NCPA - National Center for Policy Analysis

New Threats to Private Sector from States' Attorneys General

April 4, 2000

Some legal experts warn that the new activism of states' attorneys general amounts to no more than raids against the private sector. Their role has evolved and jumped traditional boundaries since they started hiring personal injury lawyers on a contingency fee basis to go after one class of business or another to extract multibillion dollar settlements for their states.

  • First, of course, were the tobacco companies and the well-publicized windfall fees the lawyers took home.
  • Then firearms manufacturers were targeted -- with Smith & Wesson caving in and agreeing to controls on the distribution of its products in exchange for a settlement of lawsuits against it by 30 local governments.
  • Now a number of states' attorneys general have their sights set on Microsoft and have joined the federal government in the attack.

What business or industry will be next, critics ask?

Rhode Island Attorney General Sheldon Whitehouse has launched a lawsuit against the makers of lead paint -- even though it was banned by the federal government in 1978. Moreover, he thinks he has a case against the makers of latex rubber gloves, after reading that 10 percent or more of the health care work force is now latex allergic.

Observers point out that if the latex industry can be attacked, what about suits against the users of those latex gloves -- such as HMOs, pharmaceutical firms and nursing home owners?

Source: Editorial, "Who's Next?" Wall Street Journal, April 4, 2000.


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