Saturday, March 12, 2005

Case Against Alcohol Companies For Drunk Driving Accident Dismissed

One cutting-edge area of tort law is the spate of lawsuits against alcohol companies for their role in contributing to drunk driving accidents. Unfortunately, one of the pioneering cases (a class action!) was just dismissed by a California trial judge, apparently because the plaintiffs did not allege enough facts about specific advertisements or that the drunk driver had viewed them. The plaintiffs plan to appeal, though. If they're reading this, I'd love to help!

A great introductory article to this area is "Lawsuit Claims Alcohol Companies Marketed to Underage Drinkers," in Lawyers Weekly USA (Jan. 19, 2004). The case just dismissed was not covered well by the media, although there is a good article in the Milwaukee Journal Sentinal (click here). Click on "read full post" for my ranting and raving on this issue...

From the article:

[The suit asked the court] to stop alleged underage marketing practices. It also sought damages equivalent to the money it says Miller and Anheuser-Busch received by selling alcohol to underage consumers. That could be $4 billion to $5 billion, according to the Goodwins' attorney, Steve Berman, who vowed to appeal Lichtman's ruling. Both Milwaukee-based Miller and St. Louis-based Anheuser-Busch said the lawsuit was without merit. Both companies said their ad campaigns and sales practices target people who are 21 and older.

Yeah, right! Most of the beer ads I see appear to be targeted at junior high boys. In an interesting twist, Miller Brewing Company is now suing its four insurers for their refusal to cover litigation costs over this issue, especially The Hartford (where one of my close friends works!). Click here for that story.

I think alcohol companies are simply externalizing the social costs of their products; and it is one of the costliest products in our society. As a Legal Aid lawyer, my previously-held biblical scruples against alcohol consumption blossomed into an impassioned resentment of the stuff and those who peddle it, as it seemed to be one of the main things generating poverty in the lives of my clients. Then I started teaching Criminal Law, and had to conclude that "intoxication was no defense" to crimes at common law mostly because it would have exonerated the defendant in almost every case.

The billions of dollars in profits taken in by alcohol companies should be offset by some of the billions of dollars in social costs that their products generate; in the absence of that, the rest of us are essentially forced to subsidize them by internalizing those costs ourselves (even those of us who don't drink). I understand that I won't win many people over to my Prohibitionist platform anytime soon, but I do think the alcohol companies should have to make an honest buck like everybody else - and right now, they're not. They're taking money out of my pocket without asking me - via higher premiums for auto insurance, health insurance, and taxes for our criminal justice system and welfare system. The alcohol companies could, however, purchase insurance for such liability, which would help them internalize the realistic costs of their product. (Their current insurers are saying they haven't paid for such coverage yet). This is why I think these cases are fantastic. And the companies would cover their increased premium either by docking the dividends to their shareholders - the ones currently transferring wealth to themselves from the rest of us without our consent - or from the consumers of their products, who would have to pay higher prices. Higher prices lowers consumption (except with a rare economic scenario called "Giffen goods") - so it should lower the amount high school kids consume. Higher alcohol prices should, in theory, price out the most irresponsible consumers from the market first.