Faced with a deluge of lawsuits, Santa Claus is seriously considering liquidating his business, owing to intractable risk management problems. Though his Christmas sojourns began three centuries ago, 98% of the court action has occurred within the past five years. Santa has finally decided to appoint a third-party claims administrator – The North Pole Group, Ltd. -- to bring under control a burgeoning claim volume.
Santa’ first stint as defendant involved a suit (1989) that was dismissed from court. An air traffic controller at LaGuardia Airport in New York accused Santa of violating public air space, "risking several hundred passengers' lives." Complex regulations govern LaGuardia air traffic, and these -- along with New York accents -- were poorly understood by Santa's four-legged sleigh guide. After being forced to land at LaGuardia, Santa was held up on the ground for four hours during tense negotiations over American Airlines attempt to charge him over $900,000 in excess baggage fees.
In 1997, Santa attempted to avert the airborne problem by keeping his sleigh on the ground, but was mired in traffic at the Holland Tunnel and barely completed his gift deliveries. In 2008, Santa's sleigh was towed and impounded by Manhattan Police after the sleigh stopped in front of a sign which read, "Don't Even THINK About Parking Here!"
In the early 2000’s, at least a dozen suits were filed in as many states, mostly by environmentalists. To wit: allowing twelve reindeer to fly through the air, given the "chances for accidental airborne pollution," was unacceptable. The Federal EPA threatened to cite Santa as a "potentially responsible party" and a transporter of hazardous material. A compromise was reached, requiring Donner and Blitzen to wear protective “dropping suits.”
Twelve bad boys in Austin, TX -- overlooked by Santa for failing to help with the dishes, not making their beds, and writing nasty words in public bathrooms -- won a landmark "fair share" decision in Harris County in 2008. Evidence showed that Santa had bypassed their houses in an "arbitrary and capricious way." The jury did, however, absolve Santa of having violated the Texas Deceptive Trade Practices Act. Additional plaintiffs, also overlooked by Santa, have filed suit under the Federal RICO (Racketeer Influenced Corrupt Organization Act), seeking treble damages for what they claim is a North Pole plot to discriminate against their failure to take out the trash, and playing a Snoop Dog rap version of “Muskrat Love” on their iPhones.
The early 2000’s also brought a barrage of product liability suits. "Since Santa crafts his toys," bleated Philadelphia Judge K. Kringle, "he must be held to the same standards as conventional manufacturers." Observers believed the big toy makers had stimulated these suits because Santa, using cheap elf labor and magic, had gained an unconscionable large market share. This led to opening of a formal Department of Justice investigation of Santa on antitrust grounds.
In 2009, Donner filed an "equal opportunity" suit against Santa and the North Pole Inc. Board of Directors on behalf of eleven reindeer against Rudolf. The court ruled that, with the exception of extremely foggy nights (to be determined by a court-appointed arbitration board), there would be a twelve-year rotation for the position of point-deer.
Recently, a spate of nuisance suits have embittered Santa: Spreading particulates from Chinese drywall from chimney-diving, 2007. Cruelty to animals, 2008. Wearing an inflammable red suit, 2009. Smoke pollution (his pipe was declared illegal, whether lit -- for causing air pollution -- or not -- for setting a bad example), 2009. Unlawful interstate commerce (United States vs. Claus, 2010). Violation of Section 2, Sherman Anti-Trust Act, for monopolistic practices, 2011.
Most bizarre was the 2010 suit pitting Santa against the "Cruel and Hazardous Labor Practice Act." Tragically, a four-foot elf suffocated in a nine-foot snow drift. Suit papers drafted by Lieff Cabrasser LLP asserted that Claus "knew or should have known" that unusual drifting conditions made it excessively risky for his diminutive helper. "Inexcusable negligence," said the open-minded jury with its findings.
What finally prompted to prepare a request for proposal for claims adjustment services? One elf observed, "Santa was not burned out, just burned up." Specifically, he was:
• Sickened by “Occupy North Pole” protesters who squatted near his workshop, insisting that toys “for the 1%” be instead distributed equally rather on the basis of merit for good behavior. (He refused a compromise offer of a quality-assurance committee to define "good behavior.")
• Fed up with litigators growing wealthy on the back of his generous spirit. In 2009, for the first time, the American Association for Justice (AAJ) formed a special Santa Litigation Group. As a result, about 250 firms nationwide established a network for exchanging document information obtained through discovery and production requests in dozens of lawsuits. Observed attorney Theodore S. Grinch of Yule & Tide, West Orange, NJ, "Public sympathy for Santa is such a big obstacle for plaintiffs to overcome, that this coordination is a must for injured parties seeking redress."
• Angered by cynics who question his motives for spreading joy. The worst of this sort suggested, without evidence, that the toy scheme was a "front" for international drug-smuggling. Documents produced through Freedom of Information Act disclosure in 2008 revealed that for nine months, Santa was the target of a Drug Enforcement Administration (DEA) probe. Rumors swirled of elf-staffed meth labs in the North Pole. Right-wing activists hinted that he was an Al-Qaeda cell operative. The fact that Saint Nicholas was a Russian also drew CIA attention, even in this post-Cold War age.
• Disenchanted with cash-starved local municipalities who lamented sales tax losses from free toys.
"And so," said a four-foot unemployed elf, "Santa is looking for a full-time in-house claims administrator."
Mrs. Claus, ever the realist, took no comfort from the knowledge that lawyers may no longer be able to profit so easily at her husband's expense.
"In 2012," she predicted, "they'll probably go after the Easter Bunny."
Kevin Quinley CPCU, ARM, AIC is a claims consultant in the Washington D.C. area. You can reach him at email@example.com or at www.kevinquinley.com