Businesses “More Likely to Sue Frivolously” trumpets Bizarro-Overlawyered and Greedy Trial Lawyer, quoting a Public Citizen report. Except not even the Public Citizen report supports this claim, and no mathematically-literate person reading the report could think so.
Here’s what the Public Citizen press release says: “The study also found that when these corporations did file lawsuits, they and their attorneys were 69% more likely than individual tort plaintiffs and their attorneys to be sanctioned by federal judges for filing frivolous claims or defenses.”
In fact, all the study did was look at the most recent hundred Rule 11 sanctions issued by federal judges. As we’ve discussed before, what Rule 11 considers “frivolous” is considerably narrower what the common non-lawyer considers “frivolous.” But let’s take Public Citizen’s methodology at face value and ignore the issue with the small sample size, or the fact that Public Citizen didn’t investigate whether the sanctions were reversed on appeal. Out of the 100 sanctions, a whopping thirty-five were issued to corporations. Thus, corporations, say Public Citizen, are more likely to be sanctioned.
Now, those of you who have graduated second grade might be wondering, “But isn’t 35 a minority of 100?” And you would be right. Public Citizen gerrymandered corporations into the leading source of sanctions by (1) combining all corporate suits into one group; and (2) separating individual suits into three groups: individual tort suits with an attorney, individual non-tort suits with an attorney, and pro se suits. Once those 65 sanctions are divided into three different categories, only 22 of them are for represented individuals suing in tort, and 35 is 69% more than 22. Thus, says Public Citizen, corporate lawsuits are 69% more likely to be sanctioned than individual tort plaintiffs.
Except even this manipulatedly bogus statistic is wrong on its own terms. “More likely” requires a denominator. And, as Public Citizen points out, corporations file 3.3 to 5.8 times as many lawsuits as individual tort plaintiff, in part because half of all corporate suits are contract suits, and Public Citizen omitted individual contract suits from the other side of the equation. But only 1.7 times as many sanctions are issued to corporations. Do the junior-high-school math with denominators, and one finds that, in fact, using Public Citizen’s data, individual tort plaintiffs represented by attorneys are between 107% and 264% more likely to be sanctioned for frivolous filings: Public Citizen and DMI got it precisely backwards. (NB also that Public Citizen’s press release made the similar mathematically-illiterate error of translating “3.3 times as many lawsuits” into “3.3 times more likely to file a lawsuit,” despite the absence of a comparable denominator: Costco, for example, engages in millions of times as many transactions as an individual.)
Of course, the main problem with the study is that it’s attacking a straw-man. Have you seen a reformer that doesn’t care about corporate litigation? Certainly not the reformers who post to Overlawyered, because many of the lawsuits mentioned in the 2004 Public Citizen study were criticized here first: April 2000; Jun. 29, 2004; Nov. 22, 2003. It’s almost as if they got the cases from Overlawyered itself. The study also criticizes the number of subrogation suits without mentioning that many reformers wish to abolish the collateral source rule that makes subrogation suits necessary. (I’m not one of those reformers, though I believe in other reforms that would reduce the need for separate subrogation litigation.) Regular Overlawyered commenter David Nieporent notes:
1) Since the subject is “tort reform,” why are you bringing up a study that talks about litigation generally, rather than tort litigation? The study itself makes clear that it includes such litigation as landlord-tenant and mortgage foreclosures, not to mention routine collection cases. Indeed, businesses almost never file tort suits, if you check the data at the back of the study.
2) Why you think “hourly defense firms,” rather than trial lawyers, are filing these suits on behalf of businesses is beyond me. You think “hourly defense firms” are handling routine collection work or landlord-tenant cases?
3) Counting the number of suits is pretty misleading, since suits can have different numbers of parties. One class action may have thousands of plaintiffs. If we’re trying to measure the rate at which individuals sue, such a suit should count as thousands of suits, not one; the fact that those are consolidated tells you nothing about how likely individuals are to sue.
That Cyrus Dugger and GTL got it so wrong shows the danger of reflexively regurgitating trial-lawyer propaganda without thinking.