When Al Capone ordered his murderous henchmen to bump off seven of “Bugs” Moran’s boys at a Chicago warehouse back on Valentine’s Day in 1929, they used machine guns to get the job done. Seventy-eight years later, some Michigan state lawmakers in Lansing, acting at the behest of personal injury lawyers, have armed themselves with a legislative proposal that could shoot holes in an important safeguard against lawsuit abuse and kill thousands of jobs while they’re at it.
After a Valentine’s Day hearing, the legislation was reported out of the House judiciary committee and is expected to pass the full House this week. If the Michigan Trial Lawyers Association has its way, the state Senate will act quickly, too, and a carefully reasoned, 11-year-old protection for drug manufacturers and those they employ could be massacred unless Gov. Jennifer Granholm (D) changes her position and vetoes the bill.
Testing plans for broader, post-election tort reform rollbacks in other states, spokespersons for the self-interested personal injury litigation industry have purposely mischaracterized as “immunity” for pharmaceutical firms Michigan’s existing law which generally precludes lawsuits in connection with a drug the federal Food and Drug Administration (FDA) has already approved. Not coincidentally, this propaganda fails to explain that plaintiffs are currently allowed to sue a drug company if the FDA finds that the company made misrepresentations or illegal payments to influence the approval process.
To be clear, the legislation now being considered would repeal Michigan’s FDA defense law and thus create an open invitation for personal injury lawyers to recruit litigants for thousands of new lawsuits. Such litigation could hobble the development of lifesaving medicines, further inflame health care inflation and downgrade the state’s economic condition from serious to critical.
While the overall U.S. economy grew at a robust average pace of 5.1% from 2000 through 2005, Michigan’s state economy limped along at less than half that or 2.4%. And though the nationwide unemployment rate averaged a very healthy 4.6% last year, the jobless rate for Michiganders was nearly 50% higher or an anemic 6.8%.
Since Gov. Granholm campaigned for reelection last year with promises to promote economic growth and job creation, she might want to stand against any legislative effort that would make it harder to deliver on those promises. But so far, the governor, an attorney herself, has sided with the trial lawyers. (If you think she should change her mind, call her at 517.373.3400 or send an email by going to http://www.michigan.gov/gov/0,1607,7-168-21995-65331--,00.html.)
Meanwhile, Pfizer, the world’s largest pharmaceutical research and manufacturing company, announced in late January that it will be closing facilities in both Ann Arbor and Kalamazoo. Roughly 2,400 Pfizer jobs will be lost, and economists at the University of Michigan estimate that the plant closings will ultimately lead to the loss of 6,000 positions in the state during the next three years as other jobs supported by Pfizer operations and its employees also disappear.
Pfizer executives have not linked their shutdown decisions to Michigan’s emboldened personal injury bar or the legislation it’s backing to strip drug makers of commonsense protections. But one doesn’t have to be an industrial economist to know that companies large and small routinely consider a state’s litigation climate when making plans for expansion, relocation or the closing of facilities. Texas Gov. Rick Perry (R) reported last year, for example, that his state’s limits on lawsuits helped create 580,000 new jobs there in the previous three years.
With its auto industry struggling against fierce global competition, the last thing Michigan ought to do is make it easier for trial lawyers to target with speculative litigation the pharmaceutical companies that can create wealth, produce jobs and sustain communities throughout the 21st century. Yet if litigation-loving lawyers get their way with state lawmakers and the governor, Michigan will, in effect, be ordering such companies “Up against the wall!”