Clicking on banner ads enables JWR to constantly improve
Jewish World Review Oct. 16, 2002 / 10 Mar-Cheshvan , 5763

Jonathan Turley

JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
Ann Coulter
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
James Glassman
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
John Leo
Michelle Malkin
Jackie Mason
Chris Matthews
Michael Medved
Kathleen Parker
Wes Pruden
Sam Schulman
Amity Shlaes
Roger Simon
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports

Reverse pawn shops? Broke state officials across the country have been looking for businesses to buy their assets at a fraction of their worth to pay for budget shortfalls | Outside of Las Vegas is a little pawn shop that does big business. It buys everything from jewelry to cowboy boots to dentures from broke gamblers who need money for gas to get home. It is a testament to the rule that where there are fools, there are opportunities.

This month, the pawn business has moved into the big time. Broke state officials across the country have been looking for businesses to buy their assets at a fraction of their worth to pay for budget shortfalls. Like every itinerant gambler, they want to avoid facing the public with the news that they bet on the economy and lost in a big way.

Looking around for things to sell, many states have quickly latched onto their most valuable movable commodity: tobacco damages. This is fitting because states first won, and then squandered, billions in windfall damages to their residents.

This scandal began when state leaders cut outrageous contingency deals with private lawyers that guaranteed fees as high as a billion dollars. Rather than using government lawyers for these lawsuits, politicians allowed private attorneys to pocket billions in damages suffered by citizens. Then, flush with the expected cash from the settlements, state officials spent wildly.

When the economy soured, they woke up with a huge budget headache and an unpaid bill.

Now these same leaders are selling off the remaining awards for a fraction of their worth to make up for budget shortfalls.

In return for ready cash now, the states trade away the full value of damages to be paid over time. Thus, residents in some states may receive as little as 25% of the damages that they incurred through smoking, while attorneys and businesses could receive the other 75%.

Take Maryland. Lawyer Peter G. Angelos was given a contract to pay him 25% of the state's damages, or about $1 billion. (Angelos recently agreed to accept the paltry sum of $150 million in fees.) Lt. Gov. Kathleen Townsend, who is running for governor, now has proposed selling off some of the remaining damages at 72 cents on the dollar. She is not alone. Fifteen other states have sold off these damages at discounts as low as 25 cents on the dollar.

This may be one reason why states are looking for new litigation prospects. State governments are crowding into courtrooms seeking damages for products ranging from paint to guns. It is part of a new era of government revenue generation: seeking millions not in taxation but in litigation. The result is a type of government ambulance chasing that would make the most hardened slip-and-fall lawyer blush.

For example, Rhode Island and other states have sued paint companies for their use of lead paint in public housing and government buildings. The lawsuit suggests that the dangers from lead were known long before lead paint was banned. Yet this ignores the fact that the government had much of the same available knowledge and decided to use the paint anyhow. Moreover, the injuries to children in public housing were in part caused by a failure of the state in allowing walls to crumble without new paint or maintenance. In California and other states, gun manufacturers are the designated defendants of the day.

State officials argue that gun manufacturers should be liable for violent crimes and should pay them hundreds of millions of dollars. One common claim is that these companies should have better monitored the use of their guns in crime and avoided selling to dealers responsible for such sales.

Once again, however, the question is the government's own responsibility. The government could demand the same information and regulate gun licenses based on improper sales. It could also outlaw handguns.

There is nothing more dangerous than a politician short of cash.

Hope springs eternal in litigation lottery. The question is whether citizens will impose some discipline on their leaders and stop the litigation-liquidation cycle. First, however, they will have to catch them. These days, every sound of an ambulance siren can empty out an entire state Legislature.

Enjoy this writer's work? Why not sign-up for the daily JWR update. It's free. Just click here.

JWR contributor Jonathan Turley is a constitutional law professor at George Washington University. Comment by clicking here.

10/08/02: A legal tattoo hullabaloo
10/02/02: Gagged justice sets dangerous precedent
09/25/02: The Great Salmon Rose Caper
09/17/02: Reparations: A Scam Cloaked in Racial Pain
09/12/02: This country's hidden strength
09/04/02: 1st Amendment protects even the ugliest among us
08/28/02: A secret court goes public
08/20/02: I defended Ashcroft during his nomination; he's become a constitutional menace
08/07/02: San Francisco embracing states-rights
07/31/02: Who needs Jenny Craig when you can have Johnnie Cochran?
07/22/02: The meaning of justice and the madness of Zacarias Moussauoi
07/16/02: The President vs. the Presidency
07/08/02: How one woman's whims dictates the rights of millions
07/02/02: Just say 'no' to extracurricular activities
06/24/02: Missing Ted Bundy
06/10/02: A comedy of eros06/14/02: 05/31/02: Beyond the 'reformed FBI' hype
05/23/02: Do we really need a Federal Marriage Amendment?
05/19/02: No "battlefield detainee" should leave home without a U.S. birth certificate
05/10/02: The perfect constitutional storm
04/26/02: 'Slave of Allah' wounds justice
04/12/02: The importance of being nameless
04/05/02: The adjusted value of justice
03/18/02: How Clinton got off: A law professor's take
03/11/02: Profiling and the terrorist lottery
03/05/02: Yes, Sharpton, there was a failure of justice
02/28/02: The Lay of the land
02/14/02: Living in constitutional denial
02/05/02: Legal Lesson for Afghanistan: War's Not a Slip-and-Fall Case
01/25/02: Sever "Jihad Johnny"'s ties to his homeland
01/21/02: "Out of sight, out of mind," but they're still prisoners
01/14/02: Your papers, please!
01/07/02: Prescription for disaster
12/18/01: Madison and the Mujahedeen
12/07/01: In the U.S., espionage crime is easy to understand but difficult to prove
11/19/01: What type of 'creature' would defend bin Laden?
11/19/01: Could bin Laden be acquitted in a trial?
10/28/01: The ultimate sign of the different times in which we are living
10/25/01: Al-Qaida produces killers, not thinkers
09/28/01: The Boxer rebellion and the war against terrorism
08/31/01: Bring back the silent Condit
08/27/01: Working out the body politic

© 2002, Jonathan Turley