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Why the Vaping Industry Should Utilize Litigation as a Deterrence (part 3)

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Fred Kelly Grant: Trial Lawyer and Coordination expert

In prior posts, I have recommended filing a lawsuit to challenge the banning ordinances in San Francisco and Oakland.  Based on my experiences in the trenches for over 50 years I know that litigation deters others from following in the footprints of the defendants being sued.  If for no other reason, I recommend litigation challenging those ordinances to deter other cities and towns up and down the Pacific corridor and the Intermountain West from passing the same ordinance.

Think about it from a city’s standpoint:  San Francisco passed its ordinance.  No one sued, which to the layman means none of the people in the industry could find anything legally wrong in that action (that is not speculation; my experience in trial work is that people believe that “no lawsuit, nothing done wrong.”)  So, there is nothing standing in the way of a  city banning the product and shoring up its position for getting more tobacco money.  (Evidence of this is the fact that Oakland put its ordinance on hold when it became clear that San Francisco was going to act.  When several weeks had passed and no lawsuit filed, and the only attack on San Francisco seems to be referendum, Oakland took down its ordinance and passed it.)

The evidence is clear that neither San Francisco nor Oakland fears the referendum. The Supervisors know it will be costly and difficult to build up a front wall for the vaping industry.  Cities will risk referendum because of limited costs.  And in smaller cities, the elected officials know what the temperature is among the voters.  And they know what moves their voters and they have the means to get out “their” vote at the polls.

A plethora of law journal articles points out the deterrent effect of litigation.  One of the great judicial talents of our time, Judge Lou Posner of the Seventh Circuit Court of Appeals specifically points to the deterrent effect of litigation in answer to regulations issued by administrative agencies in chapter 13, “The Choice Between Regulation and Common Law” in the book  “Economic Analysis of Law”, Posner, L. 7th ed. Aspen Publishers, 2007.   He points out that economic analysis of law puts “emphasis on the deterrent effect of the threat of liability, rather than on the compensatory value “of a case”. Throughout his article he cites numerous scholarly writings supporting the concept that litigation deters actions like those being challenged.

Professor of Law, Andrew F. Popper, American University Washington College of Law, in an article “In Defense of Deterrence” 75 Albany Law Review 181 said: “The civil justice system deters misconduct.  It generates far reaching and positive market effects beyond victim compensation and recovery.  Civil judgments, settlements, the potential for litigation—the tort system itself—has a beneficial effect on the behavior of those who are the subject of legal action as well as others in the same or similar lines of commerce.”  In other words, “The actual or potential imposition of civil tort liability changes the behavior of others.”  75 Albany Law Review at 181.

A good trial lawyer lusts for the thrill of the courtroom battle.   The opportunity to argue to a jury draws like a giant magnet.  My University of Chicago Law professor Karl Nickerson Llewellyn said that the great trial lawyer so held the attention of the jury that when they went into the jury room, it was as though he/she took the hand of the twelfth juror and strolled in with them.  And if the arguments had been successful, when an issue arose, one of the jurors would ask “well now what did Mr. Grant say about that?”

One would think then that the good trial lawyer would always steer the client to trial, to enter the fray as the noble combatant.  But, not so. He or she knows the client is rarely served better if the case goes to trial.  The stress, the extra cost, the unknowns along the way, the inevitable appeal and further delays—-all are avoided if the case can be settled.  A good embattling trial is the trial lawyer’s cup of tea, not the client’s.

A virtual given, however, is that no meaningful settlement is going to simply be offered out of the goodness of the opponent’s heart.   Something must spur the opponent to settlement mode.  Most often that is the initiation of the actual lawsuit or the imminent and real threat of such lawsuit being filed.  When both parties to an issue are convinced they are right, it takes a strong deterrent to push your opponent to settlement.  Most often the best deterrent to that is the filing of the lawsuit—where the presence of complex issues offers the threat of extreme costs and time lost.

When a party is threatened with the imminence of a lawsuit, the question of whether the lawsuit can be successful or not pales into insignificance compared with what is at risk with the cost of proceeding and the extreme cost if a loss does result.

Unless the San Francisco and Oakland ordinances are challenged in court, I really fear that more and more cities along the entire west coast will adopt ban ordinances.  Once passed, and not challenged, the industry is through in that city no matter the victories that may be won in the arenas with coordination and the Duncan Hunter legislation.

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