In the political battle over tort reform, Democrats argue that discouraging frivolous lawsuits creates a chilling effect that also hurts those with legitimate claims. Are they in earnest? Or are they just making a convenient argument to protect the rent-seeking efforts of trial lawyers?
We get a hint at the answer by considering the terms of the auto bailouts:
Vicki Denton died several years ago after the airbag in her 1998 Dodge Caravan minivan failed to deploy during a head-on collision in the Georgia mountains. In 2009, a jury found Chrysler responsible for her death because of a manufacturing defect, awarding her surviving son and other relatives $2.2 million.
The family was near collecting those damages on the eve of Chrysler’s government-brokered bankruptcy. Now, two years removed from a $12.5 billion bailout, Chrysler Group LLC still hasn’t paid the damages, and doesn’t have to.
The reason: The company’s restructuring allowed it to wash away legal responsibility for car-accident victims who had won damages or had pending lawsuits before its bankruptcy filing. The same holds true for General Motors Co., which discarded the liabilities as part of its own $50 billion bailout and restructuring. . .
Among the creditors who suffered most, car-accident victims represent a distinct mold. Unlike banks and bondholders, this group didn’t choose to extend credit to the auto makers. As consumers, they became creditors only after suffering injuries in vehicles they purchased.
When push came to shove, Democrats protected the labor unions, not accident victims.
(Via Instapundit.)
