Financial War. Now Legal War.

I’ve been reading a book by James Rickards. He makes a case that kinetic wars are a thing of the past. He highlights that nation states will contest to damage each other in the future with financial weapons.  Today, an email arrived from a friend, highlighting an additional perspective: Legal Wars are also viable because of weaknesses we inflict on ourself.  Most of the words below are his.

If you have an American soldier in the field with his M-16 rifle he is just a soldier. But, if you give him a radio that he can use to call in artillery or an air strike then he is much more powerful. In the Army we call that radio “a combat multiplier.” That radio multiplies the power of that individual soldier many times over.

Looking at the cyber attack on Sony, the Koreans are relying on “combat multipliers” to bring Sony to it’s knees. The “combat multipliers” are the plaintiff lawyers in this country and the out of control litigation system in this country. Because the cyber terrorists threatened attacks on the theaters showing the movie, if Sony had released that movie and someone had shot up a theater then the plaintiffs attorneys would have descended on Sony like a swarm of flies.

“Sony put profits above the safety of the the theater goers!”
“This evil corporation must be punished for that!”
“Give my client a hundred million dollars in punitive damages to teach that evil corporation a lesson, so no other corporation will risk the lives of their customers!”

Without that threat Sony could have released the movie and told the Koreans to “pound sand.” But our tort system empowers these terrorists to do their damage. This is what led to the government compensation for the victims of the 9-11 attacks. This scheme compensated the victims on the condition that they didn’t sue the airlines, the airports, the security screeners, the aircraft manufacturers, the pilots, the air traffic controllers, and the guy who put the air in the tires of the planes, (don’t laugh, I had a case where they did sue that guy) and so destroy the air transport system.

We need a federal law that immunizes private parties from liability for terrorists acts similar to the federal law that shields gun manufacturers from liability for criminal acts committed with their products. About 15 years ago an anti-government terrorist group in Chile claimed that they had poisoned parts of the cherry crop from that county. All the American supermarkets removed and destroyed their Chilean cherries at great cost. No poisoned cherries were ever found but the damage had been done. The stores could not take the chance that the plaintiffs attorneys would descend on them if the threat had turned out to be real and someone had died for a poisoned cherry.