The Absurdity of Big Companies Suing Regular People

This was an idea I was thinking about as I was reading and recently completed “Bad Blood,” the book about Theranos.

There’s a recurring pattern in the book, one where the company manages through pure intimidation tactics. What this looks like is them threatening people, threatening to sue people, suing people, and forcing them to sign documents. Another part of what they do is bring some of the most expensive legal counsel and aggressive tactics against the individual. They pursued this route repeatedly even if there was no merit to their claim.

When you think about this, this is really an absurd situation. There is no semblance of justice or fairness here, or whatever the original intention may have been of having a legal system and legal remedies to resolve disputes.

Part of why this is true is because there is no concern with the truth. It doesn’t matter what really happened, but if they are aggressive enough, they were able to force people to agree to things that made no sense.

On the side of the individual, they now are forced to defend themselves. They could handle this on their own, which may be futile, as the legal system is tough to navigate. They could hire a lawyer, but this gets expensive fast and this cost is relatively much higher for an individual than a large company.

What this means, effectively, is that large companies are buying better laws and more favorable treatment for themselves.

While this may not seem like a big revelation, when you think about it, it really undermines the whole system. This means the result is not about what really happened or what is fair, but whoever can pay the most expensive lawyer. That clearly makes no sense.

In “Bad Blood,” when a company like Theranos sued or threatened to sue an individual who dared to question them, they also accompanied these threats with the idea that they would take them down or effectively bankrupt them. And the thing is, the way the system works, they were able to achieve these things.

Additionally, there is no true countervailing power preventing this repeated bad behavior. The limits on individuals preventing huge continued lawsuits are the expenses. But these larger companies can continually fight people in court to the tune of millions of dollars.

It’s truly a horrifying tactic, but one that seems to be legal. There are other well-known and not-as-well-known instances where a big company is going up against an individual. In every way, it’s not a fair fight.

What could fix this?

I would guess people who are legal experts may be much more familiar or have more thoughts on this problem. Here’s a few thoughts on what could fix this.

There needs to be some sort of countervailing power that prevents big company vs. individual intimidation lawsuits. I imagine there are cases where that is ambiguous, but overall, a company with a billion dollar plus valuation suing an individual is quite lopsided.

All you can eat sushi?

A better way might involve some sort of self-regulating mechanism or rule. There’s something I’ve seen at a few all-you-can-eat sushi restaurants. You pay a fixed price, maybe $30 for as much sushi as you can order. However, since it is all-you-can-eat, the restaurant needs to prevent abuse. To do this, some have a rule where it is all you can eat, but you have to pay for every piece that is left over.

This is a really nice, simple and effective rule. It’s true — you can eat as much as you like. But there is a self-regulating mechanism where you try to actually order as much as you’ll eat, because if you can’t eat it all, you pay more. So people aren’t ordering one thousand pieces of sushi.

I wonder if there is a way to apply this logic to big company vs. regular individual intimidation lawsuits. A way it could work is that for every lawsuit of this manner, the company needs to pay a fee, that increases in size over time and is relative to the size of the company. This fee is a disincentive from continuous lawsuits against individuals. The fee goes into a pool, managed by the government, which is then dedicated to providing money that can be used by people to defend themselves when they are in a lawsuit where a big company sues them.

Overall, I feel the US society is way too litigious, where many people have a reaction to every issue which is “ok well sue them!” I think that is really unfortunate and there needs to be a strong disincentive for people and companies who repeatedly exhibit this behavior.