The legal mess in the Rhode Island lead paint class-action suit is too fresh in our minds. Yesterday securities class-action king Bill Lereach spent his first night last night in prison. And we're still reeling from the fall of once-activist state attorneys general Eliot Spitzer and Marc Dann. So, yeah, it's difficult to reflect on how lucky we in America are to have the option of our well-developed class-action legal system.
But lucky we are, at least as compared to 16,000 shareholders in Germany who had invested in Deutsche Telekom. Those shareholders, it's reported in the April 10, 2008 THE ECONOMIST, "argue that the company misled investors when it issued new shares in June 2000, both by overvaluing its properties and by keeping quiet about plans to take over Voicestream, an American mobile operator, for which it paid $33 billion soon afterward." The shareholders went to trial for a relatively small amount of money. What is significant is this is the nation's, as THE ECONOMIST describes it, "first timid step towards American-style class-action suits."
Timid may say it all. A German lawyer from the firm which started this litigation laments that the system he's working with has really "no class action, no discovery of documents, and we - not the company - have the burden of proof."
In this lament, the lawyer says nothing about the monster cost of trying an American-style class-action lawsuit. Someday we may find out what that cost has been in the almost decade-old RI lead paint trials I and II. We will get an actual figure for the money plowed into that litigation by the plaintiff, that is the state of RI, and the original defendants Sherwin-Williams, NL Industries, Millennium Holdings, and Atlantic Richfield.
After this lead paint saga is all over, the plaintiff and the private law firm assisting it on contingency might consider in the future another legal kind of tool to right what they view as a wrong. Class-action might not even make their list.
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