You hear a lot about frivolous lawsuits filed by people trying to make a quick buck and tying up the courts and making attorney fees and legal costs outrageously expensive for businesses. Well, there’s more to that story than meets the eye.
Most lawsuits are filed by one business against another, and not by ordinary people at all. The vast majority of attorney fees paid to attorneys are actually collected by the lawyers who are filing those lawsuits where they represent one business suing another company. Here’s a good example.
Forest River manufactures recreational motor homes out of Indiana. One of its many competitors is Heartland Recreational Vehicles, a company that also builds Rv’s. Heartland claims to be “the fastest growing RV company in the world” which probably rubs Forest River the wrong way. On top of that, the two companies are only 11 minutes and just over 6 miles apart. Turns out that those few miles are making lots of money for their lawyers.
Awhile back Heartland ran a comparative ad that showed photos of Rv’s built by “The Competition” which included the first few being pictures of the Forest River “Puma” line of Rv’s, followed by coaches built by other Rv builders. Well, that didn’t sit well with the powers that be down the road at Forest River so the company filed a lawsuit claiming the ad was misleading and violated a federal law called the Lanham Act, which prohibits false advertising.
Forest River and Heartland have been at it before in the courts. If you want to know the particulars, you can find one summary on the internet here: http://dockets.justia.com/docket/indiana/inndce/3:2008cv00490/56146/. So this isn’t their first time to the courthouse against each other.
In fact, Eric Goldman's blog article (here: http://blog.ericgoldman.org/archives/2009/02/ambush_marketin.htm) describes some of the guerrilla fighting antics these two have been playing with for apparently years, and it makes a fascinating read to see what the lengths that one Rv company will go to in order to infiltrate and undermine the business efforts of another.
According to the more recent June 29, 2010 decision of Judge Van Bokkelen in the case in Northern District federal court in Indiana (found on Westlaw.com at 2010 WL 2674540), Forest River apparently claims that the Heartland ad “has the natural effect of misleading readers into thinking that features of other brands of trailers shown in the pictures are found in its Puma trailers, which is not true.”
The argument has been going on (this time) since last year and just keeps on going. In the end, this fight will add to the cost of the consumer products that both of them sell and it has nothing to do with spilled coffee at McDonald’s or anything else one could call “frivolous litigation.”
The plain and simple truth is that a lot of legal costs that go into consumer products is not the result of consumers suing manufacturers at all, but of one manufacturer suing another manufacturer. They just don’t paint the picture that way.
Think this is just one example? Well, Forest River sued Bird Bus Sales over that same federal law, the Lanham Act (Case No. 1:2010cv01578, filed Apr. 8, 2010), Heartland Rv (Case No. 3:2010cv00011, filed Jan. 7, 2010, copyright infringement claim), and Bechtel National (Case No. 2:2009cv06504, filed Sept. 28, 2009, product liability claim), to name just a couple.
So the next time you hear something about so-called frivolous lawsuits, just remember this example and realize that it’s only one of thousands that exist all across the country and in a courthouse near you. In fact, in a recent study, the number of federal court lawsuits fell by 79% and the number of cases that actually went to trial dropped by a whopping 78% too. At the same time, insurance company profits having been going nowhere but up, contrary to their claim about lawsuits driving up insurance rates (in one 3 year period, profits were up 62.5%, 2004-2007).
Consumers file lawsuits to find justice when they can’t find it any other way.
With big business though, could it be that it’s really just all about one company trying to make more money than another one does? True or not, that can easily be the impression the average person might get. Don't blame it on the little guy, though.