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SiebenCarey

Susan Holden

612 333-9755

January 2019

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Americans Fight Corporate Misconduct

Whenever we think we’ve seen it all, we discover we haven’t seen it all. As you read this month’s newsletter on the worst corporate conduct of 2018, you will discover that some of the best-known companies in the world are blatantly compromising the health, safety, financial security, legal rights and well-being of all Americans. Meanwhile, many government agencies are under political pressure to retreat from their traditional role of regulatory watchdogs. Thankfully, we still have our civil justice system and a court of law to hold wrongdoers accountable. And that’s a right we must protect.

Empty Promises and Insincere Apologies

Bad Corporate Conduct in the Age of “Sorry, Not Sorry”

Think back for a second on 2018. How many companies or institutions do you remember publicly apologizing for inappropriate, malicious or dangerous behavior? You will probably run out of fingers trying to count them all.

Household names like United Airlines, Wells Fargo, Uber and Papa John’s are just a few of those that asked millions of Americans for forgiveness after getting caught committing major malfeasance. But once the cameras stopped rolling and the news media hoard moved on, did those apologies really mean anything?

Not really, according to The Worst Corporate Conduct of 2018, a shattering new report from the American Association for Justice (AAJ). In fact, these apologies are increasingly part of a business strategy to placate Americans with empty platitudes before returning to business as usual. Examples from the report follow of companies that owe us all a real apology.

debtStudent loan borrowers in the US owe a combined $1.5 trillion in debt.

Navient Preys on Debt-Ridden Students

Navient, founded in 2014 as an offshoot of Sallie Mae, owns 21 percent of all student loans in the United States and is the third-largest student loan provider in the country. In just five years since its inception, Navient has garnered three times as many complaints as its competitors. Just a few include:

  • Reporting severely and/or permanently disabled veterans as having defaulted on their loans when in fact they had had them forgiven through federal disability programs.
  • Sending out $0 due bills for months that were paid in advance, but then penalizing those borrowers for “failure to pay” when payments weren’t paid anyhow.
  • Going after the families of deceased borrowers despite promises these loans would be forgiven, even charging interest in some cases.
State FarmState Farm settled a RICO lawsuit before it went to trial.

State Farm Buys Sympathetic Judge

In 1999, a lower court found that State Farm advised auto shops to repair policyholder cars with lower-quality, after-market parts. When the $1.06 billion verdict was affirmed by an appeals court in 2001, the insurer appealed to the Illinois Supreme Court. Meanwhile, millions in contributions were funneling into the successful campaign of Lloyd Karmeier, a candidate for Chief Justice. Once on the bench, Karmeier cast the deciding vote to absolve State Farm from accountability.

Years later, an investigation by a former FBI agent revealed that State Farm had secretly helped fund 90 percent of Karmeier’s $4.8 million campaign war chest. Caught red-handed, State Farm eventually settled a $250 million Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit just before the case was set to go to trial in September 2018.

Gretchen CarlsonMajor oil companies knew the threat of fossil fuels to climate 30 years ago. 

Oil Companies Ignore Own Warnings of   Damage to Climate

In January of 2018, New York City sued the world’s five largest publicly traded oil companies – BP, Chevron, ConocoPhillips, ExxonMobil and Royal Dutch Shell – claiming that the companies together were responsible for 11 percent of the world’s global warming gases. The suit also alleges that these companies have long known about the damage fossil fuels would cause through global climate change.

Recently uncovered internal documents from the 1980s and ’90s reveal that Shell researchers believed global warming would “create significant changes in sea level, ocean currents, precipitation patterns, regional temperature and weather.” Company scientists at Exxon also led research on the subject in the 1980s, predicting the same devastating effects to the environment, future living standards and food supplies.


The Great Equalizer – The American Civil Justice System

Other corporations profiled in the 2018 Worst Corporate Conduct report include Takata and General Motors, Nestle, Theranos and Michigan State University/USA Gymnastics. Again, you can download the complete report here. At a time when many federal and state regulators are pulling back from the job of corporate watchdog, it’s more important than ever that we protect the constitutional role of our civil justice system to empower any American to hold these bad actors accountable.

“Consumers don’t want apologies,” conclude the AAJ researchers. “They want to be safe from deception and negligence, from a car that can kill them, from exploitation by financial companies; they want to enjoy something as simple as chocolate without subsidizing the slave trade; and they want to be able to trust their children to coaches and doctors who are supposed to have their best interests at heart without fear that they may face sexual harassment or abuse.”

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