U.S. Business Periled by Lawsuits, Iacocca Warns

SAN FRANCISCO — Increasing litigation and the risk it represents for manufacturers who must pay multimillion-dollar judgments impairs U.S. competitiveness with international rivals, Chrysler Corp. chief executive officer Lee A. Iacocca told lawyers Monday.

Introduced as “a national folk hero,” Iacocca won frequent applause and laughter from about 2,000 of the 12,000 lawyers attending the American Bar Assn. convention as he compared the current low-key celebration of the bicentennial of the Constitution with last year’s Statue of Liberty extravaganza.

“This is not the year for tall ships and fireworks,” he said at the group’s opening assembly in the War Memorial Opera House. “The American people are not going to get misty-eyed about the Constitution. They just damn well want it to work.”

He left no doubt that he believes that the Constitution has been stretched too far in providing rights to suing plaintiffs to the detriment of manufacturers. Many small companies have chosen to shut down rather than risk being bankrupted by lawsuits, Iacocca said, noting that 18 companies used to make football helmets, but now only two remain.

“We spend $30 billion a year just suing each other,” Iacocca said “ . . . Other countries don’t waste their time looking for Mr. Deep Pockets. They are too busy beating our brains out.”

Alluding to the automobile industry’s foreign competition, Iacocca reminded lawyers with a wry smile that they are now permitted to practice in Japan.

“This is a chance to serve your country,” he encouraged them. “You can really throw them a loop, and I will tell you how: Just get them to accept the principle of punitive damages.”

Although some lawyers commented afterward that Iacocca was a little too anti-litigation, their own ABA president, Eugene C. Thomas, also cautioned the attorneys that they must pare down civil cases and the time spent on them if they hope to improve the justice system and their own tarnished image.