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This week, the trial lawyer “pay to play” scandal continues to unfold, ratcheting up the public attention and the impetus for Congress and the S.E.C. to act.

Yesterday’s New York Times editorial, lauding the S.E.C.’s new rules to end pay to play for public pension funds and 529 college savings plans invested by states, also concluded that, “There is also another very large loophole that needs to be closed: lawyers make huge fees negotiating contracts for the state and the S.E.C. has no control over lawyers unless they are fronting for investors.” Read the full editorial here.

Today, the Wall Street Journal editorializes for the sixth time on the scandal that has exposed the broad extent of the problem of trial lawyers making campaign contributions to elected officials and then being hired by those same officials to bring lucrative contingency fee lawsuits on behalf of the state. In this case, it’s the Commonwealth of Pennsylvania, and the official in question is the governor, Ed Rendell. The Journal points out that it is unusual for a state supreme court to take up a case from the appellate level before it has been concluded. The fact that the Pennsylvania Supreme Court is doing so here underscores the seriousness of the issue.

These editorials should bolster Senator Bennett of Utah’s efforts to shed light on this unseemly practice. He sent a letter to the S.E.C. this month urging that its rules include trial lawyer “pay to play.” Other members of Congress concerned about this practice should do the same.

To kill time in jail, some prisoners take up a hobby.  In "The Shawshank Redemption," Andy Dufresne carved rocks into chess pieces. Paul Newman’s character in "Cool Hand Luke" plotted and attempted numerous escapes from prison. And in "The Longest Yard," Burt Reynolds put together a team of inmates to take on the guards in a game of football.

One nominee in this month’s Most Ridiculous Lawsuit Poll has his own way of passing his prison sentence – he files lawsuits.  In fact, this Lexington, Kentucky inmate has filed so many lawsuits (against everyone from Britney Spears and New England Patriots coach Bill Belichick, to everything from the Eiffel Tower and Black History Month), that the Guinness Book of World Records wants to name him the most litigious person in the world.  But there’s one catch: he’s filed a lawsuit against Guinness to prevent them from crowning him the king of lawsuits.  

While this lawsuit might seem like an obvious winner for June’s Most Ridiculous Lawsuit poll, before voting for your favorite, check out the other suits:

• A lawsuit filed by a Kenyan man against women's organizations over the damages he’s sustained (including "mental anguish, stress, backaches, lack of concentration") due to their week-long national sex boycott;
• An ADA suit filed by a law student against his school after it expelled him for failing classes (his claimed learning disability only caused him to fail some classes, but not others); and
• And a lawsuit filed against a personal injury lawyer when one of the law firm’s chairs collapsed, injuring a potential client that was looking to file a different lawsuit.

We’ll see if any of these nominees can surpass the winner of last month’s Most Ridiculous Lawsuit poll, which earned nearly one out of every two votes cast. Congratulations to the lawsuit filed by a woman who suffered burns while handling wax that she had microwaved herself, claiming that the product should not be in the stream of commerce.

America, the land of pioneers, has become known for its innovation. When Thomas Edison invented the light bulb and when Neil Armstrong walked on the moon, the spirit of America’s ingenuity changed the world. But there are a few American ideas that other countries would rather quarantine to our borders – among them, America’s failed experiment with class action lawsuits.

Indeed, the body of evidence against America’s class action lawsuit system is vast, which is why it is so troubling that, today, Europe seems on the verge of adopting a very similar system. In recent months, two Directorates General in the European Commission have forwarded proposals to create a class action system vulnerable to the same type of abuse we face in the U.S.

The class action lawsuit was created in the 1960s, as the U.S. federal courts attempted to make the American legal system more accessible and less expensive for consumers by creating a legal mechanism that allowed many plaintiffs with similar claims to file one collective lawsuit.

Class action lawsuits held great promise of benefit for the broad society. For business, it seemed practical to address identical cases at one time, saving years and millions in added legal costs. Consumers would have access to high quality legal counsel in a collective manner without up-front costs. And the plaintiffs’ lawyers would get paid a share of the winnings on contingency fee if they prevailed in the case.

But, in the ensuing forty years, America’s experiment with the class action lawsuit has belly flopped. Of the three parties involved, trial lawyers have benefitted substantially, while consumers and businesses pay the price for frequent abuse of the system.

Instead of creating efficiencies in the lawsuit process, class actions have increasingly been used as a weapon to extract mega settlements from businesses that often must decide between the risky “bet the company” path of a trial with a possible crippling jury award or agreeing to settle for a certain—and certainly large—amount.

Consumers also have not reaped the benefits first envisioned in class action lawsuits either. In fact, 74 percent of Americans believed the class action system drives up prices and should be restrained (Penn, Schoen & Berland Associates). We see the impact of those costs not only in American bank accounts but on a macroeconomic scale as well. Class actions are one of the primary reasons tort costs amount to 1.9 percent of the GDP in the United States as compared to 0.5-0.7 percent in other OECD countries.

Lawyers, however, make out very well, as they receive much of the money consumers pour into the class action system. Often, plaintiffs’ lawyers arrange settlements that provide for millions of dollars in lawyers’ fees and leave the plaintiffs themselves with relatively small awards, or, in some cases, coupons for products or future services from the very company by which they were supposedly wronged.

For example, a class action suit was filed against the manufacturers of BlueTooth headsets, alleging that they should have warned that high volume could result in hearing loss. The plaintiffs’ lawyers negotiated a settlement in February 2009 by which the defendant companies have to pay $1.2 million to issue warnings about hearing loss, $100,000 to the charities of the plaintiffs’ lawyers’ choice, and up to $850,000 to the plaintiffs’ lawyers themselves. However, the consumers, on whose behalf the suit was filed in the first place, got nothing at all.

For those reasons, European policymakers repeatedly promise their constituents that they have no intention of recreating the American class action system. Unfortunately, if the EU implements the proposal to create class actions in antitrust or consumer cases, it may face similar consequences, as the proposals contain many of the U.S. system’s most problematic features.

Most importantly, they allow for a variety of litigation financing schemes that incentivize plaintiffs, plaintiffs’ lawyers, and consumer organizations to file myriad lawsuits with the promise of sizeable profits. Mechanisms like third party funding – which permits a third party to invest in the outcome of the lawsuit by fronting costs – create incentives to file lawsuits. If the suit fails, it costs the plaintiffs nothing. However, if they prevail, the plaintiffs and their lawyers stand to reap enormous profits. And, unfortunately, the plaintiffs often prevail in even the most frivolous of suits. Many defendants will fork over settlements – no matter how ridiculous the claim – because it is cheaper than enduring a long, costly legal process.

These proposals take a similar approach to forum shopping – by which parties could file in the most plaintiff-friendly member country forums, each of which would be empowered to make damaging, EU-wide decisions. Furthermore, the proposals would allow for duplicative litigation that negates the “efficiency” the EU hopes to achieve with class actions. The proposals may even allow for the same case to be pending in all 27 countries on behalf of the same group of plaintiffs. Some of the European Commissions’ reports on the topic acknowledge the “danger” of forum shopping. Yet, they do not propose significant preventive measures. 

The proposals also claim to recognize the value of alternative dispute resolution (ADR) – an out-of-court procedure that has helped prevent countless abusive lawsuits in the U.S. – but they do not take any steps toward implementation. According to the European Parliamentary Report on one of the proposals, ADR procedures are “an efficient alternative to collective redress, offer fair and quick out-of-court settlement, and should be encouraged.”  Yet, the proposals do not propose any specific ADR procedures, and, in the absence of concrete recommendations, ADR is unlikely to play a significant role in the new framework.

Not only do the proposals invite the same abuses we contend with in the U.S., they would likely attract the U.S. plaintiffs’ bar that has created them. Policymakers contend that European lawyers do not have the same exploitive, entrepreneurial tendencies as does the American plaintiffs’ bar. But what they seem to have overlooked is that American plaintiffs’ lawyers are looking to file class actions in Europe themselves.

U.S. trial lawyers are well aware of the progress towards class actions in Europe, and they are anxiously awaiting the opening of a new market. Some are calling European embassies to see if any bills have passed yet. And others are already opening European offices.

Hausfeld LLP, a U.S.-based class action firm, opened a London office and has been actively advocating for U.S.-style class actions in Europe. Likewise, a New York-based plaintiffs’ firm, Labaton Sucharow & Rudoff, formed an alliance with Italian and German law firms to represent European investors in complex securities cases and class actions. The list goes on.

Just as the U.S. federal courts did fifty years ago, European public officials have the best of intentions. But Europe also has the advantage of America’s experience, and the failed experiment of class actions proves that this is one American innovation Europe should not want to import.

There is no doubt that Florida legislators have seen the recent series of editorials (one, two, three) in the Wall Street Journal outlining the latest national disgrace for the plaintiffs’ bar – pay-to-play scandals involving state officials across the country.

The stories are classic old-style politics: a special interest (private plaintiffs’ lawyers) make campaign contributions to state officials (in this case, attorneys general and one governor), and in return are hired with lucrative contingency fee contracts (typically resulting in multi-million dollar paydays) in deals done behind closed doors and often without competitive bids.

While the Wall Street Journal’s series highlighted the problem states, it extolled Florida’s push to reform these contingency fee agreements thanks to Florida Attorney General Bill McCollum, who doesn’t believe in doing the public’s business the shady, behind-closed-doors, pay-to-play way. General McCollum has championed legislation that would require him and future Florida AGs to do the public’s business, believe it or not, in public.

Not only would the Transparency in Private Attorney Contracts (TiPAC) legislation require future Florida AGs to do open bidding on lawsuit contingency fee contracts, it would cap attorneys’ fees at $50 million.

As with all legislation, the TiPAC bill has been a political football as it worked its way through the Florida legislature. It passed the House. It passed the Senate with amendments. But as with any legislation worth anything, there was and remains an ongoing fight from special interest groups (plaintiffs’ lawyers) to kill, amend, stall, and/or water down the bill.

The legislative process is always a little messy, and almost never results in a final bill that looks exactly like the original proposal.

And that’s where we are as I write. The Senate has inserted an amendment that would allow the AG to lift the $50 million cap on attorneys’ fees only with a majority vote of the cabinet.

While this may give some pause, let’s be clear: the TiPAC bill, even with this amendment, is a major victory for those seeking to eliminate back-door deals, no-bid contracts and needless lawsuits.

Requiring a majority vote of the Florida cabinet maintains a check on the state attorney general and preserves the intent of the bill to stop the AG’s office from being used as a political payback machine and a piggy bank for Florida’s plaintiffs’ lawyers.

The Florida legislature has moved the TiPAC bill to the goal line. It should pass this legislation right now, before the game clock runs out.

Passage of this bill will put Florida in the vanguard of good, open and honest government. Failure to act will be a major missed opportunity. The legislature should punch it over the goal line.