Summary: The "litigation-lobby" point (pro or con) is just one argument over the distribution of rewards from structural mechanisms, legislative and judicial, that have a strong tendency to support monopolistic-extraction-of-economic-rent. You must wrap in the notion of consumer sovereignty, and the point at which some large judgment becomes the most statistically significant cause for higher prices for goods or services from one company or one describable segment of the economy. So long as monopoly is the end result of nearly all political bargains between and among segments of the economy via log-rolling there is little likelihood that any argument could be made that standardizing and/or limiting the size of awards will lead to greater consumer sovereignty, or lower prices that float downward toward some optimal equilibrium. Instead, it merely affects the relative distribution of economic rent (which is still just a tax, and I am all for lowering taxes on consumer sovereignty).

TO: Ted Frank,
( Response to this and this, and continuation of comment/rebuttal on Volokh post on Libertarian Democrat? )

A wrap around argument could be made that interest groups have a shared interest in perpetuating and enhancing monopoly power (and monopsony) at all levels of government. As proof, one note that Congress seems content, with judicial acceptance, to assert Commerce Clause power to the outer limit of zeroing in on some hermit hemp hobbyist. Should I call this government litigation, as opposed to private litigation. It is hardly characterizable as some real "economic" interest but rather reveals the depth of superficiality to which any and all economic discussion has descended in the legal arena.

Whatever Congress intends Congress gets. There is but one battle field, where contending monopolists face only other contending monopolists, and that is a winner take all position. The challenge is not about monopoly, and its inherent evilness to consumer sovereignty, but is isolated to the distribution of the rewards of the extractions of monopolistic-economic-rent. One contender -- for distribution -- , not pegged to any particular enterprise, is the collusive body of state treasurers that manage public employee savings trusts. It has contorted politics at the state level into a knot.

Imagine if states did not have special laws pertaining to "public" employee retirement trusts but simply general laws that are applicable to ALL retirement trusts -- and recognized them as banking institutions, but where there is a penalty on making a run on the bank. The penalty -- giving up the supposed micro-economic-perceived benefits of participation in favorable federal tax tweaks to income -- is a restraint on both liberty and individual responsibility, in my opinion, because it disfavors small illiquid local investments that are too small for "professional" investors to see.

I am not in favor of the Securitization of nearly ALL economic activity. Let's flip over the focus of retirement related tax incentives so as to offer them only to enterprises that have a market cap below 25 million and actually favor hands-on management and oversight of one's own savings rather than severing saver from their ability to invest in something like their own family business. The penalty for NOT participating in the federally-tax-induced retirement programs is just as extreme as the federal-statutory penalty for the exchange of State Currency, where it is not treated as criminal but rather just subject to a tax on the exchange of such state currency. If one looks only at a description of the method of enforcement one might get the idea that non-participation of pension trusts and delegation of investment decisions to others is just as criminal as where a state creates its own currency and the citizens use it instead of federal reserve notes. (I'll leave out a discussion of state bonds here, and particularly future obligation bonds for pensions to the exclusion of all other anticipated future budget items, as they oddly resemble state currency where the bond rating substitutes for a floating market-driven-exchange rate.)

Nearly every interest group -- identifiable by market segment descriptions -- has an overlapping shared interest in the formation of monopolies and their perpetuation. The political log-rolling between between such segments in the political sphere is routinely tolerated as both sufficient and necessary to generate legislative political support and judicial acquiescence to claimed bipartisan deals. The public interest in consumer sovereignty is virtually nonexistent in this context. I liken the dynamics to a gradualist approach to achieving exactly the same end as when Spanish Anarchists had eliminated all opposition and then faced the specter of control of the essential enterprises that exist to deliver the things that people demand for survival and entertainment.

The notion of opposing or supporting a litigation-lobby fits within the above framework but does not itself alone contain sufficient breath of description to draw conclusions about whether opposition or support leads to support or opposition of individual liberty. Let's look at the insurance industry and litigation against insurers --

When I see the phrase economic-rent I think of monopolistic-economic-rent. Insurance companies in particular have obtained special legislative privileges mandating insurance in many contexts. One example is auto insurance, so as to assure that medical providers can get paid even where two poor drives collide. Another context is to convert the entire notion of "liberty to contract" for medical services, and the insistence upon prices that resemble some equilibrium with the incomes and wealth of the poor, into a single question of insurance coverage.

In Oregon some folks do not bat an eye when doing a two-step dance 1) require drivers to obtain auto insurance and then 2) contemplate mandating a tax on insurance to be spent for any purpose that can be paid for from the general budget. This single fact-set should amply reveal the marriage of left and right to perpetuate and enhance the extraction of economic rent; and thus render the economic term of "consumer sovereignty" as a relic in the new world order.

Can you tell me if there is any money to be made by a litigation-lobby if their argument started from the position at the outset to identify the presence of (unlawful) extraction of economic rent (even noting offending legislative license to the extraction) of a corporate defendant? There would be no money in it. Why? Because it would immediately lead to proof, almost per se as a matter of law (at least in my opinion, given my training in economics), that the cost for huge jury awards would be paid not by the corporation but rather by consumers.

The litigation-lobby (regardless of whether it is viewed as good or evil) is just one group that seeks to capture for itself the monopolistic-economic-rent that some entity (person OR limited-liability-entity) has obtained from the public, aided by legislative branches at the state and federal level.

Today's new-left is not so much anti-capitalist as they are interested in perpetuating the extraction of economic rent, and abandoning any and all attention to eliminating the horror of abuse of monopoly power, so long as they can transfer to themselves the benefits to be derived from extractions.

As horrible to consumer sovereignty (and to individual liberty to contract) as I believe the above to be it is still like a micro-economic analysis as compared to a macro-economic look at the notion of "social investing" as argued by Bill Clinton and as practiced with a vengeance by the overtly collusive association of state treasurers in management of public employee trust funds. They, collectively, know no limits to their power to enact legislation to enhance their ability to aggregate all investment resources to themselves so as to carry out their political agenda.

Such "social investing" and the claims that it is motivated by a valid public purpose would all fall just as flat, on a macro-economic view, if the advocates instead sought to prohibit monopolistic-economic-rent, rather than merely redirect the rewards from the extraction.

Just study the actions of Oregon's State Treasurer, as an active politician on the national scene among state treasurers and his effort to gain a seat on the NYSE, on the Oregon Investment Council; for example to contract with Texas Pacific Group to attempt to take over Portland General Electric so as to transfer the benefits of the extraction of monopolistic-economic-rent from the general population to the loyal public employees. As a PR strategy TPG was bad mouthed big time while the OIC was able to hide their complicity.

This is a bigger problem than anomalous results by trial court litigants; where neither side has any economic incentive to point out a superior public interest in consumer sovereignty and nor to attack monopolistic extraction of rent wherever it is found. I consider public employee beneficiaries of publicly managed public employee pension trusts as "private," for the class of "owners" (called instead beneficiaries) does not overlap precisely with the much larger class of lowly poor consumers. I wish I could mandate that all lawyers take a course in Comparative Economic Systems and study the measures of economic performance.

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UPDATE: I could toss in the argument here one major cause of the non-competitiveness of US products abroad is by reason of the high cost of labor to accommodate the federal reserve induced interest payment extraction from residential housing. This is tied to the structural political alignment of residential home owners to corporate entities on the issue of Capital Gains treatment of income. A home owner's "investment", as distinct from that of a landlord, is dead investment; except as a mechanism for someone to extract roughly one third of the income from the working class. (This is part of my my Glorified Renter issue -- to rebut the oddly named Ownership Society twist on debt; where debt equates to slavery and the absence of liberty.)