Column: Hollywood, ’Jackpot Justice’ won’t derail Ohio manufacturing

Staff Writer
The Columbus Dispatch
Andrew O. Smith

To me — like so many others — manufacturing means opportunity and an honorable way of life. I got my start in a shoe factory, working to help cover costs in college. Manufacturing in the United States saved western civilization during World War II, then built a broad middle class back home and today employs millions of skilled workers who drive advances in efficiency and technology that enhance our everyday lives.

Today, as CEO of a paint manufacturer that has called Columbus home for 100 years, I’m honored to continue offering opportunities for rewarding careers to people who make products that protect, beautify and preserve our environment. I’m not alone. The manufacturing industry is full of people who care deeply about the communities where we live and work.

I am particularly proud to be part of the chemical industry, which has among the lowest accident rates among all manufacturers (and less than half that of elementary schools); has developed the Responsible Care system to reduce environmental impacts, increase safety and ensure security; and supports many charitable organizations in the communities we serve.

I have never met a chemical industry executive who cares less about the environment or their fellow employees than the most ardent social activist.

Manufacturing is the backbone of our economy in the Buckeye State — employing more than 700,000 Ohioans — but our continued strength and leadership cannot be taken for granted. Our industry is under increasing threats on several fronts, including from lawsuits that can destroy jobs and harm communities.

In my 2013 book “Sand in the Gears: How Public Policy Has Crippled American Manufacturing,” I detailed how the legal system has been corrupted by a system of “Jackpot Justice” where trial lawyers and special-interest groups extort huge payouts and regulate manufacturing through litigation.

These efforts are sophisticated, well-funded and harmful. My book shows these lawsuits impose a cost on our country equal to roughly 9.4% of GDP or about $2 trillion annually in dead-weight losses, showing up in higher costs for goods and services to the tune of $6,000 for every man, woman and child in this country, every single year.

When we pillory our business corporations, we had better be careful what we wish for. The attacks being made on business, and in particular manufacturers, are sometimes made by naïve young people who have been fed a diet of anti-capitalist, anti-business, anti-American agitprop by their schools and the media, and so might be forgiven. But when leading candidates for public office proudly proclaim their socialist street-cred, boldly propose the confiscation of property and ooze contempt for American businesses out of their every pore, we should be alarmed.

These trends are exacerbated by Hollywood. Take the movie “Dark Waters.” It is a highly entertaining and gripping drama, with corporate villains and a heroic lawyer (it happens) fighting the good fight to alert the public about an emerging public health crisis. But the film takes liberties with the facts and simplifies some very complicated and still-emerging science.

The movie extrapolates from an isolated (if significant) occurrence of alleged corporate malfeasance and unfairly stigmatizes not just an entire industry but our entire system of commerce, law and governance. Moreover, these dramatizations can cause overreactions and panic, leading to bad public policy and ultimately hurting the American economy.

Attacks also come from the large network of trial attorneys and activist groups using lucrative contingency-fee arrangements to pursue lawsuits against manufacturers often based on unproven science, undermining our country’s economic base. Under contingency-fee agreements, private trial lawyers — empowered by state attorneys general — are able to investigate and press cases using the full power of the government. Yet unlike civil servants who are expected to balance many competing interests, these private attorneys have a personal incentive to seek the largest awards possible.

The terrible damage caused by this Jackpot Justice system does not mean that business regulation is unnecessary, that government action is unneeded or that the rare misconduct by a corporation should go unpunished. Vigilance is warranted, particularly as science continues to increase our understanding of the many factors that contribute to health and illness. Manufacturers continue to step up, with strong new commitments to innovation and sustainability. This represents the better approach — in which scientists, industry, regulators, elected leaders and communities collaborate to solve problems and balance priorities.

Let’s give this process a chance to produce consensus, to the benefit of all Ohioans, and keep public policy decision-making out of the courtroom.

Andrew O. Smith is the CEO of Yenkin-Majestic Paint Corp. and a member of the board of trustees of the Buckeye Institute.