While Space Exploration Fuels Innovation, Legal Fears Often Keep Innovation Grounded

SpaceWith Pluto-mania sweeping the nation, we used our “Let’s Be Fair” radio commentary this week to recognize some of the ways that consumers have benefited from space exploration, and how we might still benefit in the future if liability concerns don’t stall innovation.

Modern conveniences like cell phone cameras, scratch-resistant lenses for sunglasses, water purification systems, and CAT scans were all originally developed by NASA. Yes, if you have ever been treated with a CAT scanner or know of a loved one who has, you have the space program to thank for this. This cancer-detecting tech was first used to find imperfections in space components.

Because of the brilliant minds working at NASA, it often seems like the only limit on what we can create is our own imagination. Unfortunately, one of the barriers to innovation is entirely man-made and unique to America: legal fear.

For example, at this time, a device invented by a former NASA engineer that could save lives by making it impossible to text, talk or email on a cell phone while driving is being kept off the market — in large part – because of fears about lawsuits. In a previous blog post, I explained how legal fear was stalling the rollout of this amazing technology even though the entrepreneur who developed it got two heavyweights in the insurance and cell phone industries to support his efforts.

The number of new consumer products that have been kept out of the market certainly includes many more than those developed by NASA engineers, however. John Stossel identified a number of these in an excellent article a few years ago. They include things like hypodermic needles that cause less pain to patients, a substitute for asbestos, and a medicine that relieves morning sickness for pregnant women suffering from nausea.

The morning sickness medicine, Bendectin, was finally returned to the U.S. market in 2013, 30 years after the manufacturer pulled it off shelves here in response to lawsuits that later turned out to be completely unfounded. All during those three decades, women in Canada and Europe benefited from the relief provided by Bendectin while women in the U.S. suffered unnecessarily from their nausea.

Over the years, I have talked with many entrepreneurs who either decided not to bring products to market, or who have chosen not to provide consumer-friendly modifications to their products, because of concerns over being sued. These legal concerns do not tie the hands of innovators in any other country in the world, and the real losers are American consumers.

The negative effect that lawsuit abuse has on product development and innovation is as much of a concern to consumers at the extra money we all pay for products that do make it to market.

Photo courtesy of FreeDigitalPhotos.net and xedos4.

The Sticky Legalisms of Wacky Warning Labels

Washington Times 2015 op-edThis op-ed article by the author of “Let’s Be Fair” appeared in the Washington Times on July 3, 2015.

Not too long ago, common sense ruled the day, so called because it was shared by nearly everybody. Common values, commonly understood sense of right and wrong, just and unjust, all expressed in a common language of fairness.

But what’s happened to common sense in America? Our laws, as expressed in opinions by our courts, seem disconnected from the common sense that defined our experience.

Take a look at any of the five labels that have just been named finalists in our 18th annual Wacky Warning Labels™ Contest.

There’s a warning on a ceiling-mounted smoke alarm that actually says: “Silence feature is intended to temporarily silence the horn while you identify and correct the problem…It will not extinguish a fire.” Really? Someone needs to be told that pushing a button on a device smaller than most cereal bowls won’t put out a fire?

Or take the warning label someone found on a one-inch-tall water-absorbent grow toy that looks like the Easter Bunny. To the amusement of kids across America, it expands when you place it in water. However, read the fine print on the packaging, and you’ll find a warning that says, “This toy is in no way intended to represent living people. Any resemblance is purely coincidental and not intended to harm anyone.” Evidently, someone wasn’t amused by the appearance of the toy.

Countless products are plastered with common sense warning labels today because lawyers have advised product makers that if they don’t provide the warnings, they could be sued. It’s why a popular four-inch-long brass fishing lure with sharp hooks dangling off the end now warns: “Harmful if swallowed.”

That warning was one of our past winners. The owner of the family-run business that made these fishing lures for nearly one hundred years without needing to put that warning on its products told us that they finally decided to provide that warning on the advice of a lawyer. They were informed they could be sued under California’s Proposition 65 law that requires labels on products that contain certain chemicals even though no one in their right mind would try to swallow a fishing lure. Prop 65 has been a bonanza for plaintiff lawyers, but according to experts in the field, there isn’t a single empirical study demonstrating any public-health benefits of Prop 65.

While the fear of being sued over risks that are common sense is relatively new in the long history of our country, reformers have been calling for more common sense in public policy for centuries. In fact, as we prepare to celebrate Independence Day, it’s worth noting that several months before the Declaration of Independence was written in Philadelphia, Thomas Paine published a pamphlet called Common Sense.

Thomas Paine’s pamphlet helped spark the American Revolution by encouraging colonists to rethink the rules by which they were living, and today, it holds lessons about the importance of rethinking the rules of a civil justice system that forces law-abiding product makers to worry about being sued if someone misuses their product.

In the opening paragraph of Common Sense, Paine wrote that “a long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom.” In today’s language, what Paine was saying is that it’s easy lose sight of how wrong something is when it becomes an everyday part of one’s life.

Excessive litigation has become such an everyday part of life in America that many people don’t question it anymore. However, these wacky warning labels – which aren’t found in other countries, by the way – should themselves be a warning that it’s time for us to change old lawsuit habits that haven’t served us well. Judges and lawmakers need to tell plaintiff lawyers that personal responsibility and common sense still have a place in America’s courts. When that happens, we won’t need labels like the one found this year on a bag of frozen catfish pieces that warns: “Contains fish.”

Worldwide Survey Of Litigation Trends Reveals Grim News For America

world with gavelCompanies in the United States are now facing more than twice as much litigation as companies in other countries. That’s the disturbing finding of a survey recently conducted by the third-largest law firm in the world. Click here for a summary.

The firm, Norton Rose Fulbright, which happens to be the largest law firm in the world based outside the US, conducted a poll of more than 800 corporate counsel representing companies across 26 countries, and the results are not good for American companies or the job seekers who would like to work for them.

While the survey is performed to identify litigation trends across the world, what it reveals about America’s addiction to the legal fix should make lawmakers here sick. Nowhere else in the world does the legal system suck as much money out of the production of goods and services as it does in the United States. Click here for a pdf file of the survey.

It’s not getting any better, either. According to the survey, the number of US companies spending at least ten million dollars a year on their lawsuit budgets soared nearly fifty percent in just the last two years. Fifty percent!

What kind of lawsuits do companies have to spend so much time and money defending these days? According to the survey, a growing percentage of the legal action against companies is being brought by their own government. Consider this:

“…more US respondents say regulatory/investigations are a top concern compared with the broader sample (48 percent to 39 percent).”

In other words, half of the companies that do business in America are concerned that they’ll be investigated by a regulatory agency. Of course, this is not news to any job providers reading this. However, it may be news to lawmakers who have been elected on job creation platforms across the country because there are so few studies that compare the level of litigation in America with other countries.

In addition, the poll also reveals that:

“personal injury litigation is significantly more prevalent in the US than in other countries, with 21 percent of respondents selecting it as one of the most numerous types of cases they faced in the previous 12 months. That compares to just 15 percent in the survey overall.”

Now, it’s no surprise that the US is the most lawsuit-happy country on earth, but this survey confirms that this problem is growing faster than many have believed. With the US government reporting that the economy slowed to a crawl in the most recent quarter, the last thing job seekers need is companies having to divert precious financial resources from job creation into fighting lawsuits.

This column originally appeared in Townhall.com on May 24, 2015.