With allies like erstwhile consumer advocate Ralph Nader and leading congressional Democrats, trial lawyers have emerged as America's fattest cats, waging war against producer and consumer alike and exerting veto power over all attempts at product-liabilty and no-fault tort reform.
American Spectator
September 1990
Last September a school bus carrying seventy children collided with a Coca-Cola delivery truck at a crossroads in Alston, Texas. The bus veered off the highway, plunged over an embankment, and crashed upside down in a gravel pit filled with water. Twenty-one of the children, the bus driver, and the truck driver were killed. It was the worst school bus accident in Texas history.
The tragedy was followed by a travesty. Hordes of trial lawyers converged on Texas and started bidding on clients, offering the grief-stricken families trailers, vans, and new homes if they would sign contingency contracts-which guarantee lawyers a set percentage of any damages received-to sue the deep-pockets of the Coca-Cola Company and the local government that owned the gravel pit. In April a settlement for $67.5 million was reportedly reached with the families of sixteen of the students killed.
A handful of trial lawyers walked away with $25 million, earning hourly fees that ranged from $10,000 to $40,000, according to Lester Brickman, a professor at the Cardozo School of Law at Yeshiva University in New York. Brickman calls it an outrage: "These lawyers are stealing money for doing nothing more than getting clients to sign on the line." Brickman is trying to persuade the American Bar Association to reform its self-regulatory processes to lower plaintiffs' lawyers' contingency fees when there is little or no uncertainty over the outcome of a lawsuit.
There are 65,000 plaintiffs' attorneys in the Association of Trial Lawyers of America (ATLA), a national trade group based in Washington. Defendants' lawyers are not similarly organized on the national level. Most attorneys, litigators and otherwise, belong to the more public spirited American Bar Association.
The travesty in Texas is not unusual. Thousands of American trial lawyers, led by Melvin Belli, descended on Bhopal when a gas leak at a Union Carbide plant killed two thousand. Thirty years ago, however, grand-scale ambulance chasing was rare. The new golden era dawned in 1963 when the first million-dollar award was made in New York City. Since then, courts and juries have awarded larger and larger sums to victims of various accidents, malpractices, and mishaps. Business and government agencies have offered huge sums to settle out of court with an ever-expanding pool of trial lawyers. This judicial black hole is now so large that plaintiffs' lawyers earn a staggering $10 billion a year on personal injury suits, according to Brickman.
The most troubling aspect of the litigating binge is the rising flow of trial bar money into national politics since about 1974. Before then, trial lawyers were busy making sure state legislatures did nothing to kill the tort goose that laid the golden egg. But today Congress is their lap dog, and their power-brokers on Capitol Hill are often able to thwart the will even of the Congress itself. A nationwide old-boy network pours in lots of money, particularly into the Democratic party. "In some states they constitute the entire fund-raising arm of the Democratic part," says Walter Olson, a fellow at the Manhattan Institute.
Time and again, the trial bar outwits its enemies with brilliant political strategies. These lawyers have a built-in advantages they're a one-issue interest group that fights against coalitions whose members have dozens of issues to wage in Congress. And they argue with a passion bred of raw self-interest. Says Congressman Dan Glick-man (D-Kan.): "The trial bar brings tremendous intensity to their causes. They are most forceful and most aggressive, and there's very little tendency to compromise on issues they see as fundamental to their well-being." Michael Greve of the Center for Individual Rights adds, "They are the biggest pigs at the public trough."
The "Inner Circle of Advocates," an unofficial club of the 100 wealthiest trial lawyers, can exert enormous influence. According to a former ATLA staff attorney, "Those that earn over a million dollars a year are insufferable --they can't stop talking about how much they make. All they talk about is money, money, money and how they're going to make more, and who they know in politics and who they can influence."
It is all but impossible to get a firm handle on the amount of money flowing from trial lawyers into Washington, but according to Legal Times, contributions by the ATLA Political Action Committee (PAC) and law firm PACs was $3.4 million in the 1987-88 election cycle. For 1989-90, the figure will probably come closer to $4.5 million. Individual trial lawyers may give to candidates and to the Democratic party another $5 million or more, making them probably the largest single-issue givers in national politics. "The deals that are made and the sums of money that change hands are enormous," says Olson. "But if you investigate the Federal Election Commission records, all you end up with is a long list of names you don) recognize." The trial lawyers draw attention away from the spoils they collect by posing as defenders of consumer rights. "We are crusaders of good. None of of us is in it for the money," was the incredible boast of Sacramento Inner Circle Advocate Ned Good to Forbes last,year.
Perhaps no one has done more to camouflage the self-interest of the trial bar than Ralph Nader, especially in the last decade. Although he is lionized by the press for his modest lifestyle, some of Nader's closest allies are superwealthy trial lawyers, who donate heavily to his programs. In return, Nader never endorses a consumer cause that conflicts with the interests of the trial bar. "He's a lawyer, likes lawyers, and consorts with them," says David Sanford, who became the subject of a fierce ad hominem attack from Nader, when, as managing editor at the New Republic in the early 1970s, he published an article by Leah Young revealing that the trial bar had given Nader $10,000. That early public relations setback may have kept Nader from openly advocating positions beneficial to the trial bar in the
Today, Nader's denial of trial bar support is ludicrous; its footprints are everywhere. Robert Joost, who was chief counsel for the Senate Commerce Committee during battles over federal no-fault auto insurance in the 1970s, says that Nader is "an agent at large" for the trial bar, and that they return the favor by "tithing." From a $100,000 court award, $40,000 goes to the lawyer. From that $40,000, the lawyer gives $5,000 to the national ATLA PAC, $5,000 to the state ATLA organization, and $5,000 to Nader, Joost says.
The media have been too lazy to investigate the relationship. Even so, Nader's hypocrisy is sharply revealed when consumer interests collide with those of the trial bar. Particularly telling was his opposition to a 1986 amendment offered by Republican Senator Robert W. Kasten, Jr., that would have required plaintiffs' lawyers to disclose their hours and to offer to work at an hourly rate. The Consumers Federation of America, made up of local consumer and labor organizations around the country, and Consumers Union, which publishes Consumer Reports, supported the amendment. Nader consumer groups like Public Citizen and Congress Watch fought it vigorously.
Nader also hits the campaign trail to smear supporters of tort reform, like Senator Kasten, calling him "a drunk who needs to be rehabilitated, not reelected" (according to the Senator, he was once pulled over for drunk driving but not arrested). In Pennsylvania's 15th congressional district the trial bar has funded opposition to Republican Rep. Donald L. Ritter, perhaps the strongest House advocate of product liability tort reform, for the last three elections. Nader has accused Ritter of being against the consumer because he depends on contributions from nuclear energy interests, a charge Ritter finds "dishonest," since his is a coal-andsteel district. "Nader's hypocrisy never ceases to amaze me," says Ritter. "Like clockwork he blasts me every October before an election."
Nader seems not to be driven by the same greed that propels the big-time trial attorneys, rather by a passionate ideology that he keeps largely to himself. A boot-licking Washington Post profile by Marc Fisher revealed hints of it, though, in reference to Nader's father's devotion to Marxism. A Lebanese-American, he ran a restaurant in Winsted, Connecticut. Winsted old-timer George Sherwood says Nader got his "strong ideas" from his father, making him a kind of backwater red-diaper baby. "Mr. Nader thought the wealth should be [re]distributed and salaries be limited, and he wasn't shy about telling it to anyone" who came into his restaurant. This anti-capitalism must have sounded strange to Connecticut Yankees, especially coming from an immigrant entrepreneur, but it is clearly echoed in Nader's rhetoric and passion for his causes. The same socialist themes can be heard from trial lawyers like Ned Good, who describes himself as a "social engineer," transferring wealth from the rich to the poor.
The Democratic party's socialists, like Senators Ted Kennedy and Howard Metzenbaum, have welcomed this rhetoric and forged an alliance with the trial bar, which magnifies their own influence within the party and in Congress but forces them to wear moral blinders when party interests conflict with those of ATLA. In return, the senators wage holy war' in the Judiciary Committee on conservative nominees. The plaintiffs' bar is now the nomenklatura of the judicial system and Big Daddy to the left wing of the Democratic party. And it has left Democratic leaders the strongest opponents of no-fault tort reform. As the "party of labor," one would think they'd be its strongest advocates.
Republican Senator Orrin Hatch of Utah, a member of ATLA and a critic, says the power of the trial bar is most evident on the product liability issue: "The upsurge in product liability cases has caused a serious outflow of manufacturing from the shores of the United States to less legally abusive countries. Everyone in Congress knows it, and they think something should be done about it, but the influence of the trial bar has kept reasonable, substantive changes from occurring." The nine-year congressional stalemate on product liability reform follows the trial bar's defeat of federal auto no-fault legislation in the 1970s.
New laws coming out of Congress offer generous goodies for the trial bar. The Americans with Disabilities Act, by putting the burden of proof in discrimination on employers, businesses, and property owners, will greatly enrich trial lawyers. But the new law is a piker compared to the proposed Kennedy-Hawkins Civil Rights Act of 1990, which also leaves the burden of proof on the employer. Senator Hatch calls it "a litigation bonanza for trial lawyers. This will make litigation the first choice, the preferred choice in every case." It will lead businesses to adopt quotas to avoid lawsuits. The impact on race relations will be devastating, according to economist Walter Williams. "If it passes, it will be just another piece of kindling for an already highly combustible pile for some racial arsonist to set afire."
The story of the trial bar's rise to power in Washington begins in the 1960s with the labor-and consumer-led auto no-fault movement, an echo of the labored workman's compensation movement that enacted no-fault insurance for workplace injuries in every state, in the decade after 1910. This time around, however, the trial bar either stopped the effort at the state level or sabotaged the no-fault laws with provisions that made them unworkable. The trial bar's success in stopping no-fault on the state level led to an effort in Congress to preempt state laws with a federal law and thereby thwart the trial bar.
In 1969 a massive Department of Transportation study of rising automobile insurance premiums reported that the root of the problem was the tort system, and recommended a model federal auto no-fault law similar to one in Michigan. In 1971 Democratic Senators Philip Hart of Michigan and Warren Magnuson of Washington, chairman of the Senate Commerce Committee, introduced the first major federal no--fault bill. In hearings before the Commerce Committee, a former ATLA staff attorney, Robert Joost, revealed just how state trial bars got their way with state legislatures: by creating huge funding pools to finance ATLA candidates to run against supporters of no-fault. They also funded front groups to argue their case and paid supposedly independent experts and academics to testify in support.
In 1973 ATLA President Leonard Ring stated that if there was any success at the federal level with no-fault, the trial bar would adopt a "scorched-earth we'll destroy the system and the insurance industry with it." ATLA chose Ring to lead the charge because grew up on politics in Illinois and I got to know and understand it."
Supporters of no-fault were primarily moderate and liberal Democrats and Republicans, opponents usually states' rights advocates of both parties. The odd man out was Senator Ernest F. ("Fritz") Hollings of South Carolina, who boasted that his winnings from contingency cases had financed his run for public office and he wasn't going to allow anyone to put any limits on it. The non-Nader consumer groups lined up solidly behind the reform and formed an alliance with the Teamsters, United Auto Workers, and the United Steelworkers in the National Committee for Effective' No-Fault. ATLA vigorously and publicly opposed no-fault, as did two insurance organizations.
The trial bar found an ally in conservative Republicans, although President Nixon was an avid supporter of no-fault on the state level. In 1972 the Hart-Magnuson bill, after a favorable report from the Senate Commerce Committee chaired by Senator Magnuson, was defeated after a floor fight in the Senate ended in a 49-to-46 vote to refer the matter to the Judiciary Committee, a states' rights haven. The next year, Judiciary Committee Chairman James Eastland of Mississippi agreed to report or discharge the bill by February 1974. Eastland asked no-fault opponent Republican Senator Roman Hruska of Nebraska to chair the hearings and study the constitutionality of the bill.
Mike Mullen, then counsel to the Senate Judiciary Committee, says the study was designed to buy time for the trial bar to build opposition, and trial lawyers were prominent among the witnesses in the 1974 hearings. Surprisingly, the Judiciary Committee voted eight to seven in favor of no-fault. Mullen, for his efforts, received a telephone call at home warning him that if he continued to support it, "We'll see to it that you never get another job in Washington," an associate says.
The issue reached the Senate floor in 1974. No-fault supporters had a slight edge, with a huge block of undecided senators. Taking a leaf from the trial bar's bullying tactics on the state level, Boston trial lawyer Tom Bendorf, lobbying for ATLA, threatened Louisiana Senator Russell B. Long, a soft supporter of no-fault. Bendorf reportedly told the Senator the trial bar would raise $500,000 to fund and support an opposition candidate in the next election if he stuck to his position. This threat was made publicly, to intimidate other swing votes on the issue.
ATLA could raise $500,000 for an opposition candidate by setting up PACs in all fifty states, which could then give the maximum $5,000 per primary and $5,000 per general election. ATLA even got pledges from each of the state trial bars to raise the funds. Trial lawyers, under Ring's direction, had begun to form state PACs in 1974, making the threat to fully fund a senator's opposition very credible. But Ring overestimated himself; Senator Long refused to change his vote, ATLA never raised the funds, and Long was re-elected.
In a desperate move to create the impression of a grassroots groundswell of opposition to no-fault, the Los Angeles ATLA chapter worked out a deal with Western Union to send telegrams to nine key senators. The telegrams would be signed by people from a list compiled by the local ATLA's 3,000 members, but none of the lawyers sponsoring the telegrams would sign their names. Western Union was told to send one of twenty pre-selected messages and bill the local ATLA $2 per telegram. Within two days ATLA attorneys had phoned in thousands of names and Western Union had sent 4,300 telegrams. Publicity caused the deception to backfire, enlarging congressional support for no-fault, which passed the Senate 53 to 42 in May 1974.
Failing to win the battle publicly, ATLA began to work behind the scenes with the Democratic leadership in Congress. Tom Bendorf and his ham-handed tactics were discarded and ATLA hired Tommy Boggs of the Washington law firm of Patton, Boggs, and Blow. Boggs is the son of Congresswoman Corinne C. (Lindy) Boggs, who took over the Louisiana seat held by her husband, Hale Boggs, the House majority leader killed in a plane crash in Alaska in 1972. Had he lived, Boggs would have become Speaker of the House. Tommy Boggs's close friendship with Tip O'Neill gave him access to the highest levels of the House Democratic leadership. No-fault supporters agree that Boggs is the most effective lobbyist that ATLA has employed, though Boggs refuses to talk about it. On the Republican side, ATLA signed up Bill Timmons, a former Nixon White House special assistant. Tom Korologos of. Timmons's firm became the chief Senate lobbyist. Timmons also refuses to be interviewed about his activities.
Meanwhile, Ring formed an ATLA PAC in 1975 to raise funds for congressional candidates and soft money for the Democratic party. When it was announced that the ATLA PAC had raised $400,000 in only a few months, no-fault supporters became alarmed. California Rep. Lionel Van Deerlin, chairman of a new Consumer Protection Subcommittee, swung into action and reported a no-fault bill out of his committee by a narrow five-to-four vote. "Many members vote their own backgrounds on an issue like this," Van Deerlin said, noting that about half of all congressmen then were lawyers (220 in the House and sixty-six in the Senate-very close to today's numbers). Although the President came out against the bill, it emerged from the committee on a voice vote.
The Hart-Magnuson bill swiftly moved to the floor in March 1976, where it met a sudden Waterloo. On a motion by Senator Hruska, it was sent back to committee on a 49-to-45 vote. "The trial bar won a stunning comeback," says Mullen. What happened? Nine of the former supporters switched their votes. Six were moderate Republicans who defected en masse at the last minute, including Robert Packwood of Oregon, William Roth of Delaware, and Robert Taft of Ohio. It was generally believed that the White House brought pressure on the Republican senators to switch their votes. Peter Kinzler, chief counsel for the subcommittee, points out that the Republicans had all received the $5,000 maximum contribution for their primaries from the new ATLA PAC: "It helped change their minds."
The Carter Administration breathed new life into the no-fault movement in 1977 by deciding to back the initiative, but Carter's influence ultimately proved worthless. He made no attempt to lobby for the bill, while the trial bar moved its headquarters to Washington, the better to oversee its ballooning lobbying and campaign spending budgets. In 1978 Boggs reportedly worked behind the scenes to find a way to delay consideration of the no-fault bill to give the ATLA more time to build an opposition. The vehicle for the delay turned out to be Democrat John A. Durkin of New Hampshire, co-sponsor of the legislation on the Commerce Committee. "He and Tommy Boggs had a beneficial agreement," says Kinzler. "Durkin would have no opposition in his next primary and Durkin would delay the bill in committee." In early 1978 Durkin asked Commerce Committee Chairman Howard Cannon of Nevada to authorize an independent study of the Michigan experience, claiming the DOT study was biased. Republican James Pearson of Kansas and Democrat Wendell Ford of Kentucky joined Durkin in supporting the new study. Ford, who headed a consumer subcommittee of Commerce, had already held hearings on the bill in 1977. "I don't believe that I've ever had as much pressure placed on me," he said, referring not just to the trial bar lobbyists roaming the halls of the Senate but also activist lawyers from around the country. According to Joost, two of the peskier ones were Craig Spangenberg of Cleveland and Samuel Langerman of Phoenix.
When the results of the committee's quick study had been written up but not released, Durkin told the committee he had seen the report, and that it found that no-fault had not worked in Michigan. According to Kinzler, the study said the opposite: that the Michigan no-fault law reduced premiums and increased benefits.
Then Durkin, joined by Democrat Donald Riegle of Michigan, came out openly against the no-fault bill. In a ploy that may have reflected a behind-the scenes. Nader influence, the two claimed that the bill would bring "windfall profits" to insurance companies-utterly ridiculous in the face of heavy insurance-industry opposition and consumer-group support. When the Commerce Committee finally voted, the bill passed anyhow, but never saw a vote on the floor. Senate Majority Leader Robert Byrd held it up, claiming the bill was threatened with a filibuster, presumably from Senator Hollings.
Checkmated in the Senate, supporters of no-fault made a last attempt to get House action, in Rep. Harley O. Staggers's Commerce Committee. At first, members voted 24 to 18 to reject a trial-bar-inspired motion to send it back to the consumer subcommittee. Undaunted, the trial bar managed to get a second vote scheduled on a motion to recommit. The trial bar won 22 to 19 on the second vote, after a flurry of vote switching. Three Democrats switched from support to opposition, and another two Democratic supporters did not even come to the meeting, including John Murphy of New York, the critical player in the drama. Kinzler says Murphy's absence was due to pressure from House Speaker O'Neill, who in turn was responding to pressure from Boggs: "O'Neill told Murphy his endangered species bill was threatened if he showed up for a vote." Kinzler believes that if Murphy had supported the bill, two other wavering Democrats would have joined him, and the kill motion would have failed.
This was the death knell for no-fault. Lynn Sutcliffe, head of the National Committee for Effective No-Fault, says its defeat can be attributed solely to the trial bar's hoard of money. His committee was spending $250,000 a year on lobbying, while the Washington office of ATLA was pouring in $2 million. PAC money was used to threaten congressmen and, Sutcliffe says, "The trial bar found out it worked. They set the pattern others would follow for the use of PACs." The victory was total. No auto no-fault bill has surfaced since.
Product liability became a hot issue in the mid-1970s when small businesses lobbied the Ford Administration to do something about skyrocketing insurance premiums. A task force, headed by University of Cincinnati torts professor Victor Schwartz, reported to the Carter Administration in 1978 that the bulk of the problem was due not to the insurance industry, as the trial bar and Ralph Nader claimed, but to the instability of the tort system. Judges had changed tort rules retroactively, thus making manufacturers liable for actions for which previously they would not have been held responsible. These new rules were creating "a pattern of chaos" in fifty-one jurisdictions.
The task force recommended a Uniform Product Liability Act, to be offered to the states as model legislation. The law, designed to allow manufacturers to conform to one standard instead of fifty-one, was not adopted uniformly by the states, and it was obvious by 1981 that a federal law was needed. It was then that Senator Kasten introduced the first significant legislation on product liability.
From the outset it was clear that the hundreds of businesses that made up the Product Liability Alliance-the only organization representing manufacturers, product-sellers, and insurers on this issue-were political novices compared to the trial-bar sharpies. Senator Kasten says that a businessman who comes to Washington divides his energies across a half-dozen or more issues, giving product liability "only ten to fifteen minutes of his discussion time with a congressman or senator. When he goes back home, he's not part of the political process and is not familiar with politics. On the other hand, the plaintiffs' attorney comes to Washington and has only one thing on his agenda, and outside the Beltway he's part of the political fabric in every congressional district in every state."
The Product Liability Alliance just won't quit, however, even after nine years of trying and failing. "We're absolutely committed. We'll stay on it until it is done," says a lobbyist for the alliance. The Republican base of support for a uniform product liability law is joined by key Democratic senators like John D. Rockefeller IV of West Virginia and Daniel Inouye of Hawaii, along with a raft of moderate Democrats in both houses, ultimately an unbeatable political combination.
Nader burst upon the scene like Trial-Bar Superman when product liability bills first appeared in the Senate. Schwartz, who became a lobbyist for the Product Liability Alliance, says, "One doesn't run into the plaintiffs' lawyers on the Hill: there's Nader, Nader, Nader, and Nader and his people." While Nader's profile has grown, the trial bar's has vanished, creating the impression that the Nader groups are independent and ATLA not very active. "Not so," says another lobbyist for the Product Liability Alliance. "Tommy Boggs is hard at work, and the trial bar's fingerprints are all over the place."
Even before the first product liability bill, ATIfA was setting up to blame the liability crisis on the insurance industry. They needed a consumer organization to counter the lobbying of the insurance industry in Congress, according to trial lawyer William Shernoff of Claremont, California: "Insurance lobbyists are always trying to influence Congress. So we felt consumers needed a National Insurance Consumer Organization [NICOl to have their own voice." Shernoff says he thought up the idea for NICO and talked Nader and current NICO head Bob Hunter into starting it. When Nader and Hunter hesitated, Shernoff says he offered to raise the money to start the organization.
Hunter says he had the idea first, that he organized NICO not to fight product liability but to promote consumer interests in the insurance industry. In the beginning he knew of no trial-bar support and says Nader told him he could raise the $125,000 necessary. With the funding assured, Hunter felt he could leave his job and start NICO. Then, Hunter says, he learned that Shernoff gave $25,000, and that Nader personally;) gave $25,000. The remaining $75,000 came from the Rosewater Foundation, which Hunter says is a Nader foundation. Shernoff claims that he raised the remaining money, which suggests that $75,000 of trial-bar-funds were channeled through Rosewater.
In 1985, perhaps worried that NICO might look like a front, Hunter banned direct contributions from the trial bar. It may have been too late. For one thing, it still does not prevent trial-bar money from being filtered in through a Nader-controlled foundation. While Hunter has veered from the Nader line on auto no-fault, he has not yet supported any tort reform on product liability.
To be sure, the early Kasten bills invited consumer attack by trying to turn back the clock to strict liability standards and an end to the doctrine of 'joint and several liability," under which anyone involved in a product, from the manufacturer to the distributor or retailer, can be held liable for a tort, even if the consumer was partly or totally to blame for the accident.
The consumer groups were wrong to analyze the issue strictly as one of torts, for outrageous settlements have led to higher prices for all consumers. Meanwhile, under the tort system most consumers rarely recover anything when harmed by a product. Only one consumer group seems to understand the damage done by the trial bar and the tort system. That group is Help Abolish Legal Tyranny (HALT), a member-supported organization free of special-interest control. They want consumers to be able to collect damages in automobile accidents, medical malpractice, and product liability without going through the tort system, which HALT President Glenn Nishimura calls "a lottery."
In spite of their uncritical acceptance of Nader's line on product liability, the major consumer groups were accepted as independent on Capitol Hill, and were able to keep product liability tied up in committee for three years. In 1984, however, Kasten's bill finally emerged from the Senate Commerce Committee on an eleven-to-five vote. His continued overtures to consumer groups to come up with ideas that the business and insurance community could support finally bore fruit. David Greenberg, counsel for the Consumer Federation of America, presented a new idea-no-fault choice product liability. Greenberg was not alone; University of Virginia law professor Jeffrey O'Connell, the grandfather of auto no-fault, was already beginning to talk about no-fault choice.
Under Greenberg's plan, if the consumer chose the tort system, he would face rigorous standards of common law to establish fault. If he chose no-fault, he had only to prove he was injured by a product. To pay actual economic losses, a fund using a portion of damage recoveries in the stricter tort system would be developed. Nader lobbyist Jay Angoff of Congress Watch got wind of the idea when Kasten's staff shared it with others in the consumer and labor movements. Nader, reportedly in a rage, and Angoff asked Greenberg to a meeting at Nader's Center for the Study of Responsive Law, According to two people present, Nader told Greenberg that he would attack "the Consumer Federation by name" if Greenberg continued to press his proposal. "Nader was very heavy-handed; it was surprising to me," says one. "He wasn't going to be moved." After the meeting, the executive director of the Consumer Federation, Steven Brobeck, told Greenberg that any further pursuit of the no-fault choice scheme "was not worth the fight with Nader." Greenberg concludes: "The consumer movement was not sufficiently mature to be part of the process of governing, instead of sitting on the side, shooting at it."
In 1985 the Senate Commerce Committee failed to report Kasten's bill out of committee when it was deadlocked on an eight-to-eight vote. Three senators switched from yes in 1984 to no in 1985, including Slade Gorton, Republican freshman from Washington, Daniel Inouye, and Republican Senator James Exon of Nebraska, who sent a proxy vote from his hospital bed. Leading the charge was trial-bar bulldog Fritz Hollings. In the face of that defeat, Senators Gorton and Christopher Dodd (D-Conn.) suggested an effort be made to adopt a no-fault choice system similar to Greenberg's and press harder for consumer support.
Meanwhile the trial bar was taking the battle to the enemy's turf, the insurance industry, traditionally one of the most effective lobbies on the Hill. Trial-bar ally and House Judiciary Committee chairman Peter Rodino of New Jersey set up hearings on whether or not the insurance industry's exemption from federal antitrust had caused the product liability crisis. Predictably, Nader and Bob Hunter of NICO were key witnesses. Shernoff's funding for NICO was paying off, Hunter's declaration of independence notwithstanding.
President Reagan finally threw his weight behind Kasten's newest no-fault choice bill in 1986. The Senate Commerce Committee passed it ten to seven. The bill's cap on court awards en livened the opposition, particularly Senator Riegle, who said: "There's going to be a war on this issue." Hollings tried to stop the bill with a filibuster, but the Senate voted 84 to 13 in September 1986 to consider it. A second round of filibustering by Hollings sorely tried Majority Leader Robert Dole's patience. Concerned about bigger issues like tax reform, and mistakenly assuming the Republicans would retain the Senate after elections, Dole postponed the battle until 1987. Looking back, Victor Schwartz laments: "The Republicans and the business community are not good offensive players."
When the Democrats regained control of the Senate and archenemy Hollings became chairman of the Commerce Committee, tort reform looked dead. An even more confident trial bar moved its attack on the insurance industry into the Senate. There Senator Metzenbaum, a trial-bar crony who chaired the revived Antitrust Subcommittee of the Judiciary Committee, introduced a bill to repeal the insurance industry's antitrust exemption.
Still, by 1988 the Product Liability Coalition was on the rebound, with real action on the House side, owing mainly to efforts by moderate Democrats. House Energy and Commerce Chairman John Dingell of Michigan held hearings on two bills. One was a substantive reform bill sponsored by Congressman Ritter, the other a simple uniform product liability bill sponsored by Rep. Thomas Luken (D-Ohio). Luken's bill had forty-two co-sponsors and the unofficial endorsement of Dingell, but not of Democratic leadership, including new House Majority Leader Jim Wright, like O'Neill a lock-step trial-bar ally. A hostile Rep. James Florio (D-N.J.), chairman of the Consumer Protection Subcommittee, reported the bill out favorably, and it was passed in full committee by 30 to 12.
Now the consumer groups vehemently resumed battle. It was telling that the bill they opposed contained no real tort reform. Rep. Rick Boucher (D-Va.) tried to negotiate a compromise between the Product Liability Alliance and Gene Kimmelman of the Consumers Federation and Linda Lipsen of Consumers Union in the early summer of 1988. "The effort was to craft a standard of liability that would not deny the remedies that are available today through the tort system," Boucher says. After a number of meetings a compromise on a standard that would represent the average of the fifty states "was reached by all and sealed overnight, " according to Boucher. The next day, however, Kimmelman and Lipsen "returned and said it was premature to reach a consensus and declined to support the compromise they had negotiated." Two sources close to the negotiations claim that Rep. Henry A. Waxman (D-Cal.) talked to Kimmelman and told him to back out of the agreement. Kimmelman, who reported the Waxman intervention story to Product Liability Alliance lobbyists, refused to return repeated phone calls to his office on this matter. Lipsen says she went back to her office and "was told by someone in charge that the agreement would be a net loss for the consumer." A spokesman for Waxman denies that he interfered in Boucher's compromise. Says Phil Chiliro, "The congressman does not think his role is to advise the consumer groups. They have to reach their own decisions." Waxman's explanation, like Lipsen's, is not convincing. Supporters of product liability reform say that Waxman has waged legislative guerrilla war on the mild Luken bill. Is Waxman, a tort reformer in Sacramento in the 1970s, now just another trial-bar lackey in Washington?
Later, the House leadership sent the bill to the Judiciary Committee, where Chairman Rodino took no action on it. Any doubts about Rodino's relationship with ATLA were dispelled when he retired and his chief counsel, Alan Parker, became the trial bar's chief in-house lobbyist on Capitol Hill.
A modest tort reform effort aimed at the light aircraft manufacturing industry has provided some fireworks. Since the onset of a crisis caused by excessive lawsuits (sometimes involving crashes of 50-year-old planes), Beech, Cessna, and Learjet, all in Kansas, have had to stop making most of their lighter aircraft. Kansas congressmen have sponsored legislation that would set a uniform federal standard for aircraft manufactures. In this battle the trial bar faces a passionate single-interest lobby, the General Aviation Manufacturers Association. GAMA's combative James Gormley says every time they make a little progress the trial bar's legions "come out from under the rocks" to play "dirty tricks" and wreak havoc.
Republican Senator Nancy Kassebaum introduced a bill in 1986 which was reported out of the Commerce Committee favorably, with heated opposition from Fritz Hollings, whom Gormley calls "a bastard who won't listen to facts." Like the bigger Kasten bill, it languished at the end of the 1986 session. After a two-year battle, it was favorably reported out of Hollings's Commerce Committee in 1988. It then went to the Judiciary Committee and Howell Heflin held hearings in his antitrust subcommittee without a further report. Senator Kassebaum brought it to the Senate floor as an amendment to a Metzenbaum bill at the end of the session. "Metzenbaum was faced with allowing a vote on the amendment or filibustering it," Gormley says, "and he chose to filibuster his own bill and destroy it."
Last year the aviation bill was again reported favorably out of Hollings's Commerce Committee, in spite of his hostility, and sent on to Heflin's Judiciary subcommittee, where it languished again. In June 1990 Kassebaum tried to get it passed as an amendment, this time tacked on to a bizarre blind-passenger bill sponsored by Senator Hollings. And, like clockwork, a troika of filibusterers sprang into action: Senators Metzenbaum, Hollings, and Joseph Biden (D-Del.). A motion was made for cloture to end their filibuster, but it failed by five votes. Senator Kassebaum is expected to try her amendment routine again before Congress adjourns in October.
On the House side, an aviation bill sponsored by Rep. Glickman has faced a rash of barriers laid by the trial bar via the House Democratic leadership. The first bill died when it was referred to Judiciary in 1986, but in 1987 Glickman and 200 co-sponsors rewrote it so it could be sent to the Aviation Subcommittee of the Public Works Committee. The Democratic leadership decided the bill would still have to go to a hostile Judiciary, as well as Energy and Commerce. After it passed out of Public Works on a 30 to 2 vote, it was sent to Florio's subcommittee of Energy and Commerce, where trial-bar pal Florio refused to report it out.
The Glickman bill was reported out of Public Works in the summer of 1989. Dingell, tired of the charades, decided not to move on it in Energy and Commerce until new Judiciary Committee chairman Jack Brooks did. So far this year he has not. Last year Florio was elected governor of New Jersey, reportedly with $700,000 to $1 million of trial-bar support in a campaign limited to $1.7 million total spending. The House is now waiting for the Senate to pass the bill, to put pressure on Brooks to release it from captivity.
With so few victories after nine years, Senator Kasten admits that the Product Liability Alliance could use some schooling in Machiavelli, but he thinks the businessmen turned-lobbyists, now more attuned to political realities, are finally going on the offensive. He would like to see the Product Liability Alliance divide the community of attorneys into two camps and draw ostensibly independent consumer groups away from Nader's control. The overconfident trial bar may already be doing that for them. It is working behind the scenes to build support in Congress for a ban on protective orders in product liability suits. These orders, which prohibit public disclosure of information uncovered in pre-trial proceedings, are granted by courts in order to protect privacy, encourage full disclosure, and promote settlements. From the point of view of defendants, of of protective orders would only lead To more lawsuits. According to James C. Rinaman, Jr., president of Lawyers Civil Justice (LCJ), recently set up by defense litigating attorneys, the ATLA campaign to limit protective orders "is their latest effort to create more litigation and artificially increase awards."
To build support for the cause, ATLA geared up a propaganda campaign that says court secrecy harms consumers. The Washington Post has swallowed it hook, line, and sinker. Barry Bauman of LCJ says Post reporters Elsa Walsh and Benjamin Weiser tell only the trial bar's side of the story. The two were feted at last year's annual ATLA meeting and received the Amicus Award for their series, which never mentions that the trial bar would stand to gain a windfall of new lawsuits from a ban on protective orders. To make matters worse, the Post series seemed "well orchestrated, so the trial bar could use the series of articles to launch their new program against protective orders," Bauman says. Right after it ran, Rep. Cardiss Collins (D-III.) introduced an ATLA-backed bill to limit protective orders (and a similar bill passed in the Virginia legislature). The Post ran an op-ed piece by ATLA President Russ Herman but reneged on a promise to run an opposing one by LCJ. This spring the Society of Professional Journalists took up the cause by co-sponsoring a one-sided forum with the trial lawyers.
Lawyers for Civil Justice says banning protective orders would be an invasion of the right to privacy of the plaintiff and would lead to a land office-type business in buying and selling information in court documents. Bauman says the claim that the public interest is compromised by secrecy in protective orders is a sham: judges already have the discretion to prevent keeping secret any information that is harmful to the public.
Kasten would also like to divide the consumer groups from fader, which may be hopeless. But something equally effective appears to be afoot: the consumer groups are losing credibility on Capitol Hill. Consumer lobbyists met a hostile reception in May when they showed up to testify in hearings on the latest Kasten bill before the Senate Commerce Committee. The bill, still one of genuine tort reform, is a magnet for Nader's ire. Before the hearings Nader sent the major supporters of the bill, including Senators Kasten, John Danforth (R-Mo.), and Rockefeller, letters accusing each of supporting product liability reform in return for campaign contributions from major corporations. It was the height of hypocrisy, considering Nader's heavy reliance on trial-bar donations. Senator Rockefeller was outraged: "I've never had to worry about money a day in my life."
Spark-s flew when Lipsen attacked testimony by the Monsanto Company before it had even been delivered. It had apparently been leaked by Hollings's staff. Monsanto was to testify that they have been unwilling to bring to market a substitute for asbestos because of uncertain liability standards. Lipsen began to discredit the Monsanto testimony, reportedly distorting the record on tests of mice exposed to the new product. "It was a dishonest misreading of the test results," says Kasten.
The senators had had their fill of Naderite tactics. Senator Rockefeller asked Lipsen pointedly, "Don't you receive funding from the trial bar?" Lipsen was shaken, though Consumers Union does not receive support from the trial bar. "We're completely independent. No one has a right to question our integrity," she says. But her mindless support of Nader positions has sullied Consumer Union's reputation and made it indistinguishable from the Naderite organizations. Senator Danforth made a more direct challenge to Naderite Dr. Sidney Wolfe of Public Citizen Health Research Group, by quoting Wolfe as having admitted that his group accepted money from trial lawyers. "You are Iying, Senator," shot back a furious Dr. Wolfe. That's no way to win favor in the Senate, Sid.
Is there any chance of breaking the stranglehold of the trial bar over Congress? There are hopeful signs. A revolt is building in both the Senate and House to the Democratic party leadership's stifling of the congressional majority. The American bar is beginning to divide into warring camps. The consumers groups are losing credibility. And the Product Liability Alliance is growing more optimistic by the day.
O'Connell says the supporters of federal tort reform need to strike a blow for consumers to win the battle. They can do this with the no-fault choice system. "The choice system puts the trial bar on the defensive. They have to argue that no-fault is so bad that no one should be allowed to have it if they want it-and that's not a winning argument." Congress could revive auto no-fault and the two groups could join forces. Finally, tort reformers could lead a campaign to have trial lawyers' contingency fees regulated. Congress or the Bush Administration could ask the Federal Trade Commission to consider requiring trial lawyers to advertise contingency fees, increasing competition and driving down fees.
Much is at risk. Until Congress can shake itself loose from the clutches of the all-powerful trial bar, American democracy will continue to lose ground to a government of the lawyers, by the lawyers, and for the lawyers.
ILLUSTRATIONS
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By Robert Stowe England
Robert Stowe England is a writer living in Washington, D.C
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