[Shadow_Group] Tort reform advocates play fast and loose with facts

[shadowgroup-l at lists.resist.ca]

Tort reform advocates play fast and loose with facts
By DAN ZEGART
GUEST COLUMNIST

FROM:
http://seattlepi.nwsource.com/opinion/199885_focus21.html?searchpagefrom=1&searchdiff=2<http://seattlepi.nwsource.com/opinion/199885_focus21.html?searchpagefrom=1&searchdiff=2>
Just as the GOP convention was about to kick off in
late August, the U.S. Chamber of Commerce made an
unusual announcement. Although it had never in its
92-year history endorsed a presidential candidate, the
organization vowed to help pump $10 million into ads
in seven battleground states urging voters to support
lawsuit restrictions endorsed by President Bush and
opposed by Sen. John Kerry. Calling it "a
make-or-break election for legal reform," chamber
President Thomas Donohue charged "lawsuit abuse
destroys jobs, drives doctors out of business and
forces companies into bankruptcy." 

The ads put the 3 million businesses of the
theoretically non-partisan chamber squarely in Bush's
corner. The Bush campaign hit hard at the
Kerry/Edwards ticket for allegedly being pawns of
plaintiff's attorneys. Indeed, the lines could not
have been more clearly drawn. John Edwards had a
meteoric career as a malpractice lawyer while the Bush
forces made attacks on "junk lawsuits" a mainstay of
their stump rhetoric. "You can't be pro-doctor and
pro-patient and pro-plaintiff's attorney at the same
time," Bush said in mid-August in Michigan. "I made my
choice. I am for medical liability reform now." 

The crowd applauded, although voters have never shown
the slightest interest in tort reform. But regardless
of whether the issue helped Bush get re-elected, its
heightened prominence demonstrates the escalation of
the stakes in what is now a 30-year-long war by the
ultraright to disembowel the civil-justice system and
make the United States safer for companies to work
their unfettered will. Piggybacking on the campaign of
an incumbent president, who made lawsuit restrictions
a central part of his governorship in Texas, the tort
reformers seized on the election just past as their
defining moment. 

There are no statistics, but a four-month Nation
magazine investigation established to a virtual
certainty that there are many cases of victims the
civil-justice system once helped who are now routinely
barred from court, as a kind of tort-reform frenzy has
swept the country during the past two years.

Malpractice "reforms" are only the thin end of the
wedge for a much bigger agenda. Lined up behind the
doctors are most of the Fortune 500, a formidable
coalition led by insurance and tobacco companies,
far-right think tanks and dozens of well-heeled
pressure groups, many of them fronts for corporate
interests. Buoyed by the conservative tide flowing
through the country, this coalition has stepped up the
pressure to enact damage caps and other measures.

Before unleashing its campaign ads, the Chamber of
Commerce had already poured $100 million into an
anti-lawsuit lobbying and publicity blitz that claimed
product liability suits add a "tort tax" of $809 per
person every year to the cost of goods and services.
Stories highlighting the lawsuit abuse "problem" have
become a staple in Reader's Digest and the
newsweeklies. 

It is no exaggeration to say that the civil-justice
system in the United States is under saturation
bombardment, the most significant effort at rewriting
the laws that govern lawsuits in 20 years. These are
changes some legal scholars believe could alter the
balance of the three branches of government, changes
that could defang the civil jury so thoroughly that
its role as quality-control guardian for products and
services will alter drastically, if it doesn't wither
and die. 

The cheerleader in chief for this movement is Bush. In
his first months as governor of Texas, a job he won
with the help of $1.3 million from the extremist
Texans for Lawsuit Reform, Bush declared an
"emergency" on "frivolous lawsuits" and rammed through
the Legislature a series of bills restricting suits.
Now Bush has become the first president to make
downsizing the civil courts a signature concern of
both his administration and his re-election effort.
His campaign called medical liability the "largest
cost in the health care system" -- a sheer fiction. 

Malpractice filings declined nationally by about 4
percent between 1995 and 2000. And while a recent
analysis of the Medicare population estimated that
medical errors kill 131,000 people annually, making it
the fourth-leading cause of death, medical suits are
only 5 percent of personal-injury filings, with
product-liability cases another 5 percent. Plaintiffs
lose 60 percent of product cases and 70 percent of
malpractice suits. 

Not only are socially significant lawsuits such as
malpractice and product liability a small fraction of
the legal picture, but also numerous studies show that
capping damages doesn't affect insurance premiums. One
survey examined insurance rates between 1985 and 1998,
then ranked the states according to the severity of
their restrictions on lawsuits. Increased severity did
not produce lower rates. 

According to J. Robert Hunter, federal insurance
administrator under Presidents Ford and Carter, caps
don't work because liability rates reflect not
litigation costs but the insurance industry's own
practices. During good times, insurers write policies
even for the worst risks to generate cash for
investment. When the stock market tanks, rates climb
steeply to cover losses. The current liability crisis,
Hunter notes, coincided with the market downturn that
began in the summer of 2001. And because the insurance
cycle is international, the "hard market" also drove
up premiums in Canada, Australia and France. "And
those countries have totally different legal systems,"
Hunter says. 

The irony is that just as virtually the entire country
finishes retooling its civil-justice system, the hard
market is easing and insurance costs are edging
downward, a trend that became evident in late 2003 and
for which tort reform is unjustly receiving credit,
according to Hunter. 

The numbers show that lawsuits are an insignificant
cost both to businesses and to health providers, for
whom they represent less than 2 percent of spending.
In short, the lawsuit-abuse crisis is a hoax. Yet the
Republican right has launched one of the great
propaganda blitzes of recent American history to yank
the teeth from the civil jury. 

The reach of the civil-justice system expanded
dramatically during the '70s, but by the early '80s, a
retrenchment was under way. The seed money for tort
reform came from the same group of extremist
multimillionaires whose family foundations nurtured
the rest of the ultraright's agenda, especially David
and Charles Koch, Richard Mellon Scaife, and Lynde and
Harry Bradley. Of the dozens of think tanks they
created, four -- the Heritage Foundation, the
Washington Legal Foundation, the American Legislative
Exchange Council and especially the Manhattan
Institute and its Center for Legal Policy -- took
particular aim at plaintiff's lawyers. 

They were an obvious target, especially the "mass
tort" lawyers who were filing waves of suits over
products such as the Dalkon Shield and asbestos. Only
in the United States can civil juries, which are
virtually unheard of in the rest of the world, both
compensate victims and award punitive damages against
a defendant whose behavior outrages the community.

Although less than 4 percent of tort actions are
decided by a jury verdict, that tiny handful
represents the only time a corporation's fate rests in
the hands of ordinary citizens. A punitive damage
award, or any large judgment, is a serious
embarrassment and often collapses stock prices. The
fate of asbestos maker Johns Manville, which sought
bankruptcy protection in 1982 under a deluge of 20,000
lawsuits, has often been cited as a portent of things
to come, although it is rarely mentioned that Johns
Manville was a fully solvent company with assets of
more than $2 billion when it sought shelter. Or that
it emerged six years later with its profit-generating
core intact. 

By the mid-'80s, the asbestos wars had made a number
of plaintiff's lawyers wealthy political players in
the liberal wing of the Democratic Party, while on the
other side, the American Tort Reform Association was
founded to lobby and begin reprogramming the jury pool
through a long-term propaganda campaign. The
ultraright was perfectly positioned to speak with
opinion leaders through its web of self-referential
think tanks, magazines, books and conferences. The
Manhattan Institute promoted Peter Huber, whose
influential books injected terms such as "junk
science" and "tort tax" into the national
conversation. 

Few, if any, of the ultraright's obsessions have won
such substantial backing from mainstream corporate
America as tort reform. Corporate boards may have
little stake in school vouchers or abortion, but every
company wants to limit its liability. According to
Leonard Salle, co-author of the Commonweal Institute's
report "The Attack on Trial Lawyers and Tort Law," the
total spent on lobbying, advertising, think tanks,
endowing chairs at law schools and electing
reform-friendly judges and legislators probably
exceeds $1 billion over a 30-year period.

But despite two successful waves of tort reform in the
states in the mid-'70s and mid-'80s, in Washington
anti-lawsuit bills died in committee. As an issue,
tort reform had a chilly, academic ring, like lobbying
for the metric system. 

The solution was born in south Texas in 1991, when the
Rio Grande Valley Chamber of Commerce, infuriated by a
$2.5 million verdict to two Mexican Americans
illegally fired from a sugar mill, started Citizens
Against Lawsuit Abuse, which plastered billboards
across the valley with such slogans as "Lawsuit Abuse:
Guess Who Picks Up the Tab? You Do," according to a
joint study by the Center for Justice and Democracy
and Public Citizen.

The cigarette companies were already deeply involved
in the issue, and Philip Morris provided generous
startup funding for Citizens Against Lawsuit Abuse.
Thanks in large part to tobacco largesse, there were
CALA groups all over the country by the mid-'90s. In
1993 and 1994, while a politically green George W.
Bush received instruction from Mike Toomey, soon-to-be
lobbyist for Texans for Lawsuit Reform, Karl Rove, a
consultant to Philip Morris, was persuading Bush to
exploit the lawsuit-abuse issue in his first
gubernatorial campaign, according to the book "Bush's
Brain," by James Moore and Wayne Slater. Tort reform
proved a powerful weapon. Although of little interest
to voters, the issue, according to Rove himself, was a
magnet for corporate donations -- among numerous other
benefits. 

"By publicizing all the horrors of the tort system,
they get a lot done," explains Pamela Gilbert, a
lobbyist for plaintiff's lawyers. "You pass
legislation that curbs their liability; that's the
ultimate prize. But short of that, you affect juries,
you affect elected officials, you affect judges, you
affect the entire discourse of the United States."
Best of all, by doing harm to plaintiff's lawyers,
Gilbert notes, tort reform would help defund the
Democratic Party, a key piece of strategy for the Rove
Republicans in the new millennium. 

With a uniform message and national structure, the
"lawsuit abuse" campaign grew exponentially in the
states in the '90s. Although trial lawyers and
consumer groups fought back with hastily erected
alliances, the message has become so familiar it has
jumped the fence from think tanks to John Stossel,
drive-time radio and David Letterman's "Top Ten,"
coming perilously close to turning Americans against
the civil jury, perhaps our most radically democratic
institution. 

There are, of course, plenty of things wrong with the
civil-justice system. It has high "transaction" costs,
meaning money that should go to victims is eaten up by
lawyers and others, but worst of all, it is haphazard.
In 1991, a Harvard University study of medical
malpractice in New York state found an unexpectedly
high rate of medical accidents. However, few of even
the most serious "mishaps" resulted in lawsuits, and
there was no correlation between severity and
litigation. 

Carl Bogus, a law professor at Roger Williams
University, argues that what plaintiff's lawyers do
best is regulate, a role that has become more and more
vital as government's watchdog function has shrunk
under conservative attack. Bogus notes that although
asbestos caused 170,000 deaths from lung cancer, the
Environmental Protection Agency was never able to ban
it. Lawsuits forced it from the market. 

However, if this vital aspect of the civil-justice
system is to be rescued, someone will have to make the
case for it. Despite Bush's persistent attacks and the
presence of trial lawyer Edwards on the ticket, the
Democrats apparently considered tort issues
unmentionable. 

Part of the problem, says Gilbert, the trial-lawyer
lobbyist, is that defending the system is inherently
problematic. "If someone's been a victim of medical
malpractice, to like say, 'Oh, but gee, aren't you
lucky because you get to bring a medical malpractice
lawsuit!' It's like, Well thank you very much, I'd
much rather that it never happened at all." 

The real goal is safety. Lawsuits can never provide
anything more than frontier justice in a world in
which we are surrounded by seemingly innocuous
manufactured goods that in fact can injure or kill us.
In this world, evil is truly banal -- it's the missing
plastic seal in a gas tank, the pill we take for
morning sickness, the tires on our car. Plaintiff's
attorneys can sometimes punish a wrongdoer, but there
is no swift and sure law enforcement in our
manufactured world. Whopping punitive awards -- even
in the rare cases where they are awarded and stick --
are an embarrassment and a short-term deterrent, but
the persistence of corporate wrongdoing over decades
argues that the effect wears off. Ford built the
flammable Pinto in the '70s, the rollover-prone Bronco
II in the '80s and its successor, the almost equally
hazardous Explorer, in the '90s. 

However, absent a working alternative, there is no
substitute for civil justice. For now, the sheer scale
of the harm done to an entire society by a defective
mass-marketed product makes the availability of the
tort action essential, even while underlining its
inadequacies: 11 million workers exposed to asbestos,
10,000 children born with defects because of
thalidomide, 1.5 million Pintos recalled, more than 6
million dieters who used Phen Fen, which damaged the
heart muscle. These are truly modern plagues. 

On the tort-reform side, the numbers tell a story of
squandered dollars. The $809 "tort tax" was invented
by taking $233 billion, which is what
insurance-industry consultant Tillinghast-Towers
Perrin says is the cost of the tort system, and
dividing it by the population of the United States.
But those billions represent not only legal expenses,
but also the total cost of running the insurance
industry, including executive salaries, advertising
expenditures and much else unrelated to lawsuits. The
real figure is probably less than half that amount. 

It is unlikely we will become less litigious -- that
there will be less law and fewer legal interventions.
Although the number of personal-injury suits isn't
rising, the sheer number of laws is increasing
rapidly, writes Marc Galanter, a law professor at the
University of Wisconsin. Between 1962 and 2002, the
percentage of civil cases that went to trial in
federal courts fell from 11.5 percent to 1.8 percent,
an astonishing drop. Galanter's conclusion was that
the civil trial, with its adversarial public
questioning of live witnesses, is vanishing.

The implications are disturbing. "When there was a
bigger possibility of trial, that distributed the
bargaining chips in a certain way. Now we're going to
a situation where so few things go to trial, it's not
there anymore as a wild card for plaintiffs or
underdogs to use," Galanter explains. 

In addition to these trends, there is an increasing
emphasis on alternative dispute resolution and
privatized forums for handling certain legal issues,
such as in-house tribunals within companies. If trials
all but disappear while the right of ordinary people
to sue is restricted, Galanter argues, the legal
process becomes more and more about exchanges of paper
between and within entities, especially corporations,
frequently behind closed doors. Will Americans allow
their most unique legal rights to slip down the memory
hole?

Reprinted with permission from the Oct. 25 issue of
The Nation (www.TheNation.com).



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