Deep pocket is an
American
American(s) may refer to:
* American, something of, from, or related to the United States of America, commonly known as the "United States" or "America"
** Americans, citizens and nationals of the United States of America
** American ancestry, pe ...
slang
Slang is vocabulary (words, phrases, and linguistic usages) of an informal register, common in spoken conversation but avoided in formal writing. It also sometimes refers to the language generally exclusive to the members of particular in-gro ...
term; it usually means "extensive financial wealth or resources". It is typically used in reference to big companies or organizations (ex: the American
tobacco
Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...
companies have "deep pockets"), although it can be used in reference to wealthy individuals (e.g.,
Bill Gates
William Henry Gates III (born October 28, 1955) is an American business magnate and philanthropist. He is a co-founder of Microsoft, along with his late childhood friend Paul Allen. During his career at Microsoft, Gates held the positions ...
,
Warren Buffett
Warren Edward Buffett ( ; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway. He is one of the most successful investors in the world and has a net w ...
).
In the context of a lawsuit, the deep pocket is often the target
defendant
In court proceedings, a defendant is a person or object who is the party either accused of committing a crime in criminal prosecution or against whom some type of civil relief is being sought in a civil case.
Terminology varies from one jurisdic ...
, even when the true (
moral
A moral (from Latin ''morālis'') is a message that is conveyed or a lesson to be learned from a story or event. The moral may be left to the hearer, reader, or viewer to determine for themselves, or may be explicitly encapsulated in a maxim. A ...
)
culpability
In criminal law, culpability, or being culpable, is a measure of the degree to which an agent, such as a person, can be held morally or legally responsible for action and inaction. It has been noted that the word, culpability, "ordinarily has ...
is with another party because the deep pocket has money to pay a verdict. For example, a lawyer may comment that he or she sued the manufacturer of a product rather than the seller because the manufacturer has the deep pockets, meaning it has more money than the seller with which to compensate the victim and profit the attorney.
Deep pocket as a slang term
The term “deep pockets” (also given as “deep pocket” and “deep pocketed") is attested sparsely in the 1940s through the 1960s, but became popular with the litigation explosion of the 1970s.
A person with “short arms and deep pockets” is a person (sometimes derided as “miserly” or “cheap") who saves money and doesn’t often spend it. The term “short arms and deep/long pockets” is cited in print from at least 1952.
In Ireland, this phrase was attached to a wealthy businessman from
Tipparary who, upon his round of drinks, would break his glass on the floor, knowing the owner of the pub would ask him to leave. This was also called the “O’Shea Fiddle”.
Deep pocket in law and economics
Deep pocket is a concept often used in the
law and economics
Law and economics, or economic analysis of law, is the application of microeconomic theory to the analysis of law, which emerged primarily from scholars of the Chicago school of economics. Economic concepts are used to explain the effects of laws ...
of
tort law
A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...
. It refers to the idea that the
risk
In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environme ...
of an activity should be borne by a person who is in a relatively good position to handle it. This can be achieved by either spreading the risk over a large number of risk-bearers (usually by means of
insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
), or by imposing it on a person who is relatively
risk-neutral
In economics and finance, risk neutral preferences are preferences that are neither risk averse nor risk seeking. A risk neutral party's decisions are not affected by the degree of uncertainty in a set of outcomes, so a risk neutral party is indif ...
. The latter is often assumed to be the case for wealthy individuals or large corporations, who are referred to as having "deep pockets", since their wealth will not be affected very strongly if the risk materializes. For example, a deep-pocket argument might, among other arguments, be used to justify
product liability
Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause. Although the word "product" has br ...
, as producers with "deep pockets" will normally be better able to accommodate the risk of damages than individual consumers not endowed with "deep pockets".
In 2014, the Supreme Court of
Iowa
Iowa () is a state in the Midwestern region of the United States, bordered by the Mississippi River to the east and the Missouri River and Big Sioux River to the west. It is bordered by six states: Wisconsin to the northeast, Illinois to the ...
labeled such legal theories ''deep pocket jurisprudence''.
A review found four types of application:
* ''Innovator liability'' holds an inventor of a product liable for the harms caused when others independently manufacture the same product.
* Governments may sue manufacturers and anyone in the
supply chain
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, acti ...
, holding them broadly liable for harms caused by independent misuse or abuse of a product.
* Businesses may be held liable for harms caused by employees of
independent contractor
Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...
s.
* When the true party at fault for misusing a product is unable to pay for harms they caused, the manufacturer may be held liable on a speculative theory of the product design contributing to a mishap.
A variation on the term refers to the special subtype of
frivolous litigation
Frivolous litigation is the use of legal processes with apparent disregard for the merit of one's own arguments. It includes presenting an argument with reason to know that it would certainly fail, or acting without a basic level of diligence i ...
where plaintiffs target wealthy or corporate defendants for little other reason than them having high resources. These cases involve plaintiffs who have suffered genuine damages, but the true culpability lies squarely with an individual or small entity who has very little money that could be collected if the suit was won. Instead, the plaintiff targets the nearest marginally related large corporation or wealthy defendant, often with a weak accusation of
negligence
Negligence (Lat. ''negligentia'') is a failure to exercise appropriate and/or ethical ruled care expected to be exercised amongst specified circumstances. The area of tort law known as ''negligence'' involves harm caused by failing to act as a ...
. A popular example is a person being shot by a criminal, and suing the manufacturer of the firearm instead of their attacker. Sometimes legislation is passed to prevent such lawsuits, such as the
Protection of Lawful Commerce in Arms Act
The Protection of Lawful Commerce in Arms Act (PLCAA) is a U.S law, passed in 2005, that protects firearms manufacturers and dealers from being held liable when crimes have been committed with their products. Both arms manufacturers and dealers ...
.
See also
*
Judgment proof
In the context of contract law, debt collection and civil litigation, the term judgment proof is commonly used to refer to defendants or potential defendants who are financially insolvent, or whose income and assets cannot be obtained in satisfact ...
ing, a maneuver in which a "deep pocket" positions wealth to escape liability.
*
Lady Justice
Lady Justice ( la, Iustitia) is an allegorical personification of the moral force in judicial systems. Her attributes are scales, a sword and sometimes a blindfold. She often appears as a pair with Prudentia.
Lady Justice originates from the ...
, whose blindfold represents no bias for a claimant's status, such as wealth or poverty.
*
Safe harbor
A safe harbor or harbour is literally a "place of shelter and safety, esp. for ships". It is used in many contexts:
Film and television
* Safe harbor (broadcasting), established in 1978 in the US, the time period in a television schedule during wh ...
laws and regulations, which provide immunity from liability for compliant products and practices.
References
* ''
Guido Calabresi
Guido Calabresi (born October 18, 1932) is an Italian-born American legal scholar and Senior United States circuit judge of the United States Court of Appeals for the Second Circuit. He is a former Dean of Yale Law School, where he has been a pr ...
: The Cost of Accidents: A Legal and Economic Analysis, Yale University Press, 1970.''
{{DEFAULTSORT:Deep Pocket
Law and economics
Tort law
Informal legal terminology