'I'm Being Sued for WHAT?'

May 02, 2007 — -- Seemingly frivolous lawsuits are costing us billions and changing the way Americans live and function in society, experts tell the ABC News Law & Justice Unit.

The evidence seems to be everywhere.

Lawsuits like the case of the $67 million "fancy pants" lost at a Washington, DC dry cleaners, have become a national punch line, but not everyone is laughing. Tort claims cost the country hundreds of billions of dollars per year, according to the National Federation of Independent Business, and they are changing our behavior and culture, says Phillip Howard, chairman of Common Good, a legal reform coalition.

The poster child of excessive lawsuits seems to be the 1992 case against McDonald's brought by a woman who burned herself when she spilled coffee on her lap. A New Mexico jury awarded her $2.9 million in damages. But that seems quaint compared to some recent suits.

One hopeful plaintiff sued basketball star Michael Jordan and Nike co-founder Phil Knight for $862 million "for defamation and permanent injury," because he found it "distressing" to look like and be confused with the icon. He dropped the suit but won the 2006 "Stella Award" – named after the infamous McDonald's coffee case – for most ridiculous lawsuit that year.

But the competition for most outrageous lawsuit is stiff.

One woman sued an open air mall after she was "attacked" by a squirrel on the grass, claiming that the mall "failed to warn" her about these animals, according to the Chicago Sun-Times. In another attempt to pass the buck, a photographer sued a waste management company for $50 million after he fell off a garbage truck that he had climbed atop in order to take better pictures, reported the New York Daily News. His lawyer said the company was negligent since his client "never thought in a million years the truck would move."

Schools and hospitals are popular targets for ruthless litigants. One student sued her school district when she received a failing grade for an assignment she turned in late, reported the Charleston Daily Mail. Also, a patient sued a hospital "for allowing a visitor to bring into the hospital the illegal drugs she used." She also blamed the hospital "for not noticing she was high and that her heroin or cocaine needle was broken and still stuck in her arm when she received an antidepressant," according to the Allentown Morning Call.

Although not always this audacious, Howard calls these types of frivolous lawsuits "legalized extortion" and says they change the way we behave. For example, after a $6 million verdict from a sledding accident in Greenwich, Conn., towns and golf courses across the Northeast banned sledding on their property. In some places, fear of lawsuits has caused schools to ban running at recess and playgrounds to get rid of swing sets, according to Howard.

And what is more alarming is that the threat of lawsuits may prevent action from being taken against real perpetrators. Charles Cullen, the nurse who pleaded guilty to killing at least 29 patients in hospitals in New Jersey and Pennsylvania, was able to move from one hospital to another - 10 medical facilities in 16 years – because fear of litigation prevented the hospitals from giving him a bad reference, says Howard. In the wake of the Virginia Tech shootings, legal experts pointed out that the university might have faced legal challenges had they expelled Cho Seung-Hui, the future killer, before he did anything illegal.

Experts like Howard think this is growing problem. "We took a wrong turn in American justice about 40 years ago," he told ABC News, "judges have been sitting on their hands …. letting people claim anything, and the effect is not better justice, it is worse justice."

We all pay a price for frivolous lawsuits, say experts. Tort claims cost the nation about $233 billion in 2002, which is more than double the average cost of other industrialized nations, according to a study by Tillinghast Towers Perrin.

And "one frivolous lawsuit can put a small business out of business," according to the US Chamber of Commerce

As legal threats grow, so will the uncertainty and exposure felt by individuals and businesses. "At one point in the 70's a lawsuit for a million dollars would make a headline. Now people make claims for a billion dollars," Howard told ABC News, citing the case of the $67 million fancy pants.