Uncategorized's Commentary

Cross-posted from FacesofLawsuitAbuse.org

Question: How much does it cost a grocery store to install 69 cameras and six DVRs?

Answer: About $250,000.

Question: How much does it cost to maintain the store’s recording system?

Answer: About $100,000.

Rafael Cuellar, the owner of a grocery store in Passaic, NJ, estimates he has spent around $350,000 to install and maintain his store’s camera and recording devices. Doesn’t that seem like an awful lot of money to spend to repel or catch shop lifters?

Yes, it is. Which is why preventing shop lifting wasn’t the reason Mr. Cuellar invested in his security network in the first place. The cameras and recording devices are in place to monitor every inch of his store to protect Mr. Cuellar from frivolous lawsuits.

Click here to watch the full video and learn more about Rafael's story.

“Yesterday alone we had a consumer who came back in [the store] and claimed she fell,” Mr. Cuellar recounts in the video, Supermarket Swindle. “Once the loss-prevention director said, ‘Let’s pull it up on the camera,’ she goes, ‘No, I just twisted my ankle.’ And the story changed all of the sudden.”

Indeed, Mr. Cuellar said that one-third to half of all the lawsuits filed against his company every year are fictitious or overblown. Fictitious or not, however, all those lawsuits raise Mr. Cuellar’s insurance premiums, which are his second largest expense behind payroll.

In other words, spending nearly half a million dollars on cameras and DVRs is a drop in the bucket compared to what Mr. Cuellar would spend on a reward settlement, which could be in the millions.

Just one such reward settlement has the power to wipe out Mr. Cuellar’s small business.

But it’s not just store owners who suffer the expenses of frivolous lawsuits. Consumers pay as well. The Food Institute estimates that feeding a family of four will cost $4.16 per week more this year than last. That’s an extra $200 a family must spend this year.

Rising food prices are just one consequence of frivolous lawsuits. Mr. Cuellar notes that he could have invested a lot of the money he spent on cameras to hire more employees or cut prices. But the danger is too great.

“Being an entrepreneur, you always want to continue to grow,” Mr. Cuellar says. “But I do think twice about it, because of the things I can’t control.”

Unless we enact measures to combat lawsuit abuse, small business owners like Mr. Cuellar will continue to funnel their hard-earned money into protecting what they have, not building what they want.

You can learn more about Rafael's story here.

Unanimous Ruling Preserves Key Provision of Class Action Fairness Act

WASHINGTON, D.C. – The U.S. Chamber of Commerce today praised a decision by the U.S. Supreme Court that preserves a key provision of the landmark Class Action Fairness Act (CAFA).

In its ruling today in the case of Standard Fire Insurance Company vs. Knowles (available here), the Court unanimously rejected a scheme by plaintiffs' lawyers to circumvent CAFA's $5 million amount-in-controversy requirement and prevent major class actions from being tried in federal court. The purpose of CAFA was to ensure that major class actions are tried in neutral federal courts rather than certain plaintiff-friendly state courts.

"Since its passage eight years ago, the Class Action Fairness Act has done much to curb class action abuses, such as forum shopping," said Lisa Rickard, President of the U.S. Chamber Institute for Legal Reform. "The Court's unanimous ruling preserves one of the most crucial provisions of the law and ensures that CAFA's reforms live on."

"Today's unanimous ruling is a victory for everyone supporting fairness and justice in our court system," said Lily Claffee, General Counsel of the U.S. Chamber of Commerce. "We are pleased that the Court listened to the views of America's business community and preserved this important protection against class action abuse."

Enacted in 2005, the Class Action Fairness Act aimed to improve the treatment and scrutiny given to large, interstate class actions. It gave litigants new tools to move such cases to federal courts and required greater scrutiny of class certification and settlement terms. Since the law's passage, the number of class actions filed in plaintiff-friendly jurisdictions like Madison County, Illinois has dropped precipitously.

The U.S. Chamber Institute for Legal Reform campaigned strongly for CAFA's passage. In addition, the Chamber's National Chamber Litigation Center filed amicus curiae briefs, both in support of certiorari and on the merits, in the Knowles case (available here and here).

ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels.

NCLC is the public policy law firm of the U.S. Chamber of Commerce that advocates fair treatment of business in the courts and before regulatory agencies.

The U.S. Chamber of Commerce is the world's largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

Eighty-nine percent of voters who cast ballots in Tuesday’s election believe there are too many meritless lawsuits, while eight out of ten want the next Congress to continue reforming the legal system, according to a national survey released by the U.S. Chamber Institute for Legal Reform.  You can read a summary memo of the survey here.

Creating jobs to grow the economy was top-of-mind for voters.  The results of this poll show that voters understand the high costs of lawsuit abuse and support pro-growth legal reforms.

In addition, the newly released survey found:

• 95% of voters say small business views should be taken into account in Washington, while only 43% believe they are currently taken into account;
• Eight out of ten voters said that Congress should continue to reform the lawsuit system;
• By a 10-point margin, voters believe that trial lawyers have excessive influence in Washington;
• By a more than five-to-one ratio, voters said they would be more likely to reelect their Member of Congress in the future if he or she voted for reforms to end lawsuit abuse by trial lawyers.

The poll was conducted by Public Opinion Strategies for ILR and surveyed a total of 1,600 voters on Election Day. The findings reflect the electorate’s overall concerns about the status of the economy.

According to another survey, released in September, seventy percent of the more than eleven hundred company general counsels and senior attorneys who participated said a state’s lawsuit environment is likely to impact important business decisions at their company, including where to locate or expand their businesses. This number is up thirteen percent from the same survey conducted five years ago, before the recession.