The Tortellini

Insurance Industry Now Thinks Texas Needs More Litigation

In 2003, Texas voters approved a constitutional amendment that allowed state legislators to cap pain and suffering awards in medical malpractice lawsuits at extremely low levels. The insurance industry lobbied heavily for the measure, helping to promote a false vision of Texas as a "judicial hellhole," where doctors were fleeing the state over an "epidemic" of frivolous lawsuits. Since then, malpractice lawsuits have plummeted.

Now, though, the insurance industry is wondering if its campaign worked too well—not because malpractice victims can't get justice (which they can't) but because tort reform is cutting into insurance company profits. Defense lawyer Gary Schumann told a group of insurance execs recently that tort reform had worked so well in Texas that judges were trying cases that might otherwise go to mediation just to stay busy. Not only that, but Texas nursing homes (among the worst in the nation) have become so unconcerned about getting sued that many have stopped buying private liability insurance.

Schumann said he was worried about the industry's future. "We want a little bit of litigation out there, don't we? We want a little bit of risk. We need risk or we're all out of business. … We'll see what happens but tort reform has worked. I just hope for all of our sakes it hasn't worked too well."

Upcoming Radio Interviews

For any Bay Area readers out there, I'll be appearing on the Progressive News show on Green 960 today at 5:15 p.m. Pacific time to talk about a new story I have up at Mother Jones on my attempt to buy a car and my run in with mandatory arbitration clauses. You can  also listen to it live online here.

Tomorrow, I'll be talking about the same article on The Right Balance with Greg Allen in Florida at 10 a.m. EST. You can listen online here.

Hillary Clinton Says Bye-Bye to Indicted Trial Lawyer

Bad news for trial lawyers, and bad news for Bill and Hillary, too. Famed Mississippi plaintiff's lawyer Richard "Dickie" Scruggs, who was slated to host a Clinton fundraiser next month, was indicted yesterday for allegedly trying to bribe a state court judge. The indictment comes a day after the FBI raided his office looking for a document, and two days after Scruggs' brother-in-law, Trent Lott, announced his resignation from the Senate.

When the FBI first raided Scruggs' office, Lott said the timing of his resignation was just a coincidence. But you do have to wonder. The indictment is pretty damning, and includes apparently taped conversations between the judge and some of the other lawyers involved in the alleged scheme.

The indictment will no doubt have other political fallout. Scruggs is a high-profile figure, having just used his private jet to ferry the new University of Mississippi football coach to Oxford hours before turning himself in to law enforcement authorities. He made millions off the state's lawsuit against the tobacco companies in the 1990s and has been leading the litigation against insurance companies over denied Katrina claims, including Lott's. Scruggs has been a generous Democratic political donor, particularly in Mississippi, where he used some of his tobacco winnings to found a now-defunct PAC to help elect liberal candidates to state office.

But his political loyalties have always been a little suspect, and not just because of his in-law status. This year, for instance, he has given nearly $30,000 to the Democratic Senatorial Campaign Committee and several thousand dollars to Joe Biden. But he's also contributed to Republican John McCain. Next month, Bill Clinton was scheduled to headline a fundraiser for his wife at Scruggs' Oxford home. Not surprisingly, today a Clinton spokesman tells Mother Jones that the event is "not happening."

Cross-posted from MoJoBlog

U.S. Chamber Won't Disclose Donors Without a Fight

Cross-Posted from MoJo Blog:

For years, big (and often unpopular) corporations like drug and tobacco companies, have used innocuous-sounding trade associations to lobby on their behalf, without having to disclose who picks up the tab. But a new law Congress passed earlier this year is designed to put an end to the practice. Under the threat of criminal penalties, the lobbying reform act requires trade groups to disclose members who contribute more than $5,000 in a quarter and who are involved in planning or directing lobbying activities. Not surprisingly, big businesses are not happy about this, particularly the criminal penalty part.

The U.S. Chamber of Commerce and the National Association of Manufacturers fired the first shot across the bow yesterday, sending a letter to the Secretary of the Senate and the clerk of the House asking for "guidance" on how to interpret the new reporting requirements. They're essentially asking to exempt a lot of people who might otherwise be outed by the new law on the grounds that the law is an unconstitutional intrusion into their inner workings.

The chamber isn't fond of disclosure. For instance, the Institute for Legal Reform, the chamber's $40 million-a-year tort reform lobbying arm, failed to disclose to the IRS four years and millions of dollars worth of taxable spending on political races. A few years ago, it secretly bought its own newspaper in Madison County, Illinois, where it was spending millions to defeat liberal state court judges. The paper generated a regular stream of chamber propaganda that got treated like bona fide news until its owners got outed by the Washington Post. Despite the chamber's complaints about the evils of the American legal system, yesterday's letter is a pretty good indication that it will spend some time there before it ever gives up exactly how much radioactive industries contribute to its lobbying efforts.

Trial Lawyers Still the Democrats' Deep Pockets

Cross-Posted from Mother Jones:

Lots of corporate money is making an exodus from the GOP and resurfacing in various Democratic campaign coffers this year. Yet there's still plenty of evidence that the Democratic presidential candidates are going to rely heavily on trial lawyer funding, even with a few of the old reliables either in jail, under indictment or facing other criminal charges.

The latest report comes from Mississippi, where Bill Clinton will headline a fundraiser at the home of Richard "Dickie" Scruggs, trial lawyer extrordinare and, incidentally, Trent Lott's brother-in-law. Scruggs is best known for his role in initiating the tobacco litigation in the 1990s that led to an enormous settlement between the states and the cigarette companies. The litigation also netted Scruggs several billion in legal fees and a Hollywood portrayal in the movie "The Insider."

But Scruggs is in a spot of trouble these days. He's facing criminal contempt of court charges in Alabama for allegedly violating a protective order in a case involving Katrina-related insurance claims. Apparently, though, the charges aren't serious enough to scuttle the Clinton fundraiser. No word yet on whether Scruggs' friend and fellow Mississippi trial lawyer John Grisham will make an appearance, but no doubt he's on the invite list. Last year, Grisham gave the Democratic Senatorial Campaign Committee nearly $27,000, and the former Mississippi state legislator was active in Democratic politics long before he was a bestselling author....

Tort Reform Brings More Doctors to Texas, But Only for Rich People

Cross-posted from MoJo Blog:

In 2003, Texas voters approved a ballot initiative known as Proposition 12 that helped radically restrict state residents' ability to sue doctors or nursing homes that killed or injured them. Insurance company lobbyists had claimed doctors were fleeing the state because of lawsuits and high malpractice insurance premiums, threatening access to care. Proposition 12 was supposed to fix all that. Not only would doctors rush to Texas for its friendly legal climate, but, supporters claimed, obstetricians would move en masse to the 152 poor, rural Texas counties that had no ob/gyn to deliver local babies. 

The New York Times recently declared Prop 12 a huge success because doctors (ob/gyns in particular) are supposedly flocking to Texas now that they don't have to worry about getting sued. One thing the Times didn't point out, though, was that the number of those new ob/gyns who've moved to rural, underserved Texas is exactly zero.

The Texas Observer this month crunched the numbers, and came to the not-so-startling conclusion that while there may be more doctors in Texas thanks to tort reform, virtually all of them moved into the state's richest suburbs, which were already well-stocked with highly paid specialists. As it turns out, doctors don't shun the Texas sticks because of lawsuits but because they'd just rather live closer to Starbucks and their golfing buddies.

Americans Fight Terrorism From the Jury Box

[Note: This week, I start blogging for Mother Jones, so this is cross-posted from their site, which you can find here.]

After September 11, many Americans were compelled to give blood, write checks to the Red Cross, or even to join the military as a way of serving the country. Apparently, though, an awful lot of us were also moved to show up for jury duty. This relvelation comes courtesy of U.S. District Court Judge William G. Young, who recently addressed the Florida Bar Association on the death of the jury trial. Young noted that nationwide data (which he unfortunately didn't cite) show that Americans turned up for jury service in record numbers in the year after the towers fell.

Young is most famous recently for sentencing shoebomber Richard Reid by telling him "You're no big deal," but his speech (recently posted here) is an amazing--and rare--love song to the American jury that's worth a read. Along with some harsh words for Congress for suspending habeas corpus, there are some interesting observations about the state of the federal judiciary, including this one:

In 1988, the average time a federal judge spent actually sitting on the bench each year was 790 hours. In FY 2005, that number had fallen to 437, of which only 225 hours were spent overseeing trials. So what are the judges doing all day if not on the bench?

"Litigation management," said Young. "Hardly a shining vision, is it?"

(H/T Consumer Law and Policy Blog)

The Downside of Compensation without Litigation

Over the years, tort reformers have regularly suggested that the country would be better off replacing lawsuits over medical malpractice or asbestos poisoning or other mass tragedies with administrative compensation funds a la workers comp or the 9/11 fund. But the latest controversy over a fund for the families of the victims of the Virginia Tech shooting, I think, illustrates one huge problem with that approach: It makes victims look greedy.

Again, I'm late with this, but I was struck by the story in the Washington Post last week about some of the VA Tech families griping that they weren't getting enough money from a university gift fund set up after the shootings. (The fund isn't a substitute for litigation, but may be a model for one that is.) Americans tend to get pretty queasy at the spectacle of people profiting from personal tragedy (which is one reason they are skeptical jurors). Compensation funds may be cheaper and more efficient than litigation, but they seem to be especially well designed to generate ugly squabbling among the beneficiaries over who deserves the biggest piece of the pie.

Greed obviously plays a role in some litigation, but I do believe that a desire for justice and information also genuinely motivates people to sue when they've been wronged. Public fact-finding and scrutiny of responsible parties through litigation can also help heal some wounds and mitigate the distasteful process of trying to affix a dollar figure to a life. And unlike fund claimants, lawsuit plaintiffs can legitimately claim a moral high ground--that they are seeking justice, not just money.

Claim-filing may satisfy a victim's real need for money (and a potential defendant's desire to stay out of court), but it certainly doesn't lead to the sorts of public disclosures, remedies or even exonerations that can be achieved through a lawsuit. Because the money doled out on a schedule has no relationship to a wrongdoer's conduct, the payments also look a lot more like windfalls than jury verdicts do. As Virginia considers its options in the coming months, I think it might do the VA Tech families a big favor if they just let them sue...

Will Medicare Drive Medical Errors (further) Underground?

I know I'm late on this, but I was just catching up with Eric Turkewitz's discussion on Medicare's decision to stop paying for the costs involved in preventable medical errors, and it reminded me of my first reaction when I saw the NYT story Sunday. Call me a cynic, but without a major enforcement component to this new plan, I wouldn't be surprised to see hospitals devote lots of resources not to preventing errors, but to covering them up. The threat of lawsuits has long provided hospitals and doctors with a financial incentive to avoid errors, but clearly that hasn't done much good.

Maybe there's more money involved in the Medicare payments than in lawsuits that will drive the health care system to change its ways, but if all the lawsuits I've read over the years are any indication, hospitals and doctors frequently go to great lengths to hide their involvement in botched care. Medicare ought to include some serious penalties for such behavior if they want this new strategy to improve the quality of health care.

Bud Extra: the next Joe Camel?

First they went after the cigarette companies, then it was lead paint manufacturers. But now, complains Jane Genova at Law and More, the nanny-state enforcers have banded together to go after beer companies. No lawsuits have been filed, but 29 state AGs have protested to the feds that booze makers are unconscionably marketing alcohol-laced "energy drinks" to teenagers who, of course, aren't old enough to buy them. (Sound familiar?) The nerve of those guys...