Nonprofit litigation aids lawyers more than the public

You may have seen TV ads for the American Society for the Prevention of Cruelty to Animals, or the Humane Society of the United States, two national animal-rights groups. The ads have the same formula: Sad background music and tear-jerking images of dogs and cats coupled with a plea for monthly donations.

They don't show you Mafioso characters, witness bribery, fraudulent schemes, and shady lawyers. Maybe they should.

The ASPCA recently announced that it was paying $9.3 million to settle a lawsuit alleging violations of the Racketeer Influenced and Corrupt Organizations Act, a federal law passed to fight mobsters. And the Humane Society of the United States, still a defendant along with two of its lawyers, could be on the hook for even more.

It all started a decade ago, when a cabal of animal rights groups sued Feld Entertainment, parent company of the Ringling Bros. circus, alleging elephant abuse. The animal rights groups had recruited a former Feld employee to say that he was "injured" by this alleged "abuse." But there was a small problem.

In dismissing the long-running lawsuit in 2009, a federal judge outlined how the plaintiffs had paid this witness close to $200,000, often by funneling money through a nonprofit front group controlled by their lawyers. The judge also found that the payments "were not disclosed initially in discovery, by both omissions and affirmatively false statements" and that the witness himself was "essentially a paid plaintiff and fact witness who is not credible."

As the case dragged through the courts, Feld's legal bills shot up to the tune of $20 million. Feld is seeking recovery of these attorneys' fees in the initial lawsuit, as well as pursuing a separate lawsuit under the RICO Act for the animal rights groups allegedly bribing the witness and concocting fraudulent litigation. (One of the animal rights attorneys in the Feld case argued in a separate litigation that elephants are better off dead than in the circus.)

Feld has the financial ability to weather a decade long lawsuit, but not many do. Most of the time, it's easy for legal sharks to steamroll individuals.

Consider Proposition 65, a California law passed by voters that provides "right to know" labels on products that supposedly have cancer-causing chemicals. It sounds nice. But the law allows for private enforcement - essentially, a bounty hunter provision.

This has led to trial-lawyer shakedowns over anything that might - meaning "maybe, perhaps, could in high enough doses" - cause cancer. Dangerous things such as potato chips, Christmas lights and fishing rods (I'm not making this up). Many businesses simply settle to avoid the hassle of a lawsuit.

The end result: enriched trial lawyers. A recent analysis from the Federalist Society determined that from 2000 to 2010, about $88 million of Proposition 65 settlement money went to attorney fees. Millions went directly into the pockets of nonprofit environmentalist groups. Meanwhile, scared businesses have put cancer warnings on everything from parking garages to airplane boarding ramps.

Litigation abuse doesn't end there. The nonprofit Waterkeeper Alliance brought suit against a family farm in eastern Maryland for supposedly polluting a waterway. The real point of the case was to rope in chicken giant Perdue, which the family contracted with, which would then allow Waterkeeper to sue big meat companies it doesn't like.

The case was thrown out last month after a judge found the Waterkeeper's evidence lacked credibility. The Waterkeeper Alliance, backed by the wealthy Robert F. Kennedy Jr., has the resources to go trolling for another lawsuit. But for the family farmers named as defendants, it was surely a nightmare.

Litigation all too commonly is in the private interest, not the public interest, especially in the nonprofit field. A quick search of the online federal court database PACER shows two dozen lawsuits in which Waterkeeper Alliance has been a plaintiff. For the Humane Society of the United States, which employs dozens of animal rights lawyers, it's even more.

Activists may hide behind pictures of homeless dogs or their concern for the environment, but being a lawsuit factory in pursuit of a private agenda is not a charitable activity that benefits the public - or one that taxpayers should subsidize with "nonprofit" status.

Rick Berman is the executive director of the Center for Consumer Freedom, a nonprofit coalition supported by restaurants, food companies and consumers to promote personal responsibility and protect consumer choices.