorable tradition of class action lawsuits that seek to enrich plaintiffs' lawyers by transferring the power to regulate our lives from individuals and government agencies to judges and juries.
Liability for Risk Alone?
The legal premise of Angelos's lawsuits is a favored plaintiffs' lawyer's fantasy: that sellers are liable for any and all risks that their products impose. That's just not the case.
The essential deal in the marketplace is this: the seller tells you what the product does, tells you how long it thinks the product will do it (that's really what a warranty is), and names a price. If the product works for as long as promised, you've gotten the benefit of your bargain, and have no grounds for complaint.
Products that actually injure the user are not, we all agree, working as promised a vacuum cleaner that blows up in your hand is not much of a vacuum cleaner. When that happens, you've got rights.
Plaintiffs' lawyers have been trying to upend that bargain for years in a variety of ways, of which Angelos's suit is but one example. Every industry, for example, has faced lawsuits alleging that a product is defective if it fails outside of its warranty.
But that makes no sense. Manufacturers cannot make products that last forever, so they warrant that their products will last for a certain period of time. Plaintiffs' lawyers frequently sue manufacturers in an effort to turn them into lifetime guarantors but unless a lifetime guarantee was what was promised, a lifetime guarantee should not be what is enforced in court.
A widget company may be in the business of making widgets that last for five years only, and thus may warrant them for just that length of time. These lawsuits are an effort to tell the widget company that it simply cannot be in the widget business under those circumstances.
The Cell Phone Suits
Lawsuits like these are a common plague on the auto industry. To take a well-publicized example, virtually every sport utility vehicle manufacturer has been sued on the grounds that its SUVs impose an unacceptable risk of rolling over.
These are not, remember, lawsuits involving people whose SUVs have rolled over. Rather, these are suits brought in the name of people whose vehicles have been performing fine for years. The allegation is that the carmakers have imposed a risk, and that they owe buyers something for that risk.
For years, lawyers have been trying to get courts to buy into the notion that if a product imposes a risk on the consumer, the seller has either defrauded the consumer by not disclosing the risk, or violated the contract of sale by not selling the consumer exactly what he thought he was getting. For years, courts have been rejecting this notion, ruling that if a product actually works, the buyer has gotten exactly what he bargained for.
Freedom and Risk
Angelos would no doubt tell courts that his case is different. Cell phones that are actually emitting radiation, he will argue, are different from, say, SUVs that might roll over but haven't. If cell phone radiation turns out to be harmful, then all those users have actually been harmed. Angelos is asking the courts to regulate the level of risk that a product may impose.
The problem is that courts are a lousy mechanism for regulating risks. In a free society, there are two ways of addressing risks that are consistent with ordered liberty. The principal way emphasizes the "liberty" half of that formula by letting people decide which risks to run.
The First Amendment and its consequences a free and vigorous marketplace of information and ideas allow people to gather information and they decide how to proceed. Sometimes the government provides a helping hand, as when it requires food sellers to provide nutritional information on their packages.
Sometimes risks are so pervasive and so difficult for individuals to avoid that the government steps in. Take building codes. A building houses countless dangers we can never see: poorly engineered structures can collapse, faulty wiring can burst into flames, and so on. Our lives require that we go in and out of buildings all day, and we have no way of assessing whether these buildings are safe. Building codes are the only practical way of ensuring that we can lead our daily lives safely.
A courtroom is a poor alternative to these ways of regulating risk. When courts act as regulators of an industry, they deny us our freedom, but do so without expertise or accountability. Angelos wants the courts to force the cell phone makers to hand out headsets, whether people want them or not.
All regulations deny us freedom in some sense. But at least they are imposed by accountable government actors. We elect the president; the president appoints (and Congress supervises) the Secretary of Transportation, and he in turn writes regulations governing the auto industry. Courts have no such degree of accountability; if we don't like regulations imposed by judges, we cannot throw the bums out.
Courts also have no expertise in this type of matter. But the Food and Drug Administration which regulates radiation-emitting devices, like cell phones does. And the FDA's studies have determined that at this time, there is no evidence that cell phones impose the risk that Angelos claims though, of course, further study is warranted.
A court has no way of gathering information equivalent to that of an agency, which employs its own experts. The court knows only what the parties and their experts tell it, and judges have no special capacity to assess that information. Angelos's lawsuits like many class actions are an effort to get a judge and a lay jury to take a second bite at the regulatory apple, without any of the resources that qualified the FDA to regulate in the first place.
Angelos knows well the legal environment in which he has brought these lawsuits. That is, he probably knows that his lawsuits are unlikely to succeed, but knows also that they have a nuisance value. That is, manufacturers might well prefer to settle with him than suffer the costs and adverse publicity of a long-running legal battle.
Settlements for nuisance value are common, and they invariably benefit lawyers, not the "class" of people on whose behalf a lawsuit was ostensibly brought. In other words, we could be excused for concluding that Angelos's concern for cell phone users looks a lot like his concern for Orioles fans.