By HARRY F. BELL JR.
CHARLESTON -- On a recent Monday afternoon before the election, I was sifting through all the political ads filling my computer mailbox, including various position statements from business groups attempting to portray West Virginia as a "tort hell," when one particularly interesting news item regarding a new lawsuit caught my attention.
As someone who has practiced law for more than 28 years and has proudly represented businesses, including insurance corporations, large and small, as well as small business owners and individuals who unfortunately find themselves involved in disputes which cannot otherwise be resolved short of going to court, the "Mother Of All Lawsuits" came across my screen-and it didn't involve an individual filing suit against "Big Business" in West Virginia!
That day, Citigroup had filed a lawsuit against Wachovia Corporation and its directors, as well as Wells Fargo Company, seeking more than $20 billion in compensatory damages and more than $40 billion in punitive damages arising from Wells Fargo's alleged interference with Citigroup's contract with Wachovia, and in turn from Wachovia's alleged bad faith in breaching its contract with Citigroup.
It seems to me that when you have one of the largest banking and financial corporations in America filing a lawsuit seeking such damages, including punitive damages, this is probably a case in which someone is going to spend a fortune before ever seeing, or saving, a penny. Have I mentioned that this case was not one in which a West Virginia citizen is suing "Big Business"? In fact, it involves three of the largest, wealthiest financial and banking institutions in the country, $60 billion in claims, and probably hundreds of millions of dollars in fees and costs, and it was filed in the State of New York.
It is interesting to note, in light of this suit, that the very industry in which these three companies do business refuses to do business with people and firms if they refuse to give up their right to sue for breach, misconduct, fraud and the like. One brokerage house comes to mind-Smith Barney, owned, interestingly enough, by Citigroup, the plaintiff in the multi-billion dollar New York lawsuit, which forces you to waive your right to pursue relief in a court of law if you want to use their firm. Smith Barney is without doubt the rule, not the exception, where this business practice is concerned.
What this industry does provide by way of dispute resolution, regularly upheld by courts across the country, is to force aggrieved clients to take part in "mandatory binding arbitration." This mechanism is forced upon investors and depositors via the use of a "take-it-or-leave-it" "mandatory binding arbitration clause" in all of their contracts and agreements with clients. This "clause" restricts and absolutely erases your ability as a client of these institutions to file a lawsuit against them if they have mishandled your investment account. Think about that for a minute. They can be guilty of absolute bad faith, fraud, and gross negligence, and operate in total disregard of your best interests, conduct that in the regular court system would justify the very punitive damages sought by Citigroup, yet your only recourse is submitting your claim to mandatory binding arbitration in a system provided and managed by the very industry which has wronged you.
What this recently-filed case, coupled with the mandatory arbitration system, illustrates is that Citigroup and its ilk does not want you to exercise your right to file a lawsuit against them in the same court in which they righteously believe they have a right to sue, and in which suing their former friends at Wachovia and their competitors at Wells Fargo.
Someone told me once "what's good for the goose is good for the gander," and it seems to me that if it is okay for Citigroup to take advantage of the court system available to it here in the United States of America, provided for in our Constitution, and sue for $60 billion, then Citigroup and the finance and banking industry should not complain too much if a retired schoolteacher in West Virginia, who had a retirement account with one of their crony companies, and then found that her account was totally bungled and mismanaged to her great detriment by that company, decides to exercise her Constitutional right to sue that company in a court of law here in West Virginia.
I do not begrudge anyone the opportunity to take advantage of our judicial system, which is the envy of every country in the world, as it is the proper and civil way to resolve disputes--all different kinds of disputes, even election disputes, as we saw in 2000. That was when the Bush Administration had no hesitation in rushing to the United States Supreme Court and litigating the infamous "hanging chad" controversy in Florida. As the late Tim Russert once said, "what is the most remarkable thing is that after the Supreme Court ruled, even though Al Gore won the popular vote, Bush won the electoral vote, Mr. Gore and his party vacated the White House and turned the administration of the government over to the Bush Administration."
While certainly nothing is perfect, we in the United States enjoy the benefit of a judicial system embodied by courts at different levels which exhibit the highest in integrity and fairness-again, a judicial system that is the envy of the world. The incredible power of cross-examining those against whom you are fighting, and the ability to have a case heard and tried before an actual jury, free of partiality and bias, is truly exceptional.
Just as people like Steve Roberts, head of the West Virginia Chamber of Commerce, recognize, sometimes you are faced with a situation, such as the terrible accident in which his son was injured by a neighbor's alleged reckless discharge of a BB gun, where your only option is to pursue a claim in a court of law. Likewise, business people often resort to the courts, either as the representatives of their companies or as individuals, for both business-related and personal purposes. By the same token, however, there is a substantial amount of money being spent by certain special interest groups, with high sounding names, pushing their anti-lawsuit and "tort hell" rhetoric. Word has it that these are groups backed by business.
Instead of constantly claiming that a particular state is a "tort hell" and using special interest groups to target certain races for elected office, would it not be better if the same special interest groups openly embraced and supported our judicial system, recognizing that the rule of law in this country means that businesses with legitimate disputes have the same access to the courts as individual plaintiffs, and all have the right to bring their disputes before our courts with a fair opportunity to be heard and have their disputes resolved? Unlike what we have seen in Russia, where many western businesses who came to invest have now been faced with the practical effect of being squeezed out of the very markets to which they sought entry, with no legitimate recourse? Unlike the infamous two-bit Venezuelan dictator Chavez, who nationalizes private businesses which have no legitimate recourse?
The answer should be a simple "yes." However, what this also means is the grandmother who is abused and neglected in a nursing home should have the right to bring a claim and have it heard by a jury without being harassed with claims of lawsuit abuse. It also means that the business community, for whom these special interest groups actually speak, should not enjoy special protections and the benefit of damage caps limiting liability just because, for example, elderly folks in nursing homes might not have a well-organized lobbying group like the American Bankers Association or a well-funded special interest group with a high name and a hidden agenda.
This is the situation to which we all should aspire, that being a fair and even-handed judicial system designed and empowered to resolve disputes on behalf of titans of commerce and young children injured by B.B. guns, or elderly grandmothers lying malnourished in nursing home beds, alike.
In the meantime, I wish Citigroup, Wachovia and Wells Fargo well if they begin to seek the truth in their litigation, just as I wish Mr. Roberts and his family good luck in recovering damages for his son injured in a tragic accident which resulted in a situation in which Mr. Roberts was forced to invoke his right to access to the courts.
Just remember that any time you hear about our troops fighting for the freedoms we enjoy in this country, one of those freedoms is the right to have your case heard in front of a jury, a fair judge, in a real court, without artificial restrictions.
Bell is a Charleston attorney.