July 21, 2019

Welcome to the modern world

The modern age has bred a new breed of plaintiffs’ litigation, and–as much as I spend time on the plaintiffs’ side of the bar–it still makes me uncomfortable.  It’s the dirty side of litigation, born to make money without regard to the client and, more so, without regard to any defendant having done anything wrong.

There are the “copyright trolls” like Righthaven LLC, a Nevada limited liability company, that existed for the sole purpose of bringing lawsuits for copyright infringement.  Righthaven searched the media for instances of possible copyright infringement—usually unauthorized use of newspaper articles or photographs—and then contracted with the original publisher for an interest in that same article or photograph.  It then turned around and filed a copyright infringement suit against the alleged unauthorized user and split the proceeds with the original publisher.  Being a professional litigant was Righthaven’s only line of business.  It allowed publishers to chase lawsuits and try to scratch up a little extra cash on the side without actually getting their hands dirty in the often messy world of litigation. Righthaven ultimately died when the Ninth Circuit Court of Appeals held that it didn’t actually have any right to use the materials over which it sued, just the right to sue over them, which is no right, at all. Stick a fork in Righthaven, and that’s no bad thing.

One of the more recent iterations is suits based on the gas-station sales of “male enhancement supplements” that claim to burn fat, build muscle, boost energy, and . . . ahem, “improve performance.”  Yes, no doubt they’ll claim to make that bigger, too.  It’s not the sale of these snake-oil products that’s being attacked but that someone else is making money off the oil.  Houston-based Outlaw Laboratory, a manufacturer of such products (the name should be a tip-off), has launched a nationwide campaign to sue the, often, mom-and-pop gas stations that sell competing products at their check-out counters. In a typical example of its lawsuits, Outlaw claims that “Defendants have knowingly and materially participated in a false and misleading advertising campaign to promote and sell its Enhancement Products, giving consumers the false impression that these products are safe when in reality, Defendants are well aware that the Enhancement Products contain hidden drug ingredients” and further that “Defendants’ false and misleading statements and advertising pose extreme health risks to consumers” including “by failing to inform consumers that the Enhancement Products contain sildenafil,” which may be contraindicated for some consumers.

Sildenafil” is the active ingredient in Viagra, and Outlaw is right that this shouldn’t be marketed to the public without a prescription, but its motives seem as impure as the supplements it protests.  That was what prompted a federal judge in San Diego to label Outlaw’s lawsuit—one that was accompanied by thousands of demand letters across the country to business owners claiming they were “selling illegal sexual enhancement drugs” that “subject your company to legal action for racketeering . . . under RICO (Racketeer Influenced Corrupt Organizations) and the Federal Lanham Act”–a “shakedown.”  The letters threatened six figures of liability, but they kindly offered to settle all claims in the low five figures–a burdensome, but just manageable, figure for the average mom-and-pop business–and far less than the cost of protracted litigation.

Outlaw’s moves have provoked a reaction.  There’s a sizeable group of defense lawyers ready to take on the cause of the businesses targeted by Outlaw’s aggressive tactics.  Now there may be a class certification of business owners who have been harmed by Outlaw’s tactics, and the sympathy for their cause is easy to see.  Outlaw comes across as a bully, targeting small businesses and shaking them down for a cheap settlement.  If Outlaw were serious about getting fraudulent supplements out of the market, why not target the manufacturers?  The reason: they probably have money to defend themselves.

This is what fills me with disgust.  I have no dog in this fight except to protest this breed of litigation that doesn’t have any genuine “wrong” at its heart—at least, not against the parties being sued–nor does it have any particular client represented.  Indeed, the lawyer doesn’t even know what the defendant did wrong, other than accept a product for sale, and the people being “protected” by the action–the consumers of these products–are entirely unknown.  It’s a manufactured cause of action, an excuse to bring a lawsuit, but the cost of defending that lawsuit far outstrips the cost of settling it.  It costs parties who have no idea what (if anything) they have actually done wrong, and it weakens public faith in our judicial system, making some believe that every case is nothing but a money-grab.

As an appellate lawyer, I may never meet my client, but I always know their name, and I know their story.  I know who they are and why they need my help.  I stand for a person, not a class, and I know who my opposition is. I win or lose for my client, and them, alone.  Litigation of the sort brought by Outlaw is a scourge.  It invites, and sadly deserves, the reaction it has gotten.