TorteDeForm

Cyrus Dugger

Hypocrites of Tort “Reform” Vol. 4

This series highlights the work of the Center for Justice and Democracy and others in identifying proponents of tort “reform” who have sought to limit access to the courts, but who when financially or physically injured waste no time in going to the very courthouse they made inaccessible to others.

As the Center for Justice and Democracy explains:

"No one likes a hypocrite. Yet one would be hard pressed to find
more hypocrites than in the 'tort reform' movement. Take a look
at the record of a host of lawmakers, lobbyists and even journalists
who complain about lawsuits and argue that the rights of injured
consumers to go to court should be scaled back because we are too
'litigious.' Yet when they or family members are hurt and need
compensation for their own injuries, often minor ones, these same
individuals do not hesitate to use the courts to obtain
compensation, to right a wrong, to hold a wrongdoer accountable
or to obtain justice."

Our third showcase is Ken Lay: the former CEO and Chairman of Enron.


“In a January 1994 speech following his election as chair of Houston’s leading business booster group, “Kenny Boy” Lay raised the topic of lawsuit abuse in conjunction with his lifelong obsession with defending shareholder interests. Denouncing run-away litigation, Lay warned that, “Many of us who love this city and state wonder whether it is prudent for our shareholders to keep operations or headquarters in this state.”

Later that year, Lay wrote two things that kept Enron in Texas: (1) His first check to the newly formed Texans for Lawsuit Reform PAC; and (2) A letter to newly elected Governor George W. Bush urging him to slash legal liabilities to prevent corporate flight from Texas. It was the beginning of a beautiful relationship.

Although neither one of them advertises it now, Bush and Texans for Lawsuit Reform (TLR) both count Ken Lay among their top donors. The largest single source of Bush’s gubernatorial money was Enron’s PAC and executives ($312,500). Another 10 percent of the $41 million that Bush raised for his gubernatorial races came from the tort-reform lobby—led by TLR. (Bush, Lay Shielded Errant Texas Businesses From Lawsuits Bushron Tort Dodgers!, Texans for Public Justice

(Bush, Lay Shielded Errant Texas Businesses From Lawsuits Bushron Tort Dodgers!, Texans for Public Justice) (link)


However, the former CEO and Chairman of Enron only wanted to reduce the ability of non-corporate entities to sue corporations, but not the ability of corporations to sue each other when they felt wronged:

“From 1998 through 2001, Enron was a party to dozens of civil cases in Harris County state district courts, often appearing as the plaintiff in contract disputes that pitted one business against another. Contract disputes accounted for far more of Enron’s litigation docket than did the personal injury claims that the business lobby focuses on.”
(Bush, Lay Shielded Errant Texas Businesses From Lawsuits Bushron Tort Dodgers!, Texans for Public Justice) (link)


Similarly, in his personal life, Ken Lay was only against lawsuits… directed at him:

Lay litigation In 1986 Ken Lay sued a motorist who rear-ended his daughter’s car. Represented by Vinson & Elkins, Lay sued a special education aide, seeking $6,025 for car damages and another $4,000 for such things as Robyn Lay’s “pain and suffering” and “mental anguish.” Under questioning, the plaintiffs admitted that Robyn did not seek medical attention until a week after the accident and that their insurer had paid their car repair bill—which was half of what they demanded. Lay committed tort-reform heresy as chair of the University of Houston Regents in 1991 by pursuing justice through litigation. After the regents voted to sue university financial officers who were indicted in a $600,000 kickback scheme, Lay said, “We hope this action will help us recover lost funds and bring this matter to justice.” Despite Bush’s “tort reforms,” many people wish the same today for the workers and investors who are suing Enron’s officers, directors and auditors.
(Bush, Lay Shielded Errant Texas Businesses From Lawsuits Bushron Tort Dodgers!, Texans for Public Justice) (link)

The hypocrisy continues.

Reasonable minds can disagree about the tort “reform” debate, but to advocate one side of this debate in the public forum and as applied to others, but to take another side in your own personal life as applied to your own interests is shameful.

If you or your organization is interested in learning more about or working on these types of civil justice issues, please feel free to contact me at cdugger@drummajorinstitute.org.

Cyrus Dugger
Senior Fellow in Civil Justice
Drum Major Institute for Public Policy

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Posted at 10:30 AM, Oct 17, 2006 in Hypocrites of Tort "Reform"
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