The Anti-Plaintiff Lobby
November 13, 2006
Stephanie Mencimer is a contributing editor of The Washington Monthly. She was previously an investigative reporter for The Washington Post and a staff writer for Legal Times. She now blogs about tort reform issues at TheTortellini.
The midterm election returns were barely in before the U.S. Chamber of Commerce started running ads encouraging Democrats to take up where Republicans left off. Their issue wasn’t a business staple like lower taxes, smaller government or even illegal immigration. Instead, the nation’s biggest business lobby was calling on Democrats to fix “America’s lawsuit crisis.” The ads promoted the chamber’s latest poll, which claimed that 85 percent of people who voted in the midterm elections think frivolous lawsuits are a serious problem and want the next Congress to do something about it. Helpfully, the ad suggests Democrats could improve their standing with swing voters by embracing this “bipartisan” issue.
The ads were just a sign that as much as the election changed the political climate, many things will stay the same. Restrictions on lawsuits, or “tort reform,” have been a staple of Republican politics since the 1994 Contract with America. In the past two years, the GOP-led Congress has passed restrictions on class-action litigation and immunized favored industries from fast food companies to gun manufacturers to protect them from lawsuits. At the same time, state legislatures have capped awards in malpractice lawsuits and Republican state court judges have all but eliminated punitive damages in many states.
Conventional wisdom holds that the Democratic takeover of Congress and many state capitals threatens to bring all that “reform” to a grinding halt. The conventional wisdom, though, doesn’t take into account just how many lobbyists have come to depend on this issue living another day. Consider that in 2005, more than 100 big corporations employed 475 lobbyists—nearly one for every member of Congress—to pass the Class Action Fairness Act, which forced most class actions into federal court where business thought they’d get more favorable treatment. The U.S. Chamber of Commerce alone spent $60 million lobbying for the bill. With that kind of money at stake, the tort reform industrial complex is likely to ensure that while the battle over medical malpractice lawsuits might go dormant, the larger movement to restrict lawsuits—and bash the lawyers who bring them—will not go away.
A few legal reform think-tankers, like the Manhattan Institute’s Walter Olson, believe it’s possible that some issues—such as the creation of an asbestos victims' trust fund that would end asbestos litigation—might fare better in the Democratic Congress than it did under a Republican one. Other legal reform issues will also find a friendly audience among Democrats. Big businesses have already hired a handful of veteran and Democratic tort reform lobbyists to push for legislation that would cap damages and force the loser to pay the other side’s legal bills in patent infringement lawsuits. Democratic Sen. Chuck Schumer has indicated sympathy for more legislation restricting shareholders’ litigation. Of course, these bloodless battles rarely generate the emotional fights like those over medical malpractice lawsuits or product liability litigation. Nonetheless, they’ll ensure that legal reform lobbyists won’t have to give up their skyboxes at FedEx field just yet.
Just because Democrats have retaken Congress doesn’t mean that the attacks on consumer legal rights will disappear, either. They may just come in different packages. For instance, mortgage lenders have been pushing federal legislation that, on its face, looks like a measure to crack down on predatory lending. In fact, it’s simply designed to overrule stricter state laws that allow victims to sue over abusive mortgage practices. Democrat Barney Frank has already suggested he would support such a bill.
Despite large Democratic gains, most state legislatures probably haven’t seen the last of the tort reformers, either. Indeed, the American Tort Reform Association recently launched its latest campaign against “abusive state consumer protection laws.” These "abusive" statutes enable individuals to sue over relatively small amounts of money by allowing plaintiffs to win treble damages and attorneys fees in consumer protection lawsuits. Notably, these unfair and deceptive trade practices laws have provided the basis for some big lawsuits, such as those against tobacco companies for fraudulently marketing “light” cigarettes as safer than regular ones. Tobacco companies have been one of association's major funders.
Whether the campaign will get much traction among Democrats remains to be seen. One thing is certain, though: So long as Americans continue to exercise their right to sue when they’ve been injured, financially or otherwise, the folks on the receiving end will continue fighting to restrict those suits, regardless of who’s in charge.