Within the past year, Business Week (“How Business Trounced the Trial Lawyers,” Jan. 8, 2007), the National Law Journal (“A Different Sort of Trial for Plaintiffs,” Oct. 17, 2006) and other respected media outlets had reported that the modern tort reform wars, raging for more than a decade, had finally come to an end.  Reformers, declared the media, had decisively vanquished the trial bar. 

But those of us manning the barricades against the formidable forces of America’s personal injury bar know the war isn’t over.  Though we may occasionally win a tactical victory on this front or that, we are resigned to an overarching strategic battle that may last as long as the Republic.

In the meantime, however, a lead story in the Wall Street Journal last month did report that America’s job market for lawyers is waning and growth in the litigation industry, which boomed well ahead of overall economic growth in the early 1990s, has leveled off.

A federal judge in Texas and a grand jury in New York have focused overdue attention on conspiracies between lawyers and doctors who bring fraudulent asbestos and silica lawsuits against various industrial defendants and their insurers.  Transportation giant CSX, Inc. has countersued a prominent Pittsburgh-based law firm that adduced plaintiff medical records, purporting to prove asbestos exposure, “signed” by a doctor who never existed.

Attorneys specializing in stockholder class action lawsuits aren’t faring well these days, either.  Milberg Weiss, the firm that largely pioneered this type of litigation, is under federal indictment for paying illegal kickbacks to lead plaintiffs.  Several key individuals have either pled guilty or face stiff criminal penalties if convicted at trial.

Thus DukeUniversity law professor James Cox may have had a point when he recently told USA Today, “It’s getting harder for plaintiffs’ attorneys to make a living.”       

But those whose livelihoods revolve around suing the rest of us are not jumping out of windows or considering career changes.  Instead, the personal injury litigation industry has begun to retool.  It has developed aggressive new growth strategies that rely on unmatched political influence at state and federal levels.

 

Changes at the Top

After a focus group-tested name change and the hiring of a new chief executive from the world of public relations last year, the Association of Trial Lawyers of America is now calling itself the American Association for Justice and has otherwise beefed up its communications staff for an all-out counteroffensive through next year’s presidential election and beyond.

 

Last year’s midterm elections resulted in new leadership on Capitol Hill, too.  Having helped secure new majorities in both houses of Congress with their campaign contributions, personal injury lawyers now want help from those majorities in expanding litigation opportunities.  

 

According to OpenSecrets.org, the specialized Web site of the nonpartisan Center for Responsive Politics, no single industry group has contributed more to political campaigns since 1990 than lawyers.  In fact, the litigation industry’s nearly $784 million in campaign cash donated in that timeframe easily exceeds that of the oil and gas, pharmaceutical, tobacco, insurance, and gambling and casino industries combined.

 

Spreading that cash around to key committee chairman and others, the trial lawyer lobby has pushed a series of what my colleague, American Tort Reform Association general counsel Victor Schwartz, has dubbed, “trial lawyer earmarks.”  As a major element of the litigation industry’s new growth strategy, such earmarks often appear as seemingly innocuous clauses buried in voluminous legislation. 

 

A less than innocuous example of a trial lawyer earmark was included in the House bill updating the Foreign Intelligence Surveillance Act.  Having already filed roughly 40 lawsuits seeking billions of dollars in alleged damages from telecommunications companies that had cooperated with government counterterrorism investigations in the wake of 9/11, the plaintiffs’ bar pushed majority leaders to include in the bill a provision allowing them to continue that litigation.

 

For the sake of both our national security and the health of our economy’s vibrant telecommunications sector, House leadership was forced by wiser heads in the White House and Senate to withdraw the onerous bill last week.  But it’s astounding to think that the litigation lobby came as close as it did to having lawmakers subject to speculative legal attacks those companies the Washington Post called “patriotic corporate citizens” acting “in a difficult and uncharted environment.”

 

Their FISA setback aside, trial lawyers are nonetheless pressuring Congress to deliver several additional earmarks, such as a lawsuit-promoting clause or two in anticipated housing legislation which will target deep pockets in the home loan industry following the subprime mortgage meltdown.  And keep an eye on the plaintiff bar’s continuing efforts to repeal so-called “preemption” rules that keep lawsuits against federally regulated industries out of state courts.

 

State Fare

It is in state and county courts where, unlike federal courts, presiding judges tend to be elected and thus find themselves in need of periodic campaign contributions of their own.  Not coincidentally, personal injury lawyers avoid appointed judges in federal courts if they can and instead prefer having their more creative cases heard by elected state and county judges.  So no one should be surprised to learn that the litigation lobby also is working diligently in state legislatures – spreading campaign cash there, too – to open windows for more state-based lawsuits.

 

For example, in Illinois this year the trial bar successfully convinced lawmakers to pass and Governor Rod Blagojevich to sign legislation that significantly increased potential damage awards in wrongful death lawsuits.  The new law adds grief, sorrow and mental suffering as measures for non-economic damages.  But these new measures are unquantifiable and entirely subjective, and they leave jurors with no rational upper limit on awards, a third or so of which go to plaintiffs’ lawyers.

 

In Michigan this past January, after last year’s elections boosted the number of Lansing lawmakers sympathetic to the trial bar, a determined band in the House sought to repeal retroactively an 11-year old law that had preempted state lawsuits against pharmaceutical companies if the drug alleged to have caused injury had been approved previously by the federal Food and Drug Administration.

 

Shortly after Governor Jennifer Granholm had signaled her willingness to sign such a bill, Pfizer announced plans to close two plants in the state, which University of Michigan economists say account for 6,000 jobs.  The bill was killed by last-minute maneuvering in the state Senate but may, incredibly, be reintroduced next year.  So one has to ask: With the highest unemployment rate in the nation, why would Michigan would want to create more lawsuits instead of more jobs? 

 

Attorneys General and Friends

As noted above, no single interest group or industry spends more than trial lawyers to grease the political skids.  Rhode Island Senator Sheldon Whitehouse previously served as the OceanState’s attorney general and was able to move from Providence to Washington with generous help from the lawyers he invited to sue paint manufacturers.

 

Though these manufacturers had voluntarily stopped making lead-based paint decades ago and long before federal regulations required them to, an out of state law firm convinced then Attorney General Whitehouse to hire them on behalf of the state to bring a lawsuit, not based on standard product liability law, but on an unprecedented contortion of public nuisance law.

 

A sympathetic state judge’s eventual jury instructions all but guaranteed that the verdict would go against the defendants and it did.  The case is on appeal and may make it all the way to the Supreme Court.  But in the meantime, a troublesome precedent for backdoor relationships between attorneys general and private sector personal injury lawyers has been set.  Many state attorneys general have now followed Whitehouse’s model in hiring their political supporters, deputizing them with the awesome power of the state, and unleashing them to sue entire industries for billions of dollars.

 

Long, Hard Slog

So clearly then, the war against lawsuit abuse is far from over.  Wealthy and politically connected personal injury lawyers will continue exerting political influence within all three branches of government in a never-ending effort to grow their industry and expand opportunities for litigation.

 

All the while, a neighborhood dry cleaner in Washington is sued for $54 million over an allegedly lost pair of pants, a New York City florist is sued for $400,000 because a bride was disappointed by the color of her hydrangeas, and school districts across the country are canceling recess out fear that the parents of a clumsy kid who skins a knee may sue taxpayers.  Of course, lawyers for some kids in desperate need of recess are suing restaurant chains and soft-drink makers, too, blaming them for childhood obesity.

 

Trial lawyers will deny it, but headline-generating litigation like this seriously erodes the public’s respect for, and trust in, our civil justice system.  Perhaps as important, lawsuit abuse poses significant costs to our nation’s economy while eating away at our ability to compete globally.  That’s why those of us dedicated to the cause of tort reform know we’re in for a long, hard slog against those who believe America needs more lawsuits, not fewer.

 

We’ll keep working to educate and inform the media and America’s citizens, voters and taxpayers.  But only if they further pressure policymakers to rein in the litigation industry’s selfish shenanigans can lasting victories in the tort reform wars be won.