"Defensive Efforts"Largely Successful But Litigation Industry Lobbying Will Remain Relentless

Saturday, August 1, 2009 - 01:00

Tiger Joyce

American Tort ReformAssociation (ATRA)

With three consecutive monthly articles in this publication earlier in the year, I laid out the American Tort Reform Association's analyses of the litigation industry's unprecedented lobbying campaign in statehouses across the country and the types of liability-expanding legislation it was expected to pursue. As 2009 legislative sessions have now ended in most states and are beginning to wind down in others, this is a good time for an update of both the trial lawyers' campaign and ATRA's "Defensive Efforts" to hold the line.

Though the personal injury bar had historically looked first to the judicial branch for help in expanding liability, increased scrutiny of plaintiff-friendly court rulings in jurisdictions that ATRA has dubbed "Judicial Hellholes" and political developments, both nationally and in several states, since 2006 have precipitated a new focus on the legislative branch.

In response to the litigation industry's well-organized lobbying push, ATRA organized its own Defensive Efforts campaign, designed to keep civil justice reformers across the country informed about trial lawyer legislation pending in all 50 states and to mobilize them against it.

Civil justice reformers can never be complacent when fighting to defend free markets and the rule of law from the relentless wiles of personal injury lawyers. But I am pleased to report that, so far this year, tort reformers have enjoyed far more legislative victories than have the trial lawyers. While there were well over a thousand litigation-promoting bills proposed, only 150 or so had a serious chance of passage, only 10 percent of those passed, and at least a few of those were thankfully vetoed by governors who understand that more lawsuits almost invariably result in fewer jobs and lower tax revenues.

With space limited, it's impossible to cite every piece of trial lawyer legislation proposed this year in every state. But immediately below is a representative sampling of some of the most onerous bills that that failed to become law:

Texas

Personal injury lawyers may have misread the political mood in the Lone Star State. Believing that legislators there were ready to reverse the momentum enjoyed by tort reformers during the past several years, litigation industry lobbyists reportedly spent a whopping $9 million in Austin this year, only to get shut out entirely, according to a June 13 Wall Street Journal editorial.

Of the myriad stand-alone bills and quietly inserted "trial lawyer earmarks" to ultimately meet defeat or Gov. Rick Perry's veto pen, perhaps none threatened more harm to Texas's economy than H.B. 1811. Sponsored by Rep. Craig Eiland, the bill was designed to rollback landmark 2005 asbestos and silica litigation reform law, which has since reined in what had become a jobs-killing litigation specialty there.

More broadly, Austin's continued hostility toward trial lawyer opportunism helped Texas create more jobs last year than all other states combined.

Louisiana

In neighboring Louisiana, a bill that would have allowed the state's attorney general to hire outside counsel on a contingency fee basis, but without requiring legislative oversight or competitive bidding, actually managed to pass out of the House Judiciary Committee in May. ATRA and others then fought successfully to stall and kill this sunshine-blocking bill, which flew in the face of a legislative trend in other states where attorneys general are increasingly required to do such hiring in the light of day.

As certain activist state attorneys general now routinely hire their political supporters to conduct potentially lucrative lawsuits in the name of the state, often at the expense of the public interest, ATRA and the American Legislative Exchange Council are working to pass legislation that requires public accountability, legislative oversight and competitive bidding in regulating contracts for such legal work.

Florida

In the state where Miami-Dade, Broward and Palm Beach counties are regularly cited by ATRA as a collective Judicial Hellhole, the plaintiff's bar is perpetually active in the legislature. This year, consistent with the litigation industry's coordinated efforts in other state capitals and in Washington, D.C., trial lawyer lobbyists in Tallahassee pushed hard for bills that would make mandatory binding arbitration void and unenforceable, except as provided by federal law. (Not coincidentally, their Washington counterparts are working Congress to eliminate arbitration provisions from federal law, as well.)

Along with another bill that would have allowed pet owner's to recover up to $25,000 for emotional distress if their pets were injured as a result of someone else's negligence, the anti-arbitration bills all failed to pass.

Maryland

H.B. 1156 was the same lead paint "market share" bill that has been introduced in Annapolis for the last several years, only this time it was disguised as a "local bill," applying only to residential properties in Baltimore City.

Joining a slew of trial lawyer bills that sought to increase recoverable damages and otherwise expand liability under state consumer protection law, increase liability for tortuous death to or injury of pets, raise the limits on noneconomic damages in wrongful death litigation, and unduly expand the state's False Health Claims Act. The lead paint bill failed to pass before the legislature adjourned.

New York

Though the Empire State's economy is in shambles and Albany is awash in red ink, many state lawmakers there, led by personal injury lawyer and Assembly Speaker Sheldon Silver, have nonetheless seen fit to push litigation legislation that can only drive more businesses to bankruptcy and more jobs out of state.

Arguably the most onerous of several such bills are A. 8646 and S. 5768, companion bills still pending in respective Assembly and Senate committees at press time. The legislation would create a new private right of action under the state's securities law known as the Martin Act. Currently, only the state attorney general can bring lawsuits against mutual funds and other such financial entities for acts of negligence. This mind-boggling proposal would increase the statute of limitations to six years from the date of discovery but would not require plaintiffs to show "reliance" on the defendants' conduct.

Michigan

Personal injury lawyers again managed to get their desired repeal of Michigan's longstanding products liability defense for makers of federally approved prescription drugs through the House in Lansing this year. But like last year, the radical bill, H.B. 4316, appears to have stalled in the Senate where cooler heads understand that the mere introduction of such legislation in previous years has already cost the economically ravaged state thousands of 21st century jobs.

Illinois

The Land of Lincoln is sometimes derisively referred to as the Land of Lawsuits, and for good reason. With Cook, Madison and St. Clair counties routinely cited in ATRA's annual Judicial Hellholes report, it should come as no surprise that trial lawyer lobbyists are a formidable presence in Springfield.

But with the state's entire political universe currently consumed by a gaping budget deficit and the desire to enact good-government reforms in the wake of former Gov. Rod Blagojevich's federal indictment, the list of litigation legislation was relatively short. The most threatening bill, S.B. 184, would have awarded prejudgment interest to accrue from the date a defendant was served with written notice of a claim for damages. To his credit, the bill's chief sponsor, Sen. William Haine, withdrew the bill when representatives of the Illinois Civil Justice League and others explained how it could work to coerce defendants into unjust settlements and otherwise help drive businesses and jobs from the state.

Wisconsin

In the case of the Badger State, it wasn't lawmakers with whom trial lawyer lobbyists had the most success. Rather it was Gov. Jim Doyle who was convinced to hijack the state budget bill, A.B. 75, by inserting unrelated provisions that, among other things, would have reinstituted joint and several liability for defendants found to be less than 51 % at fault, as long as the defendant's fault exceeded that of the plaintiff.

Doyle's proposal would have allowed plaintiffs' attorneys to target minimally liable defendants with deep pockets. Wisely, both the Assembly and Senate removed the governor's handiwork from the budget bill before final passage.

California

Like New York, only much worse, California is facing an unfathomable record budget deficit and losing businesses, jobs and productive residents hand over fist. Yet certain lawmakers in Sacramento remain beholden to the trial bar and persist with a litany of liability-expanding legislative proposals, any and all of which can only expedite the formerly Golden State's pending financial collapse.

One such bill that made it all the way to Gov. Arnold Schwarzenegger's desk before being terminated by his veto pen would have indefinitely lengthened the statute of limitations on fair pay claims. (WARNING: Legislators in many statehouses are now determined to move similar state versions of the federally enacted "Lilly Ledbetter Fair Pay Act.")

As noted above, not all state trial lawyer bills were defeated this year. Here are a few that have or probably will become law:

California

Staying in California, observers in Sacramento suggest at press time that Gov. Schwarzenegger is likely to sign into law a pending bill that would ban the use of the chemical bisphenol A (BPA) in plastic baby bottles and formula containers, even though the U.S. Food and Drug Administration, the European Union and the Canadian government, among others, have found use of the chemical to be safe. Since California is already home to at least 14 of the 29-and-counting BPA class action lawsuits filed nationally, most of which make no claims of actual injury, expect a new rush of litigation as prospecting trial lawyers look to strike it rich.

Oregon & Washington

Moving up the Pacific Coast, both Oregon and Washington have attracted increasing attention from the personal injury bar in recent years. This year the two states' legislatures were inundated with dozens of liability-expanding bills, and the trend is expected to continue. If there's any good news, it's that trial lawyer lobbyists only got one such bill enacted into law in each state in 2009: steadily increasing tort liability limits through 2014 in Oregon, and a broad expansion of state consumer protection law with plenty of new incentives for tort lawyers in Washington.

Iowa

Turning inward to the heartland, Iowa caved in to become the last state in the union to provide a private right of action in otherwise expanding its own consumer protection law, which, incidentally, contains vague definitions of fraud and does not require a plaintiff to prove that the defendant intended fraud.

As noted above, the litigation industry is relentless and can be expected to increase its legislative branch lobbying efforts next year. ATRA's own Defensive Efforts campaign will work to counter the trial bar. For information about how you can help and the latest legislative updates, visit ATRA's specialized and publicly accessible website, www.defendingtortreform.com.

Tiger Joyce is President, American Tort Reform Association, based in Washington, DC. He can be reached at (202) 682-1163 or through the organization's primary website, www.atra.org.