Thursday, July 13, 2006

Tort Deform Article

An article from a trial lawyer, great stuff and worth a read, pulled verbatim from

Trial lawyers are always telling stories about victims. They tell stories of grieving parents forced to stand over the graves of children who were killed by defective products. They tell stories of once-strong men and women who can no longer support their families because of on-the-job accidents. They even tell the stories of infants whose futures were stolen during their birth by negligent doctors. But for all their story-telling, they’ve forgotten an entirely different group of victims: the victims of our justice system.

Men like Maurice “Hank” Greenberg, the former chairman of AIG. It took Hank nearly thirty years to build a multibillion-dollar fortune. Throughout those years, Hank was constantly being victimized. He was victimized by a civil justice system that forced his company to pay for the medical bills of individuals injured by his insured. As if that wasn’t enough, he was most recently victimized by Eliot Spitzer, the New York Attorney General who has alleged that Hank made his billions through illegal business practices. Thanks to Mr. Spitzer, Hank was kicked out of the company he built, and he was even forced to transfer over $1 billion in assets into his wife’s name. Is it any wonder that Hank accused trial lawyers of being “terrorists” that must be stopped at any cost?

Or Bernie Marcus, the self-made billionaire who founded Home Depot. In 2004, he wrote an op-ed in which he accused trial lawyers of slowing the economy and scaring people away from helping charities. That same year, Home Depot boasted of “record profits” of over $1.5 billion dollars, and the next year, Mr. Marcus personally gave over $200 million dollars to various charities. It’s easy to see how trial lawyers hurt Home Depot and Bernie Marcus.

And let us not forget courageous Texas Attorney General Greg Abbott, who was confined to a wheelchair after a tree fell on him while he was jogging. Despite his horrific injuries, Mr. Abbott rode his wheelchair to victory in his campaign for Attorney General against a well-funded candidate whom he described as a “liberal plaintiff personal injury trial lawyer who’s made millions suing doctors, hospitals, businessmen and women.” It shocks the conscience that during Mr. Abbott’s campaign, the scoundrels of the Texas Trial Lawyers Association made scurrilous accusations about Mr. Abbott’s character, and even accused him of being a hypocrite! What supposed act of hypocrisy did he commit? Merely advocating a $250,000.00 cap on noneconomic damages shortly after receiving millions of dollars in noneconomic damages from his accident. Thank goodness Mr. Abbott has been able to fight for the rights of Texas citizens in spite of the best efforts of trial lawyers.

Wait a minute! Greenberg, Marcus, and Abbott aren’t victims of the justice system! They’re rich, powerful, and (until recently in Greenberg’s case) admired men who have benefited from America’s robust justice system. Their wealth and station in life leaves them wanting for little. So how have they managed to persuade the American public that they deserve to be helped, and that average citizens who were injured through no fault of their own deserve to be scorned? By tugging at purse strings and not heartstrings.

While trial lawyers valiantly crusade against so-called tort reform because it will endanger the public, tort reformers promise that tort reform will enrich the public. Call it greed, call it selfishness, or call it self-interest, but most Americans today care more about protecting their pocketbooks than protecting society. Plus, let’s be realistic – the average American doesn’t believe that trial lawyers really care about safety, society, or their clients. Thanks to a multiple-decade onslaught of propaganda, most Americans believe trial lawyers have a “Show me the money!” mentality that would embarrass even Donald Trump, who recently filed a lawsuit asking for $2.5 billion in punitive damages against the author and publisher of a book that questioned whether Trump is really a billionaire.

The way to beat the tort reformers in winning the hearts and minds of the American public is to beat them at their own game – make economic arguments in favor of preserving the justice system. This tactic is effective for two reasons. First, our culture is far more individualistic than collectivist; we’re raised to look out for ourselves, not for others. Arguments about preserving the legal system to protect the public often fall on deaf ears because Americans neither see themselves as victims, nor tend to be overly concerned with victims. (Until they or someone they care about becomes a victim, in which case they feel they’re entitled to unlimited punitive damages.) Second, public safety arguments at least in part ask people to believe something they don’t want to believe: That big corporations knowingly develop and market dangerously defective products. No one wants to believe that corporate America is full of psychopaths who will let consumers die just to make a buck. It’s exceedingly difficult to get people to believe something they don’t want to, even if the facts are on your side. One example of this is that depending upon which survey you believe, between 10% and 25% of Americans believe we really did find weapons of mass destruction in Iraq.

While Americans generally feel invincible and unlikely to be the victim of an accident or a defective product, there is one thing they are afraid of: Being ripped off. From shady car dealers to price-gouging oil companies, most Americans feel that someone or something lurks around every corner just waiting to steal their money. So appeal to that fear by revealing what tort reform really is – an enormous scam that will increase the cost of health insurance, reduce access to medical care, and may have to be paid for by tax increases or cuts in entitlement benefits. How best to persuade the public of this?

By destroying the most duplicitous argument tort reformers offer – that tort reform won’t prevent the truly injured from receiving compensation for their injuries, and that it won’t in any way place limits upon economic damages. To sell that lie, tort reformers use words like “fair,” “just,” “reasonable,” and “common-sense.” Trial lawyers know that most, if not all members of the American Tort Reform Association would like nothing more than to make sure their corporate masters never have to pay a dime to an injured consumer ever again, a result that is hardly “fair” or “just.” The “Holy Grail” of the ATRA and its many members is national legislation that bars product liability lawsuits over any product approved by a Federal regulatory agency such as the National Highway Traffic Safety administration or the Food and Drug Administration.

A strong proponent of this exemption is Daimler Chrysler Associate General Counsel Steven Hantler, a failed personal injury lawyer who retreated to the steady paychecks of corporate America when he found himself unable to succeed in the pay-for-performance world of personal injury litigation. If Hantler’s name sounds familiar to you it might be because under his direction, Chrysler spent over $250,000.00 to defend an $8,700 case… and then claimed that its Constitutional right to due process was violated because it had to pay almost $150,000.00 in attorney’s fees to the prevailing party. (I suppose the “loser pays” rule is only fair if you’re the winner, right Steve?) Hantler has also been known to sue plaintiffs’ attorneys for a myriad of reasons, including fraud. As Hantler says, “We want to make plaintiffs lawyers think twice before bringing a meritless case against us.”

In Hantler’s view, any product liability case is meritless if the product in question was approved by a Federal regulatory agency. Since all of Daimler Chrysler’s products are approved by the NHTSA, the legislation Hantler fights for would insure his company is never again sued for manufacturing a defective automobile. Hantler and others who support such legislation hope to persuade the public that king’s-ransom salaries “earned” by corporate executives aren’t passed on to consumers in the form of higher prices, but that the costs of the tort system are. While they rarely say it directly, tort reformers strongly imply that passing tort reform will save the public money.

Their economic argument can be easily refuted by a very basic economic principle: “There’s no such thing as a free lunch.” That well-worn maxim dictates that all costs are paid for by someone. A relevant example is what’s happening today in the State of Michigan. Prior to leaving office, former Governor John Engler signed a bill that prevents injured Michigan citizens from suing pharmaceutical companies over injuries caused by any drug that was approved by the FDA. That means that the thousands of Michigan citizens injured or killed by Vioxx, Zyprexa, or any other FDA-approved drug can’t even sue to recover their medical bills. (So much for the “we don’t want to cap economic damages” lie the tort reformers espouse.)

While Engler made the rights of injured consumers disappear, neither he nor anyone else can make the costs incurred by injured consumers disappear. So who pays for those costs, if not the manufacturers who caused them? If the injured consumer has medical insurance, his or her insurer pays those costs… and without the right of subrogation, insurers are forced to raise health insurance premiums to make up the difference. If the injured party doesn’t have insurance and can’t afford to pay the bills, then the doctors and hospitals that treated the person have to eat the cost… which forces them to raise their prices to make up the difference. And if the injured consumer is on Medicaid, Michigan taxpayers pay those costs. Engler’s legislation has been so deleterious to the health of Michigan’s economy that several staunchly conservative Republican state legislators are breaking rank and joining with Democratic legislators to try and repeal this probably-unconstitutional law.

Just like the losses from shoplifting forces retailers to raise prices, exempting government-approved products from product liability lawsuits forces health insurers and health care providers to raise their prices. Worse still, such an exemption will place an additional burden upon public assistance programs such as the already-overburdened Medicaid and Medicare which will in turn force our legislators to either raise taxes, reduce services… or both.

If Hantler and his cronies in the ATRA have their way, corporate executives in every federally-regulated industry will receive a “free” steak-and-martini lunch to be paid for by every taxpayer in America. As if it isn’t bad enough that the pharmaceutical industry and the manufacturing industry (the National Association of Manufacturers is now run by John Engler.) is pushing for this legislation, the great-granddaddy of all special interest groups will soon join them: Big tobacco.

Altria, the parent company of Philip Morris desperately wants cigarettes to be regulated by the Food and Drug Administration. In their own words, “Altria and Philip Morris USA (PM USA) strongly support the passage of legislation that would give the U.S. Food and Drug Administration (FDA) meaningful and effective authority to regulate tobacco products.” While the merits of such legislation are debatable, one thing isn’t. If that legislation passes, the tobacco industry will spend whatever it takes to pass the government-approved product exemption lobbied for by the ATRA. Together, those two pieces of legislation will insure that the tobacco industry will never have to defend another product-liability lawsuit, and will never be forced to reimburse taxpayers for the billions of dollars in medical bills caused by their products. Clearly, something must be done to prevent the charlatans behind the tort reform movement from passing national legislation.

Thanks to the cheats, liars, and crooks at companies like Enron, Worldcom, and Arthur Andersen, Americans are even more distrustful than ever of big business and corporate executives. Capitalize on that distrust by attacking the cheats, liars, and crooks who tell Americans that tort reform is good for them. When some corporate sock puppet like Sherman Joyce of the American Tort Reform Association claims that lawsuits are slowing the economy, point out that last year, the 500 CEO’s of the Fortune 500 took home over $5.1 billion dollars, up over 30% from 2004. If the economy was really being hurt by lawsuits, corporations couldn’t afford such a generous pay raise to their CEO’s, could they?

Or when a politician in the pocket of the insurance industry accuses trial lawyers of creating a poor business climate in your state, respond by accusing him or her of irresponsible fear mongering that scares off new businesses and discourages existing businesses from expanding. Then go so far as to accuse those politicians of using trial lawyers as an easy target, rather than tackling the real problems facing businesses in your state, like an unfair tax climate, or oppressive insurance rates, or any other issue your state’s Chamber of Commerce is concerned about. Think of how much fun it will be forcing the Chamber of Commerce to decide how to deal with pro-business trial lawyers.

And the next time some schmuck brings up Stella Liebeck and the McDonald’s coffee case, ask why a $2 million dollar lawsuit over third-degree burns to a woman’s genitals is frivolous, but a $5 billion lawsuit over Donald Trump’s ego isn’t. When he or she agrees with you that Trump’s suit is the epitome of a frivolous lawsuit, go on to explain that tort reform won’t prevent him from collecting $2.5 billion in punitive damages because tort reform never focuses on capping damages in financial injury cases, which are generally filed by the rich and the powerful. Instead, tort reform only applies to personal injury cases, which are generally filed against the rich and the powerful. By using clear and concise economic arguments, we can convince the public that if tort reform is anything, it’s a series of un-American changes to tort law to protect the rich and punish the poor.

People often ask me why I spend my time and money running when I’m neither a lawyer nor on the payroll of a lawyer. I tell them it’s because the thing I hate the most in the world is hypocrisy, and no special interest group has more hypocrites in it than the American Tort Reform Association. I truly believe that the only way to expose these hypocrites and win this war for our justice system is to ruthlessly and relentlessly attack them on every issue and in every forum. The brave men and women who fight for consumer rights have no choice if they want to take our court system back – you don’t win wars by defending.