News came out of Connecticut in September that should bring joy to everyone who wishes our industry well, which most certainly includes this writer. The Connecticut PHCC and Connecticut MCA, allied with contractor associations from other trades, settled under favorable terms a landmark class action lawsuit against three gas utilities - Southern Connecticut Gas Co., Connecticut Natural Gas, and Yankee Gas Services. The suit was filed in 1995 under the state's Unfair Trade Practices law, and ended with more than a half-million dollar payment to the contracting community and other nonfinancial provisions that promote the use of independent contractors. The contractor coalition contended that the utilities' use of unlicensed personnel to do residential service and repair work constituted an unfair trade practice.
Although the utilities admitted no wrongdoing, they agreed to a settlement of $542,500 to the coalition groups. Most of this money went to pay legal fees, I'm told. The agreement also requires the utilities to promote the use of professional contractors in utility mailings for the next five years, prohibits them from placing utility advertising on residential equipment, prohibits the use of utility employees for installing certain equipment, and requires them to help develop a contractor referral system.
To which I say bravo, but with a lack of enthusiasm. Don't get me wrong. Nothing I say here is intended as criticism of our friends in the Connecticut PHCC and MCA. The trade coalition is to be congratulated for its victory in helping to level the playing field against utility competition. The job of those trade association leaders is to promote their constituents' interests, and they did that effectively using the best weapon available to them.
It's that weapon I find loathsome.
The Class Action RacketClass action lawsuits are proliferating faster than rabbits fed Viagra, and therein lay much of what's wrong with modern America. Class action has become the favorite gambit of greedy trial lawyers who have discovered that there is even more money to be made at the wholesale level of victimization than by representing aggrieved parties one at a time.
A couple of months ago I got a letter inviting me to fill out a form that would make me party to a lawsuit against an airline company accused of airfare mischief. I declined out of principle. I stood to gain a few dollars off a future airplane ticket, but the real purpose of the lawsuit was to enrich the attorneys representing me and who knows how many hundreds of thousands of fellow air travelers.
Law firms prowl like hungry sharks for such opportunities to convert minor grievances into pocket change for consumers and millions in their own coffers. Go back and re-read the second sentence of the second paragraph. That's what the class action racket is all about.
It must be conceded that the bandits of the bar do not lack for willing accomplices in their schemes. Most people can't resist the lure of a few unearned bucks when all they need to do is fill out a simple form.
Sometimes money is not the motive. Political zealots increasingly turn to class action litigation to achieve ends for which they cannot muster a legislative majority. Lately we've seen them take on the likes of tobacco and firearms companies with the intent of driving them to financial ruin (while the plaintiff attorneys get enriched by billions of dollars). Consumers get seduced into applauding lawsuits against companies that make products they perceive as evil, even though most of them stop short of supporting a legislative ban on those products.
This undermines our country's well being even more than mere greed. It's a bastardization of democracy. Our social policies increasingly are being determined not by elected representatives but by minority political interests and their hired guns with law degrees.
Gunslinger's CredoThat's the big picture. At the local level, it's easy to sympathize with the plight of independent contractors threatened with extinction by unfair competition from giant utility companies. Who can blame them for fighting back with everything in their arsenal, and class action is this era's version of the Colt .45 that is said to have won the West. I do not begrudge them their hard-won gains. I only wish to point out a couple of harsh realities.
First, the settlement achieved does not put those utility companies out of the PHC business. The settlement cash sounds like a lot to a small trade association, but is chump change to the gas companies, and the business restraints agreed to by the utilities are inconvenient to them but hardly enough to drive them away from the PHC market. As is always the case with litigation, the biggest winners are the lawyers.
Also, we may all do well to remember the gunslinger's credo - he who lives by the gun may well end up dying by the gun.
You and I may view the Connecticut class action as a triumph of justice, but who knows when the same weapon might be turned against PHC contractors. It's not too hard to envision a class action lawsuit representing consumers against PHC companies accused of overcharging for their services.
Maybe some law firm will set its sights on parties that make, sell and install equipment that gives off carbon monoxide, or Legionella, or some other hazardous condition. Or, maybe they'll litigate over some off-the-wall issue nobody in his right mind can foresee. All it would take are some enterprising attorneys to crunch the numbers and decide the potential bucks are worth their time and trouble.
Sorry for sounding like the Grinch who stole Christmas, my friends. It's just that the class action option is a loaded gun being recklessly twirled in every direction.