My Take on the "Tort Wars"
Several others have already mentioned the article in the New York Times about the "tort wars." Definitely read the whole article, but here's my response to various portions of the article.
“It took guts, bravery and vision to get behind what must have seemed like an insurmountable task — taking on the powerful trial bar,” said Mr. Donohue, the chief executive of the United States Chamber of Commerce. “We have succeeded beyond our expectations.”
That's right - it's an insurmountable task for corporations with revenue in the tens and hundreds of billions of dollars to make a PR attack against the relatively disorganized trial bar. Climbing Everest pales in comparison.
NEVERTHELESS, there are battles in individual states over judicial campaigns and legislative initiatives. The number of class-action lawsuits filed in 88 federal courts rose 72 percent from 2001 to 2007, partly because of that 2005 law. (Presumably, the number of class actions in state courts has fallen, although this data is hard to come by.) And while a study released in December by Towers Perrin, the consulting firm, found that total “tort costs” fell in 2006, it predicted that costs would rise as a souring economy prompts more lawsuits.
I wonder how many of those lawsuits will be against the rapacious corporations who caused the souring economy by engaging in illegal and unethical conduct?
In Colorado, an initiative to limit lawyers’ fees was answered with a barrage of proposals that would limit executive compensation, cap real estate sales commissions and raise the maximum amount of damages payable as a result of shoddy construction, among other things. All the initiatives were eventually withdrawn.
This was a smart tactic. We need to learn a lesson from this and use it in the future.
The fight to change tort laws has developed into a big business in itself, with plenty of people invested in keeping the battle going. Neither Mr. Haber nor Mr. Donohue would say flatly that his side was winning. Doing so would make it harder to lure contributions — a point made by people on both sides of the debate.
No surprise here. If Donohue declares victories, he'd probably have to go and get a real job. He's got a very substantial interest in peddling fear, as corporate fear of lawsuits is what keeps his six-figure salary flowing.
But the chamber itself, which represents millions of businesses of all sizes, is the biggest spender on the lobbying. In 2006, it spent $72.7 million, according to the Center for Responsive Politics, a nonprofit research group that tracks money in politics. On the trial lawyers’ side, the American Association for Justice spent $8.3 million that year.
Just wanted to throw together a quick & dirty chart to visually depict the large difference between the Chamber's lobbying efforts and the AAJ's. Very interesting that the "reformers" argue that the trial lawyers outspend everyone else. The "reform" lobby's largest organization outspends the largest trial lawyer group by nearly 9 to 1.
These figures don't include the lobbying by the individual members of each group. Sure, there are some wealthy trial lawyers out there, but the combined wealth of the Chamber of Commerce membership is easily 10,000 times more than the combined wealth of the AAJ membership. Trial lawyers cannot possibly hope to outspend the "reform" movement.
They came up with what Mr. Hantler described as a multipronged strategy, involving advertising aimed at voters picking judges and continued lobbying of lawmakers. This “demonstration project,” as Mr. Hantler called it, was successful enough that the Institute for Legal Reform has expanded it over the years. [Didn't Darth Vader call it a "demonstration project" when he used the Death Star to blow up the planet of Alderaan? - JCL] At the same time, businesses have become more active in state supreme court judicial campaigns and, in the 2006 election cycle, gave twice as much as lawyers did, according to the National Institute on Money in State Politics. (In previous cycles, sometimes companies gave more, sometimes lawyers gave more.)
For years, the "reformers" have claimed trial lawyers have been buying judges. Now they've outspent judges by two to 1; how many judges did they buy?
To help deliver a pro-business message, advocates have hit upon a ranking system. One list ranks “judicial hellholes,” as compiled by the American Tort Reform Association, and another identifies those states deemed by corporate general counsels to be most and least friendly to businesses. (That list comes from the Chamber of Commerce.)
If O.J. Simpson ranks California vs. Nevada for judicial fairness, would anyone take his study seriously? It's the same concept.
Corporate executives say they want limits on noneconomic damages in order to reduce unpredictability in jury verdicts.
So they can more easily decide whether to release products that are going to kill people. Rather than grapple with the moral implications of their decisions, many corporate executives would rather base those decisions on financial implications.
Although the number of lawsuits that defendants shifted to federal courts rose after the law was passed in 2005, a report released in April by the Federal Judicial Center, a research and education agency created by Congress, found that the number of such shifts has since fallen. On the other hand, the number of class-action suits filed initially in federal courts has risen. And no one has reliable data on the total number of class-action suits filed in state courts.
In other words, there isn't enough data for the "reform" movement to claim there's a class action crisis. That's what's so nice about propaganda - it doesn't require facts. In fact, it's usually better without them!
As always, comments are welcome.