In this issue...

A Decade of Politics

Ten-gallon Tort Reform

Asbestos Facts

Spotlight on Matt Welch

Regional Chairman™s Council

A Decade of Political Action

At that time many of our courts, our Legislature, and most important statewide offi ces were controlled by people who served the agenda of personal injury plaintiffs™ lawyers. The strong influence of these lawyers enabled them to manipulate our civil justice system for personal gain.

That™s why along with the educational, legal, lobbying, and research efforts we undertook in Texans for Lawsuit Reform, we also formed a political action committee. TLR PAC started its fund raising and support of candidates in 1994, and is currently in its fi fth election cycle. The consistent goal of the PAC is to elect candidates dedicated to restoring litigation to its appropriate role in society, and to defeat candidates aligned with plaintiffs™ attorneys who seek to exploit the litigation system.

TLR PAC has had numerous victories, and is often credited with bringing about a new majority of offi cials”Republican and Democrat”who have worked together to make important, positive changes to the system.

Already this year, TLR has been involved in over two dozen campaigns for Texas House, Senate, Courts of Appeal, and District Courts. In all but three races, the TLR PAC-supported candidate won.

The work was not easy, as plaintiffs™ lawyers continue to be very active in the political process, recruiting candidates and pouring hundreds of thousands of dollars into electoral campaigns.

The races in which TLR PAC is most engaged are those where a personal injury plaintiff ™s lawyer is challenging a pro-reform incumbent. Examples of this were State Representative Allan Ritter (D-Nederland), who was challenged by plaintiffs™ lawyer David Bernsen, and State Representative Joe Nixon (RHouston), challenged by plaintiffs™ lawyer Rick Plezia. TLR PAC strongly supported both incumbents. The plaintiffs™ lawyers spent fortunes on the candidacies of these challengers. The results of our efforts were rewarding, with Rep. Ritter winning an overwhelming 56% of the vote, and Nixon clobbering Plezia with 73% of the vote.

The plaintiffs™ lawyers were also active in judicial races, one of which they won by what is best described as a œstealth strategy. Recently in Harris County, the plaintiffs™ bar recruited one of their own, Sharon McCalley, to run against a very able District Judge appointed by Governor Perry, Reece Rondon. Even though Ms. McCalley was heavily engaged in personal injury plaintiffs™ work, she campaigned œagainst lawsuit abuse and claimed to be a œGeorge W. Bush Republican. She was able to wage an aggressive campaign with bountiful funds received from the plaintiffs™ bar, allowing her to narrowly defeat Judge Rondon in the Republican primary, winning by less than 400 votes out of 70,000 cast. We will see the plaintiffs™ bar increasingly use this tactic in Republican primaries for judgeships.

Prior to the March 9 primary, TLR PAC was heavily involved in a Special Election for Texas Senate District 1 in East Texas “ the seat vacated by the retirement of Senator Bill Ratliff, one of the authors of HB 4 last session. The race was a match-up between former State Rep. Paul Sadler, an asbestos plaintiffs™ lawyer, and Kevin Eltife, a businessman who supports reforms. This was a clear choice between a candidate who wants to cure legal abuses, and one backed by the largest asbestos plaintiff law firms in Texas.

In the Texas Senate, 21 out of the 31 Members must vote to get a bill to the floor for consideration. Therefore, every Senate election in which there is a clear choice between a reformer and a non-reformer is critical. TLR PAC determined that it would raise and spend a substantial amount of money to oppose Mr. Sadler™s election. Because of the short time period between the Governor™s calling a Special Election, to the date of the election itself, TLR PAC decided to run its own educational campaign informing voters of Mr. Sadler™s record.

Sadler started the campaign with only 8% of the people having a negative impression of him. He ended with about 30% having a negative impression” simply because TLR PAC informed his constituents of his voting record. The PAC used a variety of methods: newspaper, radio and television ads, and direct mail, as well as personal communication with our 400 TLR supporters in SD 1.

One of the main issues in the race was the practice of plaintiffs™ lawyers who routinely file asbestos claims on behalf of persons who are not sick. (According to the RAND institute, recent studies have estimated that up to 90% of current claims are on behalf of persons who show no impairment from asbestos exposure.) This means that sick claimants have a more difficult time getting full and timely compensation. Abusive asbestos litigation has bankrupted over sixty-five American companies, destroyed more than sixty thousand good American jobs, and new claims are increasing.

Personal injury plaintiffs™ lawyers, heavily engaged in asbestos litigation, bankrolled Paul Sadler™s campaign with over $1,000,000. Data from the Texas Ethics Commission shows that 82% of Sadler™s money came from this group. But TLR PAC was there to counter the plaintiffs™ lawyers™ wealth. We made sure that the voters of SD 1 had the facts they needed to make an informed, wise decision. Kevin Eltife defeated Paul Sadler by some 3,000 votes out of 90,000 cast.

TLR™s team of political, public relations, polling, research and media consultants” along with our TLR staff members such as Matt Welch (PAC Director) and Ken Hoagland (Communications Director)”produced an effective, hard hitting yet honest campaign to make sure that Mr. Sadler, a vigorous opponent of tort reform, was denied a seat in the Texas Senate.

The elections that have taken place so far this year provide solid evidence that the plaintiffs™ lawyers remain a persistent and formidable force in Texas politics.

In addition to the œstealth strategies by individual candidates, these lawyers have employed a new tactic of organizing stealth PACs with innocuous sounding names. They use these to funnel money to their candidates in ways that make it difficult (or impossible) for voters to identify the true source of funding.

In fact, just a couple of months ago personal injury plaintiffs™ lawyers created a new stealth PAC called œTexans for Insurance Reform (how™s that for an innocent-sounding name?), which spent hundreds of thousands of dollars in the closing days of the primaries to defeat legislators who supported tort reform last session.

The general election is already well underway, and TLR PAC is engaged in several key races across the state. We will keep you posted on this important part of our overall efforts to prevent abusive lawsuits from undermining respect for the law, and harming our families and the economy.

Ten-Gallon Tort Reform Took Ten Years

A decade after beginning Texans for Lawsuit Reform, Richard Weekley, CEO and co-founder of Texans for Lawsuit Reform, is as determined as ever to make Texas a model for the rest of the nation. œWe have shown the country that it is possible to win common sense reforms, even against virtually unlimited spending by personal injury plaintiffs™ lawyers, said Weekley.

œWe have learned important lessons in the last ten years, he said, adding, œWithout the determination of TLR™s talented team of volunteers and thousands of grassroots supporters around the state, as well as our excellent team of professionals, we never could have made so much progress. œ

œOne thing we learned is that winning real reform meant changing not only the civil justice laws, but also changing what had become the status quo in political strategies in Texas, said Dick Trabulsi, President of TLR. œBefore TLR, it was rare for an issue-oriented Political Action Committee to contribute to a candidate challenging an incumbent elected offi cial. That meant that once an anti-reform individual was elected to offi ce, they were pretty much there to stay, making real, systemic change almost impossible.

œWe have confi rmed that the people of Texas can still be the single most infl uential voice with elected offi cials, said Leo Linbeck, Jr., Senior Chairman of TLR. œIn the beginning, our opponents assumed that average Texans would not concern themselves with the complexities of civil justice abuses, said Linbeck. œTo the contrary, people are very aware that lawsuit abuse hurts both individuals and society at large. They quickly understand the details of reforms necessary to bring about a fair and balanced civil justice system. Texas citizens are more sophisticated about politics and policy than our opponents ever imagined.

Both Trabulsi and Linbeck credited Dick Weekley with being the catalyst for creation of TLR. œHe brought so much energy, determination and optimism to the cause, that he attracted people all over the state who had become disgusted with the rampant lawsuit abuse that had corrupted our legal system, said Trabulsi. œI had been involved in public policy and politics all of my life, Trabulsi continued, œand I saw that Dick Weekley was going to provide the kind of total-immersion leadership that is necessary to achieve signifi cant reform. That™s what caused me to devote so much of my time and energy to TLR. Linbeck noted that Weekley™s enthusiasm and idealism was contagious, and that even some of Austin™s toughest political leaders admired Weekley™s civic-mindedness. œIn fact, remembered Linbeck, œBob Bullock used to call Dick ˜Mr. Smith Comes to Washington,™ after the idealistic and effective movie character played by Jimmy Stewart.

Since the 1995 legislative session, TLR has been credited for its help in enacting the most comprehensive civil justice reforms of any state in the nation. œThat could be because we had the farthestto go, said Hugh Rice Kelly, one of TLR™s cofounders and currently its general counsel. œSolid legal research, broad grassroots support and advocacy, a principled electoral strategy, and a small but very determined, dedicated professional team have helped us make a real difference in the future of Texas, he added.

It is a difference that has been noticed outside our state. The Wall Street Journal recently lauded Texas for enacting what it called, œTen Gallon Tort Reform. Lisa Rickard, President of the U.S. Chamber Institute for Legal Reform was more specifi c: œWhen you want to describe a model civil justice reform effort, you look at Texas. When you want to know why, you look at Texans for Lawsuit Reform, for their determination, ˜can-do™ attitude, and drive. With a lot of hard work, TLR has changed the ˜political reality™ in Texas to bring about fundamental changes.

œOur work is not fi nished by a long shot, said Trabulsi. œThe goal is nothing less than returning litigation to its appropriate role in society. Weekley, a former Naval offi cer, added, œIt™s an ˜allhands™ effort, and it™s well worth it.

ASBESTOS FACTS

• At end of year 2000, over 600,000 people had fi led claims for asbestos-related personal injuries, typically against dozens of defendants.

   

• Over 8,000 companies have been named as defendants, including many small businesses with 20 employees or less.

   

• Mesothelioma cases represent a tiny fraction of all pending claims. In fact, it is estimated that 89% of asbestos claims are fi led by people who do not have any form of cancer.

   

• Asbestos-related bankruptcies are becoming more frequent: a total of 16 bankruptcies were fi led in the 1980s, 18 in the 1990s, and 29 from 2000 through the summer of 2002. So far, 67 companies have gone bankrupt as a result of asbestos liabilities, and many more are threatened with bankruptcy.

   

• More than 60,000 jobs have been lost as a result of asbestos-related bankruptcies. The total could reach as high as 423,000 jobs.

   

• Workers at the bankrupted companies have seen their 401(k)s drop by an average of 25%.

   

• A total of $54 billion has already been spent on asbestos litigation. Attorney fees and other transaction costs have consumed more than half of all amounts paid by defendants.

   

• Of amounts paid after transaction costs, experts estimate that about 65% of the compensation has gone to claimants who are not sick, and may never become sick.

   

• Estimates of the total costs of all asbestos claims range from $200 to $265 billion, creating a huge drag on the American economy.

   

• The Los Angeles Times estimated that the number of people expected to fi le injury claims could eventually reach 2.5 million, and that œ¦the economic toll of asbestos could run as high as $200 billion, higher than estimates for all Superfund sites combined, Hurricane Andrew, or the Sept. 11 terrorist attacks.... (1/27/02)

SPOTLIGHT ON MATT WELCH

Matt Welch, Director of TLR's Political Action Committee since 1996, is a native Texan and a graduate of Texas A&M University. As PAC Director, Matt has been actively involved in over 100 legislative, judicial and statewide campaigns. Matt reports regularly to our PAC Board, making recommendations for endorsements and contributions. He personally manages the PAC's involvement in the races in which we are most heavily engaged. Matt is known for his strong work ethic, sound judgment, and vast knowledge of Texas politics. He has unique instincts about how to conduct winning campaigns. Matt is a man of high principle and extraordinary effectiveness, and we are proud that he is an integral part of the TLR team.

Formation of TLR Regional Chairman™s Council

When Dick Weekley, Leo Linbeck, Dick Trabulsi, and Hugh Rice Kelly created Texans for Lawsuit Reform in 1994, their objective was to establish a vibrant statewide organization to promote comprehensive civil justice reform. TLR™s successes over the last decade are due to the more than 11,600 dedicated volunteers in over 650 separate communities across the state.

At the end of this last legislative session, TLR™s leadership asked itself: œHow can TLR do an even better job of informing, activating, and utilizing its unique and invaluable reservoir of volunteers?

We determined that there was a need for more structured input from TLR supporters, to engage them more actively on a broad range of our activities, and to recruit new fi nancial and volunteer support from people not currently involved with TLR.

The result is the new Regional Chairman™s Council (œRCC). This Council formalizes the ad hoc leadership that has been in place statewide and has served TLR well for the past decade. The RCC is comprised of 21 Regional Chairmen and 21 Regional Co-Chairmen, representing the major cities of Houston, Dallas, San Antonio, Fort Worth and Austin, as well as sixteen other regions encompassing the entire State. These 42 Chairmen and Co-Chairmen are dedicated, loyal supporters who have consistently proven their commitment to tort reform through pro-active involvement and fi nancial support. Each is an accomplished leader in their community.

Leo Linbeck, Jr., who is TLR™s Senior Chairman, believes that the establishment of the RCC is a logical step in TLR™s ongoing effort to maximize citizen involvement in the government of Texas. Leo observes œOur nation is unique in its founding, in that it is based on the principle that the citizen is sovereign”not the state. This reality requires the citizen to engage in the political process as a volunteer, so that government refl ects the will of the people, not the will of narrow special interests.

Over the next few months, there will be events in many of the Regions. Dick Weekley, TLR™s Chairman and CEO, and Dick Trabulsi, TLR™s President, will attend to discuss recent accomplishments, the current status of tort reform in Texas, and the agenda of TLR”all with the goal of establishing Texas as the Beacon State for Civil Justice in America.

We would appreciate any ideas you have on how an active Regional Chairman could promote your personal involvement in TLR grassroots activities and encourage fi nancial support of our overall efforts.