Holding Corporations Accountable for Defective Products

A federal judge in Michigan just shot down a motion by Fiat Chrysler to derail litigation alleging it sold 800,00 vehicles with faulty gearshifts. The company could end up paying many millions in damages. At about the same time, a federal judge in New York gave final approval to a $5.2 million settlement of class action litigation claiming that DevaCurl products caused hair loss and scalp damage.

These are two recent examples of actions in an arena in which corporations are held accountable for causing harm to their customers: product liability lawsuits. These kinds of court cases are the latest category of class-action and multi-district litigation to be added to Violation Tracker.

The database now contains entries covering 120 of the most significant product lawsuits of the past two decades in which corporations paid substantial damages or a monetary settlement to large groups of plaintiffs.  The total paid out by the companies in these cases is more than $54 billion.

Fourteen of the cases involved payouts of $1 billion or more, the largest of which was the $9.6 billion Bayer agreed to pay to resolve tens of thousands of suits alleging that the weedkiller Roundup, produced by its subsidiary Monsanto, causes cancer. Bayer, which produces pharmaceuticals as well as chemicals, was involved in five other cases on the list, bringing its aggregate payout to more than $12 billion, the most for any corporation.

Next in line are Pfizer and Johnson & Johnson, each with payout totals of about $5.5 billion for cases involving harm caused by products ranging from hip implants and diabetes drugs to heartburn medication and talcum powder. These two companies and other pharmaceutical and medical equipment producers account for one-third of the cases on the list and half of the payout total. The giant settlements involving opioid producers and distributors are not included here, since they are treated as matters of illegal marketing rather than defective products—and because those cases are most often brought by state attorneys general rather than as private litigation.

The motor vehicle industry also features prominently, with 32 cases and total payouts of $9 billion. The largest portion of that is linked to Toyota, with $5.3 billion in payouts in cases involving issues such as unintended acceleration, defective airbags and premature corrosion. Volkswagen has actually paid out much more in class action settlements due to its emissions cheating scandal, but Violation Tracker categorizes those as environmental rather than product liability cases.

Among the remaining cases are a $1 billion settlement by the German company Knauf involving drywall that emitted noxious odors and a $500 million settlement by Sears Roebuck of allegations that it sold stoves that had a tendency to tip over.

Yet perhaps the most surprising of the cases were two involving the Brazilian company Taurus, which paid a total of $277 million to resolve allegations that it produced firearms with a defect that caused them to go off when dropped. The irony is that gunmakers are shielded from liability when their weapons are used in criminal activities.

Product liability class action and multi-district cases—like similar litigation involving issues such as toxic chemicals, wage theft and privacy violations—are reminders that the courts are an important complement to the regulatory system in addressing corporate misconduct.

Targeting Polluters in the Courts

When it comes to dealing with egregious corporate polluters, we tend to think first about what the EPA and the Justice Department are doing to address the problem. Yet there is another way in which environmental miscreants can be called to account: private litigation.

For the past half century, a series of major lawsuits have served as the means by which large corporations have been compelled to change many of their worst environmental practices and compensate victims of those abuses.

Some of these cases have become legendary and have inspired Hollywood movies. The 2000 film Erin Brockovich told the story of a legal clerk who was central to a successful lawsuit against the utility Pacific Gas & Electric for contaminating the water supply of a California town with the carcinogen hexavalent chromium. The 2019 movie Dark Waters dramatized the efforts of attorney Robert Bilott to get DuPont to take responsibility for exposing residents of a West Virginia community to highly toxic chemicals called PFOAs.

The latest expansion of Violation Tracker includes entries on the PG&E and DuPont cases as well as 100 other lawsuits resolved over the past two decades. As a result of these actions, dozens of major corporations have paid out a total of more than $15 billion in settlements around the country.

These are all group actions in which multiple plaintiffs sued the companies for widespread harm. Initially, major environmental lawsuits were brought as class actions. In the 1990s the U.S. Supreme Court put significant restrictions on such lawsuits, but trial lawyers have been able to achieve substantial settlements through the system of multi-district litigation in which cases from various jurisdictions are transferred to a single federal court with the aim of reaching a global settlement. MDLs are even more common in product liability cases (which Violation Tracker will tackle next).

Among the 104 environmental cases just added to the database, there are class actions and MDLs as well as suits brought by environmental organizations on behalf of communities.

Topping the list of settlement amounts are the cases brought in connection with the 2010 Deepwater Horizon catastrophe in the Gulf of Mexico. BP agreed to a $7 billion in 2012 settlement, which was separate from the more than $20 billion it later paid out to federal and state governments. Halliburton, also implicated in the disaster, paid a $1 billion private settlement. The other giant case was the $1.6 billion settlement Volkswagen reached with its dealerships affected by the automaker’s emissions cheating scandal. Like BP, VW also paid billions more in government settlements.

The company with the next highest total is Exxon Mobil, which has paid out more than $590 million in six different private environmental actions. Most of this amount came from a long-running lawsuit stemming from the 1989 Exxon Valdez oil spill off the coast of Alaska. The company was originally hit with a $5 billion punitive damages award, but it appealed all the way to the Supreme Court, which in 2008 slashed the amount to $507 million.

Four of Exxon’s other cases involved the gasoline additive MTBE. Communities and governments in various parts of the country have sued numerous oil companies to hold them responsible for MTBE contamination of water supplies from leaking underground oil tanks.

Another issue involving multiple companies is that of the PFOAs mentioned above in connection with DuPont. A variety of corporations have been sued for contaminating water supplies with these hazardous substances, also known as PFAs or forever chemicals because they do not break down in the body or the environment. DuPont and its spinoffs Chemours and Corteva have paid out hundreds of millions of dollars in these cases, while firms such as 3M and Georgia-Pacific have paid smaller amounts. Other suits are pending.

The dozens of other environmental cases have involved a wide range of toxic substances such as PCBs, dioxin, arsenic, TCE and vinyl chloride. The average of the 104 settlements is $150 million. Sixteen corporations have settlement totals above $100 million.

Missing from the list are major cases involving the role of corporations in exacerbating the climate crisis. Various suits have been brought, often by state and local governments and framed as shareholder actions, but so far none have resulted in significant monetary settlements. That is likely to change as the crisis grows worse and corporations are held culpable. When that happens, Violation Tracker will document the results.

Note: I would like to thank Suzanne Katzenstein and a group of her students at the Duke University Sanford School of Public Policy, who helped identify some of the environmental lawsuits discussed above.

Targeting Gunmakers in the Courts

Among the scores of industries covered in Violation Tracker, one of the most under-represented is the business of producing firearms. That’s not because gunmakers are particularly virtuous, but rather because there are few laws and regulations for them to violate.

Federal oversight of the industry is pretty much non-existent. The few penalties that have been imposed on companies such as Remington, Beretta, Colt’s Manufacturing, Smith & Wesson, and Sturm, Ruger have had nothing to do with their specific activity. Instead, they have been imposed by agencies such as OSHA that oversee companies of all kinds. The penalty total for each of these firms is no more than a few hundred thousand dollars—a trivial amount for an industry whose products do so much harm.

The other arena in which the industry has enjoyed near impunity is the court system. That’s largely due to the 2005 Protection of Lawful Commerce in Arms Act, which prevents dealers and manufacturers from liability when guns are used in shootings and other criminal activities.

Ironically, gun companies are still considered liable when their products are defective. For example, in 2016 the Brazilian gunmaker Forjas Taurus agreed to pay $239 million to settle a class action brought in federal court in Florida. The plaintiffs had alleged that its guns fired unintentionally when dropped.

Various attempts have been made to get around the industry’s liability shield. A lawsuit brought against Remington by the families of the victims of the Sandy Hook massacre in Connecticut was able to proceed by using the state unfair trade practices law. The case still dragged on for years, though it was recently reported that Remington is offering to settle the matter for $33 million. That’s not much, but it could serve as a stepping stone to more appropriate damages in other cases.

Another novel approach is being taken in a lawsuit recently filed in federal court in Massachusetts by the government of Mexico against ten U.S. gunmakers. The suit accuses the companies of facilitating the flow of weapons to the drug cartels causing so much havoc in Mexico. It argues that the federal liability shield does not apply, since the harm took place in another country.

The lawsuit is considered a long shot, but if nothing else the case may expose more details about the questionable practices of the industry. The complaint has already highlighted the brazen practice by one gunmaker of engraving the image of Emilio Zapata on one of its models to appeal to Mexican buyers. One of those pistols was used to kill a Mexican investigative reporter.

There are signs that the real purpose of the lawsuit is to pressure the U.S. government to put restrictions on the firearms trade. The suit seeks to do this by equating cross-border gun trafficking from the U.S. to the drug trafficking from Mexico that American officials frequently decry. Significant change is not likely to happen any time soon, but meanwhile any challenge to the gun’s industry’s impunity is welcome.

Corporate Contamination

The infrastructure bill making its way through the Senate is said to include $55 billion for water systems, including funding to replace lead pipes throughout the country. That will be a relief for many localities, but other communities face water problems caused not by aging pipes but by corporate negligence.

One example is the town of Hoosick Falls in upstate New York, which discovered in 2014 that its water supply had been contaminated by perfluorooctanoic acid, or PFOA, a toxic chemical linked to a range of ailments, including cancer. PFOA is one of a group of substances known as PFAS, also called “forever chemicals” because they don’t break down in the body or in the environment.

The source of the contamination in Hoosick Falls was a plastics plant that produced electronic components treated with PFOA, which was originally developed by DuPont for its Teflon non-stick coating for cookware. DuPont has been embroiled in a long-running dispute over the impact of PFOA on residents living near the plant in West Virginia where it produced the dangerous chemical.

It is now in a similar controversy with regard to Hoosick Falls, together with the French company Saint-Gobain, which purchased the plant in 1999, and other companies that operated it before that. Residents filed a class action lawsuit against the companies and recently reached a tentative $65 million settlement with most of the defendants.

DuPont is not part of that deal and is challenging it in court, claiming that it will hinder its ability to get a fair deal in its ongoing negotiations with the plaintiffs. A federal judge just rebuffed the company and gave preliminary approval to the settlement.

It is difficult to feel any sympathy for DuPont, whose response to the PFOA problem over the years has left a lot to be desired. As dramatized in the 2019 film Dark Waters, it took a crusading lawyer named Robert Bilott to break through the attempt by the company and its outside attorneys to cover up the pattern of cancers and birth defects experienced by residents of Parkersburg, West Virginia exposed to PFOA.

Yet DuPont is not the only corporation responsible for causing harm to water quality. For example, poultry producer Mountaire Farms recently agreed to pay a total of $205 million to settle a class action lawsuit and a case brought by the Delaware Department of Natural Resources and Environmental Control in connection with groundwater contamination caused by its processing plants.

I am now in the process of documenting these and dozens of other major environmental lawsuits—also known as toxic torts—for the next expansion of Violation Tracker scheduled for September. These cases, pushed by community activists as well as lawyers, are a reminder that the civil justice system is often a necessary supplement to government regulatory action in addressing corporate misconduct.

Corporate America Wants Its Own Immunity Passport

It is unclear at the moment whether Mitch McConnell and other Congressional Republicans are backing off their demand that corporations be given protection from covid-19 lawsuits — or if they are maneuvering behind the scenes in favor of the proposal.

What I find amazing is that business lobbyists and their GOP supporters think they can sell the country on the idea, which would be a brazen giveaway to corporate interests.

There are numerous compelling arguments against immunity, but I want to focus on one: the track records of corporations themselves. Proponents of a liability shield imply that large companies normally act in good faith and that any coronavirus-related litigation would be penalizing them for conditions outside their control. These lawsuits, they suggest, would be frivolous or unfair.

This depiction of large companies as innocent victims of unscrupulous trial lawyers is a long-standing fiction that business lobbyists have used in promoting “tort reform,” the polite term for the effort to limit the ability of victims of corporate misconduct to seek redress through the civil justice system. That campaign has not been more successful because most people realize that corporate negligence is a real thing.

In fact, some of the industries that are pushing the hardest for immunity are ones that have terrible records when it comes to regulatory compliance. Take nursing homes, which have already received a form of covid immunity from New York State.

That business includes the likes of Kindred Healthcare, which has had to pay out more than $350 million in fines and settlements.  The bulk of that amount has come from cases in which Kindred and its subsidiaries were accused of violating the False Claims Act by submitting inaccurate or improper bills to Medicare and Medicaid. Another $40 million has come from wage and hour fines and settlements.

Kindred has also been fined more than $4 million for deficiencies in its operations. This includes more than $3 million it paid to settle a case brought by the Kentucky Attorney General over issues such as “untreated or delayed treatment of infections leading to sepsis.”

Or consider the meatpacking industry, which has experienced severe outbreaks yet is keeping many facilities open. This sector includes companies such as WH Group, the Chinese firm that has acquired well-known businesses such as Smithfield. WH Group’s operations have paid a total of $137 million in penalties from large environmental settlements as well as dozens of workplace safety violations.

Similar examples can be found throughout the economy. Every large corporation is, to at least some extent, a scofflaw when it comes to employment, environmental and consumer protection issues. There is no reason to think this will change during the pandemic. In fact, companies may respond to a difficult business climate by cutting even more corners.

The two ways such misconduct can be kept in check are regulatory enforcement and litigation. We have an administration that believes regulation is an evil to be eradicated.

This makes the civil justice system all the more important, yet business lobbyists and their Congressional allies are trying to move the country in exactly the opposite direction. They want to liberate big business from any form of accountability, giving it what amounts to an immunity passport. Heaven help us if they succeed.

Inflicting Financial Pain on the Pain Pill Pushers

The proceedings in a Cleveland courtroom are addressing issues about the fundamental nature of a major American industry. The case consolidates more than 2,000 lawsuits brought mainly by state and local governments against all the major parties responsible for the opioid crisis: the drug manufacturers, the drug distributors, the pharmacy benefit managers, the large drugstore chains and major supermarket chains whose stores contain pharmacies.

What is known as Multidistrict Litigation 2804 is scheduled to begin trial proceedings on October 21 in a partial action involving two Ohio counties and a handful of the corporate defendants — unless Judge Aaron Polster (photo) succeeds in his effort to get the parties to reach a settlement. Reports on potential deals have been emerging at frequent intervals. The New York Times reports that several of the defendants, including the three big drug distributors – AmerisourceBergen, Cardinal Health and McKesson – together with two of the pharmaceutical producers, have been offering a deal worth nearly $50 billion.

That sounds like a lot of money, but there may be less to it than meets the eye. For one thing, only about half the total consists of cash payments, with the rest taking the form of addiction treatment drugs, supplies and delivery services. It would be easy for the companies to inflate the value of the in-kind compensation and thus lower their burden.

Moreover, the cash payments would probably be paid out over time, again making things easier for the defendants and reducing the resources that state and local governments need in the short term. Those costs are massive. The Times quotes a report by the Society of Actuaries estimating the cost to society of the opioid epidemic at roughly $188 billion this year alone.

This suggests that a reasonable settlement should be some multiple of the $50 billion figure currently being considered. The 1998 Master Tobacco Settlement showed that a large profitable industry could handle payments that were estimated to cost $206 billion, spread out over time. The industry has paid out more than $132 billion over the past two decades, with annual payments in recent years amounting to about $6 billion.

The plaintiffs should not focus on the total theoretical size of the settlement but instead on how much will be available to each jurisdiction each year to address a problem that remains overwhelming.

It is also worth remembering the size of the industry in question. The big three drug distributors alone have combined annual revenues of more than $500 billion. Their deep pockets and those of the other defendants should be depleted as much as possible.

The drug industry giants have caused massive pain and suffering in the opioid epidemic. They should be made to feel substantial financial pain of their own.

Bipartisan Corporate Crime Fighting by the States

A new report from the Corporate Research Project of Good Jobs First on lawsuits filed by state attorneys general shows that the current cases against the drug companies and the tech sector are part of a long-standing practice of bipartisan cooperation in fighting corporate misconduct.

The report focuses on 644 cases in which AGs from multiple states took on companies over issues ranging from mortgage abuses to illicit marketing of prescription drugs and collected more than $100 billion in settlements over the past two decades.

These multistate cases are a subset of more than 7,000 state AG actions compiled for the latest expansion of Violation Tracker and now available for searching on the database.

In at least 260 multistate cases, a majority of the states signed on as plaintiffs. In 172 of the cases, 40 or more states participated. State AGs are split almost evenly between Democrats and Republicans, meaning that the cases with large numbers of state participants are necessarily bipartisan.

In 362 of the cases, the defendants were giant companies included in the Fortune 500 or the Fortune Global 500. The parent company with the most cumulative multistate AG penalties is, by far, Bank of America, with more than $26 billion in settlements over issues such as mortgage abuses and the sale of toxic securities. It is followed by the Swiss bank UBS ($11 billion), Citigroup ($8 billion), JPMorgan Chase ($6 billion) and BP ($4.9 billion).

The most frequent defendant has been CVS Health, which has paid out more than $215 million in 14 settlements, most of them involving the alleged submission of false claims to state Medicaid programs and the payment of illicit kickbacks to healthcare providers.  Another 47 parent companies have been involved in three or more multistate AG cases.

In 118 multistate AG cases, corporations have paid penalties of $100 million or more; in 19 of these the amount exceeded $1 billion. The biggest individual settlement was an agreement by UBS to repurchase $11 billion in investments known as auction-rate securities whose safety it allegedly misrepresented to investors. The second largest was an $8.7 billion agreement by Bank of America to resolve claims relating to predatory home mortgage practices by its Countrywide Financial subsidiary. (The recently announced multistate settlement with Purdue Pharma is not included because it is still tentative.)

Banks and other financial services companies account for far and away the largest monetary share of penalties paid in multistate AG cases — $70 billion from 122 settlements involving 65 different parent companies. In second place is the pharmaceutical industry with $10.4 billion in penalties from 137 settlements.

Consumer protection and price-fixing cases are the most numerous kinds of multistate AG lawsuits, but investor protection and mortgage abuse lawsuits against the big banks have generated the greatest monetary penalties.

In 243 of the multistate cases, the U.S. Department of Justice or another federal agency was also involved in the settlement and often led the negotiations. These actions, which accounted for $31 billion of the $105 billion in total penalties, include cases in which the federal entity, usually DOJ, initiated the investigation and brought in the states — as well as ones in which federal and state prosecutors were involved from the start.

Multistate AG lawsuits originated in the 1980s, when state prosecutors grew concerned at rollbacks in federal enforcement by the Reagan Administration and decided they needed to fill the gap. They scored a big win with the master tobacco settlement of the late 1990s and continued their actions through both Republican and Democratic presidential administrations.

There is every reason to believe that the number of multistate AG settlements will continue to grow. The pending cases against opioid and generic drug producers, as well as emerging antitrust investigations of the tech sector, could add billions more to the penalty totals.

Suing Employers for Retirement Plan Abuses

In late March the Swiss company ABB agreed to pay $55 million to resolve a lawsuit brought by its U.S. employees alleging that the company charged excessive fees to administer their 401(k) plan. This was just the latest in a long series of class actions brought under the Employee Retirement Income Security Act of 1974, or ERISA, which protects the rights of retirement plan participants.

As part of the latest expansion of Violation Tracker, the Corporate Research Project has identified 201 such cases in which the defendant was a corporation included in the Fortune 1000, the Fortune Global 500 or the Forbes list of America’s Largest Private Companies.

Our compilation finds that in these cases, which date back to the beginning of 2000, corporations had paid out a total of $6.2 billion in settlements and verdicts. The largest settlement, $480 million, was reached in 2014 in a retiree health benefits suit brought against Daimler AG on behalf of workers at the German company’s U.S. truck manufacturing plants.

The 201 lawsuits (details here) alleged various types of misconduct by employers, including:

  • Charging excessive fees or offering overly risky investment options in 401(k) plans;
  • Improper investment of pension plan assets in company stock, especially during times of instability;
  • Inadequate or misleading disclosure of financial information to plan participants; and
  • Mishandling conversions of pensions to cash-balance plans.

Some suits were brought against investment managers or plan trustees rather than the employer. For example, in 2015 Bank of New York Mellon agreed to a $335 million settlement to resolve allegations by multiple pension funds that it deceptively overcharged them on currency exchange rates relating to the purchase of foreign securities.

Apart from Daimler and Bank of New York Mellon, 13 other large corporations have had total ERISA payouts of $100 million or more.  Among them are IBM, Foot Locker, Xerox, Bank of America, AK Steel, AT&T and JPMorgan Chase. The industry with the most ERISA payouts is banking, with a total of more than $1.3 billion.

In addition to large for-profit corporations, some major nonprofits, especially healthcare systems, have had to pay out large sums. Most involve lawsuits alleging that religious institutions improperly claimed that their plans were exempt from ERISA. The biggest settlements have involved Providence St. Joseph Health ($351 million) and Bon Secours Mercy Health ($161 million from two suits).

In many cases the settlement costs are covered in part or wholly by an insurance policy, but Violation Tracker attributes the amount to the corporation or non-profit named in the lawsuit.

With the addition of the ERISA cases and the updating of other categories, Violation Tracker now contains more than 368,000 civil and criminal entries with total penalties of $464 billion. The new ERISA entries—like our earlier compilations of wage theft and employment discrimination lawsuits—include details on each case and links to key court documents.

The fastest way to get a list of the ERISA cases from Violation Tracker is to choose the Option 2 offense type “pension ERISA violation.” You’ll get the 201 large-company cases discussed above plus 51 more brought against non-profits and companies not on the Fortune and Forbes lists.

Regulation via Litigation

For all the talk of populism, the Trump Administration is preoccupied with easing federal oversight of big business. It’s done this through attempts to undo regulations and by weakening enforcement of the rules that remain. Sure, there are areas in which it is politically expedient to pretend to be tough on corporate misconduct. That’s what we see with drug prices or the current Boeing scandal, but for the most part companies are getting what they want.

It’s a different story in the courts. In recent days there has been a slew of major settlements and verdicts in which large corporations will be paying out substantial sums to resolve various allegations of wrongdoing.

Purdue Pharma and the Sackler Family agreed to pay $270 million to the state of Oklahoma to resolve a lawsuit relating to the company’s role in the opioid crisis that has taken the lives of more than 200,000 people in the United States. Many more such lawsuits involving other states are expected to follow.

Johnson & Johnson and Bayer agreed to pay $775 million to settle about 25,000 lawsuits involving the blood thinner Xarelto, which they jointly sell. The suits allege that the companies failed to warn patients that the drug could trigger potentially fatal massive bleeding.

A federal jury in California ordered Monsanto to pay $80 million to a man who alleged that he developed cancer as a result of using the company’s controversial weedkiller Roundup. The jury found that Monsanto was liable because it failed to include a warning label about the cancer risk. Monsanto’s parent, the German chemical company Bayer, said it will appeal the verdict. Also under appeal is another Roundup verdict from last year in which the plaintiff was awarded $289 million (lowered by the judge to $80 million).

Many more lawsuits are in the works, in some cases threatening the survival of companies. Pacific Gas & Electric had to file for bankruptcy protection in the face of tens of billions of dollars in potential liability in connection with California wildfires believed to have been caused by its aging transmission lines. A ruling by the Connecticut Supreme Court allowing wrongful marketing claims cases against gun makers may lead to billions in settlements by the industry.

Such litigation is nothing new, but the cases are taking on increasing importance in the fight against corporate misconduct at a time when federal regulation is faltering. The danger is that lawmakers and the courts themselves may curtail the ability to bring these lawsuits. There is not much they can do when the suits are brought by state attorneys general, but class actions may be more vulnerable.

This is already happening in the area of employment law. In 2011 the U.S. Supreme Court dismissed a nationwide gender discrimination suit against Walmart and made it more difficult to get such classes of plaintiffs certified. Last year, in the Epic Systems case, the high court made it easier for employers to use arbitration agreements to block lawsuits over issues such as wage theft.

If litigation goes the way of regulation and there are no effective controls on corporate behavior, we will be in big trouble.

Resisting the Trump Organization Business Model

A recent 60 Minutes episode provided further evidence of how the pharmaceutical industry successfully pressured federal regulators to allow excessive prescribing of powerful opioids, paving the way for the ongoing epidemic of fatal overdoses. In recent days there have been reports that Purdue Pharma, the company at the center of the crisis, is planning a bankruptcy filing to reduce the risk from the 1,600 lawsuits that have been brought against the company.

These developments illustrate how the main structures that are supposed to deter corporate misconduct – government regulation and the civil justice system – are not up to the task. Despite the endless complaints from the business world about rules and lawsuits, there are in fact few meaningful limits on corporate behavior.

Despite years of evidence showing that many industries dominate and neutralize the government agencies that are supposed to oversee them, the proponents of deregulation all too often carry the day. The current presidential administration has embraced that ideology whole-heartedly and has even tried to promote the idea that relaxed regulation benefits not only corporations but workers and consumers.

Yet there’s growing evidence that what interests Trump most is using regulatory powers to punish his political enemies and reward his friends. That’s the message of new reporting by Jane Mayer in The New Yorker that Trump personally urged the Justice Department to try to block AT&T’s acquisition of Time Warner, apparently thinking that by sinking the deal he would harm Time Warner’s CNN unit and boost its rival, the exceedingly Trump-friendly Fox News.

There were earlier reports that Trump’s criticism of Amazon’s contract with the U.S. Postal Service was an indirect assault on the Washington Post, owned by Amazon CEO Jeff Bezos.

Aside from being an obvious abuse of presidential power, this approach is no better than a “principled” deregulatory stance. While Trump may occasionally direct his ire against companies that deserve to be punished, the vast majority of miscreants will end up being let off the hook.

Many of the same business apologists who criticize regulation also fulminate against lawsuits. These tort reformers don’t explain how else we are supposed to deal with rogue corporations. Nor do they acknowledge that such companies can greatly limit their exposure with the help of the bankruptcy court.

Purdue Pharma would be far from the first corporation to use Chapter 11 in this way. The filing would not shield the company entirely, but it would greatly reduce its financial liability and make it easier to survive the process.

Moreover, the Wall Street Journal pointed out that “Purdue’s assets may not be enough to resolve the company’s potential liability, in part because most of its profits had been regularly transferred to members of the company’s controlling family, the Sacklers.” In other words, much of the corporation’s ill-gotten gains are already out of the reach of the plaintiffs.

When restraints are weak or non-existent, it is more likely that companies will adopt the business model of the Trump Organization, which appears to be that of breaking every rule and cheating everyone it can. Our challenge is to find new ways to fight back.