Goliath Corporations on Mission to Squash David are Fighting the Free Market

by Ryan Banfill, FJA Communications Director

Global corporations operating in America don’t like it when citizen juries hold them accountable when they injure people. Until recently, corporate interests only worried about trial attorneys who pursue justice for people and only get paid if they win their client’s case.  

The corporations see another threat. This one is driven by intelligent entrepreneurs who have marshaled the power of capitalism to close the financial advantage corporations enjoy in legal disputes.

Free-market forces have spurred the emergence of the litigation finance sector that provides plaintiffs a fairer opportunity to exercise their constitutionally guaranteed civil justice rights, access the courts, and take on powerful interests.   

The corporate CEO’s, Boards of Directors, and associated think tanks are fuming mad. Capital has flowed into litigation finance as investors embrace an opportunity to gain a return on their investment in a vehicle some say relatively immune to the ups and downs of the stock market, fluctuations in interest rates, and geopolitical trade disputes.

Putting Forward a “Small” Biz Face

After gaining little traction at the federal level to regulate litigation financing to death, the corporations are taking the fight to the state level.

That likely explains by seemingly desperate big corporations are putting small businesses at the front of their campaign to effectively close the courthouse doors to people by pressing lawmakers to undermine litigation finance. It’s another step in their decades-long mission to render meaningless the natural constitutional course-correcting impact that comes from the 7th Amendment’s right to a civil jury trial and Florida’s right of access to courts.

Just last week, the corporations opened a front in Florida on the issue. With NFIB up first, the U.S. Chamber Institute for Legal Reform-owned Florida Record published a series of articles where various interest groups called for the Legislature to act to put reins on emerging litigation finance industry.

Corporate Rainmakers Shower Cash on Outside Legal Counsel

There’s an old maxim, “Don’t listen to what they say. Watch what they do.” With that in mind, it’s important to note that corporate spending on outside legal counsel is at an all-time high.

Data from BTI Consulting shows corporate legal “rainmakers” in 2018 spent  $64.7 billion to hire outside legal counsel. That’s a $3.2 billion increase over 2017. This year, they plan to add another $2 billion to the market to bring the number to $66.7 billion.

That’s on top of the amount corporations already pay for in-house legal counsel.

The jump in spending on outside counsel follows a 10-year post-recession period of level spending.

Corporations must be startled to see the cost of defending their business practices begin to creep higher. Which explains why they’re acting like the producers of an off-Broadway show by putting their long-running K-Street production against litigation financing on the road in Florida.

A Case of “Never Mind What We Said Before”

The same corporations that fight tooth and nail to protect their trade secrets from public discovery are deviously invoking transparency to cloak their attack on individual civil justice rights.

It’s a curious position for corporate forces to take. When you look at the record, corporations jealously guard their information.

In 2016 the Florida Legislature passed and Gov. Rick Scott signed Senate Bills 180 and 182 to exempt qualifying  corporate financial information from transparency required by the state’s Sunshine Law.

To receive trade secret status, the information must meet a multi-part test detailed in Sec. 812.018, Florida Statues that says: 

… “Trade secret” includes any scientific, technical, or commercial information, including any design, process, procedure, list of suppliers, list of customers, business code, or improvement thereof. Irrespective of novelty, invention, patentability, the state of the prior art, and the level of skill in the business, art, or field to which the subject matter pertains, a trade secret is considered to be:

1. Secret;

2. Of value;

3. For use or in use by the business; and

4. Of advantage to the business, or providing an opportunity to obtain an advantage, over those who do not know or use it. …

If the financial information meets the test it would be a felony to disclose the records.

In opposing the Sunshine in Litigation Act a decade ago, the Heritage Foundation argued confidentiality agreements and orders in civil litigation protect litigants’ privacy rights and greatly reduce disagreement and delay during discovery.

“Asking a court to adjudicate a dispute should not rob parties of their right to keep private matters private,” wrote Heritage Foundation Senior Legal Policy Analyst Andrew Grossman in 2009. “A wide variety of expert agencies already investigate threats to public health and safety and mandate the public disclosure of relevant materials. These experienced agencies are better placed than courts to determine whether the public has a legitimate interest in otherwise  private information and have a wide variety of tools at their disposal, from administrative enforcement to criminal prosecution, to ensure that  businesses  do  not  escape their obligations to be forthcoming.”

Zoom forward 10 years and the defenders of big business are singing from a different hymnal.

“Blocking or making plaintiff’s attorneys come out and fully disclose that they are being funded on a lawsuit essentially will say that this is not a lawsuit that has merit,” one of Florida’s leading corporate advocates told The Florida Record.

Today’s position is a rich example of split public policy personality. The same corporations that enjoy a Florida public records trade secret exemption for their financial records want plaintiffs to open their financial underwear drawer.

It raises a question: In the cold-hearted defense of billions of corporate dollars and the power that flows from it, will anything be off limits to the corporations when they’re called to account before a citizen jury?

There is no “means test” in the Bill of Rights. America’s courthouses are not exclusive clubs where only the wealthy can enter. The U.S. and Florida Constitutions provide everyone the right to seek justice from a citizen jury.

Having access to resources allows all people an opportunity to argue their case for corporate accountability on the merits and let a citizen jury decide.

“The friends and adversaries of the plan of the Convention, if they agree in nothing else, concur at least in the value they set upon trial by jury; of if there is any difference between them it consists in this: the former regard it as a valuable safeguard to liberty; the latter represent it as the very palladium of free government,” wrote Alexander Hamilton in 1788’s Federalist No. 83.

“Trial by jury is the cornerstone of our liberty.  It is our birthright; who is in opposition to the genius of America shall dare to attempt its subversion?” founder James Madison wrote. “Trial by jury is essential to secure the liberty of the people as any one of the pre-existent rights of nature.”

America’s civil trial by jury has withstood repeated attacks and remains as a bedrock in the Constitution’s Bill of Rights that we must defend. It’s a freedom that protects people from becoming submissive subjects to the tyranny of the powerful.

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