The Tortellini

Small business owners: Not shaking in their boots over fear of lawsuits

Business Week notices that small businesses aren't that worried about getting sued, $54 million lost pants suit notwithstanding...

Fred Thompson: An old fashioned Republican?

Conservatives really want to love former senator Fred Thompson as a viable alternative to the less than ideal GOP presidential contenders Rudy Giuliani (the philandering pro-choice choice), John McCain (the no-longer-straight-talking pro-war candidate), and Mitt "I shot a squirrel once" Romney (the Mormon-good-hair candidate). But they're apparently hung up on his refusal to drink the Kool-Aid on tort reform. His main offense? Having refused to support caps on fees for the lawyers who successfully sued the tobacco industry in the mid-1990s. The National Review airs the gripes here...

Union members for tort reform?

I've often wondered why unions weren't more involved in tort reform legislation, given that it often has such adverse effects on injured workers. As it turns out, at least one big union has been involved--in trying to get tort reform passed! The SF Weekly yesterday told the story of Andy Stern, head of the giant service workers' union SEIU, and a secret deal he cut with nursing home operators in California to help them win legal immunity for killing, maiming or otherwise negligently injuring elderly patients. It's not a pretty picture of the often revered union boss. California consumer activist Jamie Court has posted all the incriminating documents here...

Playground Bullies continued..

Interesting debate going on in the comments coming off my earlier post about the overblown hysteria surrounding playground litigation. A poster suggests that the skate park in his town shut down after a lawsuit filed by parents of a kid injured while trying to do a handstand on his skateboard.

First, I'd be interested to see whether this was really the basis of the lawsuit. If so, it's totally baseless and the town is way overreacting. But here's my other reaction: isn't this is what insurance is for? Maybe I'm just naive, but I thought that municipalities had insurance to pay for legitimate claims and also defense costs as a way of KEEPING THINGS OPEN. (Oh, and for the record, at least in D.C., defense by city lawyers really is something of a bargain, as most make less than $70,000 a year. Of course, they lose all the time, which probably makes them more expensive than their salaries suggest, but still...)

I really think that a lot of these alleged crises are the result of insurance company shenanigans. We see this a lot in media law, where newspapers have libel insurance so that they can be protected from the costs of legitimate lawsuits, but also so that they can take some calculated risks in running legitimate and serious and true stories that need to be told, often about people who are highly litigious.But lately, libel insurers have been putting the kibosh on stories that are not libelous just because the subject might file a baseless lawsuit, even though the insurance premiums that the paper has paid more than cover the defense costs.

I'm not just a conspiracy theorist in this regard. It's standard practice in the insurance industry, as any D.C. car owner can attest. I can't tell you how many times I've heard this story: Your car gets broken into by a homeless person or sideswiped on a city street. You file a claim with your insurer to fix the minor damage, and they promptly cancel your policy. I suspect that something like this is at work with these threats of playground and skateboard park closings. While I certainly believe that municipal officials wildly overreact to threats of lawsuits, I suspect that they are often reacting more to unethical threats from insurance companies to either jack up premiums to exorbitant rates or to cancel their policies all together...

I Must Tell the King that the Sky is Falling!

My old boss, Washington Monthly founder Charles Peters, is famous for long ago identifying a clever ploy used by bureaucrats to fend off budget cuts. He observed that, for instance, whenever Congress threatened to cut the budget of the National Park Service, the agency would come before Congress and lament it would be forced to close the Washington Monument. Of course, the situation was never so dire, but no good legislator could risk incurring the wrath of the millions of home-state tourists who would be shut out of the legendary federal attraction, so the budget would be restored.

Some "fear of lawsuit" stories strike me as falling into a similar vein. Take this one, from Nebraska, where legislators have been considering legislation to change the state's public recreational liability statute. Last month, the town of Norfolk announced that it would be canceling its annual "Big Bang Boom" fireworks show because it claimed it couldn't afford the insurance to cover the event. The local business association has also threatened to cancel the annual Christmas tree lighting and even downtown trick-or-treating events as well unless the state legislature offers them some relief from onerous liability requirements.

There's nothing like sicing disappointed ghosts and goblins on state legislators to move legislation, but you'll have to forgive me if I find these threats a little dubious....

Merchants of Death Find Lawsuits Lethal

This just in.. A group of conservative scholars has concluded definitively that not only is tort litigation a tax on every pocketbook, but it's lethal, too! Given that death or dismemberment is practically a prerequisite these days before filing a personal injury lawsuit of any value, this seems like a stretch. But the brain trust of the Pacific Research Institute concludes that exactly 114,000 people have died needlessly over the past 20 years because lawsuits have allegedly restricted access to health care and kept life-saving products off the market.

Strangely, the researchers also lament that lawsuits have hurt the economy by wiping out thousands of asbestos jobs--you know, the ones that give you and your kids lung cancer. But then again, the study's introduction is written by Mississippi governor and premiere Washington tobacco lobbyist Haley Barbour, who recently went to court and successfully defunded the nation's premiere anti-smoking program. The program had reduced smoking among Mississippi's middle school students by more than 40 percent in just a few short years. The Institute itself is funded by the cigarette industry.

Despite the obvious silliness in the Merchants of Death warning that lawsuits are lethal, I'm sure plenty of elected officials already are preparing to blandish the study in their eternal quest for "fairness" in the legal system. Blawgletter has a nice send up of the study, with links to the Wall Street Journal op-ed today touting the research...

How do you define "meritless"?

Here's a question: If a plaintiff loses a lawsuit in court, does that automatically mean the case was bogus? That's what AEI's Ted Frank seems to be suggesting in his comments from a few days ago. As evidence, he pointed to Bill Lerach's shareholder class action against the big banks and financial institutions that aided and abetted the Enron fraud, which was decertified by the 5th Circuit Monday.

I'm not intimately familiar with the case, but a quick read on it suggests that the Enron bank litigation was anything but meritless. I've not seen too many people other than Ted argue that the banks were simply "innocent bystanders" in the Enron debacle. Even the judges on the 5th Circuit acknowledged that their decision was deeply at odds with our notions of justice and fair play, largely because the evidence showed the banks were deeply and knowingly involved in the Enron fraud. Reasonable lawyers obviously differ on the interpretation of the law that allowed the lower court judge to certify the class, but the facts at the heart of the case strike me as extremely serious. This was no Econo Lodge suit.

The civil justice system was designed as a place where people can resolve legitimate disputes without shooting at each other. So I can't believe that just because one side wins and the other side loses doesn't mean that the plaintiff didn't have a legitimate dispute or that the courthouse wasn't the best place to wrestle with it. Yet the tort reform movement seems premised on the notion that the corporation is never wrong, and that average people have no business questioning its conduct, particularly in the courtroom.

If the real purpose of tort reform is to make the legal system work better for everyone, its leading lights would occasionally acknowledge that some lawsuits have merit, that juries get a lot right, and that big awards are occasionally warranted. But that just never happens. Instead, they categorize all lawsuits against "innocent bystander" banks or other corporations as simply meritless, and when juries on those rare occasions find for a plaintiff, well, that's just an error that needs to be corrected by a judge (preferably not one on the 9th Circuit).

A citizens' movement without any citizens

I'm always amused at how tort reformers like to come up with names for their front groups that suggest that theirs is a broad, "grassroots" citizen-based movement representing people from all walks of life who are just fed up with "lawsuit abuse." There's Citizens Against Lawsuit Abuse, Texans for Lawsuit Reform (TLR), Texans for Texas, etc. (Texas has a bumper-crop of these.) None of them ever has any real "citizens" in them, the way that most nonprofit consumer groups do. Bill Summers, who runs the Rio Grande Valley CALA group in Weslaco once told me that his group used to be a nonprofit until some horrible trial lawyers sued the group to find out who its donors were, so they converted it into a wholly-owned subsidiary of the Weslaco Chamber of Commerce.

The latest evidence of the lack of average "citizens" in the tort reform movement comes from TLR, the powerhouse Texas tort reform group that helped put George W. Bush in the White House. In the 2006 elections, according to Texans for Public Justice, TLR's political action committee, which raised nearly $4 million for state elections last year, got 60 percent of its money from just eight rich guys. Topping the list was Swiftboat Veterans for Truth funder and homebuilding magnate Bob Perry. Hardly the sign of a populist revolt in the making...

Dickie Scruggs: Witness for the Prosecution

Looks like the famous Mississippi trial lawyer, Richard "Dickie" Scruggs, will be appearing this week in a Jackson federal courtroom, not as a lawyer but as a witness for federal prosecutors. Scruggs, best known for his role in orchestrating the state tobacco litigation that brought the cigarette industry to its knees, at least for a while, and for his current role in suing insurance companies over Hurricane Katrina claims, has been given immunity from prosecution in exchange for his testimony in the bribery trial of his former colleague Paul Minor and two other state court judges.

Scruggs wasn't called in the first trial in which Minor and the judges were acquitted of several of the charges, but he's expected to appear this go around. In theory, his testimony should be interesting, as there were allegations during the first trial that Scruggs was intimately involved in the transactions at the heart of the Minor trial. His personal secretary "supplied a bag of cash" to the now ex-wife of a state court judge running for reelection, according to the woman's interview with FBI agents a few years back, and allegedly Scruggs was trying to round up people willing to serve as "donors" for the money to the judicial campaign.

None of this was ever proved or even elaborated on in the first trial, as Scruggs wasn't prosecuted, and bringing it up would have allowed Minor to argue, as he had in earlier filings, that he was being selectively prosecuted. Scruggs is Republican Senator Trent Lott's brother-in-law and he occasionally gives money to Republicans. But Scruggs is a smart lawyer, and my guess is even if they put him on the stand, he won't have much to say...

It's the process, stupid.

While doctors may have paved the way for caps on noneconomic damages in medical malpractice lawsuits across the country, I've often thought that caps were a strange thing on which to focus their energy, given that 1) they doesn't lower their insurance premiums and 2) it gives the other side a chance to make its best case by bringing out all the victims of medical malpractice who wouldn't be able to sue with the caps in place. The victims help make the debate highly emotionally charged and the doctors occasionally lose as a result.

I'm not the only one who thinks this. Apparently, the smartest tort reformers are giving up the focus on caps on damages and looking for new "stealth" measures that accomplish their goals without getting the public all up in arms about the possibility that rotten medical care will go unpunished.

Thanks to Point of Law for tipping me to an interesting article on this "second-wave" tort reform by some of its leading gurus, who promote "procedural" reforms that benefit defendants without running into constitutional challenges from trial lawyers (the recent class action legislation standing out as the best example). The authors note, too, that damage caps are pretty much dead anyway as a legislative issue, either because most states have them or because of recent Supreme Court decisions. Future tort reform efforts, as a result, are likely to focus on minutiae of the legal system that the public doesn't understand but will be just as or more effective as limiting jury awards through legislation.

Schumer drinks the Kool-Aid

I saw that the Wall Street Journal ($) yesterday was heralding the fact that New York senator Chuck Schumer, a Democrat, has "seen the light," so to speak, about tort reform. Schumer has endorsed the ridiculous study commissioned by Mayor Bloomberg that declares tort reform the single biggest key to retaining U.S. dominion of global finance.

I don't want to beat a dead horse here, but as I've noted before, I find it very hard to believe that the threat of a lawsuit is the biggest fear foreign companies have of doing business on U.S. soil, especially when you consider all the other factors like, say, the health care system. In any event, just as a reminder, the latest research on securities litigation suggests that the CEO's concern about shareholders' suits cited in the now-famous McKinsey study is wildly overblown.

Not only has the rate of shareholder suit filings plummeted 44 percent over the past decade, but the risk of getting sued has also fallen such that the average American corporation has less than a 2 percent chance of getting hit by a shareholder suit in any given year. If that's enough to scare off foreign companies, we have a lot bigger problems than the tort system. Oh, and before you start writing in about the "lawsuit lottery" and the risk of that one big, ship-sinking verdict, let me just point out here that no company ever settles a lawsuit for billions of dollars unless it actually did something really mean or really stupid to deserve it (and yes, Enron does come to mind here), in which case, the lawsuits are working exactly like they're supposed to...

Those Wacky, Tragic Warning Labels

One of the tort reform movement's most succesful media campaigns involves those "wacky warning labels" that manufacturers put on products to help avoid lawsuits. The tobacco-industry creation, M-Law, or Michigan Lawsuit Abuse Watch, now sponsors an annual contest for the craziest label, and the media eats it up (John Stossel can't get enough of these). On their face, many of the labels do seem sort of nutty, but this year's winner bothers me because I suspect that the origins of the warning label stem from a bona fide tragedy.

This year's contest winner, picked by listeners of a Detroit radio station, was a label on a laundromat washing machine that read, "Don't put any person in this washer." Maybe this sounds self-evident, but Washington area readers may recall that in 2005, a 14-year-old West Virginia boy was waiting with his 5-year-old sister for their mother to use a pay phone at a laundromat. Playing around, the boy put the little girl inside one of the washing machines, and when he closed the door, it started to run, even though he hadn't put any quarters in it. The machine air locked and there was no way to open it until after it finished the cycle. The boy and his mother tried using rocks from the parking lot to break the glass on the front, and the mother clawed through the glass with her bare hands trying to save her daughter. But by the time she was able to get her out, the little girl had died.

I remember this story being so harrowing, and the images of the mother using her fingernails to scrape at the washing machine glass while watching helplessly as her daughter was suffocated so awful, that it's hard for me to get a good laugh out of the warning label. Maybe adults know not to play around with these things, but kids will do stupid things sometimes, and anything that would give them pause, I'm all in favor of. I mean, the label may seem dumb, but what's the harm in putting it on--especially if it might save a child's life?

Bush and the docs

I suppose I should weigh in on the State of the Union address last night, but I confess that I didn't watch it. I didn't need to hear Bush speak to know that he would beat the old malpractice horse and call for fewer "junk lawsuits" against doctors. I have to wonder sometimes whether doctors still fall for this. It's the domestic policy version of blaming Osama bin Laden for the war in Iraq.

In the run-up to the 2004 presidential election, Bush and his policy operation helped organize doctors and whip them in to a frenzy about malpractice lawsuits, promising them that support for Republicans would bring them relief from high insurance premiums and "lawsuit abuse." Some states went ahead and passed legislation making it harder for injured patients to sue their doctors. But no one ever really thought Congress would do anything about this, much less the White House, whose lobbying efforts on the med mal bills were half-hearted at best. After all, medical malpractice law is overwhelmingly a state issue, not a federal one. Even some Republicans can see that.

Doctors, though, with all their white-coat protests and threats to abandon their elderly patients to move to Guam or whatever state had a "better liability climate," provided Bush and his corporate backers with a useful tool for passing another anti-consumer bill they really did want, the Class Action Fairness Act (CAFA). Of course, CAFA had nothing to do with medical malpractice, but the doctors' protests enabled Bush to equate legal reform with helping Marcus Welby, M.D.

Remember how Bush showed up in Madison County, Illinois for a photo op with some nice doctors in 2005, just a few weeks before CAFA went to the Senate floor? The U.S. Chamber of Commerce had already made the county the poster child for class action reform, but Bush made it sound like passing it would fix the health care system. Talk about bait and switch! Doctors, though, I've come to realize, have a bit of a tin ear when it comes to politics. I do hope someday they realize that they've been had...

When tort reform backfires...

One thing that always heartens me is the way the dynamic American legal system continues to confound the corporate interests trying to immunize themselves from lawsuits. Sometimes I think it must be a conspiracy by tort reform lobbyists as a way of keeping themselves lucratively employed, but it's not unusual to see some tort reform measures backfire on the very people who wanted them so much.

Good examples in the past include the Florida doctors who in the 1980s demanded a "loser pays" provision in the state's medical malpractice law that would require losing parties in a lawsuit to pay the other side's legal bills. They thought it would deter lawsuits. Instead, after a few years in practice, doctors begged the legislature to repeal it because they often ended up being the losers who paid. Even when they won, the brain-damaged plaintiffs or widows who'd sued them didn't have much money to offer the defense lawyers.

In 2004, business groups in California succeeded in passing a measure that would divert a hefty portion of any punitive damage award to a state public benefit trust fund as a way of keeping the money away from trial lawyers. After the fund collected exactly zero dollars, the business groups tried to prevent its reauthorization, largely because they realized that jurors might be inclined to award even bigger punitive awards if they knew the money would go to the public and not an individual plaintiff. (The legislature renewed it anyway.)

But the latest example comes in the hot area of securities litigation. Back in 1995, at the behest of big businesses, Congress in all its wisdom passed a bill over Clinton's veto to restrict shareholders' lawsuits. New data from National Economic Research Associates show that the law did reduce the rate of filings by 44 percent over the past decade. But when it comes to these sorts of things and the lawyers who file them, what doesn't kill them only makes them stronger. The remaining shareholder class actions were among the largest ever, in part because of multi-billion settlements in the enormous corporate fraud cases like Enron and WorldCom. The other reason is that the 1995 law forced lawyers to be more selective in their filings and to find bigger plaintiffs, like public pension funds, to lead the litigation, which drove up the stakes substantially in what lawsuits were still able to go forward.

The results shouldn't be so surprising. Similar things have happened in the medical malpractice and products liability arenas, where median awards have actually gone up in places that have passed caps on damages or made it harder for injured patients to sue. There are fewer suits, but the remaining ones are really, really serious. Unfortunately, these trends have the perverse effect of creating yet more demands for tort reform even as the ability of regular people to prevail in a lawsuit has already been substantially curtailed...

Nardelli calls it quits..

A coincidence? Yesterday I posted about Home Depot CEO and tort reform enthusiast Robert Nardelli's paranoid and autocratic management tendencies, and then, he resigned (WSJ sub req). Naturally, he'll be taking $210 million with him in a severance package as thanks for depressing the company's stock price and continuing to let cheap lumber fall on its customers....

(Thanks to Eric Turkewitz for the heads up...)

Home Despot

I was reading Gretchen Morgenson's column($) in the New York Times Sunday and heartened to see her give the "What Would Stalin Do?" award to Robert Nardelli, the CEO of Home Depot, for running the company's shareholder meeting like a Gulag chief.

Nardelli, if you'll recall, appeared with George W. Bush early last year at the White House Economic Conference panel on tort reform, a cause Nardelli has embraced as his company's safety record has deteriorated. Home Depot shareholders this year finally got a good taste of the paranoia about public scrutiny that the company has shown in dealing with injured workers and customers.

In 2003, the Atlanta Business Chronicle published a disturbing investigation into the dangers that lie in Home Depot's aisles of plumbing pipes and aluminum siding, including the story of a 3-year-old who was crushed to death by 2,000 pounds of falling kitchen counter tops. The series highlights Home Depot's legal strategy of covering up stories about people injured or killed in its stores through aggressive use of confidentiality agreements at all levels of litigation, not just in settlements.

None of this is new, but Nardelli's dishonorable mention Sunday just reminded me that I've often suspected it's not really just money that drives business leaders to support tort reform, but transparency. Personal injury lawsuits rarely put a dent in big companies, which have insurance and deep pockets to pay out most of the awards against them. But those suits often dislodge important (and embarrassing) information from companies about their public health and safety records--information that the government rarely obtains. And that's why CEOs hate them so much, especially people like Nardelli, who just can't countenance anyone on the outside questioning the way his company does business, even if it kills someone.

The Beast That Refuses to Die

Last month's election may have signaled a hiatus in the tort wars for a while, but that doesn't mean we've seen the end of business attacks on the legal system. There are far too many lobbyists whose livelihoods depend on a constant stream of new initiatives (especially those that generate big fights but never pass).

A major target in the new year is likely to be the tattered shreds of state consumer protection laws. These are laws like deceptive trade practices acts that empower attorneys general to sue on behalf of regular folks who've been been ripped off by shady car dealers or subprime mortgage companies. The laws also allow private citizens to sue when they've been defrauded as well. They create incentives for this private enforcement by allowing plaintiffs to collect legal fees and often triple damages if they win, to make small cases viable enough for an attorney to prosecute. They also allow for the dreaded class action.

Big companies hate these laws because entrepreneurial plaintiff's lawyers have been trying, with limited but potential success, to use them against the booze industry, fast-food chains and the tobacco industry for such things as making the bogus claims that "light" cigarettes are better for you than regular ones.

Right now, the "free market" American Legislative Exchange Council and the American Tort Reform Association are pushing "model legislation" that will supposedly rein in "abusive" private consumer lawsuits. Among other things, the legislation would:

--require plaintiffs to prove that a defendant willfully deceived the public before winning treble damages (usually a nearly impossible standard)

--abolish punitive and exemplary damages in consumer protection actions, supposedly to avoid "double punishment" of a defendant.

--abolish "statutory" damages in class action, i.e., the guarantee of a minimum recovery even in cases with small financial losses

--abolish provisions that allow plaintiffs to recover legal fees except in those rare cases where they can prove that the defendant's conduct was "willful"

--impose a loser pays fee-shifting system

--bar consumer lawsuits over practices that are authorized or approved by government regulatory agencies, like smoking.

As with so many things that come off the desk of ATRA general counsel and longtime tobacco industry lawyer Victor Schwartz, the proposals sound sooo reasonable on their face. They're the sort of things that sensible people can all agree on, right? Of course, most of these proposals would all but eliminate most consumer protection lawsuits. Without the possibility of recovering legal costs or special damages, most consumer ripoffs are too small to ever be financially viable in the courthouse.

States in the cross-hairs for this new campaign include Massachusetts, Illinois, Maryland, Kansas, New Jersey, and right here in the nation's capital....

It's the injuries, stupid.

For the past few years, the insurance consulting firm Tillinghast has released an annual study purporting to tabulate the cost of the tort system to the American economy. The latest one came last week. I hate this study, and various people have taken whacks at it for its methodology, for different reasons. I won't rehash all that here (follow the links if you want more). What bugs me about this stupid study, besides that it's meaningless, is that it's never accompanied by any acknowledgment that there would be no tort costs if there weren't any accidents.

Even if you acknowledge, as I do, that the transaction costs of the tort system can be quite high (meaning that you have to spend a bundle to get any compensation you're owed), the real hit to the economy is not from the lawsuits but from the initial injuries. For instance, medical errors, most of which go entirely uncompensated, are supposed to cost the country $38 billion a year. Some 42,000 people a year are killed and nearly 3 million seriously injured in car accidents, at a cost of around $230 billion a year (a number suspiciously close to the Tillinghast tort costs!). That is a big drain on the economy.

The tort system is simply one way that many of these injured people are supposed to be made whole, either by claiming insurance coverage they're rightfully owed or by making the wrongdoers pick up the tab. Rather than always harping on the "tort costs," it seems to me that insurance companies, health care providers, and business groups ought to focus on the source of the problem, and figure out cost effective ways to reduce accidental injuries. Maybe this is too simplistic, but it seems to me that everyone would be better off this way.

The American Appetite for Tort Reform

Ted Frank, the tort-reform-industrial-complex's Internet cop over at the American Enterprise Institute, has generously pointed out in comments that Blocking the Courthouse Door is not likely to become a bestseller. Of course, I knew this. The publisher didn't even print enough copies of the book for me to earn out the advance (meaning they'd actually have to print more before I could ever see any royalties). Even my own agent has always believed that the book will tank. (Thank goodness for Dr. Phil, whose books subsidize all the rest of us losers at the Free Press!)

Truthfully, the American public could really care less about tort reform or the civil justice system, which is why most Citizens Against Lawsuit Abuse groups generally don't have any citizens in them and have to be run by PR firms and chambers of commerce. It's the reason that when the tort reform blogs like Point of Law or Overlawyered write something nasty about me and link to my site, I see all of about 50 new readers as a result, whereas a link from the Washington Monthly blog generates several hundred.

Despite all those polls generated by ATRA and the U.S. Chamber of Commerce claiming that 99.9 percent of Americans think there are too many frivolous lawsuits, tort reform doesn't even register on most voters' lists of political priorities. And despite all the media drumbeat heralding a "litigation explosion," most Americans will never file a suit, nor will they be sued.

So it's not hard to see why no one reads books about the civil justice system except maybe a few lawyers. The only reason that some of those tedious tort reform books get any circulation is that groups like Common Good and the Manhattan Institute use the big donations they get from insurance and tobacco companies to buy thousands of copies and then give them away to influential people like judges and reporters to create the false impression that there is a groundswell of support for their position. But the reality is that most people don't care about the legal system until they need it, and that's when they discover that you really can't win millions of dollars in the "lawsuit lottery" for slipping on a banana peel. A few of those folks might then buy my book...

And the winners are...

So I was wrong about Marshall, Texas, sort of....

Today the American Tort Reform Association released its 2005 Judicial Hellholes report, identifying the jurisdictions it finds the most unfair towards defendants. The list hasn't changed much from previous years, although Mississippi now doesn't land there. West Virginia, though, still ranks high. I don't know why I'm even giving the report any ink, as it's not based on much science. There is always a nice correlation, though, between jurisdictions that have seen big tobacco cases and the alleged "hellholes," such as south Florida and Southern Illinois, which are in the top five. The tobacco industry, which has given ATRA millions of dollars over the years, is clearly getting its money's worth.

Meanwhile, thanks to those who have suggested nominations for "plaintiff's heckholes." Some serious contenders, along with my nomination of one-third of Pennsylvania, are:

The entire state of Michigan, where one commenter says that "the "open and obvious" defense was successfully used to explain why a blind person should not recover for slip and fall injuries suffered from water on the floor of a public restroom."

Wyoming, where another commenter says 45 of the past 46 medical malpractice trials have resulted in verdicts for doctors.

I love these sorts of stories, so please keep them coming!

Seeking nominations for plaintiffs' heckholes!

The American Tort Reform Association tomorrow will tell the nation which of our esteemed judicial jurisdictions are too liberal and "unfair" to big business with the release of its 2006 Judicial HellholesTM report. I've always thought that the definition of a "hellhole" (or "heckhole" as someone suggested, to avoid any trademark violations) is in the eye of the beholder.

There are plenty of jurisdictions where juries rarely award money to injured plaintiffs, like a big chunk of Pennsylvania, where in 2005, juries in 22 counties handed down defense verdicts in 100 percent of all medical malpractice cases. I have no data to back this up, but the story about Shelby County, Alabama is that the only time it ever saw a plaintiff's verdict was when the plaintiff was the local country club. None of these places, of course, ever make the ATRA list, so I thought I'd make a list of my own, just to provide a little balance. How about some nominations for plaintiff's heckholes?

Bets on this year's judicial hellholes

Tomorrow, the American Tort Reform Association will release its annual Judicial Hellholes report for 2006. These are sort of ridiculous rankings cooked up without much scientific data--just the impressions of a few corporate counsels. Strangely enough, they always seem to dovetail perfectly with U.S. Chamber of Commerce efforts or other big lobbying campaigns to bring legal "reform" to various jurisdictions. Usually, too, you can just pick any part of the country that's heavily minority or really poor and it's likely to be on the list.

Last year, the Rio Grande Valley and South Texas took first place, despite the state's 2003 radical reforms that killed off most malpractice and nursing home litigation. Cook, Madison and St. Claire counties in Illinois all dominated the list, along with the entire state of West Virginia.

Just for kicks, I thought I'd make some predictions on this year's winners. Given the media coverage (sub required) this year and the renewed focus on "patent reform," I'm betting that Marshall, Texas suddenly jumps to its own special spot on the top of the billing for 2006. I'd put money on California getting a bump up, too, now that class action "reform" has supposedly killed off the "magic jurisdictions" of Madison and St. Claire counties. But West Virginia will probably still make the list. Of course, ATRA could surprise me, so stay tuned and I'll report back tomorrow on the winners.  Meanwhile, any other educated guesses out there?

If a corporation can be a person, why not a dog?

Carolyn Elefant over at legalblog watch today highlights a case headed for the Vermont supreme court over whether to allow people to sue for damages over the loss of a pet.

A Maryland couple sued an old man in  Northfield who shot their dog with a pellet gun after it ran on to his property. The dog died, and the man was criminally charged and ordered to pay the dog's owners $4,000. The childless couple sued for emotional damages and loss of companionship, and the case was thrown out. They're now appealing.

Obviously tort reformers aren't thrilled with the burgeoning movement to open the courts to suits over dead pets. ATRA counsel Victor Schwartz warns Fox News that vets, kennels and other animal care providers will be overwhelmed with lawsuits and that--God forbid--their insurance premiums will go up!

I'm sure Ted Frank and his Overlawyered buddies will not be surprised to learn that I think the movement is a good idea, but not for the reasons they might suspect. Personally, I think if you let your dog run on to someone's property, you're solely responsible for what happens to the dog. (I could easily see my BB-gun wielding father becoming a defendant in one of these cases.) But what happens in commercial pet facilities like vet clinics and kennels is a different story.

In 2003, a dog day care center and "pet spa" opened up next door to my downtown DC townhouse, putting 40 or 50 dogs basically in my backyard, 24/7. Aside from the obvious problems of living next to a kennel, I got a chance to observe dog day care up close. The dogs got in fights, humped each other, ate garbage, and barked up a storm while left largely unattended (this photo was taken from my house).

One dog was nearly killed there, others seriously injured. But most of the dog owners, who paid $50 a day for all this, had no idea what went on inside.

The city doesn't regulate kennels, and the Washington Humane Society won't enforce anti-cruelty laws in a commercial facility (many of whom give it financial donations). So basically any schmo can open up one of these places, throw a bunch of dogs in the yard, and call it a spa. It's lucrative business.

Free marketeers might argue that that poor care will eventually kill off these rogue businesses, making the need for lawsuits or regulation unnecessary. But the kennel operator on my block didn't have to worry about losing business through bad care because there are so many more dogs than kennels in the city that owners are really desperate for places to leave their dogs when they travel. The place next door, which actually joined the Better Business Bureau, never seemed to have a shortage of dogs.

Given all these factors, even with the small potential recovery, the threat of lawsuits right now is one of the few things that keeps the excesses of D.C.'s dog industry in check. (My next door neighbor got sued by a toy poodle owner whose dog was maimed in an attack, and the suit forced them to at least increase the number of staffers on site to keep the fights under control.)

Obviously the city needs to regulate the places, but that will be a long, slow and arduous process--and considering that DC can't effectively police child care facilities, not a promising solution. So for the moment, lawsuits offer dog owners the only mechanism for punishing bad businesses and for pushing the pet care industry to adopt better practices. Increasing the amount of money pet owners can sue for would only help this situation.

Doctors aren't disappearing, but plaintiffs' lawyers might be

This month, the American Lawyer says a eulogy for plaintiffs lawyers in an article called "It's Over." Alison Frankel writes:

"The power of the plaintiffs bar is on the wane in this country, and will be for a long time to come...If you're a plaintiffs lawyer and you haven't already bought the plane and yacht of your dreams, well, sorry, pal. You're too late."

Frankel credits tort reformers with tremendous success and blames trial lawyers' handling of mass torts for giving them so much good material to work with in their campaign to restrict lawsuits...

Obama's anti-consumer vote

As Obama-mania sweeps across the land and has Democrats everywhere buzzing, I find myself a bit wary of it all. Not that I'm a single-issue voter, but when it comes to civil justice issues, Illinois senator Barack Obama is a bust. His willingness to buy the corporate line about class action "reform" last year prevents me from joining the hallelujah chorus.

The 2005 Class Action Fairness Act (CAFA), a pet cause of George W. Bush, essentially forced most state consumer class actions into the backlogged and Republican dominated federal courts. Like the bankruptcy bill before it, class action reform was a special interest extravaganza, with the insurance, credit card, banking, pharmaceutical and auto industries hiring so many lobbyists that there was nearly one for every member of Congress. (You can read more about some of the chicanery involved in selling CAFA in my book.)

Obama's state was also the focus of intense media campaigns surrounding the bill sponsored by the U.S. Chamber of Commerce. But when the bill came up for a vote, Obama's fellow Illinois democrat, Sen. Dick Durbin, didn't cave. Potential presidential rival Hillary Clinton voted against the bill. Even John Kerry, who went on national television during the 2004 presidential debates and said, "John Edwards and I support tort reform," voted against this bill.

So what's up with Obama? No surprise here, but maybe it's the $2 million in campaign contributions he got from law and lobbying firms that represent many of the big business interests behind the bill. According to the Center for Responsive Politics, he got $60,000 from Mayer, Brown Rowe & Maw, the heavyweight lobbying firm whose partners reportedly helped write CAFA. Obama also got  $70,000 from Sidley Austin, home of the notorious Dan Troy, the former FDA general counsel who used his government perch to help drug companies win lawsuits filed by injured consumers.   

Obviously the class action vote was just one among many, but I do find it telling. Either Obama didn't fully understand the implications of the bill for consumers (who may be shut out of court when they're ripped off for relatively small amounts of money), or he was voting with an eye on the White House and courting future campaign contributors in the business world. Neither scenario gets me especially excited about the Democratic Party's new rock star.

Following the blue-ribbon money

New York Times columnist Floyd Norris has a great post on his blog about the money behind the blue-ribbon Committee on Capital Markets Regulation that's pushing to relax corporate governance regulations. Turns out that the panel's biggest funder is none other than Hank Greenberg, the former and longtime CEO of the world's largest liability insurer, AIG. 

Greenberg, as you may know, has also been one of the nation's richest and meanest tort reformers, dumping tons of money into groups working for lawsuit restrictions, including the U.S. Chamber of Commerce and the Manhattan Institute. In 2003, before he had to resign in the face of business fraud allegations, Greenberg said publicly that his company and other investors should stop buying municipal bonds in states that refuse to pass tort reform--an enormously powerful threat given the size of AIG and its affiliates (some run by Greenberg's sons).

A year later, he caught fire for referring to plaintiffs lawyers as terrorists. Given his funding for the "blue-ribbon" panel, its calls for more limits on shareholder lawsuits and corporate investigations by state attorney generals should surprise exactly no one.

ADAmn Mess

You'd really have to be an ideologue not to appreciate the top-notch journalism at work in this week's series in the Sacramento Bee (registration required) on lawsuits under the Americans with Disabilities Act (ADA). While it always pains me to see more media fodder for tort reformers, in this case, the facts simply speak for themselves, and the reporters have done a tremendous job of telling a balanced story.

The stories confirm my long-held belief that the ADA is an example of Republicans getting what they deserve. The law was a landmark piece of civil rights legislation, but the cheapos in the first Bush administration who helped pass it did so without creating any meaningful governmental mechanism--or funding--to adequately enforce it. Instead, they just left the enforcement to private attorneys, who are now doing just that, and at a record clip in California. So of course, business groups are up in arms about it. The Bee does note that there wouldn't be so many lawsuits if businesses had simply come into compliance with the nearly 20 year old law. Anyway, the series has some wonderful reporting in it, including this gem:

One Southern California man who issued a string of letters demanding payment for ADA violations turned out not to be a lawyer, but a self-described "nutritionist," better known to authorities for his Internet business arranging body-parts transplants overseas..

Any reporter worth her salt would kill to find a few stories like that one. It's just too bad they had to turn up in the already beleaguered legal system. ...

 

John Edwards: The coffee-table book

I learn by way of Huffingtonpost that former VP candidate John Edwards has a new book out this week.

The coffee-table book is decidedly apolitical but the tour will take Edwards to key electoral hot spots like Iowa and New Hampshire. I suppose this could just be a coincidence, but I can tell you that my publisher will definitely not be sending me to the gigantic media markets of Des Moines and Nashua next month when my book comes out. (Of course, they're not sending me anywhere, but that's a different story...)

Obviously Edwards is running again. In fact, I heard a rumor a while back that asbestos lawyer Fred Baron recently relocated to North Carolina to work on the campaign. What interests me about Edwards, though, is whether he can rise above his trial lawyer roots. Seems unlikely given that there's a whole industry devoted to making sure voters never forget his former profession (and of course, having Baron on his team doesn't help much, either).

Edwards is clearly trying to repackage himself by focusing on poverty through his One America Committee. But he's nuts if he thinks he can ever stop being identified as "former trial lawyer John Edwards," no matter how many trips he makes to Uganda or how many meaningless proposals he floats to combat frivolous lawsuits.

It's tort reform, stupid.

As Republicans tear their shirts over their electoral debacle last week, a few of them are blaming GOP candidates for not doing more to emphasize their tort reform successes. On the flip side, apparently some people believe GOP candidates lost because while in power, they still failed to enact any meaningful tort reform.

U.S. Chamber of Commerce polls notwithstanding, it's hard to imagine that anyone seriously thinks  campaigning on class action reform and immunizing gun manufacturers from lawsuits would have saved even one endangered Republican. I suppose it's easier to scapegoat "lawsuit abuse" in all its forms than to face the mirror in the morning and admit, "Iraq is a disaster."

Speaking of the poll, read an interesting dissection of the methodology over at TortsProf Blog....

Score one for Dan Savage

When anti-abortion Democrat Bob Casey is sworn in next year as Pennsylvania's newest senator, he will no doubt thank all the usual supporters and his family for putting him in office. But the one man who really deserves some credit for Casey's election is a gay Seattle sex columnist.

If you recall, back in 2003, Casey's opponent, incumbent senator Rick Santorum gave a homophobic interview to the Associated Press, saying that "In every society, the definition of marriage has not ever to my knowledge included homosexuality. That's not to pick on homosexuality. It's not, you know, man on child, man on dog, or whatever the case may be." 

Outraged, Seattle Stranger columnist Dan Savage started a contest to define "santorum" as something sex-related and gross. He succeeded wildly, so now if you Google "santorum," the first site to pop up is this one. Casey, of course, won't be sending Savage a mash note (he actually returned Savage's campaign contribution last year), but he clearly owes him one.

So you're now wondering: what does all this have to do with tort reform? Not much, except that Santorum has been one of the Senate's biggest hypocrites on the issue. A rabid proponent of caps on medical malpractice damages, Santorum supported his wife's lawsuit against her chiropractor in 1999, in which she won a $350,000 jury verdict for her pain and suffering. So Savage's gay rights' victory just happened to be a big win for the civil justice system, too.

All politics, all the time

The much-better-funded corporate bloggers over at AEI's liability project have saved me the trouble of writing a run-down of how tort reform and other legal issues are playing in elections around the country.

Their hot spots: Southern Illinois and Georgia judicial races, AG races in Connecticut, Arkansas and Oklahoma; governors' races in Wisconsin, where the incumbent vetoed a bunch of tort reform bills over the last few years, and Florida, where the GOP candidate picked a trial lawyer as a running mate; and Iowa's first congressional district, where Bruce Braley, the president of the Iowa Trial Lawyers' Association, is running a strong race.

Converts?

Back when crime was a bigger political issue, there was an old Washington joke that went something like this:

Q: What do you call a Republican?

A: A Democrat who's been mugged.

I think today there's a corollary to that old joke that goes something like this:

Q: What do you call a Democrat?

A: A Republican who's been malpracticed on.

I found a few of these people while researching my book, and they provided an interesting window into GOP politics. One particularly telling interview came from Gary Murphree, the vice president of Dutch Lubricants, a large "Christ-centered" oil company, who found himself on the receiving end of one of George W. Bush's legal reform efforts.

Murphree told me that he thought Bush would go down in the books as the worst president in American history. The statement was extraordinarily frank coming from a former honorary chair of the Mississippi Republican Party. Murphree once made six-figure contributions to the GOP, but he told me he wasn't going to give the party another dime until Bush was out of office, and that he wasn't alone among Republicans in his state.

I don't know how this sentiment will play out tomorrow, but if Murphree's comments are any indication, the Democrats would be smart not to write off the South in 2008.