A REPORT ON THE LITIGATION LOBBY

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        STR EET
          NW
           ON THE
AR  EPORT LOBBY
LITIG ATION
     2010
    A Message from the Director
    A         merica’s litigation-friendly legal system continues to im-
              pose a heavy burden on our economy. The annual direct
    cost of American tort litigation—excluding much securities liti-
                                                                                       law is, for the most part, crafted by state judges rather than en-
                                                                                       acted by state legislatures, these efforts have centered on ensuring
                                                                                       a friendly judiciary, whether appointed or elected.
    gation, punitive damages, and the multibillion-dollar settlement                        With business groups now fighting back against Trial Lawyers,
    reached between the tobacco companies and the states in 1998—                      Inc.’s longtime grip on state judiciaries, the litigation lobby has
    exceeds $250 billion, almost 2 percent of gross domestic prod-                     turned its attention to state legislatures, where it is not only block-
    uct.1 The indirect costs of excessive litigiousness (for example, the              ing tort reforms but working to expand its portfolio of litigation
    unnecessary tests and procedures characterizing the practice of                    opportunities. Among other things, state legislators are authoriz-
    “defensive” medicine, or the loss of the fruits of research never                  ing new kinds of lawsuits, raising damage caps, and giving private
    undertaken on account of the risk of abusive lawsuits) are prob-                   lawyers authority to sue on behalf of the state.
    ably much greater than the direct costs themselves.2                                    Of course, the growth in federal regulation and law has made
         Of course, tort litigation does do some good, and it does deter               it necessary for Trial Lawyers, Inc. to lobby Congress as well.
    some bad behavior. The problem is that it deters a lot of good                     Thanks to large contributions, both to the Democratic Party and
    behavior, too. Indeed, the legal system does such a poor job of                    to individual legislators, lawyers have not only blocked most fed-
    distinguishing between good and bad behavior that the high cost                    eral efforts at tort reform but are also working to coax goodies
    of litigation is effectively a “tort tax” paid by every American. The              from Congress that pad their bottom line. Such efforts include:
    share of America’s economy devoted to lawsuits is far higher than                      • Lengthening statutes of limitations in employment law to
    that of other developed nations such as Germany and Japan (see                             make it easier to file discrimination suits;4
    graph below, left). Yet America is hardly safer as a result.                           • Spurring securities litigation by allowing suits to be filed
         As this report details, the causes of the staggering growth in                        against the vendors of corporations accused of fraud;5
    the overall economic costs of litigation in America (see graph be-                     • Cutting contingent-fee lawyers a tax break worth over a
    low, right) are somewhat complex. A series of writings by academ-                          billion dollars;6
    ics and decisions by judges from the 1930s through the 1960s—                          • Gutting arbitration contracts designed to encourage resolu-
    many of which were well-intentioned—changed our legal rules to                             tion of disputes that are too expensive to take to trial;7 and
    make it much easier to file and win lawsuits.3                                         • Allowing state juries to override federal regulations.8
         Alongside these doctrinal changes, the modern trial-lawyer                         The litigation industry isn’t making political headway because
    lobby emerged. As the plaintiffs’ bar became wealthier, more                       it is popular. Eighty-three percent of Americans think that the
    organized, and more like an industry—we like to call it Trial                      legal system makes it too easy to assert invalid claims.9 The plain-
    Lawyers, Inc.—it grew into a major political force. Combining                      tiffs’ bar became so nervous about its public image that it changed
    large-scale political giving with K-Street lobbying sophistica-                    its name: in 2006, the Association of Trial Lawyers of America
    tion, the lawyers worked to maintain the legal shifts that had                     rebranded itself the American Association for Justice.10
    enriched them, as well as to initiate changes that would enrich                         But general public unease over the conduct of litigation today
    them still more.                                                                   cannot combat the overwhelming influence that Trial Lawyers,
         The litigation industry’s political strategy is multifaceted. Be-             Inc. has obtained in the halls of power. In the last decade, lawyers
    cause tort law is state law in the United States, the states have been             and law firms—excluding lobbyists—have injected $780 million
    the focus of Trial Lawyers, Inc.’s political efforts. And because tort             into federal campaigns,11 on top of $725 million donated to state

       Tort Litigation Consumes Much More of America’s                                                              Since 1950, U.S. Tort Costs Have Risen
          Economy than of Other Developed Nations’                                                                          Much Faster than GDP
                                                                                                              1 6 ,0 0 0
               U.S .                                                   2.2
                                                                                         Percentage C hange




                                                                                                              1 4 ,0 0 0
              Italy                                      1.7                                                  1 2 ,0 0 0
                                                                                            C um ula ve




          G erm any                        1.1                                                                1 0 ,0 0 0
                                                                                                                8 ,0 0 0
             Japan                  0.8                                                                                                                                                 Tort C os ts
                                                                                                                6 ,0 0 0
            Franc e               0.7                                                                           4 ,0 0 0                                                                GD P
               U.K .              0.7                                                                           2 ,0 0 0
                                                                                                                       0
                       0   0.5         1           1.5          2            2.5                                        1 95 0 1 96 0    1 97 0    1 98 0    1 99 0    2 00 0
                             Tort Costs, Percent G DP , 2003                                                                 1 95 5 1 96 5    1 97 5    1 98 5    1 99 5    2 00 5
                                                               Source: Towers Perrin                                                                                           Source: Towers Perrin



                                                                     www.TrialLawyersInc.com
                                                                                                                                                                                           K STREET




                            Tort Costs Have Risen More Slowly of Late
                                                                                                                                                                    Table of
                                                                                                                                                                   Contents
                    20.0

                             14.7
                    15.0              13.4

                    10.0
   Percent Change




                                               5.5         6.0 6.6     6.3     6.1
                                                     4.7                                4.8
                     5.0        3.2      3.4                                                     3.3         Tort Costs
                                                                                     2.1
                                                                     0.4
                                                                                              1.1            GDP                                     A Message from the Director                 2
                     0.0
                             2001     2002     2003        2004      2005    2006
                                                                             20      2007     2008
                                                                                                                                                     Introduction                                4
                    (5.0)
                                                                             (5.6)                                                                         The King of Torts                     5
            (10.0)
                                                                                                  Source: Towers Perrin
                                                                                                                                                           The Law Expands                       6
                                                                                                                                                     Public Relations                            9
races. Lawyers’ giving is so lavish that it exceeds all other industries’,
                    12
                                                                                                                                                     State Government Relations                  12
and likely would do so even if donations by defense firms were backed
                                                                                                                                                           Suing for the State                   13
out of total contribution figures (see note 36).13 Moreover, the plain-
tiffs’ bar strategically concentrates its giving, wielding disproportionate                                                                                Justice for Sale                      15
influence in contested state supreme court elections and over the lead-
ership of both the U.S. Senate and key state legislatures.                                                                                           Federal Government Relations
     The progress of the plaintiffs’ bar has not been entirely unimpeded.                                                                                Expanding Liability                     16
Since the Manhattan Institute issued, in 2003, its first report entitled
Trial Lawyers, Inc., major tort-reform legislation in states such as Texas                                                                                 Deputizing Trial Lawyers              17
and Mississippi has forced plaintiffs’ lawyers to look for friendly new                                                                                  Attacking Arbitration                   20
jurisdictions.14 Judges such as Janis Graham Jack have blown the doors
off a program of manufactured testimony and medical examinations                                                                                           The Anti-Federalist Congress          20
in the asbestos-lawsuit industry, producing a sharp drop in new case                                                                                       Toy Story                             22
filings in that line of litigation.15 From 2004 through 2008, the cost
                                                                                                                                                           A Trial-Lawyer Tax Break              23
of litigation to the economy rose more slowly than overall economic
growth (see graph above). And four key members of our original Trial
                                                                                                                                                     Conclusion                                  24
Lawyers, Inc.’s “leadership team” have left the business altogether: fed-
eral prosecutors uncovered bribery and kickback schemes that led to                                                                                  Appendix                                    25
the imprisonment of Dickie Scruggs,16 Bill Lerach,17 and Mel Weiss;18                                                                                Endnotes                                    26
and former U.S. Senator John Edwards has retreated from the public
scene in ignominy.19                                                                                                                                 Other Resources                             31
     But make no mistake: trial lawyers are re-                                                                                                      	         	
acting to recent setbacks not by licking their
wounds but by flexing their political muscle.
Newly enlarged Democratic majorities—swept
into office by financial crisis, disaffection with
the war in Iraq, and enthusiasm for “hope and
change”—seem intent on rewarding their po-
litical benefactors. I hope that this report, by
shedding light on their shenanigans, can help
stem the damage.
                                                                                                                                                            Visit TrialLawyersInc.com for online
                                                                                     James R. Copland                                                         versions of this report, previous
                                                                     Director, Center for Legal Policy                                                      editions in the series, updates, and
                                                                Manhattan Institute for Policy Research                                                                 other resources.

                                                                                                                    C L P
                                                                                                     C E N T E R   F O R   L E G A L   P O L I C Y
                                                                                                                                                                                                      
                                                                                                       AT   THE    MANHATTAN      INSTITUTE
    IntroductIon


    PoliTiCAl Power
    How Trial Lawyers, Inc. Became Washington’s Most Influential
    Business Lobby




    T        he late Fred Baron, one
    of the litigation industry’s most
                                                                                                                        The	Rise	of	The	PlainTiffs’	BaR
                                                                                               Although the legal profession and the
    successful asbestos lawyers, was                                                           Anglo-American system of tort law long
    never bashful about acknowledging                                                          predate the United States itself, an or-
    trial lawyers’ political influence. In                                                     ganized plaintiffs’ bar—and the rise in
    2002, in reaction to a recent Wall                                                         political influence of trial lawyers like
    Street Journal editorial claiming that                                                     Fred Baron—are relatively recent de-
    “the plaintiffs bar is all but running                                                     velopments. As noted by legal historian
    the Senate,” Baron quipped, “I                                                             John Fabian Witt, “For the first century
    really, strongly disagree with that.                                                       and a half of U.S. history, the plaintiffs’
    Particularly the ‘all but.’ ”20                                                            lawyer barely existed as a category.”24
          A past president of Trial Law-                                                       Until the late nineteenth century, torts
    yers, Inc.’s political wing—known                                                          was not recognized as a discrete branch
                                                                                           Josh Merwin/New York Times
    when he headed it as the Associa-                                                          of law; the first American treatise on the
    tion of Trial Lawyers of America—                                                          subject was not published until 1859.25
    Baron had personally donated mil-                                                          Early-American accident lawyers “shifted
    lions of dollars to political causes.21                                                    back and forth between representing de-
    For his friend and fellow trial law-                                                       fendants and plaintiffs,” and “[t]hrough
                                                                             Fred Baron
    yer John Edwards’s 2004 and 2008                                                           the first half of the twentieth century,
    runs for national office, Baron di-                                                        plaintiffs’ lawyers remained for the most
    rected fund-raising operations, lent the campaign his private     part diffuse and unorganized.”26
    jet, and infamously paid to relocate the candidate’s mistress,          However, amid and following the upheavals of the Indus-
    who was pregnant.22                                               trial Revolution, reformers during the Progressive era and the
          Baron was but one of many heavy-hitting plaintiffs’ law-    New Deal came to believe that the old common-law tort system
    yers who have ponied up big cash to political campaigns. In-      was ill equipped to handle proliferating workplace injuries and
    deed, at the time Baron retired from his old firm Baron &         thus promoted the establishment of a regulatory system. Bor-
    Budd, in 2002, there were seven trial-bar contributors to fed-    rowing from Germany, American states began to enact workers’
    eral campaigns that had given more than his firm: the indus-      compensation laws that handled employees’ injury claims out-
    try’s political action committee; three fellow Texas personal-    side the tort system: “Between 1910 and 1921, forty-two states
    injury firms, Williams & Bailey, Nix, Patterson & Roach, and      passed industrial injury legislation, replacing tort law with an
    Provost Umphrey; and the law firms of asbestos kingpins Ron       administrative system affording compensation for accidental
    Motley (who also led the states’ multibillion-dollar litigation   injuries arising on the job.”27
    against tobacco companies), Peter Angelos (who now owns the             From among the lawyers who handled these new workers’
    Baltimore Orioles), and the recently deceased John O’Quinn        compensation claims arose the trial-lawyer bar and its lobby-
    (who also made a fortune on breast-implant suits).23              ing arm. In 1946, Sam Marcus, a Detroit workers’-comp lawyer


                                                      www.TrialLawyersInc.com
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                                                   The	King	of	ToRTs

   I f Trial Lawyers, Inc. had a single founder, it would have to be San
     Francisco personal-injury lawyer Melvin Belli, dubbed the “King of Torts”
   by Life magazine in 1954.44 Belli was “a man of scarlet silk-lined suits, of
                                                                                  Melvin Belli, the King of Torts

   multi-colored Rolls Royces, of courtroom theatrics and Hollywood high-
   jinks.”45 His clients included the Rolling Stones, Lee Harvey Oswald killer
   Jack Ruby, and Hollywood stars Mae West and Errol Flynn.46 Belli also
   wrote several books, including the three-volume treatise Modern Trials,
   which earned him over $1 million in royalties.47
        Other lawyers had reason to buy Belli’s book, which explained the
   tactics he had used to revolutionize the world of tort law. Belli had been
   the trial attorney in the famous 1944 case Escola v. Coca-Cola Bottling
   Co.,48 which laid the foundation for strict liability—liability without fault—
   in product defect cases (see box, next page). In the 1950s, Belli launched
   modern pharmaceutical litigation with his successful case against a
   manufacturer of polio vaccines.49
        A seminal law review article he wrote,50 along with his aggressive
   advocacy, helped increase substantially the amounts awarded for




                                                                                                                                       AP Photo/Paul Sakuma
   “intangible” injuries like pain and suffering. And to play upon jurors’
   heartstrings and put them in a more generous mood, he pioneered the
   use of “demonstrative evidence”—photographs and props that depicted
   and dramatized his clients’ suffering.51 Many of Belli’s theatrics seem
   bold even today: in one case, he arranged to have “an injured, 680-
   pound client [hoisted] through the courthouse window,” and in another, he shocked a 1940s jury “by having a client bare
   her chest to show scars from an injury. She then shed tears that landed right on her scars.”52



representing the Congress of Industrial Organizations, met Sam                  Because the regulated world of workers’ compensation of-
Horovitz, a Boston employee-claims attorney who represented                fered attorneys far less upside than did the open and rapidly
the American Federation of Labor.28 In August of that year, the            expanding world of tort law, the NACCA soon found itself
two formed the National Association of Claimants’ Compensa-                departing from its original purpose. “Within just a few short
tion Attorneys (NACCA). Initial membership was eleven, and                 years, the NACCA had become an organization dedicated not
Marcus was the group’s first president. In 1949, NACCA began               to the improvement of the workmen’s compensation system,
to take on its current form, when the nation’s most prominent              but to its rollback. By the early 1950s, NACCA advocated the
personal-injury lawyer, Melvin Belli (see box), persuaded the              abolition of workmen’s compensation.”32
group to admit all tort lawyers rather than merely those repre-                 Membership in the lawyer lobby swelled, and in 1960,
senting injured workers.29                                                 the organization changed its name to the National Association
      Although Horovitz initially opposed Belli’s entreaties, he           of Claimants’ Counsel of America, which better reflected its
soon embraced the group’s expanded mission with gusto, and in              new mission. Four years later, the group adopted the catchier-
1949, he “took his family on a three-month, 10,800-mile tour               sounding American Trial Lawyers Association (ATLA), then
across the South and Southwest in a silver aluminum Airstream              switched again in 1972 to a similar name, Association of Trial
trailer to establish local branches and chapters of the NACCA.”30          Lawyers of America.33 The government-relations arm of Trial
Dubbed the Silver Bullet Tour by the trial lawyers, Horovitz’s             Lawyers, Inc. would keep this moniker for thirty-four years,
mission was wildly successful, bringing hundreds, and then                 before deciding in 2006 to disguise its mission by adopting the
thousands, of new recruits to the lawyer-lobby cause.31                    innocuous-sounding American Association for Justice.34


                                                                  C L P                                                                                       
                                                   C E N T E R   F O R   L E G A L   P O L I C Y
                                                     AT   THE    MANHATTAN      INSTITUTE
    IntroductIon


                                                                                                                         The	l aw	exPands

      T   rial Lawyers, Inc. could never have
          grown into the big business it is
      if the traditional legal rules limiting
                                                       Roger Traynor
                                                                                                                                                              of Torts,62 which greatly influences state
                                                                                                                                                              supreme courts around the country.
                                                                                                                                                              (Prosser had argued for strict product
      the scope of litigation had not first                                                                                                                   liability in his 1941 torts treatise.63) The
      been loosened. In 1944, pioneering                                                                                                                      Second Restatement also legitimized




                                                  Courtesy of The Bancroft Library, University of California, Berkeley
      trial lawyer Melvin Belli represented                                                                                                                   other theories of liability that have come
      Gladys Escola, a waitress who had                                                                                                                       to dominate product-liability litigation:
      suffered severe hand injuries when                                                                                                                      “design defects” (which asks juries to
      a bottle of Coca-Cola exploded as                                                                                                                       play scientist and determine whether
      she was putting it into a refrigerator.53                                                                                                               an alternative product design would
      Under traditional doctrines, in order                                                                                                                   have reduced or avoided injuries) and
      to establish liability, Belli would have                                                                                                                “failure to warn” (which asks juries to
      had to prove negligence on the part                                                                                                                     determine whether products’ warning
      of the bottling company.54 However,                                                                                                                     labels—which have, understandably,
      the bottle’s pieces had been discard-                                                                                                                   proliferated as the result of application
      ed, and he had no evidence of error                                                                                                                     of the legal rule—are sufficient to notify
      in the manufacturing process.55                                                                                                                         customers of product risks).64
            Belli persuaded the California                                                                                                                          In parallel with this expansion of
      Supreme Court to discard the existing legal standard and                                                                       the substantive law of tort, the procedural law went through a
      hold that a jury could deem the bottler negligent under                                                                        major overhaul, and this also facilitated a surge in litigation.
      the doctrine of res ipsa loquitor (“the facts speak for them-                                                                  Under both the common law and various state codes, filing
      selves”), permitting the court to infer and assign fault purely                                                                a lawsuit required pleading a case with particularity—that is,
      on the basis of evidence of the explosion.56 Escola ushered                                                                    meeting certain thresholds before a legal claim would be al-
      in the era of modern product-liability law; Belli remarked,                                                                    lowed to proceed.65 These pleading rules were “criticized for
      thirty years later, “If there is one legal decision upon which                                                                 overemphasizing form over substance,”66 and when Yale Law
      Ralph Nader built, this was it.”57                                                                                             School dean Charles E. Clark set about drafting the first Fed-
            The Escola case is remembered less for its holding—few                                                                   eral Rules of Civil Procedure during the New Deal, under au-
      today would argue that it is unreasonable to hold a manu-                                                                      thority delegated to the judicial branch by the Rules Enabling
      facture liable for an exploding soda bottle—than for its con-                                                                  Act,67 he effectively gutted the old rules.
      currence,58 written by Justice Roger Traynor, who had taught                                                                        Code pleading had controlled the volume of litigation not
      Belli at the University of California at Berkeley’s Boalt Hall                                                                 only by requiring plaintiffs to plead facts with particularity but
      School of Law. Traynor argued that the court should dis-                                                                       by requiring them to give notice to a defendant that a suit had
      pense with negligence altogether and instead embrace the                                                                       been filed, to narrow the legal issues, and to exclude meritless
      doctrine of “strict liability,” that is, “an absolute liability when                                                           claims.68 The new 1938 Federal Rules, however, dispensed
      an article that [a manufacturer] has placed on the market,                                                                     with all such requirements save notice.69 Clark’s vision was
      knowing that it is to be used without inspection, proves to                                                                    to allow virtually any claim to have its day in court—where
      have a defect that causes injury to human beings.”59 Traynor                                                                   the truth of the matter would be determined—but it failed to
      would enshrine strict liability in the law of California in the                                                                anticipate the economic realities that the new system would
      1963 case Greenman v. Yuba Power Products,60 which, ac-                                                                        create. The Federal Rules’ new, open-ended discovery process
      cording to a 1996 poll of the membership of the Association                                                                    enabled wildly expensive fishing expeditions and—in combi-
      of Trial Lawyers of America, was the most significant change                                                                   nation with the “American rule” that each side in litigation must
      made to tort law in the previous fifty years.61                                                                                bear its own costs70—encouraged shakedown suits and other
            In 1965, a scant two years after Yuba Power was decided,                                                                 forms of what was, in effect, legal extortion. Later procedural
      William Prosser, a University of California, Hastings College of                                                               changes, including a shift to “opt out” class actions in a 1966
      the Law professor, would incorporate Yuba Power’s strict-liability                                                             amendment of the Federal Rules,71 gave even more power to
      standard into the American Law Institute’s Second Restatement                                                                  plaintiffs and the lawyers who represented them.



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                                                                                                                                                                                                                                                               K STREET



                               The Trial Lawyer PAC, Now Named the American                                                                    Since 1990, Lawyers Have Given Over $1
                                                                                                                                           Since 1990, Lawyers Have Given Over $1 Billion Billion
                                Association for Justice, Is Regularly Among the                                                                 to Federal Campaigns--More Than Any Any
                                                                                                                                            to Federal Campaigns—More ThanOther Other
                                      Top Donors to Federal Campaigns                                                                                   Industry in Each Elec on Cycle
                                                                                                                                                      Industry in Each Election Cycle
                                                                                                                                                                                        250                                                                    233
                                               4.5




                                                                                                                                           Federal Campaign Contribu ons, $, Millions
                                                                                         4.1    4.2
  Federal Campaign Contribu ons, $, Millions




                                               4.0
                                                                          3.5                                                                                                           200                                                      184
                                               3.5                               3.1                                  3.0
                                               3.0                                                            2.8
                                                            2.5    2.5                                 2.6                                                                              150
                                               2.5                                                                                                                                                                                                      121
                                                                                                                                                                                                                                   113
                                               2.0   1.7                                                                                                                                                                                   95
                                                                                                                                                                                        100
                                                                                                                                                                                                                     78
                                               1.5
                                                                                                                                                                                                      57                    60
                                               1.0                                                                                                                                                           49
                                                                                                                                                                                         50
                                                                                                                                                                                                25
                                               0.5
                                               0.0                                                                                                                                        0
                                                     1990   1992   1994   1996   1998   2000   2002   2004   2006    2008                                                                      1990   1992   1994   1996   1998    2000   2002   2004   2006   2008

                                                                                        Source: Center for Responsive Politics                                                                                                    Source: Center for Responsive Politics



iT ’s	all	aBouT	The	Money                                                                                                             Committee in the last campaign were plaintiffs’ law firms—
     When ATLA first set up the Attorneys Congressional Cam-                                                                          New York asbestos and class action giant Weitz & Luxenberg
paign Trust, in 1979, it was a relatively small player, giving only                                                                   ($505,400) and Illinois asbestos powerhouse Cooney &
$400,000 to campaigns that year.35 It quickly became a much                                                                           Conway ($326,500).39 Over the last five years, Weitz &
more powerful force: since 1990, the group’s PAC contributions                                                                        Luxenberg has also been the third-largest contributor to Senate
to federal campaigns have exceeded $33 million, and lawyers al-                                                                       majority leader Harry Reid (D-Nev.), who counts plaintiffs’
together, excluding lobbyists, have contributed $1.05 billion to                                                                      firms as four of his top seven contributors.40 The top two, and
federal candidates (see graphs above).36 Not only have lawyers’                                                                       seven of the top twenty, donors to Senate majority whip Dick
campaign contributions exceeded those of every other industry                                                                         Durbin (D-Ill.) are plaintiffs’ law firms, including Cooney &
or profession over the last two decades; they have exceeded those
of every other one in each two-year political cycle.37 Trial Law-
yers, Inc.’s ability to keep tort reform off the table in the recent
discussions over health-care reform is not surprising in light of
the fact that lawyers’ congressional-campaign contributions in
the last election cycle substantially exceeded the combined total
of political donations from doctors, pharmaceutical companies,
HMOs, hospitals, and nursing homes.38
     As Fred Baron suggested, the plaintiffs’ bar has a
stranglehold over the U.S. Senate. Two of the top five
private contributors to the Democratic Senatorial Campaign


                                                                                                                                                                                                                                                                 istockphoto.com/Ben Thomas



Lawyers’ campaign contributions
exceeded those of every other
industry over the last two decades.


                                                                                                                             C L P                                                                                                                                                            
                                                                                                              C E N T E R   F O R   L E G A L                                           P O L I C Y
                                                                                                                AT   THE    MANHATTAN      INSTITUTE
    IntroductIon




                                                                                                                                                                                                            AP Photo/Jim Mone
                                     Senate Majority Leader Harry Reid Receives Much of
                                            His Funding From Trial Lawyers, Inc....

                                          Lawyers/Law Firms                                                        2,108,723

                                     Securi es & Investment                           885,460

                                     Lobbyists (All Industries)                    753,196

                                           Casinos/Gambling                       700,300

                                         Health Professionals                     684,575

                                                                  0       500,000 1,000,000 1,500,000 2,000,000 2,500,000
                                                                      Campaign Dona�ons to Harry Reid, $, 2005-2010
                                                                                                Source: Center for Responsive Politics
                                                                                                                                                           Senate Majority Leader Harry Reid


                                      Senate Majority Whip Dick Durbin
                                                                                                                       ... As Does Senate Majority Whip Dick Durbin

                                                                                                                Lawyers/Law Firms                                                                   2,448,107


                                                                                                            Securi es & Investment                         766,512

                                                                                                                          Real Estate               506,396
     AP Photo/Charles Rex Arbogast




                                                                                                             Lobbyists (All Industries)          380,255

                                                                                                                           Pro-Israel           373,712

                                                                                                                                          0    500,000     1,000,000   1,500,000   2,000,000    2,500,000
                                                                                                                                              Campaign Dona ons to Dick Durbin, $, 2005-2010
                                                                                                                                                                         Source: Center for Responsive Politics




    Conway and fellow in-state firms Simmons Cooper (his largest                                                             tribute hefty sums to state legislators, attorneys general, and
    donor), Korein Tillery (his second-largest donor), Clifford Law                                                          other statewide officials. In some cases, leaders in part-time
    Offices, Corboy & Demetrio, and Power, Roger & Smith—all                                                                 state legislatures are themselves plaintiffs’ lawyers or affili-
    featured in Trial Lawyers, Inc.: Illinois.41 In total, Trial Lawyers,                                                    ated with personal-injury firms. In New York, for example,
    Inc. dwarfs all other industries in contributing to the Senate                                                           State Assembly Speaker Sheldon Silver and State Senate
    leadership (see graphs above).                                                                                           Democratic Conference Leader John Sampson each have “of
         Since tort law exists primarily at the state level, Trial                                                           counsel” relationships with major asbestos- and personal-
    Lawyers, Inc. has of necessity been a force in state elec-                                                               injury-litigation firms, Weitz & Lexenberg and Belluck &
    tions as well, giving almost $725 million over just the past                                                             Fox, respectively.43 The lititgation industry’s massive con-
    decade.42 The trial bar works feverishly to control state                                                                tributions and web of financial ties to state political leaders
    supreme courts, and spending on many of these races, in                                                                  have enabled it not only to block tort-reform efforts but
    states where they are held, has exploded since business be-                                                              also, increasingly, to craft an affirmative state-level agenda
    gan fighting back (see box, page 15). Trial lawyers also con-                                                            to expand litigation opportunities. Tli




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PublIc relatIons
                                                                                                                                     K STREET




ATTorney iMAge MAkers
The Litigation Industry Works Through the Academy, Media,
and Surrogate Groups to Burnish Its Perception




T        he litigation industry realizes that it has a popularity
problem, as evidenced by its recent decision to change the
                                                                             former dean of Harvard Law School.75 Pound later penned
                                                                             a glowing introduction to Belli’s best-selling book Modern
name of its top industry association from the Association of                 Trials.76 An early critic of the common law, Pound in his later
Trial Lawyers of America (ATLA) to the American Association                  years had become a fierce opponent of the New Deal, and he
for Justice72—a moniker less suggestive of a lobbying group                  came to view the common law of tort as a substitute for the
for plaintiffs’ lawyers than of the Justice League of America,               bureaucratic state.77 Pound thus became a leading advocate for
the team of superheroes in the 1970s Saturday-morning Su-                    the plaintiffs’ bar and, by doing so, gave it an air of academic
per Friends cartoons.73 Lawyers will never be popular—doubts                 legitimacy. The Harvard professor’s legacy continues to aid the
about barristers predate the American republic74—but the trial               litigation industry: the Pound Civil Justice Institute, a think
bar has much to gain from obfuscating its avaricious business                tank founded by the plaintiffs’ bar in 1956, conducts seminars,
model and perpetuating its image as a loose cadre of individual              including some for judges, and publishes papers to promote the
advocates who simply hang their shingles and stand up for the                interests of Trial Lawyers, Inc.78
little guy against corporate predators.                                            The tort bar continues to cultivate relationships with aca-
      To meet its public-relations aims, Trial Lawyers, Inc. sup-            demics who are willing to speak on its behalf. Drawing upon
plements its government-relations efforts with a strong web of               their august institutions’ reputations for seriousness and their
ties to the academy, media, and various “consumer” groups.
By encouraging law-review articles and amicus briefs; news
stories, movies, and television programs; and studies and state-
ments from purportedly independent nonprofit organizations,
the trial bar works to reinforce its mythical identity—and thus
head off and disarm popular opposition.

ivoRy-ToweR	advocaTes
     As the organized plaintiffs’ bar developed, its leader, Melvin
Belli, befriended septuagenarian law professor Roscoe Pound,

                                                                                                                                        istockphoto.com/Micheal O Fiachra



Many law professors can earn hefty
sums as “expert” witnesses by giving an
academic seal of approval to litigation.


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                                                       AT   THE    MANHATTAN      INSTITUTE
     PublIc relatIons

      own for independence, many of them profit handsomely from                     This partnership between reporters and trial lawyers
      their ties to the trial bar. Law professors can earn hefty sums          is not a good thing, but it’s hard for us reporters to resist,
      as “expert” witnesses by giving an academic seal of approval to          because trial lawyers are a perfect source. They do most
      mass-litigation settlements, dodgy fee arrangements, and ques-           of the work for us. We don’t need to make phone calls to
      tionable theories of injury.                                             search for victims; the lawyers identify the most telege-
           Law professors’ work is regularly cited in support of pro-          nic of them, the people whose stories make you cry, and
      litigation positions, notwithstanding conflicts of interest.             they’ll bring them right to our office.
      Consider Jones v. Harris Associates,79 a case for which the U.S.              Then they identify the “bad guy” for us. We don’t
      Supreme Court heard oral arguments on November 2, 2009.                  need to do much original investigating, since the lawyers
      In Jones, the trial bar is seeking greater latitude to sue mutual        use their subpoena power to force companies to turn over
      funds over their management fees. A group of law professors              just about every record they’ve ever produced. The lawyers
      signing a friend-of-the-court brief on behalf of the plaintiffs          usually find some dirt (bet they’d find dirt on you if they
      cited the work of three other professors who had already                 got all your papers) and hand it to us. We double-check it,
      served as expert witnesses in the same case.80 Such practices            but we’re following the lawyers’ script.84
      are often undisclosed; the same trial bar that attacks any study
      even partly funded by industry tries to obscure its own role in     consuMeR	gRouP	suRRogaTes
      enriching its ivory-tower advocates.                                     Trial Lawyers, Inc. often works with allied groups to cul-
                                                                          tivate an air of legitimacy in promoting its agenda to the press
      an	unsusPecTing	Media                                               and general public. Chief among these are the Naderite con-
            Trial lawyers have also aggressively courted the media. The   sumer groups that purport to protect the public from alleged
      little-guy-against-corporate-evildoer makes for good theater,       corporate abuses. The innocuous-sounding Citizens for Justice
      so the trial lawyers’ mythology finds its way regularly into the    and Democracy, headed by Nader disciple Joanne Doroshow,
      popular media, for instance in the books and movies written         exists exclusively to fight efforts at reforming the civil justice
      by John Grisham and in television shows produced by David           system.85 The group produces scores of position papers and
      E. Kelly.81 Grisham is himself a former plaintiffs’ lawyer who      “studies” designed to confuse the facts about the civil justice
      makes no secret of his friendship with his fellow Mississip-        system; and through a subsidiary organization, Americans for
      pian Dickie Scruggs,82 a leader of Trial Lawyers, Inc. before he    Insurance Reform,86 it makes a practice of blaming the high
      pleaded guilty to conspiring to bribe a judge.83                    price of medical-malpractice and other liability insurance on
            Trial lawyers also work the news media to stir up pub-        the greed and mismanagement of insurance companies rather
      lic fear, primarily by funneling victim stories to consumer re-     than on the underlying litigation being insured against.
      porters. News analyst John Stossel, who earlier won nineteen             Other Naderite organizations—such as the Center for
      Emmy Awards as a consumer reporter, notes that trial lawyers        the Study of Responsive Law,87 the Public Interest Research
      are the reporter’s “perfect source”:                                Group,88 and Public Citizen89—are less single-minded in their
                                                                          support of the trial bar, though their public positions signifi-
                                                                          cantly overlap. Public Citizen, for example, pushes Trial Law-
                                                                          yers, Inc.’s agenda directly, through its Litigation Group, which
                                                                          fights preemption of tort claims, arbitration clauses, and other
                                                                          issues adverse to interests of the plaintiffs’ bar;90 and indirectly,
                                                                          through its Health Research Group, which publicly attacks the
                                                                          safety of hundreds of drugs and medical devices that are the
                                                                          bread and butter of the mass-tort bar.91
     Associated Press/Rogelio V. Solis




                                                                               A Harvard-trained lawyer, Ralph Nader rose to fame in
                                                                          1965, when the then-thirty-one-year-old published the book
                                                                          Unsafe at Any Speed,92 an attack on the automobile industry
                                                                          and its products. Nader focused his criticism particularly on
                                                                          the Chevrolet Corvair, an economy car that drew upon de-
                                         Dickie Scruggs
                                                                          sign features of European car models and thus differed from


10                                                         www.TrialLawyersInc.com
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 Prominent plaintiffs’ attorneys have
 supported Ralph Nader’s consumer                                                          Ralph Nader and Joan Claybrook


 crusades “in every way possible.”

 its American competitors. Although some of Nader’s safety
 criticisms doubtless had merit, the federal National High-




                                                                                                                                                          AP Photo/Barry Thumma
 way Transportation and Safety Administration (NHTSA)—
 founded by Congress in 1966, partially in response to Nader’s
 book—ultimately determined that “the 1960–63 Corvair
 compares favorably with contemporary vehicles used in the
 tests” and that “the handling and stability performance of the
 1960–63 Corvair does not result in an abnormal potential
 for loss of control or rollover, and it is at least as good as the                  of its largesse. In a 1999 interview, Joan Claybrook, president
 performance of some contemporary vehicles both foreign and                          of Public Citizen at the time, admitted that her group received
 domestic.”93 Unfortunately, lay juries are unable to engage in                      “about $200,000” per year from plaintiffs’ attorneys.95 Because
 the sort of comparative and cost-benefit analysis employed by                       the contributions it receives are not disclosed in public filings,
 the NHTSA. Nader’s attacks on the auto industry, in combi-                          it is impossible to determine whether other trial-lawyer money
 nation with substantive shifts in legal doctrine, helped gener-                     is funneled indirectly into its coffers. The comments of some
                                                                                     trial lawyers would suggest that the sum Claybrook mentions
                                                                                     is just part of the story: prominent California plaintiffs’ at-
AP Photo/stf




                                                                                     torney Herb Hafif has said that the trial bar supported Nader
                                                                                     “overtly, covertly, in every way possible,” and the late Texas tort
                                                                                     king Pat Maloney noted that the litigation industry supported
                                                                                     Nader’s efforts “for decades,” contributing “a huge percentage
                                                                                     of what he raises.”96
                                                                                           Although there is no reason to suspect that “Saint Ralph”97
                                                                                     and his organizational offspring operate from venal motives—
                                                                                     many of “Nader’s Raiders” and their successors are true believ-
                                                                                     ers in their cause—his crusades seem to have provided him
                                                                                     with a good living: the financial disclosure forms that he re-
                                                                                     leased during his 2004 presidential campaign showed him as
               A Chevrolet Corvair on display at the 1959 Paris Auto Show
                                                                                     having over $4 million in net liquid financial assets.98
                                                                                           So appreciative of consumer groups is the plaintiffs’ bar
 ate waves of automobile “design defect” cases. Before long, the                     that in 1986 ATLA attorneys set up their own charitable
 public was left with the impression that “all economy cars are                      trust—the Civil Justice Foundation—to support those that
 inherently defective for tort purposes.”94                                          are dedicated to furthering the trial bar’s interests.99 As for
      Nader and the organizations he founded were of great use                       Nader, he plans to build an American Museum of Tort Law
 to the litigation industry, which in turn made them recipients                      in his hometown.100 Tli




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                                                               AT   THE    MANHATTAN      INSTITUTE
     state Government relatIons



     sTATe shenAnigAns
     State by State, the Litigation Industry Works to Establish
     New Lines of Business




     I    n America’s federal system, common law is state law. The
     litigation industry spends heavily on state elections to protect
                                                                           the case to proceed, the plaintiffs’ attorney will happily find
                                                                           himself playing on home turf.104
     itself. Over the last decade, lawyers and law firms have given
     almost $725 million to state political campaigns (see graph).                         Law Firms Have Contributed
                                                                              Lawyers andand Law Firms Have Contributed Over Over
                                                                                   Lawyers
           Whereas trial lawyers’ giving at the federal level tends to                Million to State Elections Since
                                                                                $700$700 Million toState Elec ons Since 2000 2000
     focus on Congress, at the state level the money is spread among                                              180
                                                                                                                                                                     165
     all three branches of government. Because state judiciaries                                                  160                 147



                                                                            A orneys and Law Firms, $, Millions
     make most tort law—and have the power to invalidate statu-                                                                                      135

                                                                               State Elec on Contribu ons,
                                                                                                                  140
     tory tort reforms as unconstitutional—the plaintiffs’ bar has                                                120
                                                                                                                                                                                    103
     long concentrated on getting its allies onto the state bench (see                                            100
     box, page 15). State legislatures, as the source of statutory tort                                                  80
                                                                                                                   80
     reform, are another arena of interest: any state legislator who
                                                                                                                   60
     tries to advance tort-reform legislation immediately becomes a
                                                                                                                   40                         29
     target of the trial bar and can expect a very expensive reelection                                                                                      22              25
                                                                                                                   20           14
     campaign. The litigation industry has even begun to turn its
                                                                                                                    0
     attention to the executive branch, since state attorneys general                                                   2000   2001   2002   2003    2004   2005    2006    2007    2008
     can farm out representation of the state’s civil lawsuits to attor-                                                                Source: National Institute on Money in State Politics
     neys in private practice, and state treasurers and comptrollers,
     who control public-employee pension funds, can hire outside                Even if a state improves the quality of its elected and ap-
     lawyers to initiate securities-fraud lawsuits (see box, opposite      pointed officials or enacts legislation that levels the playing
     page). Such litigation can make plaintiffs’ lawyers millions of       field, the federal system allows many plaintiffs to move their
     dollars through contingent-fee contracts, as it has already done      cases to some other, more sympathetic state. When the judicial
     in actions against tobacco and pharmaceutical companies.101           leadership in Madison County, Illinois, for example, decided
                                                                           to combat the county’s reputation as the nation’s worst “judi-
     fedeRalisM	and	liTigaTion                                             cial hellhole,”105 a powerhouse local law firm then known as
          Though federal courts can hear cross-state disputes, they        Simmons Cooper started shifting its caseload to Delaware.106
     must be guided by each state’s underlying substantive legal           After tort reforms in Texas made its asbestos cases less profit-
     rules,102 and tight limits on federal courts’ jurisdiction enable     able, Dallas plaintiffs’ giant Baron & Budd began directing its
     clever plaintiffs’ lawyers to keep many of their cases within         cases to California.107 Reforming the tort system state by state
     state judicial systems. For Trial Lawyers, Inc., the federal sys-     is thus very similar to a game of Whack-a-Mole: when trial
     tem creates a powerful “race to the bottom” effect. Lawyers           lawyers are knocked down in one place, they inevitably pop
     can shop their case to a favorable court—seeking out a county         back up somewhere else.
     judge who is an ally of the plaintiffs’ bar, or a locality that has
     a jury pool with a proven propensity for awarding big verdicts.       an	aggRessive	legislaTive	agenda
     The odds are low that a defendant will succeed in getting its              Historically, the trial bar’s political efforts vis-à-vis state
     case removed to federal court;103 so once the local court allows      legislatures were defensive. The courts, not the legislatures,


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                                                                suing	foR	The	sTaTe

    I  ncreasingly, Trial Lawyers, Inc.
       is profiting from its government-
    relations efforts in the executive
                                                 West Virginia Attorney General
                                                 Darrell McGraw
                                                                                                to his reelection campaigns to sue
                                                                                                Oxycontin manufacturer Purdue
                                                                                                Pharma; the $10 million settlement
    branches of state governments.                                                              the firms secured netted them $3
    In 1994, asbestos lawyer Dickie                                                             million in fees.136
    Scruggs of Mississippi joined forces                                                              In addition to these collabora-
    with Mississippi attorney general Mike                                                      tions with state attorneys general,
    Moore to sue tobacco companies                                                              trial lawyers are working with state
    for any additional Medicaid costs                                                           treasurers and comptrollers, who
    that the state had incurred as the                                                          control public-employee pension
    result of health problems of its                                                            funds, either directly or as ex officio
    citizens induced by tobacco use.129                                                         board members, and are therefore in
    Though he was representing the state                                                        a position to initiate lawsuits on the
    government, Scruggs did his work                                                            funds’ behalf. Because the 1995 Pri-
    on the basis of a fee arrangement                                                           vate Securities Litigation Reform Act
                                            AP Photo/Bob Bird




    that promised him a share of any                                                            (PSLRA)137 specified that the “lead
    eventual proceeds. Scruggs later
                          130
                                                                                                plaintiffs” in securities class actions
    brought in veteran South Carolina                                                           should be those “most capable of
    trial attorney Ron Motley to assist,                                                        adequately representing the interests
    and Moore won the cooperation                                                               of class members”138—that is, they
    of the attorneys general of other states. Eventually, all should be the members of the class with the “largest finan-
                                                 131

    fifty states became participants in the litigation, and the cial interest” in the litigation —pension funds, as the largest
    private attorneys they retained profited handsomely from the investors in the market, especially those based in populous
    contingent fees they scored on the states’ behalf, netting as states such as California and New York, typically control
    much as $30 billion from settlements reached in 1998 with such litigation. After the PSLRA became law, Trial Lawyers,
    the major tobacco businesses.132                                 Inc. set its sights on influencing the public officials who con-
          In the years since Scruggs, Motley, and other attorneys trol such funds by donating generously to their campaigns.
    in the tobacco litigation pocketed those windfalls, plaintiffs’       Investing in officials with control over public pensions
    attorneys around the country have worked to secure similar has proved to be profitable indeed for firms practicing se-
    arrangements with state attorneys general, who collect hefty curities law. In New York, for example, two law firms gave a
    campaign donations from lawyers to whom they later farm combined $121,800 in campaign funds to Alan Hevesi,139
    out the state’s work. While some states have adopted eth- who, as state comptroller, was the sole trustee and manager
    ics rules to govern such contingent-fee contracts, including of its public pension funds.140 Hevesi subsequently asked
    ones requiring competitive bidding and disclosure of con- the same firms to handle the state pension funds’ lawsuits
    tract terms, others have put off doing so.133 Darrell McGraw, against Citigroup stemming from the collapse of MCI
    West Virginia’s attorney general since 1992, was criticized WorldCom.141 The attorneys collected over $300 million
    by a judge and the state auditor for the contracting out of in contingent fees when the case settled in 2004.142 This
    state legal business in the tobacco litigation;134 but in recent sort of success has been repeated in other states, such as
    years, he has given no-bid contracts to private lawyers des- Louisiana, three of whose public-employee pension funds
    ignated “special assistant attorneys general.”135 In 2001, are among the five most active lead plaintiffs in securities
    McGraw hired four private firms that had given $47,500 lawsuits around the United States.143


took the major steps in expanding liability (see box, page 6).                               Over time, while heightened political competition has
In state assemblies, the trial-lawyer lobby largely contented                            lowered the litigation industry’s ability to determine the com-
itself with blocking legislative reforms, depending on state su-                         position of state judiciaries (see box, page 15), shifting political
preme courts to invalidate, on constitutional grounds, those                             trends have produced or increased majorities of trial-lawyer-
that somehow achieved enactment.108                                                      friendly Democrats in state legislatures.109 In turn, Trial Law-

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                                                                   AT   THE    MANHATTAN      INSTITUTE
     state Government relatIons

     yers, Inc. has worked to increase its profits by encouraging leg-




                                                                                                     AP Photo/Mike Groll
     islators to draft statutes that generate more lawsuits, increase
     recoverable damages, or weaken or eliminate statutes of limita-
     tion and legal defenses.
          Some of the bills and enactments pushed by Trial Lawyers,
     Inc. at the state level in recent years include:
        • Authorizing lead-paint litigation. One of the litigation
           industry’s new business lines involves suing paint
           manufacturers over the “public nuisance” of having to
           eliminate lead-based paint from homes—paint that the
           manufacturers stopped producing over thirty years ago.110
           In Maryland—where asbestos lawyer Peter Angelos, owner
           of the Baltimore Orioles, pioneered such litigation111—a
           legislature historically beholden to Angelos’s interests
           continues to flirt with legislation that would authorize
           such suits.112                                                                                                  Sheldon Silver,
                                                                                                                           Speaker of the New York State Assembly
                                                                      Peter Angelos
                                                                                               York Assembly Speaker Sheldon Silver, who moonlights
                                                                                               as “of counsel” for the mammoth plaintiffs’ asbestos firm
                                                                                               Weitz and Luxenberg. 120
                                                                                           •   Authorizing new whistle-blower lawsuits. In recent years,
                                                                                               New Mexico, New Jersey, and Oklahoma have all adopted
                                                                                               new qui tam statutes, which deputize plaintiffs’ lawyers as
                                                                                               “private attorneys general” (see box, page 17).121 Many
     AP Photo/ H. Rumph, Jr.




                                                                                               other state legislatures have considered whistle-blower
                                                                                               bills without (yet) passing them.122
                                                                                           •   Expanding recovery of noneconomic damages. Lawyers have
                                                                                               worked aggressively to overturn various state limitations on
                                                                                               recovery of noneconomic damages. In 2007, Illinois passed
                        • Expanding consumer-fraud litigation. In response to the              a law permitting recovery for “grief, sorrow, and mental
                          enactment of tort reforms, trial lawyers have resorted               suffering.”123 Also in 2007, Iowa extended recovery for “loss
                          to the private-enforcement mechanisms of many state                  of consortium” from parents of minor children to parents of
                          consumer-protection acts, which often require no showing             adult offspring.124 In New Jersey, an effort to create the new
                          of actual injury for plaintiffs to recover.113 Iowa, the last        damage categories of “mental anguish, emotional pain and
                          holdout against this tide, finally relented, in 2009, under          suffering, and loss of companionship” passed the legislature
                          pressure from trial lawyers.114 Washington broadened its             but was defeated by a pocket veto.125
                          consumer-fraud statutes last year.115 And lawyers have           •   Increasing damage caps. In 2009, Oregon raised its
                          tried, unsuccessfully, to broaden consumer-fraud laws in             limitations on recoverable damages against the state.126
                          Michigan and New Hampshire.116                                       Trial lawyers have tried to get other states to raise damage
                        • Expanding securities litigation. In New York, a group of             limits, albeit without significant success.127
                          legislators tried to add a private right to sue to the state’s   •   Eliminating or extending statutes of limitation. Many state
                          Martin Act117—the state’s securities-fraud statute that              legislatures have attempted to eliminate or lengthen the
                          Eliot Spitzer, as attorney general, controversially used to          time limits within which plaintiffs must file tort claims.
                          reshape the nation’s finance and insurance industries.118            In California last year, only a gubernatorial veto stopped
                          In 2009, the American Tort Reform Association gave the               a bill that would have allowed “fair pay” employment
                          amendment its Silver Award for being that year’s worst               claims to be filed, regardless of how much time had
                          civil-justice bill;119 the award is named, ironically, for New       passed since the matter in question occurred.128 Tli

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                                                     JusTice	foR	sale

T   wenty-one states have popularly elected supreme courts,
    and thirty-nine states elect judges at some level.144 Since
most tort law reposes in judicial decisions, not legislative en-
                                                                            generally left-leaning Detroit Free Press—but was undone in
                                                                            part by a late “dirty tricks” television commercial that ac-
                                                                            cused him of sleeping on the bench.153
actments, Trial Lawyers, Inc. has long understood state judi-                     The unseemly nature of high-dollar state supreme court
ciaries to be essential to its business, and has accordingly                elections drew the attention of the U.S. Supreme Court in
spent big bucks on judicial races to ensure that its favorite               Caperton v. A.T. Massey Coal Co.,154 which was decided last
sons join or remain on the bench. Inevitably, the business                  year. A divided court determined that Caperton’s constitu-
lobby started fighting back, and expensive—and often ugly—                  tional due-process rights had been violated when West Vir-
campaigns were the result. Just as inevitably, conflicts of in-             ginia Supreme Court Justice Brent Benjamin heard his case
terest have arisen between judges’ role as neutral interpreters             after receiving over $3 million in campaign contributions
of the law and their status as elected officials with a need to             from the chairman of the coal company opposite Caperton
fund-raise for campaigns.                                                   in the legal dispute.155 The facts of Caperton tested the outer
      In the 1980s, Texas emerged as a hotbed of political                  bounds of propriety, but the conflict of interest they posed
activity in judicial races, and the home of the first million-dol-          was hardly isolated; as Chief Justice Roberts noted, “‘Con-
lar campaigns. After “business” scored a win over “lawyers”                 sumers for Justice’—an independent group that received
in the 1988 elections, plaintiffs’ lawyer Pat Maloney defiantly             large contributions from the plaintiffs’ bar—spent approxi-
asserted: “We are resilient, and we will bounce back.”145 In                mately $2 million” on the same judicial campaign.156
1990, another trial lawyer brazenly told Forbes magazine:                         Caperton notwithstanding, it is unlikely that the courts
“[U]ntil last year the plaintiff bar owned and controlled the               will venture often or more deeply into such a thorny thicket.
Texas Supreme Court.”146                                                    Judicial elections compromise impartiality, or at least cast
      Both sides continue to struggle for dominance, in Texas               suspicion upon it, but there are no easy solutions. Judicial
and elsewhere. From the 1990s to the past decade, cam-                      appointment systems can be highly political themselves—
paign contributions to judicial races nationwide doubled,                   witness the federal nomination and confirmation process—
and judges raised over $200 million in the decade leading                   and in states with judicial “nominating boards,” the
up to the 2008 elections.147 In many states, multimillion-dol-              plaintiffs’ bar has often worked to stack such committees
lar judicial elections have become the norm (see graph). In                 with its allies.157 In 2009, the U.S. Chamber of Commerce
some hotly contested races, expenditures of independent in-                 Institute for Legal Reform—a major player in state judicial
terest groups on television commercials have exceeded the                   campaigns—published a report on such bodies, with an
entire spending of the campaigns themselves.148                             eye toward developing “best practices” that would curb
      In the 2009 elections, the judicial race to watch was                 political influence.158
the Pennsylvania Supreme Court contest between Democratic
incumbent Jack Panella and Republican Joan Orie Melvin.149
Melvin won the race, but not before being outspent by Pan-
                                                                              Multimillion-Dollar Campaigns Have Become
ella more than two to one.150 Panella’s $1.85 million cam-
                                                                               the Norm in Contested Judicial Elections
paign war chest received hundreds of thousands of dollars
                                                                                      Alabama                                                          40.9
in contributions from the plaintiffs’ bar, including $500,000
                                                                                         Ohio                                  21.2
from the Philadelphia Trial Lawyers Association alone.151
                                                                                       Illinois                                20.9
      Although it failed to get Panella reelected, Trial Lawyers,
                                                                                        Texas                              18.4
Inc., in concert with the Michigan Democratic Party, did suc-
                                                                              Pennsylvania                              16.1
ceed at its top priority of the previous year: defeating Michi-
                                                                                  Michigan                          13.0
gan Supreme Court Chief Justice Cliff Taylor, who had pre-
                                                                                                  0.0        10.0         20.0         30.0       40.0          50.0
sided over a divided court.152 Taylor was a highly respected                                            Candidate Fundraising, State Supreme Court Elec ons,
jurist—the author of the state’s definitive, three-volume text                                                         2000-08, $, Millions
                                                                                                                                            Source: Justice at Stake
on Michigan personal-injury law, he was endorsed by the




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                                                      AT   THE    MANHATTAN      INSTITUTE
     Federal Government relatIons: exPandInG lIabIlIty



     sue you, sue Me
     Congress Is Working to Undo Limits on How, When, and Whom
     Lawyers Can Sue




     U          ntil recently, the main purpose of Trial Lawyers, Inc.’s
     involvement in federal politics was to block reform legislation
                                                                           steered comprehensive tort reform through the Texas Legisla-
                                                                           ture.164 But with one exception, he was unable to get traction
     that would deny it various lucrative lines of business. In 1995,      against the lawyer lobby’s Washington power, which doomed his
     for example, Bill Clinton, an ally of trial lawyers, vetoed the       efforts to reform medical-malpractice law by imposing national
     Private Securities Litigation Reform Act (PSLRA),159 which            caps on damages,165 as it did his efforts to shift thousands of
     was designed to stop class action “strike suits” against compa-       questionable, if not fraudulent, asbestos claims out of the courts
     nies whenever their stock’s price sharply declined. But Con-          and into an administrative system.166 Bush’s one success was the
     gress overrode the veto,160 and the new law has helped improve        Class Action Fairness Act of 2005 (CAFA),167 which prevented
     the securities litigation climate.161                                 plaintiffs’ lawyers from “shopping” large, national class actions
          When, in 1996, Congress tried to pass a product-liabil-          to the most lawsuit-friendly jurisdictions in the country by al-
     ity law designed to curb frivolous suits by limiting punitive         lowing defendants to remove them to federal court.
     damages, it, too, met with a Clinton veto,162 even though he                With the Democratic Party currently controlling both
     had supported such legislation as governor of Arkansas.163 This       Congress and the White House, the litigation industry is tak-
     time, however, Congress lacked the votes to override.                 ing a somewhat different tack. No longer satisfied with fend-
          Clinton’s successor, George W. Bush, was a president friend-     ing off efforts to reform lawsuit abuse, the plaintiffs’ bar is
     ly to litigation reform: as governor of Texas, he had successfully    now actively seeking to expand its business opportunities. One
                                                                           of the bills backed by Trial Lawyers, Inc.—the first passed by
                                                                           the new Congress—extends the time that plaintiffs have to file
                                                                           suit, allowing attorneys to dredge up long-dormant claims.168
                                                                           Other legislation would facilitate legal “fishing expeditions” by
                                                                           permitting claims to go forward that rested upon the shakiest
                                                                           of allegations.169 Still other proposed acts of Congress would
                                                                           expand the universe of parties that plaintiffs can sue.170 One
                                                                           of them would lift a prohibition against suing the government
                                                                           itself, at considerable cost to the taxpayer.171

                                                                           led	By	ledBeTTeR
                                                                                Perhaps the clearest evidence of Congress’s new penchant
                                                                           for generating litigation is the transformation of Lilly Ledbetter,
                                                                           a former employee at a Goodyear Tire plant in Gadsden, Ala-
                                                                           bama,172 into a Democratic symbol of victimization by corpora-
              AP Photo/Charles Dharapak




                                                                           tions. Invited to speak on the second night of the 2008 Demo-
                                                                           cratic National Convention, right before keynote speaker Mark
                                                                           Warner, the former governor of Virginia,173 Ledbetter was the
                                                                           subject of a 2007 decision by a divided U.S. Supreme Court that
                                            Lilly Ledbetter
                                                                           denied her sex-discrimination claim against her former employer


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                                                                                dePuTizing	TRial	l aw yeRs
                                                                                                                of fraud suits actually intended to defraud the government—as
                                    Senator Dick Durbin (left) and
                                    Senator Patrick Leahy                                                       the U.S. Supreme Court did in its unanimous 2008 decision in
                                                                                                                Allison Engine Co. v. United States.211 The Fraud Enforcement
                                                                                                                and Recovery Act of 2009,212 signed into law in May 2009,
                                                                                                                overturns Allison Engine, even with respect to those cases that
                                                                                                                stem from conduct that occurred before the act’s passage.
                                                                                                                The new law dramatically expands the plaintiffs’ bar’s reach
 AP Photo/Lauren Victoria Burke




                                                                                                                in qui tam suits by allowing lawyers to go after subcontractors
                                                                                                                to businesses that do government work, though they never
                                                                                                                worked directly for the government themselves or intended to
                                                                                                                commit fraud.213 The bill’s sponsor, Senate Judiciary Committee
                                                                                                                chairman Patrick Leahy (D-Vt.), has received more than twice as
                                                                                                                much money from lawyers since 2005 as he has from any other
                                                                                                                industry, and those donations overwhelmingly come from the

                                  O      f the legislative gifts that Congress has bestowed on
                                         Trial Lawyers, Inc., one of the most bounteous is the
                                  right—inscribed in qui tam, or “whistle-blower” statutes—to
                                                                                                                plaintiffs’ bar.214 Two of Leahy’s top four donors are California
                                                                                                                plaintiffs’ firms—toxic-tort giant Girardi & Keese and personal-
                                                                                                                injury powerhouse Cotchett, Pitre & McCarthy—and he’s also
                                  police frauds allegedly committed against the federal gov-                    received hefty sums from the American Association for Justice,
                                  ernment. After the False Claims Act (FCA),206 enacted in                      the political action committee of the plaintiffs’ bar.215
                                  1863, was expanded in 1986,207 it became big business for                           An even more audacious power grab for Trial Lawyers,
                                  the plaintiffs’ bar. Since then, whistle-blower actions have                  Inc.’s qui tam business was attempted by Rep. Lloyd Doggett
                                  produced more than $20 billion in claim payments.208                          (D-Tex.) during the markup of health-care reform legislation
                                        The qui tam provisions of the FCA permit private attor-                 in the House. Doggett tried to insert language into the bill
                                  neys representing whistle-blowers to obtain damages, on the                   that would allow suits involving Medicare to be filed on behalf
                                  government’s behalf, of three times the amount of money lost                  of the U.S. government, even when it objected. Fortunately,
                                  in the alleged fraud. The whistle-blower and his attorney can                 Republicans on the committee insisted on removing the provi-
                                  collect up to thirty percent of these sums.209 The resulting wind-            sion.216 Like Leahy, Doggett received campaign contributions
                                  falls can total tens of millions of dollars.210                               from lawyers in this electoral cycle that were at least double
                                        Because of the potential for abuse of such statutes, the                those from any other industry, his largest donor being Nix, Pat-
                                  courts have worked to limit their reach by insisting that the targets         terson & Roach, the giant Texas asbestos-litigation firm.217


on the grounds that she had filed her complaint too late.174 The                                                tion testimony that “[d]ifferent people that I worked for along
Ledbetter decision prompted a media outcry—“Injustice 5, Jus-                                                   the way had always told me that my pay was extremely low”
tice 4” declared a New York Times editorial175—and then-candi-                                                  relative to the pay of other workers.179 Ledbetter further noted
date Barack Obama adopted Ledbetter’s cause as his own.176                                                      that she had learned from a superior of a pay discrepancy in
     The Lilly Ledbetter Fair Pay Act, which reversed the Su-                                                   1992, some six years before taking early retirement and filing
preme Court’s decision, and made that reversal retroactive to                                                   her lawsuit;180 and that she had learned the specific amount she
the day before the decision was issued, became law in January                                                   was underpaid in 1995, three years before filing, at which time
2009.177 It was the first piece of legislation signed by the new                                                she complained that she “needed to earn an increase in pay . . .
president, who proclaimed that Ledbetter was “just a good                                                       to get in line with where my peers were.”181
hard worker who did her job . . . for nearly two decades before                                                      In determining that Ledbetter’s claim was filed outside the
discovering that for years, she was paid less than her male col-                                                six-month statute of limitations specified by Title VII of the
leagues for doing the very same work.”178                                                                       1964 Civil Rights Act, the Supreme Court noted that Ledbet-
     The president’s statement—like most media accounts of                                                      ter had failed to argue that the statute of limitations should
the case—is simply false. In fact, Ledbetter admitted in deposi-                                                have started running only after she learned of her injury, an

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     “equitable tolling” rule long recognized in other contexts by      with new, liberal discovery rules that enabled plaintiffs’ law-
     the Court.182 The Court’s decision also emphasized that Led-       yers to demand essentially any document or file that might be
     better might have had a valid discrimination claim under an-       remotely relevant to a lawsuit,188 licensed “fishing expeditions”
     other statute—the Equal Pay Act—that has a longer statute of       in federal courts: plaintiffs could file first, seek documents at
     limitations.183 Thus, Ledbetter probably did have some legal       defendants’ expense, and determine whether they actually had
     recourse, notwithstanding her failure to sue earlier—and the       a case once the documents came in.189
     fact that her former supervisor, a key witness in the case, had         In recent years, the Supreme Court has tried to place outer
     died while she delayed in pursuing her claim.184                   boundaries on these expeditions. In a 2007 case, Bell Atlantic v.
          Politicians under the sway of Trial Lawyers, Inc., how-       Twombly,190 plaintiffs’ lawyers filed a class action alleging that
     ever, were undeterred by these facts. The law enacted in Led-      local telephone companies had conspired to restrain trade in
     better’s name could have clarified the period in which a Title     violation of the antitrust laws. The Court determined that the
     VII suit can be filed by stating that it would start only upon     plaintiffs’ allegations, even if true, could not sustain a valid
     discovery of the alleged discrimination, a rule that would not     claim because the plaintiffs did not allege “enough factual mat-
     have been in conflict with the Court’s actual decision. In-        ter (taken as true) to suggest that an agreement was made”
     stead, the first act of the 111th Congress gutted the statute      among the phone companies—a legal requirement for finding
     of limitations in pay-discrimination claims entirely. It now       such an antitrust violation.191
     effectively allows potential plaintiffs to wait years before su-        In May 2009, the Supreme Court considered another
     ing, as paycheck after insufficient paycheck piles up, adding      case, Iqbal v. Ashcroft,192 in which a Pakistani Muslim detained
     to the damages that can be claimed and forcing employers to        after the September 11, 2001, terrorist attacks alleged that he
     maintain old employment records indefinitely.185 Moreover,         had been mistreated while in custody. Iqbal’s lawsuit targeted
     the new law dramatically expands the class of potential liti-      various federal officials, including the attorney general of the
     gants in such suits by changing the long-standing rule that        United States and the director of the Federal Bureau of In-
     a claimant had to be an actual victim of discrimination; the       vestigation. The Court determined that Iqbal’s complaint was
     new law states that anyone “affected by” the discrimination        insufficient to support a claim under Twombly, since the legal
     being alleged can sue.186                                          standard required proof of intentional discrimination by the
                                                                        individuals named, who would have had to be driven by ani-
     going	fishing                                                      mus toward the plaintiff, and Iqbal alleged no facts that would
          In addition to extending the period in which employ-          permit even an inference of discriminatory intent.193
     ees may file pay-discrimination claims, the new Congress is             Needless to say, Twombly and Iqbal, though cases of limit-
     considering legislation that would make it dramatically easier     ed applicability, sent shock waves through the plaintiffs’ bar by
     to file suits across the board. As noted on page 6, the 1938       threatening to imperil lawyers’ strategy of launching fishing ex-
     Federal Rules of Civil Procedure abolished traditional plead-      peditions. To “fix” this problem, Pennsylvania Democrat Arlen
     ing requirements for filing a civil lawsuit and implemented a      Specter—whose son Shanin is a major Philadelphia plaintiffs’
     system of “notice” pleading whereby a litigant merely has to       lawyer and a vocal public critic of tort reform194—introduced
     place a defendant “on notice” of being sued and of the factual     a bill, the Notice Pleading Restoration Act of 2009,195 which
     and legal claims against him.187 Notice pleading, combined         would overturn the Supreme Court’s decisions in Twombly




     The new Congress is considering legislation that would
     make it dramatically easier to file suits across the board.



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and Iqbal. Even critics of those decisions, however, have noted
that Specter’s poorly drafted bill would likely interfere with                                                                     Over the Last Ten Years, Securities Class
statutory pleading requirements well beyond the scope of the                                                                        Action Settlements Have Skyrocketed
Court’s recent decisions.196




                                                                                 Securi es Class Ac on Se lements, $, Millions
                                                                                                                                 20,000
                                                                                                                                                                                                18,262

secuRiTy-suiT	scheMes
     Senator Specter has not limited himself to protecting Trial                                                                 15,000

Lawyers, Inc.’s fishing license; he has also been working hard
                                                                                                                                                                                        9,989
to ensure that plaintiffs’ lawyers can cast their lines in new                                                                   10,000
waters. Notwithstanding stricter rules imposed on securities                                                                                                                                             7,186
                                                                                                                                                  5,154
suits by the 1995 PSLRA197 and the “kickback” conspiracy                                                                          5,000                                         3,517                            3,094
convictions that put the two most prominent securities                                                                                                            2,949 2,642
                                                                                                                                                          2,067
                                                                                                                                          1,231
class action attorneys, Mel Weiss and Bill Lerach, in federal
                                                                                                                                     0
prison,198 recent financial crises—the bursting of the dot-com                                                                            1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
bubble, the subprime-mortgage debacle, and the subsequent                                                                                                                               Source: Cornerstone Research
collapse of major financial institutions—have left ample
opportunity for the securities litigation industry to thrive (see             of being a publicly traded company under our law,” and “shift
graph, right).                                                                securities offerings away from domestic capital markets.”200
                                                                                    Indeed, securities class actions do little more than arbi-
                                                                              trarily shift dollars from one group of shareholders to another.
                                                                              In such suits, one group of shareholders, which bought or sold
                                                                              shares in a given time period, sues the company whose shares
                                                                              they own. Unfortunately, suing the company means essential-
                                                                              ly suing all the other shareholders. Generally speaking, then,
                                                                              small, diversified shareholders, who are about as likely to be
                                                                              holders as buyers of any given security, particularly if they are
                                                                              invested in pension or mutual funds, are also as likely to be
                                                                              defendants as plaintiffs in such litigation.201 In addition to fail-
                                                                              ing to compensate the victims of a successfully executed fraud,
AP Photo/Khue Bui




                                                                              securities class actions are ineffective at deterring fraud, since
                                                                              research shows that securities class actions’ settlement values
                                                       Mel Weiss              are unrelated to the merits of the underlying cases.202 Securities
                                                                              lawsuits, therefore, serve mainly to enrich the plaintiffs’ bar by
     In 2008, however, the Supreme Court decided not to ex-                   extracting massive settlements from companies experiencing
tend the judicially created “right to sue” over alleged securities            stock-price turbulence.203
fraud to plaintiffs suing third parties.199 In that case, Stoneridge                Nevertheless, last summer Senator Specter introduced the
v. Scientific Atlanta, the Court considered a class action filed by           Liability for Aiding and Abetting Securities Violations Act of
the stockholders of a cable company that had inflated its books.              2009,204 which would overturn Stoneridge and create an ex-
However, their suit was not against the cable company itself                  plicit, open-ended private right of action against anyone who
but rather its vendors. The Court noted there was no evidence                 provided “substantial assistance” to anyone else guilty of vio-
that Congress intended to authorize private securities litigation             lating “any rule or regulation” under any of the vast number of
against third parties under an “aiding and abetting liability” the-           securities laws.205 Specter’s bill would go far beyond the narrow
ory and that doing so would “expose a new class of defendants”                facts of the Stoneridge case to create a whole new class of secu-
to litigation risks, raise “the costs of doing business,” deter               rities class action defendants—and a whole new spectrum of
“[o]verseas firms . . . from doing business here,” “raise the cost            legal shakedown opportunities for Trial Lawyers, Inc. Tli




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     ConTrACT killing
     Trial Lawyers, Inc.’s Allies in Congress Are Trying to Scale Back
     Private Arbitration



     T       he Democrats in Washington can’t seem to decide
     what they think about arbitration. On the one hand, one of
                                                                               many industries—they are indeed the only way that small in-
                                                                               juries can ever get compensated, given the expense of litiga-
     the top legislative priorities of the congressional leadership and        tion that often makes legal representation unavailable, because
     the White House is the Employee Free Choice Act (EFCA),218                such cases offer plaintiffs’ attorneys only paltry contingent
     which calls for mandatory arbitration of all union disputes.              fees. But arbitration and other forms of alternative dispute
     So deep is the EFCA-backers’ faith in arbitration that the law            resolution remove the middleman—the trial lawyer—which,
     would even empower government-appointed arbitrators to                    to the plaintiffs’ bar’s political patrons, makes such extralegal
     write labor contracts from scratch when newly formed unions               approaches unthinkable.
     cannot agree to terms with management—in effect, to dictate
     the terms of a labor “contract” without reference to any actual           The	value	of	aRBiTRaTion
     underlying contract into which the parties freely entered.219                  In contrast to the EFCA’s heavy-handed provisions,
          On the other hand, congressional leaders are waging an               standard employment and consumer arbitration contracts
     all-out war to eliminate all arbitration clauses in consumer              operate against a backdrop of preexisting contractual norms and
     and employment contracts. Such provisions are standard in                 rules of law. Professional arbitrators—usually senior attorneys

                                                 The	anTi-fedeRalisT	congRess

        F   rom the time of the New Deal onward, the Left has
            generally favored a strong national regulatory regime,
        while conservatives have generally fought its relentless
                                                                               Court noted, however, Riegel’s doctor failed to heed these
                                                                               warnings.246 The artery into which the doctor inserted the
                                                                               catheter was “heavily calcified,” yet he attempted to force a
        expansion. It is therefore curious that the Democratic majority        full ten atmospheres of pressure through it.247
        in Congress should be considering bills permitting tort actions              Fortunately, Congress included express language in 1976
        to be brought under state law against the financial242 and             statutory amendments that forbade the states from setting
        automobile243 industries, for example—even if such state tort          standards for medical devices beyond those required by the
        claims conflict with the federal regulatory regime.                    FDA.248 On that basis, the Court made the commonsense
             State tort litigation can make a mess of the federal              ruling that Riegel’s lawsuit against the manufacturer was
        regulation of interstate commerce. Consider the situation in           barred.249 Unfortunately, the express preemption language
        health care, one of the most heavily regulated—and litigated—          that governs medical devices does not apply to all FDA-
        industries. In 2008, the U.S. Supreme Court considered a case,         regulated products. Indeed, such clauses are rare within the
        originating in New York, in which a patient had been injured           federal code, much of which was written before the litigation
        by the bursting of a balloon catheter during surgery.244 The           explosion of the last five decades.
        patient alleged that Medtronic, the device’s manufacturer, was               Perhaps unsurprisingly, the lawyer-dominated Congress
        at fault. The facts of the case, however, told a different tale: the   is working to eliminate the statutory provision that barred
        catheter’s labeling—as required by the U.S. Food and Drug              Riegel’s product-liability claim. Worse, the bill in question,
        Administration (FDA)—indicated that it should not be used              the Medical Device Safety Act of 2009,250 would permit suits
        in “calcified” arteries and that it was designed to withstand          to proceed that stem from injuries that originated long before
        only “eight atmospheres” of “rated burst pressure.”245 As the          the law’s effective date, if otherwise valid under state law.



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Senator Al Franken’s first legislative                                                                              Senator Al Franken

success was an amendment expanding
civil liability.

or retired judges—resolve claims without incurring the time
and expense of civil litigation, which takes, on average, more
than two years220 and can cost thousands of dollars.
     Thus, arbitration has served as a major avenue for provid-
ing justice to small claimants. In 2002, the American Arbitra-
tion Association handled more than 200,000 claims—a figure




                                                                                               AP Photo/ Jim Mone
corresponding to roughly 80 percent of all federal civil cases.221
In 2006, the National Arbitration Forum handled 214,000 ar-
bitrations dealing solely with debt collection.222
     Although you wouldn’t know it from the criticisms issue
from the trial bar and its allies, these private arbitration systems
are not tilted in business’s favor. A November 2009 study re-                      On October 1, Senator Franken took to the Senate floor
leased by the Searle Center on Law, Regulation, and Economic                  to relate the sad plight of Jamie Leigh Jones, who claimed that
Growth at Northwestern University School of Law examined                      she was harassed, drugged, and gang-raped four days after ar-
comprehensive data sets of consumer arbitrations and found                    riving in Iraq to work for Kellogg Brown & Root (KBR).228
that after controlling for variations in case characteristics, con-           Jones initially filed an arbitration complaint, then sought to
sumers were more likely to prevail in arbitration than in court               sue her employer in court. KBR tried to consolidate the com-
and that there was “no statistical difference in the amount they              plaint before the arbitration panel, which Jones opposed. After
were awarded as a percentage of the amount sought.”223                        three years of legal wrangling, the Fifth U.S. Circuit Court
     Americans in general realize the value of arbitration. When              of Appeals held the arbitration clause unenforceable in Jones’s
asked whether they would choose litigation or arbitration if                  case because her claimed injury was not “related to” her em-
they could “choose the method” of resolving “any serious dis-                 ployment, and the court gave Jones the go-ahead to proceed
pute” between themselves and a company, 82 percent of those                   with her civil claim.229
surveyed said that they would opt for arbitration.224 And 71                       Franken said on the floor of the Senate that three years
percent said that they opposed Congress’s “remov[ing] arbitra-                was “simply too long for a rape victim to wait, just to have her
tion agreements from contracts consumers sign with compa-                     day in court.”230 He therefore proposed an amendment to an
nies.”225 Unfortunately, such consumer sentiment may not be                   appropriations bill for the Defense Department that would,
sufficient to hold back Congress’s assault on contract, which is              he said, “extend much of the Fifth Circuit’s reasoning to gov-
propelled by the lobbying clout of Trial Lawyers, Inc.                        ernment contractors who continually subject workers to these
                                                                              so-called mandatory arbitration clauses.” But it would do so,
funny	Business                                                                he said reassuringly, only by “narrowly target[ing] the most
     Before he was a senator, Al Franken (D-MN) entertained                   egregious violations.”231
the public as a writer and performer on the sketch comedy                          When thirty Republican senators voted against Frank-
show Saturday Night Live. Perhaps it’s fitting, then, that Fran-              en’s amendment, they became fodder for comic ridicule. The
ken’s first legislative success,226 an amendment supported by                 Daily Show’s Jon Stewart exclaimed, on the air, “I understand
Trial Lawyers, Inc.,227 became the premise of comedians’ jokes                we’re a divided country, some disagreements on health care.
and spoof websites.                                                           How is anyone against this?”232 A video posted on the web-

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                                                                               Toy	sToRy

        O       n October 12, 2009, lawyers
                at the class action firm Cough-
        lin Stoia Geller Rudman & Robbins
                                                                                                 concerns that provoked the health
                                                                                                 scare. Anne Northup, a commis-
                                                                                                 sioner of the federal Consumer
        reached a settlement with toy maker                                                      Product Safety Commission (CPSC),
        Mattel and its Fisher-Price subsidiary                                                   observes that the law reaches prod-
        resolving a suit over the 2007 recall of                                                 ucts “that do not create a lead haz-
        967,000 toys, manufactured in China,                                                     ard for children” and that “such
        that may have contained lead-based                                                       ordinary items as zippers, buttons,
        paint.251 The lawyers stand to pocket                                                    belts, the hinge on a child’s dress-
        a hefty $12.9 million in fees252—likely                                                  er—and even that bicycle from San-
        to be a high percentage of the total                                                     ta Claus—are outlawed,”258 mak-
        settlement value —but the litigation
                           253
                                                                                                 ing any manufacturer or retailer of
        overall is hard to condemn: a major                                                      such products subject to a lawsuit
                                                Stefan Zaklin/epa/Corbis




        manufacturer distributed products that                                                   premised on an alleged violation of
        contained a dangerous substance                                                          the statute’s provisions.
        banned under U.S. law.                                                                        To make things easy for the law-
              Notwithstanding the righteous                                                      yers, the statute authorizes an open
        concern about Mattel’s potentially                     House Speaker Nancy Pelosi        website for reporting violations—
        dangerous products, the congressional                                                    which attorneys will doubtless use
        response to the public panic over the lead-containing toys—the both to identify claims and “establish” purported wrong-
        Consumer Product Safety Improvement Act (CPSIA),254 signed doing.259 Also waiting in the wings are suits by pioneer-
        into law on August 14, 2008—is a regulatory nightmare and ing, politically ambitious state attorneys general (see box,
        litigation time bomb that threatens to place virtually every page 13), who are authorized to enforce the law alongside
        producer of items for children on the wrong side of the law. the CPSC.260 As reported in Crain’s Chicago Business, suits
        Hawked by lawyer-allied consumer groups like the Public Interest arising from the CPSIA are among the “most likely” suc-
        Research Group,255 and pushed by House Speaker Nancy Pelosi cessors to the litigation industry’s long-standing asbestos-
        (D-Cal.), the bill was drafted in the House under the watchful lawsuit profit center.261
        eye of Energy and Commerce Committee Chairman Henry                   The CPSIA’s costs are not conjectural—the CPSC esti-
        Waxman (D-Cal.), a longtime ally of trial lawyers whose second- mates that the law cost toy manufacturers $2 billion in the
        largest campaign donor over the last twenty years has been eight months following its enactment262—and they will grow
        the plaintiff’s bar’s political action committee, now known as exponentially once all of the statute’s testing requirements
        the American Association for Justice.256 That same lawyer PAC come into effect. Economies of scale permit large manufac-
        once employed as a registered lobbyist David Strickland, who turers like Mattel to meet the CPSIA’s onerous testing and
        developed the CPSIA in the Senate, where he served as counsel labeling requirements, but the prohibitive cost of complying
        to the Commerce Committee.257 (Strickland now oversees with these rules has prompted small manufacturers and re-
        American automobile regulation as the head of the National tailers of toys to shut their doors.263 Although the CPSIA has
        Highway Transportation Safety Administration.)                   generated many a public outcry, Congress has predictably
              With such a cast of characters drafting the bill, it is resisted holding hearings to learn about the grievances of
        unsurprising that the CPSIA goes beyond the lead-paint those affected.


     site of MSNBC’s Rachel Maddow went viral, the Democratic                          ed.” Rather, Franken’s legislation makes any arbitration clause in
     Senatorial Campaign Committee went on the attack,233 and                          the employment contracts of any defense contractor inapplicable
     the Republican senators were mocked on a spoof Internet                           to “any claim under Title VII of the Civil Rights Act of 1964” or
     site, www.republicansforrape.org.                                                 “any tort related to or arising out of” an “intentional infliction
           The problem with the comedic and political reaction is that                 of emotional distress” or “negligent hiring, supervision, or reten-
     Franken’s amendment was not, as he claimed, “narrowly target-                     tion.”234 In essence, Franken’s amendment prevents every defense


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contractor from contracting with its employees to choose private                    tives, would make unenforceable arbitration clauses in
arbitrators over the civil courts to resolve virtually any kind of                  any mortgage loan or home-equity line of credit.237
employment dispute—a far broader provision than Franken’s                        • The Payday Loan Reform Act (H.R. 1214) would pres-
invocation of the gruesome allegations in Jones’s case would sug-                   ent challenges to arbitration clauses in “payday loans,”238
gest. But given the public caricature of Franken’s amendment, it                    and the Taxpayer Abuse Prevention Act (S. 585) would
is unsurprising that it made it into the final law.235                              prohibit arbitration clauses in loans given in anticipation
                                                                                    of tax refunds.239
an	assaulT	on	conTRacT                                                           • The Consumer Fairness Act (H.R. 991) would make
    Senator Franken’s amendment is but one of the litigation                        consumer-arbitration contracts unenforceable,240
industry’s attacks on private arbitration. Other such bills be-                     while the Arbitration Fairness Act (H.R. 1020, S.
ing pushed in Congress by Trial Lawyers, Inc. include:                              931) would go even further and make unenforceable
   • The Fairness in Nursing Home Arbitration Act (H.R.                             arbitration clauses in all employer, franchise, and
     1237, S. 512) would make unenforceable all arbitration                         consumer contracts.241
     clauses regulating disputes between nursing homes and                         Each of these pieces of legislation would reduce consumer
     their boarder-patients.236                                               choice, increase costs, and deny compensation to many truly
   • The Mortgage Reform and Anti-Predatory Lending Act                       injured individuals. But they would all help the bottom line of
     (H.R. 1728), which passed in the House of Representa-                    Trial Lawyers, Inc. Tli

                                              a	TRial-l aw yeR	Tax	BRe aK

   O      ne way that Trial Lawyers, Inc. is exploiting its con-
          gressional influence is by seeking an old-fashioned
   tax break. A group of legislators led by Republican-turned-
                                                                                Senator Arlen Specter


   Democrat Arlen Specter—“the favorite senator of the trial
   lawyers”264—has introduced a bill giving the plaintiffs’ bar a
   $1.6 billion cut in its taxes.265
        Under the traditional common law, “maintenance” and
   “champerty” were crimes (and torts). Generally speaking, it




                                                                                                                                          AP Photo/Gene J. Puskar
   was illegal for anyone, including an attorney, to maintain,
   support, or promote another’s litigation (maintenance),
   whether or not an agreement existed to pay the supporter
   a portion of a lawsuit’s proceeds (champerty), should there
   be any.266 On its face, the personal-injury bar’s financing
   structure—the “contingent fee,” the share of the proceeds that                  Specter’s bill would change the IRS rule and allow all
   a winning client pays his attorney, who has fronted the cost              litigation costs to be expensed immediately, even though
   of the litigation—runs afoul of the historical understanding              other kinds of loans generally are not. This tax break would
   of champerty. Therefore, expenses in contingent-fee cases                 encourage lawyers to file both a greater number of cases
   have been treated by courts not as support of litigation per              and weaker cases, and “the federal government [would],
   se but rather as loans to clients, to be repaid upon a winning            for all intents and purposes, share in the cost and risk of
   lawsuit’s resolution.267                                                  bringing the initial litigation. Under current and certainly
        The IRS has thus forbidden plaintiffs’ lawyers working               potential future tax laws, this could be as much as [forty
   on the basis of contingent-fee arrangements to deduct, for                percent] of the cost of bringing litigation.”269
   tax purposes, litigation costs as “expenses” when they are                      Unsurprisingly, the trial bar’s advocates in Congress
   incurred. Rather, such expenses are treated as loans, to be               would prefer to avoid an up-or-down vote on the legislation
   expensed as “losses” only in the event that the loan is “uncol-           on its own. Thus, lawyer-lobbyists have worked to “tuck it into
   lectible” after a losing case has been closed (or, alternatively,         something”270 else—for example, a 2008 bill that extended
   to be deducted from the sum of taxable proceeds following                 (but did not change) various research-and-development
   profitable verdicts or settlements).268                                   and energy tax credits.271


                                                                     C L P                                                                                          
                                                      C E N T E R   F O R   L E G A L   P O L I C Y
                                                        AT   THE    MANHATTAN      INSTITUTE
     conclusIon



     Pushing BACk
     Achieving Meaningful Liability Reform Is Difficult but Not Impossible




     T        he academics and judges who transformed American




                                                                                                                                                AP Photo/J. Scott Applewhite
     tort law and civil procedure in a relatively brief period of time
     did not anticipate the full consequences of the changes they
     wrought, though they received fair warning from a few of their
     colleagues that some of the changes would prove calamitous.272
     Even defensible expansions of liability had the unhappy effect
     of creating a litigation industry that has depressed economic
     growth and impeded American competitiveness. As Harvard
     Business School professor Michael Porter has observed, the
     competitive advantage of U.S. companies is hampered by a
     tort-law system that is “extreme compared [with that of ] other
     nations” because “[t]he risk of lawsuits is so great and the con-
     sequences so potentially disastrous.”273
          Reforming the liability system should be a political prior-
     ity, especially in a deep recession like the present one, with
     double-digit unemployment, but it has proved difficult, given        livelihoods depend, opposing factions, like business and the
     the litigation lobby’s clout. Last fall, former Democratic Na-       medical profession, have interests that are diffuse. In the pub-
     tional Committee chairman Howard Dean candidly admitted,             lic-policy universe, doctors care about liability but are more
     “The reason why tort reform is not in the [health-care reform]       worried about the repercussions of health-care reform and the
     bill is because the people who wrote it did not want to take         size of Medicare reimbursements; car companies care about
     on the trial lawyers.”274 In December, the president of the trial    liability but are more anxious about cap-and-trade legislation
     lawyers’ lobbying group, the American Association for Justice,       and fuel-efficiency standards. In some instances, industries can
     declared the organization’s lobbying effort on health care “a        be at cross-purposes; efforts at asbestos-liability reform, for ex-
     stunning victory,”275 as well he should have: neither the House      ample, were stymied in part by a conflict of interest between
     nor Senate health-care bills dared to tackle liability reform, and   insurers and manufacturers.278
     the version that passed the House contained provisions that,               In addition to holding these systemic advantages, lawyers
     perversely, would impede liability reform (by discouraging state     have shown themselves to be peculiarly capable of navigating
     reforms adverse to the litigation industry’s interests)276 and ex-   the waters of modern political influence. Campaign finance
     pand litigation opportunities (by empowering state attorneys         laws that limit contributions (to $2,400 per candidate at the
     general to enforce federal regulatory provisions, which could        federal level)279 frustrate concentrated giving in many indus-
     involve the hiring of private lawyers on a contingent-fee basis      tries, but the organized plaintiffs’ bar has proved adept at coor-
     to help them do so).277 (At the time this report went to print,      dinating its giving, both within firms and across states.
     it was unclear whether these provisions would be included in               Notwithstanding the power of the lawyer lobby, efforts at
     the final House-Senate bill.)                                        reform are not futile. Even in the current political environment,
          It is unsurprising that the litigation industry has evolved     some states have been working to restore sanity to their own
     into such a powerful political force. Whereas trial lawyers’ in-     liability systems. In 2009, for instance, Oklahoma’s legislature
     terests are concentrated in the issue of liability, on which their   passed a comprehensive package of tort reforms that included


                                                         www.TrialLawyersInc.com
                                                                                                                                        K STREET


stricter evidentiary standards, caps on noneconomic damages,               age caps, his rhetoric and his record suggest that, were congres-
and limitations on a lawyer’s ability to “shop” cases to the most          sional leadership to change, he might be open to the funding
favorable forum.280 Over time, states that rein in lawsuit abuse           of state-level experiments in reform or supporting legislation
have an advantage in attracting businesses and doctors.                    that, like CAFA, tightens federal procedural rules.
     Furthermore, only five years ago, a differently constituted                 Reforming America’s liability rules is not easy: the lawsuit
Congress did pass a major liability reform, the Class Action               lobby is unusually strong, and America’s system of government
Fairness Act (CAFA),281 that limited lawyers’ ability to bring             is structured to make change difficult. But the very reason that
large national class actions in the most favorable state courts.           Trial Lawyers, Inc. devotes so many resources to its government-
Barack Obama, then the junior senator from Illinois, voted                 relations and public-relations efforts is that the political objective
for CAFA, unlike his major rivals for the Democratic presi-                for which it is fighting—the maintenance of the oversized law-
dential nomination.282 The president has, in fact, expressed               suit industry—is both harmful and unpopular. In recent years,
an understanding of the problems of lawsuit abuse,283 and his              proponents of legal reform have made progress, if haltingly, and
large and diverse base of campaign donors has made him less                the American public does want to curb lawsuit abuse. So while
dependent on Trial Lawyers, Inc. than congressional leaders                the litigation industry today is aggressively leveraging its politi-
such as Senators Harry Reid of Nevada and Dick Durbin of                   cal power to advance its self-interested legislative agenda, change
Illinois. Although the president has voiced opposition to dam-             for the better may not be too far beyond the horizon. Tli



                                                    Appendix
   The following federal legislation is mentioned in this report:
   ExPANDING LIABILITY
     • Lilly Ledbetter Fair Pay Act (H.R. 11, S. 181) (employment discrimination) (enacted 1/29/2009 as Public Law 111-2)
     • Notice Pleading Restoration Act (S. 1504) (lawsuit-filing standards)
     • Liability for Aiding and Abetting Securities Violations Act (S. 1551) (securities lawsuits)
     • Carmelo Rodriguez Military Medical Liability Act (H.R. 1478) (medical-malpractice lawsuits)
     • Fraud Enforcement and Recovery Act (S. 386) (whistle-blower lawsuits) (enacted 5/20/2009 as Public Law 111-21)

   RESTRICTING PRIVATE ARBITRATION
     • “Franken Amendment” (SA 2588) (defense contractors) (enacted 12/19/2009 as Public Law 111-118)
     • Fairness in Nursing Home Arbitration Act (H.R. 1237, S. 512) (nursing homes)
     • Mortgage Reform and Anti-Predatory Lending Act (H.R. 1728) (mortgages and home-equity lines)
     • Payday Loan Reform Act (H.R. 1214) (payday loans)
     • Taxpayer Abuse Prevention Act (S. 585) (tax-refunds loans)
     • Consumer Fairness Act (H.R. 991) (consumer contracts)
     • Arbitration Fairness Act (H.R. 1020, S. 931) (employer, franchise, and consumer contracts)

   PROHIBITING FEDERAL PREEMPTION
     • Consumer Financial Protection Agency Act (H.R. 3126) (national banks)
     • Right to Clean Vehicles Act (H.R. 609) (automobile emissions standards)
     • Medical Device Safety Act (H.R. 1346, S. 540) (medical devices)

   FACILITATING CONSuMER AND HEALTH-CARE LAWSuITS
     • Consumer Product Safety Improvement Act of 2008 (lead standards) (enacted August 14, 2008 as Public Law 110-314)
     • Affordable Health Care for America Act (H.R. 3962) (state attorney-general lawsuits)

   CuTTING LAWYER TAxES
    • “Trial-Lawyer Tax-Break Bill” (H.R. 2519, S. 437) (contingent-fee deductibility)

   For a full and updated listing of pending trial-lawyer “earmarks,” visit www.triallawyerearmarks.com,
   sponsored by the U.S. Chamber of Commerce Institute for Legal Reform.

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                                                     AT   THE    MANHATTAN      INSTITUTE
     endnotes
     1. See Towers Perrin, 2009 UPdaTe on U.s. TorT CosT Trends 5 (2009),                   21. See Jason Embry, Baron’s Rebuilding Efforts Already Showing Results, aUsTin
         http://www.towersperrin.com/tp/getwebcachedoc?webc=USA/2009/                           amer.-sTaTesman, Nov. 12, 2006.
         200912/2009_tort_trend_report_12-8_09.pdf (costs as of 2008). As noted             22. See Brian C. Mooney, Candidates Got Around with a Little Help From Their Friends,
         by Manhattan Institute fellow Walter Olson:                                            BosTon GloBe, Dec. 18, 2007; Gromer Jeffers, Jr., Dallas Lawyer Fred Baron Paid
              [The Towers Perrin] studies are particularly useful in assessing long-            for Edwards’ Mistress To Relocate, dallas morninG news, Aug. 9, 2008.
              term trends in liability-cost burdens (since long-term data will tend to      23. See Center for Responsive Politics, http://www.opensecrets.org/industries/
              transcend the vagaries of passing hard/soft markets) and in international         contrib.php?ind=K01&cycle=2002 (last visited Jan. 13, 2010).
              comparisons (since well-defined liability insurance markets exist in other    24. John Fabian Witt, The Political Economy of Pain 20, Apr. 2, 2008, http://
              advanced countries and can be subjected to comparable metrics). Perhaps           commongood.org/assets/attachments/Witt.pdf.
              for those very reasons, and because the figures are widely acknowledged       25. See G. edward whiTe, TorT law in ameriCa: an inTelleCTUal hisTory 3
              within the industry as having a high degree of accuracy in measuring what         (1980).
              they set out to measure, the [Towers Perrin] numbers have been furiously      26. See Witt, supra note 24, at 20-21.
              attacked by organized trial lawyers and their allies.                         27. Robert L. Rabin, Some Reflections on the Process of Tort Reform, in
         Posting of Walter K. Olson to PointofLaw.com, http://www.pointoflaw.                   PersPeCTives on TorT law 284 (Rabin ed., 3d ed. 1990).
         com/archives/2008/11/tillinghasttowe.php (Nov. 21, 2008, 11:14 EST).               28. See American Association for Justice, An Expanded History of ATLA/AAJ, http://
         For a response to these criticisms, see Posting of James R. Copland to                 www.justice.org/cps/rde/xchg/justice/hs.xsl/2079.htm (last visited Jan. 13, 2010).
         PointofLaw.com, http://www.pointoflaw.com/archives/000877.php (Jan. 19,            29. See id.
         2005, 19:11 EST); see also Towers Perrin, CorreCTions and ClarifiCaTions           30. John faBian wiTT, PaTrioTs and CosmoPoliTans: hidden hisTories of
         (2005), http://www.towersperrin.com/tillinghast/pdf/response_0517.pdf.                 ameriCan law 241 (2007).
     2. See, e.g., Ronen Avraham et al., The Impact of Tort Reform on Employer-             31. See id.
         Sponsored Health Insurance Premiums (Nat’l Bureau of Econ. Research,               32. Witt, supra note 24, at 23.
         Working Paper No. 15371, 2009), available at http://ssrn.com/                      33. John Fabian Witt, First, Rename All the Lawyers, N.Y. Times, October 24, 2006.
         abstract=1478789 (finding that various state-level tort reforms reduce             34. See Kamen, supra note 10.
         employer-sponsored health-plan premiums one to two percent each).                  35. See Neil Hrab, Association of Trial Lawyers of America: How It Works with
     3. See infra p. 6.                                                                         Ralph Nader Against Tort Reform 2 (Jan. 2003), http://www.heartland.
     4. See Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (2009).        org/custom/semod_policybot/pdf/11566.pdf.
     5. See Liability for Aiding and Abetting Securities Violations Act of 2009, S.         36. See Center for Responsive Politics, http://www.opensecrets.org/industries/
         1551, 111th Cong. (2009).                                                              indus.php?ind=K01 (last visited Jan. 13, 2010). Data include contributions
     6. See H.R. 2519, 111th Cong. (2009); S. 437, 111th Cong. (2009).                          from lawyers in defense-oriented and generalist firms, not simply those of
     7. See, e.g., Arbitration Fairness Act of 2009, H.R. 1020, 111th Cong. (2009);             plaintiffs’ lawyers. Thus, contributions from what we call Trial Lawyers,
         S. 931, 111th Cong. (2009).                                                            Inc. constitute only a portion of these dollars. However, even if plaintiffs’
     8. See, e.g., Medical Device Safety Act of 2009, H.R. 1346, 111th Cong.                    lawyers give only half of all such contributions (according to Towers Perrin,
         (2009); S. 540, 111th Cong. (2009).                                                    a consulting firm, plaintiffs’ lawyers collect about 57 percent of litigation
     9. See Press Release, Common Good, New Survey Finds That Only Sixteen                      dollars that go to attorneys), such contributions would generally exceed those
         Percent Of American Adults Trust The Legal System To Defend Them                       from most other industries. In the last political cycle, lawyers gave more than
         Against Baseless Claims (June 27, 2005), available at http://commongood.               twice as much to federal campaigns as any other industry save securities/
         org/assets/attachments/140.pdf.                                                        investment (and lawyers gave 97 percent more than that industry). See id. at
     10. See Al Kamen, Just Don’t Call Them the Suers, wash. PosT, July 14, 2006, at A19.       http://www.opensecrets.org/industries/mems.php?party=A&cycle=2008 (last
     11. See Center for Responsive Politics, http://www.opensecrets.org/industries/             visited Jan. 13, 2010).
         indus.php?ind=K01 (last visited Jan. 13, 2010).                                                 There is good reason to believe that bundled contributions from the
     12. See National Institute on Money in State Politics, Table 1: Attorneys &                plaintiffs’ bar well exceed those from the defense bar. Big corporate-defense
         Law Firms Contributions to All Candidates and Committees, http://www.                  firms do show up on contributions tables, but that is primarily because of their
         followthemoney.org/database/IndustryTotals.phtml?f=0&s=0&b%5B%5D=                      size. The average lawyer at the giant defense firm DLA Piper has contributed
         K1000 (last visited Jan. 13, 2010).                                                    $118 to federal campaigns, and at peer firms K&L Gates and Hogan &
     13. See Center for Responsive Politics, supra note 11. As the “Rank” column                Hartson it has been $232 and $264, respectively; by comparison, the average
         indicates, lawyers and law firms, not including lobbyists, rank first for every        lawyer at the plaintiffs’ firm Simmons Cooper gave $4,231, at Girardi & Keese
         election cycle, except for 2004 and 2008. The “industry” ranking first in              $7,917, and at Clifford Law Offices $14,175. See id. at http://www.opensecrets.
         those cycles is “retired persons,” so lawyers are the largest givers among             org/industries/contrib.php?cycle=2010&ind=K01 (last visited Jan. 13, 2010)
         industries and professions in each election cycle. See also infra note 36.             (denominators—number of attorneys—taken from firms’ websites).
     14. In 2003, Texas passed comprehensive tort reform, the Med-Mal & Tort                             Moreover, the defense bar and plaintiffs’ bar have congruent economic
         Reform Act of 2003, H.B. 4, 78th Leg. (Tex. 2003) (enacted), and Mississippi           interests when it comes to litigation: loose substantive liability rules, loose
         passed comprehensive reform in 2004, see H.B. 13, 2004 Ext. Sess. (Miss.)              pleading standards, and open-ended discovery rules increase the defense bar’s
         (enacted). Both states have seen a subsequent reduction in excessive litigation.       profits. While defense lawyers are less likely to lobby aggressively against tort-
         See, e.g., James Tanella, Presentation at Mealey’s Asbestos Super Conference,          reform legislation—out of a desire not to antagonize their clients—very few
         Sept. 26, 2007, p. 11 of hard copy and Oct. 11, 2007 e-mail correspondence.            lawyers, whether representing plaintiffs or defendants, advocate litigation reform.
     15. See In Re: Silica Products Liability Litigation, MDL No. 1553 (S.D. Tex.)          37. See id. at http://www.opensecrets.org/industries/indus.php?ind=K01
         (June 30, 2005) (Order No. 29 at 116) (“[T]hese diagnoses were driven                  (last visited Jan. 13, 2010). Figures for lawyers include all non-lobbyist
         by neither health nor justice; they were manufactured for money.”). New                contributions from lawyers and law firms. See also supra note 13.
         asbestos filings fell dramatically: from a high of 70,412 nonmalignant             38. See id. at http://www.opensecrets.org/industries/memsphp?party=A&cycle=
         and 6,435 malignant claims filed in 2002 to 2,462 malignant and 2,596                  2008 (last visited Jan. 13, 2010).
         nonmalignant claims in 2007. See Tanella, supra note 14 at 12 and e-mail.          39. See id. at http://www.opensecrets.org/parties/contribphp?cmte=DSCC&
     16. See Richard Fausset, Bribery Case Brings Down Legal Legend, L.A. Times,                cycle=2008 (last visited Jan. 13, 2010). A third top-five contributor, Fortress
         Mar. 15, 2008.                                                                         Investment Group, is a New York–based financial company that employed
     17. See Michael Parrish, Leading Class-Action Lawyer Is Sentenced to Two Years in          plaintiffs’ lawyer John Edwards. The other two top-five contributors are
         Kickback Scheme, N.Y. Times, Feb. 12, 2008.                                            financial giants Goldman Sachs and JPMorgan Chase.
     18. See Jonathan D. Glater, High-Profile Trial Lawyer Agrees to Guilty Plea, N.Y.      40. See id. at http://www.opensecrets.org/politicians/contrib.php?cycle=2010&ci
         Times, Mar. 21, 2008.                                                                  d=N00009922&type=C&mem= (last visited Jan. 13, 2010). The other large
     19. See Neil A. Lewis, For Edwards, Drama Builds Toward a Denouement, N.Y.                 plaintiffs’ bar contributors to Sen. Reid have been the Law Offices of Peter
         Times, Sept. 19, 2009.                                                                 G. Angelos, Simmons Cooper LLC, and Girardi & Keese.
     20. John Fund, Have You Registered to Sue?, wall sT. J., Nov. 6, 2002, available       41. See id. at http://www.opensecrets.org/politicians/contrib.php?cycle=2010
         at http://www.opinionjournal.com/diary/?id=110002581.                                  &cid=N00004981&type=C&mem= (last visited Jan. 13, 2010). “Retired

                                                                        www.TrialLawyersInc.com
                                                                                                                                                                    K STREET
      persons” have given more collectively to Sen. Durbin than has Korein Tillery,          77. See Witt, supra note 30, at 252-58.
      though not more than has Simmons Cooper.                                               78. See Pound Civil Justice Institute Home Page, http://www.roscoepound.
42.   See National Institute on Money in State Politics, http://www.                             org/about.aspx (last visited Jan. 13, 2010).
      followthemoney.org/database/IndustryTotals.phtml?f=0&s=0&b%5B%5D=                      79. 527 F.3d 627 (7th Cir. 2008), cert. granted, 129 S. Ct. 1579 (March 9,
      K1000 (last visited Jan. 13, 2010).                                                        2009) (No. 08-586).
43.   See Brendan Scott, Sampson Playing a Law-Firm Shel Game, N.Y. PosT, Jan. 4, 2010.      80. See Brief of Law and Finance Amici Curiae in Support of Respondent at 5
44.   See Robert Wallace, The King of Torts, life, Oct. 18, 1954, at 71.                         n.4, Jones v. Harris Associates, 527 F.3d 627 (7th Cir. 2008), cert. granted,
45.   See Witt, supra note 24, at 24–25.                                                         129 S. Ct. 1579 (Mar. 9, 2009) (No. 08-586).
46.   See Jim Herron Zamora, “King of Torts” Belli Dead at 88, S.F. Chron., July             81. Grisham’s books have often developed themes of small-scale crusading
      10, 1996.                                                                                  lawyers taking on big corporations. See, e.g., John Grisham, The rainmaKer
47.   See melvin m. Belli, modern Trials (1954); see also Zamora, supra note 46.                 (1995); Grisham, The rUnway JUry (1996). But see Grisham, The KinG of
48.   24 Cal.2d 453 (1944).                                                                      TorTs (2003). Kelly’s television shows, such as Ally McBeal, The Practice, and
49.   See generally PaUl a. offiT, The CUTTer inCidenT: how ameriCa’s firsT                      Boston Legal have often reinforced these themes.
      Polio vaCCine led To The GrowinG vaCCine Crisis (2005).                                82. See, e.g., Posting of Peter Lattman to WSJ Law Blog, http://blogs.wsj.com/
50.   See Melvin M. Belli, The Adequate Award, 39 Cal. l. rev. 1 (1951).                         law/2007/12/03/the-dickie-scruggs-case-a-qa/ (Dec. 3, 2007, 20:45 EST).
51.   See Witt, supra note 24, at 30.                                                        83. See Ashby Jones & Paulo Prada, Richard Scruggs Pleads Guilty, wall sT. J.,
52.   See Zamora, supra note 46.                                                                 Mar. 15, 2008.
53.   See Escola v. Coca-Cola Bottling Co., 24 Cal.2d 453, 456 (1944).                       84. John sTossel, Give me a BreaK: how i exPosed hUCKsTers, CheaTs, and
54.   See id. at 459.                                                                            sCam arTisTs and BeCame The sCoUrGe of The liBeral media 158 (2004).
55.   See id. at 456.                                                                        85. See Center for Justice & Democracy Web Page, http://www.centerjd.org/
56.   The doctrine of res ipsa loquitor dates to the 1863 British case Byrne v.                  about.php (last visited Jan. 13, 2010).
      Boadle, 2 H. & C. 722, 159 Eng. Rep. 299 (holding that evidence that a                 86. See Americans for Insurance Reform Web Page, http://www.insurance-
      barrel of flour had dropped from a store window onto a passerby’s head was                 reform.org/about/index.html (last visited Jan. 13, 2010).
      sufficient on its face to permit an inference of negligence).                          87. See Center for the Study of Responsive Law Web Page, http://www.csrl.org/
57.   See Offit, supra note 49, at 159.                                                          (last visited Jan. 13, 2010).
58.   Escola, 24 Cal. 2d at 461-68 (Traynor, J., concurring).                                88. See U.S. PIRG Web Page, http://www.uspirg.org/about-us (last visited Jan.
59.   Id. at 461.                                                                                13, 2010).
60.   Greenman v. Yuba Power Products, Inc. 59 Cal. 2d 57 (1963).                            89. See Public Citizen Web Page, http://www.citizen.org/about/ (last visited Jan.
61.   Jeffrey Robert White, Top 10 in Torts: Evolution in the Common Law, Trial,                 13, 2010).
      July 1996, at 50-53.                                                                   90. See Public Citizen Litigation Group Web Page, http://www.citizen.org/
62.   See resTaTemenT (seCond) of TorTs § 402A (1965).                                           litigation/index.cfm (last visited Jan. 13, 2010).
63.   See william l. Prosser, Prosser on TorTs, 688-89 (1941).                               91. See Public Citizen Health Research Group Web Page, http://www.citizen.
64.   See resTaTemenT, supra note 62, at § 402A & comment j (“In order to                        org/hrg//drugs/index.cfm (last visited Jan. 13, 2010).
      prevent the product from being unreasonably dangerous, the seller may be               92. ralPh nader, Unsafe aT any sPeed (1965).
      required to give directions or warning, on the container, as to its use.”).            93. See Bob Helt, Government Tests Prove the Corvair Does Not
65.   See Charles alan wriGhT & mary Kay Kane, law of federal CoUrTs 471                         Have a Handling or Stability Problem, http://www.corvaircorsa.com/
      (6th ed. 2002); see David M. Roberts, Fact Pleading, Notice Pleading, and                  handling01.html (last visited Jan. 13, 2010).
      Standing, 65 Cornell l. rev. 390, 395–96 (1980).                                       94. PeTer w. hUBer, liaBiliTy: The leGal revolUTion and iTs ConseqUenCes
66.   See Christopher M. Fairman, The Myth of Notice Pleading, 45 arizona l.                     42 (1988).
      rev. 987, 990 (2003).                                                                  95. See Hrab, supra note 35, at 4.
67.   Pub.L. 73-415, 48 Stat. 1064 (1934).                                                   96. Peter Brimelow & Leslie Spencer, The Plaintiff Attorneys’ Great Honey Rush,
68.   See 5 Charles alan wriGhT & arThUr r. miller, federal PraCTiCe and                         forBes, Oct 16, 1989.
      ProCedUre § 1202, at 68 (2d ed. 1990).                                                 97. Michael Kinsley coined the term “Saint Ralph” in reference to Nader in a
69.   See fed. r. Civ. P. 8(a)(2).                                                               December 6, 1985, article in The New Republic.
70.   Unlike in most other countries in the world, the longstanding American rule            98. See Center for Responsive Politics, http://www.opensecrets.org/pfds/
      has been that each party normally must pay its own fees and expenses. See, e.g.,           pfd2003/N00000086_2003.pdf.
      Arcambel v. Wiseman, 3 U.S. (3. Dall.) 306 (1796). For a discussion of the             99. See Civil Justice Foundation Web Page, http://civiljusticefoundation.org/
      policy relevance of this rule, and how to incorporate loser-pays principles into           aboutus.html (last visited Jan. 13, 2010).
      American law, see Marie Gryphon, Greater Justice, Lower Cost: How a “Loser Pays”       100. See Laura Longhine, Display Cases, leGal aff., Nov.-Dec. 2005, available
      Rule Would Improve the American Legal System, manhaTTan insT. Civ. J. reP.                 at http://www.legalaffairs.org/issues/November-December-2005/scene_
      no. 36 (2008), available at http://www.manhattan-institute.org/pdf/cjr_11.pdf.             longhine_novdec05.msp.
71.   See fed. r. Civ. P. 23(c)(3)(B). By shifting from an “opt in” to an “opt out”          101. See, e.g., Robert A. Levy, The Great Tobacco Robbery: Lawyers Grab
      rule, the advisory committee effectively created modern class action litigation.           Billions, Mar. 6, 1999, http://www.cato.org/dailys/03-06-99.html; text
      Because class members are included in such litigation unless they request                  accompanying note 136.
      exclusion, these types of cases are essentially lawyer-driven. Securities class        102. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).
      action attorney Bill Lerach once boasted, “I have the greatest practice of law         103. See 28 U.S.C. §§ 1441, 1446 (2008) (defining removal jurisdiction).
      in the world. I have no clients.” See Neil Weinberg, Shakedown Street, forBes.         104. Plaintiffs’ home turf can be quite favorable. Plaintiffs’ lawyer Dickie
      Com, Feb. 11, 2008, http://www.forbes.com/2008/02/11/lerach-milberg-                       Scruggs once candidly admitted that there are “magic jurisdiction[s]” in
      weiss-biz-cz_nw_0211lerach.html.                                                           which “the judiciary is elected with verdict money,” and he noted that “it’s
72.   See Kamen, supra note 10.                                                                  almost impossible to get a fair trial if you’re a defendant in some of these
73.   The Justice League of America first appeared in DC Comics in 1960. See                     places.” Richard Scruggs, Asbestos for Lunch, Prudential Securities Financial
      The Comic Book Database, http://comicbookdb.com/issue.php?ID=11725                         Research and Regulatory Conference (May 9, 2002) (on file with author).
      (last visited Jan. 13, 2010). The fictional group starred for several seasons          105. Every year, the American Tort Reform Foundation (ATRF) publishes a
      beginning in 1973 on a Saturday-morning television cartoon, Super Friends.                 study listing the nation’s worst jurisdictions for being a civil defendant—
      See The Internet Movie Database, http://www.imdb.com/title/tt0069641/                      venues it calls “judicial hellholes”—such as Madison County, Illinois.
      (last visited Jan. 13, 2010).                                                              ameriCan TorT reform foUndaTion, JUdiCial hellholes (2009-2010).
74.   See, e.g., Jonathan Rose, Medieval Attitudes Toward the Legal Profession: The              Madison County has improved its legal climate in recent years. See id.
      Past as Prologue, 28 sTeTson l. rev. 345 (1998).                                       106. See Allen Adomite, Watch Out Delaware: We’re Chasing Them Out
75.   See Witt, supra note 30, at 246-52.                                                        of Illinois (July 18, 2005), http://www.legalreforminthenews.com/Op-
76.   See Belli, supra note 47.                                                                  Ed/Op_Ed-ICJL-SimmonsCooper.html; Steve Korris, Asbestos Shift to

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     endnotes
         Delaware Is Sign of Distinction for Madison County, madison-sT. Clair                          appropriation of state funds); Phil Kabler, Legislative Audit Questions
         reC., July 7, 2005.                                                                            Attorney General’s Authority, CharlesTon GazeTTe, Jan. 8, 2002, at 5A.
     107. Telephone Interview, In-House Counsel of Defendant Industry (Mar. 31,                     135. Chris Dickerson, AG’s Practices Questioned by House Committee, W. Va.
         2008) (notes on file with author).                                                             reC., Feb. 2, 2007.
     108. See Victor E. Schwartz, Judicial Nullification of Tort Reform: Ignoring History, Logic,   136. See West Virginia Citizens Against Lawsuit Abuse, Special Report: Flaunting
         and Fundamentals of Constitutional Law, 31 seTon hall. l. rev. 688 (2001).                     [sic] Laws You Are Charged to Protect—A Critical Look at Fourteen Years in
     109. Cf. 2008 Post-Election Partisan Composition of State Legislatures, http://                    the Office of Attorney General Darrell McGraw 6 (June 2007), available at
         www.ksefocus.com/pdf/2008Post-ElectionChart.pdf.                                               http://www.wvrecord.com/content/img/f196361/CALAreport.pdf; Lawyer
     110. See CPSC Rel. 77-096 (Sept. 2, 1977) (banning lead-based paint).                              Receives $3.85 Million; Attorney Was Only Briefly Involved in Tobacco Lawsuit,
     111. See Peter G. Angelos Web Page, http://www.angeloslaw.com/pga.htm (last                        CharlesTon daily mail, June 27, 2002.
         visited Jan. 13, 2010) (noting that Angelos “made history . . . when he                    137. Private Securities Litigation Reform Act, Pub. L. No. 104-67, 109 Stat. 737
         became one of the first to move against the [paint] industry . . . . ” Recently,               (1995).
         Angelos’s firm withdrew from participation in individual suits against paint               138. See id. at § 27(a)(3)(B)(iii)(I)(bb).
         manufacturers. See Posting of Jane Genova to Law and More, http://                         139. See Editorial, Hevesi vs. the Holdouts, N.Y. SUn, July 26, 2004, available at
         lawandmore.typepad.com/law_and_more/2009/03/another-lead-paint-war-                            http://www.nysun.com/editorials/hevesi-vs-the-holdouts/78541/. Note that
         over-this-one-endured-10-years.html (Mar. 13, 2009, 2:11 EST).                                 although Hevesi subsequently pleaded guilty to a felony relating to his conduct
     112. See Baltimore City Lead Poisoning Recovery Act of 2009, H.B. 1156, 2009                       in public office, see Michael Cooper, Hevesi Pleads Guilty to a Felony and
         Sess. (Md. 2009); see also Daniel LeDuc & Michael E. Ruane, Orioles Owner                      Resigns, N.Y. Times, Dec. 23, 2006, the allegations of wrongdoing leading to
         Masters Political Clout, wash. PosT, Mar. 28, 1999, at C1.                                     that guilty plea are unrelated to his handling of the MCI WorldCom litigation.
     113. See American Tort Reform Foundation, Private Consumer Protection                          140. See New York State Retirement Fund Web Page, http://www.osc.state.
         Lawsuit Abuse (2006), available at http://www.atra.org/reports/consumers/                      ny.us/pension/index.htm (last visited Jan. 13, 2010).
         consumer_protection.pdf.                                                                   141. See Editorial, supra note 39.
     114. See Press Release, Office of the Attorney General, Consumer “Private                      142. See Editorial, Hevesi, Round II, N.Y. SUn, July 19, 2007, available at http://
         Right of Action”: What Consumers Need to Know (July 1, 2009), available                        www.nysun.com/editorials/hevesi-round-ii/58725/.
         at http://www.iowa.gov/government/ag/latest_news/releases/july_2009/                       143. See Laura E. Simmons & Ellen M. Ryan, Securities Class Action
         private_right_of_action.html.                                                                  Settlements: 2006 Review and Analysis 11 & fig. 10 (Cornerstone Research,
     115. See S.S.B. 5531, 61st Legis., Gen. Sess. (Wash. 2009) (codified as amended                    2006), available at http://securities.stanford.edu/Settlements/REVIEW_
         Rev. Code Wash. 19.86).                                                                        1995-2006/Settlements_Through_12_2006.pdf.
     116. See Tiger Joyce, “Defensive Efforts” Largely Successful but Litigation Industry           144. See Justice at Stake, http://www.justiceatstake.org/issues/state_court_issues/
         Lobbying Will Remain Relentless, meTro. CorP. CoUns., Aug. 2009, available                     index.cfm (last visited Jan. 13, 2010).
         at http://www.metrocorpcounsel.com/pdf/2009/August/11.pdf.                                 145. See Brimelow & Spencer, supra note 96.
     117. See A. 8646, 230th Legis. Sess. (N.Y. 2009); cf. N.Y. Gen. Bus. L. § 352-c.               146. See id.
     118. See James R. Copland, Spitzer’s Sins in the Spotlight, naT’l rev. online, Mar.            147. See Justice at Stake, http://www.justiceatstake.org/resources/facts_stats_
         11, 2008, http://www.manhattan-institute.org/html/miarticle.htm?id=5267.                       and_quotes/ (last visited Jan. 13, 2010).
     119. See Press Release, American Tort Reform Association, ATRA Awards Medals                   148. See, e.g., Press Release, Independent Expenditures Defined 2006
         for “Best” and “Worst” State Civil Justice Legislation in 2009 (Sept. 1,                       Washington Supreme Court Races, Justice at Stake (May 17,2007), available
         2009), http://www.atra.org/newsroom/releases.php?id=8408.                                      at http://www2.justiceatstake.org/contentViewer.asp?breadcrumb=7,55,978.
     120. See Scott, supra note 43.                                                                 149. See Posting of Carter Wood to PointofLaw.com, http://www.pointoflaw.
     121. See A. 3428, 212th Legis., Reg. Sess. (N.J. 2008) (enacted Jan. 15, 2008);                    com/archives/2009/11/most-important.php (Nov. 2, 2009, 10:21 EST).
         S.B. 889, 51st Legis., 1st. Sess. (Okla. 2007) (enacted Apr. 25, 2007); H.B.               150. See National Institute on Money in State Politics, http://www.
         770, 48th Legis., Reg. Sess. (N.M. 2007) (enacted Mar. 15, 2007).                              followthemoney.org/database/StateGlance/state_candidates.
     122. See, e.g., H.B. 2600, 86th Gen. Assem., Reg. Sess. (Ark. 2007); H.B. 1144,                    phtml?s=PA&y=2009&f=J (last visited Jan. 13, 2010).
         66th Gen. Assem., 1st Reg. Sess. (Colo. 2007); H.B. 551, 149th Gen.                        151. See National Institute on Money in State Politics, http://www.
         Assem. (Ga. 2007); H.B. 631, 82nd Gen. Assem., 1st Sess. (Iowa 2007);                          followthemoney.org/database/StateGlance/candidate.phtml?c=116295
         H.B. 483, 85th Legis. Sess. (Minn. 2007); S.B. 1244, 93rd Gen. Assem.,                         (last visited Jan. 13, 2010). Interestingly, the Philadelphia Trial Lawyers
         2d Reg. Sess. (Mo. 2006); A.B. 4308, 230th Legis. Sess. (N.Y. 2007); S.B.                      Association hedged its bets and also gave $125,000 to winning candidate
         179, 2007 Gen. Assem. (N.C. 2007); S.B. 2126, 60th Legis. Assem. (N.D.                         Melvin. See National Institute on Money in State Politics, http://www.
         2007); H.B. 329, 190th Gen. Assem., Reg. Sess. (Pa. 2007); S.B. 82, 117th                      followthemoney.org/database/StateGlance/candidate.phtml?c=116282 (last
         Gen. Assem., 1st Reg. Sess. (S.C. 2006); S.B. 1309, 80th Legis. (Tex. 2007).                   visited Jan. 13, 2010).
     123. H.B. 1798, 96th Gen. Assem., Reg. Sess. (Ill. 2007) (codified as amended                  152. See Press Release, Michigan Democratic Party Highlights Cliff Taylor as Top
         740 Ill. Comp. Stat. 180/2 (2008)).                                                            Target in 2008, Michigan Democratic Party (May 29, 2008), available at
     124. See S.F. 538, 82nd Legis., 1st Sess. (Iowa 2007) (enacted May 9, 2007).                       http://www.michigandems.com/newsroom.php?id=44.
     125. See A. 1511, 212th Legis., Reg. Sess. (N.J. 2007).                                        153. See Editorial, Despite His Agenda, Retain Chief Justice Clifford Taylor, deT.
     126. See S.B. 311, 75th Legis., Reg. Sess. (Ore. 2009) (enacted Apr. 15, 2009).                    free Press, Oct. 14, 2008.
     127. See, e.g., S.B. 5815, 60th Legis., Reg. Sess. (Wash. 2007) (calling for                   154. See Posting of Walter K. Olson to PointofLaw.com, http://www.pointoflaw.
          increase in maximum damages in consumer-protection lawsuits).                                 com/archives/2008/11/election-result-2.php (Nov. 5, 2008, 2:55 EST).
     128. See A.B. 793, Reg. Sess. (Calif. 2009) (vetoed Oct. 11, 2009: “as drafted,                155. No.08-22, slip op. (U.S. June 8, 2009), available at http://www.
          this measure is far more expansive than the federal law and could pose                        supremecourtus.gov/opinions/08pdf/08-22.pdf.
          unreasonable and unlimited liability for California employers”).                          156. See id. at 13 (Roberts, C. J., dissenting).
     129. For a thorough account of the state tobacco litigation, see Walter Olson,                 157. See Michael DeBow et al., The Case for Partisan Judicial Elections
          The rUle of layyers: how The new liTiGaTion eliTe ThreaTens                                   (Federalist Society 2003), available at http://www.fed-soc.org/publications/
          ameriCa’s rUle of law 25-72 (2003).                                                           PubID.90/pub_detail.asp.
     130. See id.                                                                                   158. See U.S. Chamber of Commerce Institute for Legal Reform, Promoting
     131. See id.                                                                                       “Merit” in Merit Selection: A Best Practices Guide to Commission-Based
     132. See Levy, supra note 101.                                                                     Judicial Selection (2009), available at http://www.instituteforlegalreform.
     133. See Jeffrey S. Nielsen & Jeffrey P. Yushchak, Report on Policies and Practices                com/images/stories/documents/pdf/research/meritselectionbooklet.pdf.
         of State Attorneys General in Initiating and Conducting Investigations and                 159. Private Securities Litigation Reform Act, Pub. L. No. 104-67, 109 Stat. 737 (1995).
         Litigation (2007), available at http://www.instituteforlegalreform.com/                    160. See Doug Abrahms, Veto Override Makes High-Tech Firms Happy, wash.
         component/ilr_issues/29/item/AAG.html.                                                         Times, Dec. 23, 1995, at A13.
     134. See McGraw v. American Tobacco Co., No. 94-C-1707 (W. Va. Cir. Ct.                        161. See, e.g., Marilyn F. Johnson et al., Do the Merits Matter More? The Impact of
         Nov. 29, 1995) (holding that a contingent-fee arrangement is an unlawful                       the Private Securities Litigation Reform Act, 23 J.L. eCon. & orG. 627 (2002).

                                                                              www.TrialLawyersInc.com
                                                                                                                                                                           K STREET
162. See Common Sense Product Liability Legal Reform Act of 1996, H.R. 956,                   195. S. 1504, 111th Cong. (2009).
    104th Cong. (1996) (vetoed May 2, 1996).                                                  196. See Michael C. Dorf, Should Congress Change the Standard for Dismissing
163. See Pamela Becker, Congress and States Take Action on Tort Reform,                           a Federal Lawsuit?, findlaw.Com, July 29, 2009, http://writ.news.findlaw.
    meChaniCal enGineerinG, Apr. 1, 1995.                                                         com/dorf/20090729.html.
164. See, e.g., H.B. 668, 75th Legis., Gen. Sess. (1995) (codified as Tex. Bus. & Com.        197. See Pub. L. No. 104-67, 109 Stat. 737 (1995).
    Code art. 17.42-.50 (2008)) (deceptive trade practices); H.B. 971, 75th Legis.,           198. See Jonathan D. Glater, High-Profile Trial Lawyer Agrees to Guilty Plea, N.Y.
    Gen. Sess. (1995) (codified as Tex. Rev. Civ. Stat. art. 4590i) (medical malpractice          Times, Mar. 21, 2008.
    and expert witness qualifications); S.B. 25, 75th Legis., Gen. Sess. (1995)               199. See Stoneridge Investment Partners v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008).
    (codified as Tex. Civ. Prac. & Rem. Code art. 41) (punitive damages); S.B. 28,            200. Id. at 163-64.
    75th Legis., Gen. Sess. (1995) (codified as Tex. Civ. Prac. & Rem. Code art. 33,          201. See, e.g., Donald C. Langevoort, Capping Damages for Open-Market
    95) (joint and several liability and premises liability); S.B. 32, 75th Legis., Gen.          Securities Fraud, 38 ariz. l. rev. 639, 646–57 (1996) (“[B]uy and hold
    Sess. (1995) (codified as Tex. Civ. Prac. & Rem. Code art. 15 ) (venue).                      strategies make it somewhat more likely that [small, diversified investors]
165. Cf. Help Efficient, Accessible, Low-cost, Timely Healthcare Act, H.R. 534,                   will be non-trading shareholders of an issuer defendant . . . than members of
    109th Cong. (2005).                                                                           the plaintiff class who stand to gain from the settlement or judgment.”).
166. Cf. Fairness in Asbestos Injury Resolution Act, S. 3274, 109th Cong. (2005).             202. See, e.g., Janet Cooper Alexander, Do the Merits Matter? A Study of Settlements
167. S. 5, 109th Cong. (2005) (codified as 28 U.S.C. §§ 1332(d), 1453, 1711-                      in Securities Class Actions, 43 sTan. L. rev. 497 (1991) (concluding that
    1715 (2006)).                                                                                 settlement value in securities fraud cases is not a function of merit).
168. See Lilly Ledbetter Fair Pay Act of 2009, S. 181, 111th Cong. (2009) (enacted).          203. See, e.g., John C. Coffee, Jr., Memo to Congress: Reform and Its Perils,
169. See Notice Pleading Restoration Act of 2009, S. 1504, 111th Cong. (2009).                    N.Y.L.J., Nov. 15, 2007, at 5 (asserting that transaction costs in securities
170. See Liability for Aiding and Abetting Securities Violations Act of 2009, S.                  litigation consume approximately 50 percent of recoveries).
    1551, 111th Cong. (2009).                                                                 204. S. 1551, 111th Cong. (2009).
171. See Carmelo Rodriguez Military Medical Liability Act of 2009, H.R. 1478,                 205. See id. at § 2.
    111th Cong. (2009).                                                                       206. 31 U.S.C. § 3729–3733 (2008).
172. Cf. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007),                        207. See False Claims Act Amendments of 1986, Pub. L. 99-562, 100 Stat. 3153
    superseded by statute, Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-                 (1986).
    2,123 Stat. 5 (2009).                                                                     208. See Bill Myers, Blowing Whistle Pays Off Big for Fortunate Few, wash.
173. See Posting of Carter Wood to PointofLaw.com, http://www.pointoflaw.                         examiner, May 28, 2009.
    com/archives/2008/08/lilly-ledbetter.php (Aug. 26, 2008 10:32 EDT).                       209. See 31 U.S.C. § 3730 (d)(2).
174. See 550 U.S. at 628-29.                                                                  210. See Myers, supra note 208.
175. Editorial, Injustice 5, Justice 4, N.Y. Times, May 31, 2007.                             211. 128 S. Ct. 2123 (2008), superseded by statute, Fraud Enforcement Recovery
176. See Stephanie Mencimer, Lilly Ledbetter: Obama’s Newest Ad Star, moTher                      Act of 2009, Pub. L. 111-21, 123 Stat. 1617 (2009).
    Jones, Sept. 23, 2008.                                                                    212. Pub. L. 111-21, 123 Stat. 1617.
177. See Pub. L. No. 111-2, § 5 (“This Act, and the amendments made by this                   213. See id. at §§ 4(b)(1)(B), 4(b)(2)(A)(ii).
    Act, take effect as if enacted on May 28, 2007 . . . .”).                                 214. See Center for Responsive Politics, http://www.opensecrets.org/politicians/
178. Obama Signs “Lilly Ledbetter Fair Pay Act”, USA Today, Jan. 29,                              summary.php?type=C&cid=N00009918&newMem=N&cycle=2010 (last
    2009, available at http://content.usatoday.com/communities/theoval/                           visited Jan. 13, 2010).
    post/2009/01/62099146/1.                                                                  215. See id. at http://www.opensecrets.org/politicians/contrib.php?cycle=2010&c
179. Joint Appendix at 233, Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S.                     id=N00009918&type=C&mem= (last visited Jan. 13, 2010).
    618 (2007) (No. 05-1074), available at http://www.lawmemo.com/docs/us/                    216. See Walter Olson, Inside the Health Care Bill, forBes.Com, July 22, 2009,
    ledbetter/appendix.pdf.                                                                       http://www.forbes.com/2009/07/22/medicare-republicans-reform-bill-
180. See id.                                                                                      opinions-contributors-walter-olson.html.
181. Id. at 231-32.                                                                           217. See Center for Responsive Politics, http://www.opensecrets.org/politicians/
182. The Supreme Court first recognized the equitable tolling doctrine in Bailey                  summary.php?cid=N00006023&cycle=2010 (last visited Jan. 13, 2010).
    v. Glover, 88 U.S. (21 Wall.) 342, 348 (1874).                                            218. H.R. 1409, 111th Cong. (2009).
183. See 550 U.S. at 639-40 & n.9 (“Ledbetter originally asserted an EPA claim,               219. See id. at § 3.
    but that claim was dismissed by the District Court and is not before us.                  220. See, e.g., Lynn Langton & Thomas H. Cohen, Civil Bench and Jury Trials
    If Ledbetter had pursued her EPA claim, she would not face the Title VII                      in State Courts, 2005 8 (Bureau of Justice Statistics, 2008) (finding in jury
    obstacles that she now confronts.”).                                                          trials an average of 26 months from filing to disposition).
184. See id. at 630-31 n.4 (“Ledbetter’s claims of sex discrimination turned                  221. See Deborah R. Hensler, Our Courts, Ourselves: How the Alternative Dispute
    principally on the misconduct of a single Goodyear supervisor, who,                           Resolution System Is Reshaping Our Legal System, 108 Penn sT. l. rev. 165,
    Ledbetter testified, retaliated against her when she rejected his sexual                      167 n.11 (2003).
    advances during the early 1980’s, and did so again in the mid-1990’s when                 222. See Interim Report on Creditor Claims in Arbitration and in Court, Searle
    he falsified deficiency reports about her work. . . . Yet, by the time of trial,              Center on Law, Regulation, and Economic Growth at Northwestern Law 1
    this supervisor had died and therefore could not testify. A timely charge                     (2009), available at http://www.law.northwestern.edu/searlecenter/uploads/Credi
    might have permitted his evidence to be weighed contemporaneously.”).                         tor%20Claims%20Interim%20Report%2011%2019%2009%20FINAL2.pdf.
185. See 42 U.S.C. § 2000e–5(e)(3)(A) (2008).                                                 223. See id. at 27.
186. See id.                                                                                  224. See Bill McInturff et al., Key Findings from a National Survey of Likely Voters 7
187. See fed. r. Civ. P. 8(a)(2).                                                                 (2008), http://www.instituteforlegalreform.com/component/ilr_issues/29/item/
188. See fed. r. Civ. P. 26, 34.                                                                  ADR.html (follow “View the survey results (PDF)” hyperlink) (discussing 2007
189. See, e.g., United States v. AT&T Co., 461 F. Supp. 1314, 1341 (D.D.C.                        survey of 800 registered voters).
    1978) (“If the purposes of the Rules, and of pretrial discovery generally are             225. See id. at 11.
    to be effectuated, actual discovery must be expected to be somewhat of a                  226. See Sam Stein, Franken Gets His First Amendment Passed by Roll Call Vote,
    ‘fishing expedition’ . . . .”).                                                               hUffinGTon P., Oct. 7, 2009, http://www.huffingtonpost.com/2009/10/07/
190. 550 U.S. 544 (2007).                                                                         franken-gets-first-amendm_n_312399.html.
191. See id. at 553.                                                                          227. See S. Amdt. 2588, 111th Sess. (2009).
192. 129 S. Ct. 1937 (2009).                                                                  228. See 155 Cong. Rec. S10028 (daily ed. Oct. 1, 2009) (statement of Sen.
193. See id. at 1951.                                                                             Franken); see also Posting of Ted Frank to Overlawyered.com, http://
194. See Larry Rulison, Lawyers, Malpractice and Money, PhiladelPhia BUs. J.,                     overlawyered.com/2007/12/halliburton-gang-rape-and-fear-of-arbitration-
    June 11, 2004, available at http://philadelphia.bizjournals.com/philadelphia/                 the-jamie-leigh-jones-case/ (Dec. 12, 2007).
    stories/2004/06/14/story1.html.                                                           229. See Jones v. Halliburton Co. No. 08 20380, 2009 U.S. App. LEXIS 20543,

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     endnotes
         at *19-20 (5th Cir. Sept. 15, 2009), available at http://www.ca5.uscourts.           265. See S. 437, 111th Cong. (2009).
         gov/opinions/pub/08/08-20380-CV0.wpd.pdf.                                            266. See BlaCK’s law diCTionary 231 (6th ed. 1994).
     230. See 155 Cong. Rec. S10028.                                                          267. See, e.g., Silverton v. Commissioner, 36 T.C.M. (CCH) 817 (1977), aff ’d, 647
     231. See id.                                                                                 F.2d 172 (9th Cir. 1981).
     232. See Alex Leo, Jon Stewart Takes on 30 Republicans Who Voted Against Franken         268. See Priv. Ltr. Rul. 94-32-002 (Mar. 30, 1994) (“[P]ayment by one taxpayer of
         Rape Amendment, hUffinGTon P., Oct. 15, 2009, http://www.huffingtonpost.                 the obligation of another taxpayer is not considered an ‘ordinary and necessary’
         com/2009/10/15/jon-stewart-takes-on-30-r_n_321985.html.                                  expense for purposes of section 162(a).”).
     233. See Manu Raju, Dems Jam GOP with Al Franken Vote, PoliTiCo, Nov. 12,                269. Victor E. Schwartz & Christopher E. Appel, Federal Government Bailout for
         2009, available at http://www.politico.com/news/stories/1109/29439.html.                 Trial Lawyers, Wash. Leg. Found. Leg. Opinion Ltr. 1 (May 22, 2009).
     234. See S. Amdt. 2588, 111th Sess. (2009).                                              270. See Chris Rizo, Lobbyist: AAJ Looking To Quietly Pass Plaintiff Lawyer Tax
     235. See Pub. L. No. 111-118, § 8116 (2009).                                                 Break, leG. newsline, July 29, 2009, available at http://www.legalnewsline.
     236. See H.R. 1237, 111th Cong. (2009); S. 512, 111th Cong. (2009).                          com/spotlight/222204-lobbyist-aaj-looking-to-quietly-pass-plaintiff-lawyer-tax-
     237. See H.R. 1728, 111th Cong. (2009).                                                      break (quoting Linda Lipsen, senior vice president of public affairs, American
     238. See H.R. 1214, 111th Cong. (2009).                                                      Association for Justice).
     239. See S. 585, 111th Cong. (2009).                                                     271. See Posting of Carter Wood to PointofLaw.com, http://www.pointoflaw.com/
     240. See H.R. 991, 111th Cong. (2009). As of this writing, the consumer-                     archives/2008/06/tax-break-for-trial-lawyers-mo.php (June 7, 2008, 15:15 EDT).
         arbitration market is in serious jeopardy. In July 2009, Minnesota attorney          272. In 1958, Roscoe Pound, see supra page 9, worried aloud that those pushing for
         general Lori Swanson sued the National Arbitration Forum, alleging                       expansive strict product liability were “not looking squarely at all the facts” and
         deceptive trade practices. To settle the charges, the National Arbitration               that such a program would have “consequences beyond the law of torts.” rosCoe
         Forum, the largest provider of these services, agreed to stop processing                 PoUnd, The ideal elemenT in law 340 (1958).
         new consumer-arbitration claims. The American Arbitration Association                273. miChael PorTer, The ComPeTiTive advanTaGe of naTions 525 (1990).
         announced its own moratorium on hearing most consumer-debt disputes.                 274. Mark Tapscott, Dean Says Obamacare Authors Don’t Want to Challenge Trial
     241. See H.R. 1020, 111th Cong. (2009); S. 931, 111th Cong. (2009).                          Lawyers, wash. examiner, Aug. 26, 2009.
     242. See Consumer Financial Protection Agency Act, H.R. 3126, 111th Cong. (2009).        275. Letter from Anthony Tarricone, president, American Association for
     243. See Right to Clean Vehicles Act, H.R. 609, 111th Cong. (2009).                          Justice, http://images.magnetmail.net/images/clients/ATLA/attach/
     244. See Riegel v. Medtronic, Inc., 128 S. Ct. 999 (2008).                                   SENATEPASSESHISTORICHEALTHCAREREFORM.pdf (last visited Jan. 13, 2010).
     245. Id. at 1005.                                                                        276. See Affordable Health Care for America Act, H.R. 3962, 111th Cong. § 2351
     246. See id.                                                                                 (2009); see also James R. Copland, Tort-Bar Treat, N.Y. PosT, Nov. 3, 2009.
     247. See id.                                                                             277. See id. at § 257; see also Chris Rizo, House Health Care Bill Expands State AGs’
     248. See Medical Device Amendments of 1976, 21 U.S.C. § 360k(a) (2008).                      Powers, leG. newsline, Nov. 24, 2009, available at http://www.legalnewsline.
     249. See 128 S. Ct. at 1008.                                                                 com/news/224232-house-health-care-bill-expands-state-ags-powers.
     250. H.R. 1346, 111th Cong. (2009); S. 540, 111th Cong. (2009).                          278. See Stephen Labaton, Asbestos Bill Is Sidelined by the Senate, N.Y. Times, Feb. 15,
     251. See Notice of Class Action and Proposed Settlement, In re Mattel, Inc., Toy             2006.
         Lead Paint Products Liability Litigation, MDL No. 1897 (C.D. Cal., Oct.              279. See 14 U.S.C. §§ 441a(a)(1), 441a(c) (2008).
         23, 2009), available at https://www.mattelsettlement.com/Prod/Content/               280. See H.B. 1603, 52nd Legis., 1st Reg. Sess. (Okla. 2009) (enacted May 29, 2009).
         PDF/exC.pdf; John Kell, Mattel Settles Suit Over Lead in China-Made Toy,             281. S. 5, 109th Cong. (2005) (codified as 28 U.S.C. §§ 1332(d), 1453, 1711-1715
         wall sT. J., Oct. 14, 2009; Louise Story, Lead Paint Prompts Mattel to Recall            (2006)).
         967,000 Toys, N.Y. Times, Aug. 2, 2007.                                              282. See U.S. Senate Roll Call Votes 109th Congress, 1st Session, http://www.senate.
     252. See Stipulation of Class Action Settlement at 35, In re Mattel, Inc., Toy Lead          gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session
         Paint Products Liability Litigation, MDL No. 1897 (C.D. Cal., Oct. 23, 2009),            =1&vote=00009 (last visited Jan. 13, 2010). Sens. Hillary Clinton (D-N.Y.) and
         available at https://www.mattelsettlement.com/Prod/Content/PDF/mattelstip.pdf.           Joe Biden (D-Del.) both opposed CAFA; Sen. Chris Dodd (D-Conn.), as well as
     253. The ratio of attorneys’ fees to actual settlement value depends on the responses        Sen. Obama (D-Ill.), did vote for the bill. Dodd was not generally considered a
         of class members. Mattel’s liability to claimants is $10.875 million or less from        “major” presidential aspirant.
         certain claimants; plus a sticker-price voucher for each toy or valid proof of       283. See President Barack Obama, Address to a Joint Session of Congress on Health
         purchase returned; plus no more than $10 to each responding individual who               Care (Sept. 9, 2009), available at http://blogs.wsj.com/washwire/2009/09/09/
         had already submitted a recalled toy for a voucher. Given the number of toys             prepared-text-of-obamas-speech-on-health-care/.
         affected (about 967,000), the relatively modest price of most of the eligible toys
         (see Lead Paint Toy Settlement, List of Recalled Toys, In re Mattel, Inc., Toy       GRAPHS
         Lead Paint Products Liability Litigation, MDL No. 1897 (C.D. Cal., Oct. 23,
         2009), available at https://www.mattelsettlement.com/Prod/Content/PDF/               Page 2: “Tort Litigation,” see Towers Perrin (TillinGhasT), U.s. TorT CosT and
         Catalog-ALL_TOYS.pdf), and the probability that a high percentage of eligible            Cross-Border PersPeCTives: 2005 UPdaTe 4 tab. 2 (2005). “Since 1950,” see
         class members will not file for recovery, the lawyers’ take seems likely to be an        Towers Perrin, supra note 1, at 13 app. 1A.
         inordinately high proportion of the payments made to the class.                      Page 3: See Towers Perrin, supra note 1, at 13, app. 1A.
     254. Consumer Product Safety Improvement Act of 2008, Pub. L. 110-314, 122               Page 7: “The Trial Lawyer PAC,” see Center for Responsive Politics, http://www.
         Stat. 3016 (2008).                                                                       opensecrets.org/industries/contrib.php?ind=K01&cycle=2008 (and other cycles) (last
     255. See Walter Olson, A Destructive Toy Story Made in Washington, wall sT. J.,              visited Jan. 13, 2010). “Since 1990,” see id. at http://www.opensecrets.org/industries/
         Sept. 13, 2009.                                                                          indus.php?cycle=2008&ind=K01 (last visited Jan. 13, 2010).
     256. See Center for Responsive Politics, supra note 11, http://www.opensecrets.          Page 8: “Harry Reid,” see id. at http://www.opensecrets.org/politicians/summary.
         org/politicians/contrib.php?cycle=Career&cid=N00001861&type=C (last                      php?type=C&cid=N00009922&newMem=N&cycle=2010 (last visited Jan. 13,
         visited Jan. 13, 2010).                                                                  2010). “Dick Durbin,” see id. at http://www.opensecrets.org/politicians/summary.
     257. See Posting of David Ingram to The BLT, http://legaltimes.typepad.com/                  php?type=C&cid=N00004981&newMem=N&cycle=2010 (last visited Jan. 13,
         blt/2009/12/senate-lawyer-chosen-to-lead-highway-safety-agency.html (Dec.                2010).
         7, 2009, 13:05 EST).                                                                 Page 12: See National Institute on Money in State Politics, http://www.
     258. See Anne M. Northup, There Is No Joy in Toyland, wall sT. J., Dec. 24, 2009.            followthemoney.org/database/IndustryTotals.phtml?f=0&s=0&b%5B%5D=K100
     259. See Pub. L. 110-314, § 212.                                                             0 (last visited Jan. 13, 2010).
     260. See id. at § 218.                                                                   Page 15: See Justice at Stake, http://www.justiceatstake.org/media/cms/JAS_
     261. See Steven R. Strahler, Asbestos and the Legal Black Hole, Crain’s ChiCaGo              20002008CourtCampaignExpenditur_63951A4654869.pdf (last visited Jan. 13, 2010).
         BUs., Sept. 28, 2009.                                                                Page 19: See Ellen M. Ryan & Laura E. Simmons, Securities Class Action Settlements:
     262. See Northup, supra note 258.                                                            2008 Review and Analysis, Cornerstone Research 1 fig. 1 (2009), available at
     263. See id.                                                                                 http://securities.stanford.edu/Settlements/REVIEW_1995-2008/Settlements_
     264. See Timothy P. Carney, Specter’s Voting Record, wash. Times, Nov. 11, 2004.             Through_12_2008.pdf.

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