Conservative Appeal Trial-Lawyers Lobby Discovers

The Wall Street Journal, July 08, 2004


Anti-Regulatory Philosophy Helps Stall 'Tort Reform'; Now, the Edwards Factor Winning Sen. Hatch's Vote

Staff Reporter
Page A1

WASHINGTON -- President Bush badly wants to make it tougher for plaintiffs' lawyers to win big verdicts. He did it in Texas when he was governor. He talks about it frequently from the presidential podium, eliciting cheers from business. His party controls Congress, and his opponents, the Association of Trial Lawyers of America, traditionally support Democrats.

Yet Mr. Bush isn't making much headway. Nine "tort reform" bills have been defeated in the Senate in the past 14 months, including two attempts to limit attorneys' fees and three to overhaul medical-malpractice laws.

The Senate is struggling to pass a class-action reform bill that shifts big cases from state to federal courts. But even if Republican leaders manage to pass the legislation in the Senate, there is little time for the full Congress to complete work on it before the November election. The debate is now taking center stage in the presidential campaign with Sen. John Kerry's selection as a running mate of Sen. John Edwards, a leading North Carolina trial lawyer.

The trial lawyers' association, long viewed as one of Washington's smartest and most partisan lobbies, has outmaneuvered the White House and its business allies at almost every turn. The group, known by its initials, ATLA, stirs public sympathy for victims that typically trumps Mr. Bush's complaints that lawsuits are clogging the arteries of the American economy.

It also deftly exploits the tension in Republican ranks between two competing principles: that trial lawyers are bad and that government regulation is bad -- including regulation that restricts the ability of lawyers and their clients to rake in big judgments.

"Republicans don't like to cap anything but their income tax," says Matt Towery, a Republican pollster in Atlanta who has done research for ATLA.

Lately, ATLA has also taken advantage of the often-overlooked political fact that like Democrats, many Republicans start out in the courtroom, before their political ambitions take them to Washington. A leading example is Orrin Hatch of Utah, the influential chairman of the Senate Judiciary Committee and a former trial lawyer. In the closely divided Senate, a handful of Republican votes are enough to block lawsuit limits.

Shortly after Republicans retook the Senate in 2003, they decided to take a swipe at the well-paid attorneys who have sued tobacco companies on behalf of states. Sen. Jon Kyl of Arizona proposed that the lawyers be forced to return to states any fees that work out to more than $20,000 an hour per attorney.

ATLA deployed James Parkinson, a Republican trial lawyer in Palm Desert, Calif., to lobby Sen. Hatch, an old family friend. Both men recall Mr. Parkinson saying of the Kyl bill, "Orrin, I would like to go through this, because it is absolutely unconstitutional." Sen. Hatch and 12 other Republicans voted against the measure, which failed by a vote of 37-61. "They know I will support them when they are right," Sen. Hatch says in an interview, referring to this vote.

The drive to restrict lawsuits seeking compensation for harms ranging from botched surgery to securities fraud began in the 1970s with pressure from the insurance industry. As Texas governor in the 1990s and now as president, Mr. Bush has elevated the campaign. He calls "the lawsuit industry" one of the "biggest obstacles to growth." He routinely gets applause, as he did in a speech last month to small-business executives, when he calls for changes so "that if there ever is a verdict, the people who benefit are those who got injured, not the lawyers." Since Republicans took control of the Senate 18 months ago, tort-reform debate has consumed roughly as much floor time as the Iraq war, according to ATLA.


"Tort reform" defeats in the Senate:
May 19, 2004
37-62 To express Senate support for imposing an excise tax on tobacco lawyers' fees in excess of $20,000 per hour.
April 22, 2004
50-47* To create a trust fund for asbestos victims.
April 7, 2004
49-48* To cap certain medical-malpractice awards.
Feb. 24, 2004
48-45* To cap malpractice awards related to obstetrical and gynecological services.
Oct. 22, 2003
59-39* To transfer large interstate class-action cases to federal courts.
July 9, 2003
49-48* To cap medical-malpractice awards.
*60 votes needed for passage.
Source: Congressional Record

Voters will hear much more about the topic, as Republican and their business allies have already said they plan to attack Mr. Edwards as part of a greedy trial-lawyer cabal that plays on people's dreams of striking it rich in a litigation lottery.

Trial lawyers counter that lawsuits are frequently the only way to help victims of physical or economic harm and deter misbehaving companies or professionals. More broadly, ATLA asserts that litigation is often the most effective means for ordinary citizens to challenge the powerful. When Republicans have assailed Sen. Edwards's legal career in the past, he typically has responded by telling the stories of clients like Valerie Lakey. The 5-year-old North Carolina girl had her intestines mangled when she was trapped by the suction of water into a swimming pool's drain. In 1996, Mr. Edwards won a $25 million jury verdict against the drain's manufacturer, Sta-Rite Industries Inc. That victory, the richest product-liability verdict for an individual in North Carolina's history, earned Mr. Edwards a public-service award from ATLA.

Some states have passed tort reform at the state level, but ATLA has generally blocked it on a national basis. The group went on especially high alert when Mr. Bush came to town. So far during his administration, Congress has rejected bills to protect the fast-food industry from suits from obese customers, to shield gun makers from injury victims, and to cap huge damage awards in medical-malpractice suits.

Lawmakers now are struggling to negotiate a trust fund to pay asbestos victims out-of-court to prevent years of tortuous litigation. Republicans also want to shift national class-action cases involving large groups of plaintiffs to federal instead of state courts, where juries are sometimes more plaintiff-friendly. These ideas, which have kicked around for years, have gone further than any of the other current tort-reform proposals. Many Democrats acknowledge they address real problems in the court system, but with few business days left on this year's Capitol Hill calendar, even proponents give them little chance of becoming law soon.

Democrats remain the bedrock of ATLA's success. So far in the 2003-2004 election campaign, the trial lawyers' political action committee ranks second only to the electrical workers' union in contributions to Democratic campaigns, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign contributions. The center's records show the trial lawyers' PAC has given $1.3 million to Democrats and just $106,500 to Republicans.

Democrats have returned the favor by blocking almost every tort-reform bill to come along since Republicans took control of the House of Representatives in 1994. Since then, ATLA has suffered just one major loss: In 1995, Congress overrode President Clinton's veto and curbed shareholder suits against companies whose stock prices have fallen.

Bruce Josten, the top lobbyist for the U.S. Chamber of Commerce, which since 2001 has spent nearly $100 million on television ads and other efforts to promote tort reform, regularly reminds business leaders: "Who's the wealthiest, the toughest opponent you have politically? The trial bar."

'Hooters and Polluters'

ATLA even helped to sink an energy bill that is among Mr. Bush's other high priorities. The trial bar objected to a provision that would have protected makers of the gasoline additive MTBE from liability related to allegations that it has contaminated ground water in some states. Veteran ATLA lobbyist Linda Lipsen, a Democrat, and her staff found an unrelated subsidy in the bill that would have given favorable "green bond" financing to environmentally friendly shopping-center projects. At least one of the sites was supposed to include a Hooters restaurant, known for scantily clad waitresses.

In November, as the Senate neared a vote on the legislation, ATLA blanketed Capitol Hill with a blast fax titled "Hooters and polluters." Soon senators were citing it in floor statements. "Whatever you do has to fit on a bumper sticker," Ms. Lipsen explains. "We're always looking for angles, a way to make complicated legal concepts come alive." On Nov. 21, opponents of the bill blocked it by a 57-40 vote, and it still hasn't passed.

Republicans thought they had a good shot at passing medical-malpractice reform when they took over the Senate in 2002. Physicians and insurance companies contend that huge verdicts have driven up health-care costs and forced doctors in some states to close their practices. The American Medical Association launched a "states in crisis" public-relations campaign, complete with a color-coded map.
ATLA fought back by, among other things, helping to arrange for Linda McDougal to testify before the Senate judiciary and health committees in February 2003. The Navy veteran and mother of three had both breasts removed in May 2002 after two pathologists read the wrong biopsy slide and erroneously diagnosed her with cancer.

Sen. Dianne Feinstein of California had been one of the few Democrats willing to consider capping punitive damages, which are supposed to deter reckless conduct and are awarded on top of compensation for injuries. But she cited Ms. McDougal's case when she announced her opposition on the Senate floor last summer: "Is this Congress willing to say there should be a cap of $250,000 on non-economic damages for this kind of mistake? I think not." The $250,000 was the amount cited in a California law passed back in 1975.

The federal bill, which would have capped punitive damages at both the state and federal level, fell 11 votes short of the 60 needed to overcome procedural hurdles in the Senate. Although only two Republicans opposed it on the procedural votes, others were quietly pleased to see it die. One of those in the latter group, Sen. Mike Crapo of Idaho, himself a former plaintiffs' attorney, says, "There's a lot of reform in the medical-malpractice arena that would probably be helpful." But, he adds, "I don't believe in price controls."

Nor do many Republican voters, it turns out. A few years ago, ATLA's Ms. Lipsen, a stalwart liberal, hired Mr. Towery, the Atlanta pollster and a former aide to ex-House Speaker Newt Gingrich. In subsequent surveys, Mr. Towery found that Republican voters, particularly in the South, agree with Mr. Bush that frivolous lawsuits are a bad thing. But those voters said they preferred stricter regulations on hospitals and insurers rather than limits on medical-malpractice damage awards. Republican voters also oppose caps on damages more strongly than Democrats, Mr. Towery says.

Courting Hatch

ATLA stepped up its courting of Republicans -- particularly in the Senate -- about three years ago. David Casey Jr., a Democrat who at the time was ATLA's vice president, invited Mr. Parkinson, the Republican lawyer, to his San Diego law office. Mr. Casey knew his friend Mr. Parkinson had personal ties to Sen. Hatch, a fellow Mormon who first ran for the Senate at the urging of one of Mr. Parkinson's uncles. "Let's explain to the Republican Party that there are trial lawyers like you, and they're part of our organization," Mr. Casey told his guest, they both recall.

Mr. Parkinson, now 54 and known to friends as "Parky," joined ATLA in 1976, when he graduated from Brigham Young University law school. One of his favorite court victories, he says, was a $1 million verdict in 1996 for an 80-year-old woman whose legs were crushed by a car while she was buying a newspaper outside a Desert Hot Springs, Calif., convenience store. Elderly plaintiffs rarely win such large verdicts because their injuries don't cause them to lose wages, and their life expectancy isn't long, Mr. Parkinson says. He wouldn't say what his fee was in the case, but normally, he contracts to take one-third of a jury award.

Mr. Parkinson went to see Sen. Hatch, who, he says, told him, "Not all Republican senators and House members favor the wholesale dismantling of the civil-justice system, but the view is that you're completely Democratic." If ATLA "would just try to be fair to both sides, they're going to find the reception" among Republicans more welcoming, Sen. Hatch says in an interview. He was the only senator who attended ATLA's Christmas party in Washington last year. Now, he and Sen. Lindsey Graham of South Carolina, another Republican former trial lawyer, are helping Mr. Parkinson identify potentially supportive senators in their party.

Until a few years ago, ATLA didn't keep track of its members' party allegiance. A poll of its board of governors in 2003 found that more than a fourth were Republicans. "They just weren't telling us," says Mr. Casey, who just finished his term as ATLA president. The group now asks members to identify their political party.

In June 2001, Ms. Lipsen, the ATLA lobbyist, hired former congressional staff member Elizabeth Humphrey as in-house Republican lobbyist. The longtime House aide started combing through old vote counts to identify potential supporters. One was Rep. John Doolittle, a California Republican who had opposed a medical-malpractice bill in the 1990s. He addressed ATLA Republicans at the trial lawyers' annual conference last year. This year's ATLA convention wrapped up in Boston yesterday, and the Republican speaker was former Rep. Joe Scarborough, now a conservative talk-show host on MSNBC. His message: There are quite a few receptive Republicans like him, and ATLA must continue reaching out to them.

The group picked up two approachable Republicans in 2002, when former trial lawyers Mr. Graham and Saxby Chambliss of Georgia were elected to the Senate. At Mr. Parkinson's invitation, Sen. Graham addressed a luncheon of Republican trial lawyers when they visited Capitol Hill in April. The senator also is urging ATLA to increase its Republican giving, as is Alabama Republican Sen. Richard Shelby, a longtime ATLA ally.

The trial bar's Republican push again showed results last month, when Sen. Kyl tried once more to pass his attorney-fee cap for tobacco cases. This time, 15 Republicans opposed it, two more than last time.
Write to Shailagh Murray at shailagh.murray@wsj.com1

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