Politics & Policy

The Majority Leader of the Lawsuit Lobby

The Democrats write laws to benefit their paymasters, the tort lawyers.

The late Fred Baron — the asbestos lawyer who paid to relocate John Edwards’s pregnant mistress — was typically unabashed about the political influence of the trial bar. In 2002, he reacted to a Wall Street Journal editorial that had claimed the plaintiffs’ bar was “all but running the Senate” by saying: “I really, strongly disagree with that. Particularly the ‘all but.’”

Under Harry Reid’s leadership, sadly, Baron’s joke is our reality. Over this election cycle, Senator Reid’s campaign and leadership committees have raked in over $2 million from non-lobbyist lawyers, more than twice as much as he has received from any other industry or profession. Four of Reid’s seven largest campaign donors are law firms, and these aren’t corporate-law firms helping to structure the financials for Las Vegas casinos but rather out-of-state plaintiffs’ firms, including asbestos firms in New York, Maryland, and Illinois, as well as a toxic-tort firm in California.

Why are plaintiffs’ firms with little or no presence in Nevada so interested in Senator Reid’s career? The answer, simply, is that their money buys power. And the Senate under Reid’s leadership has done the trial lawyers’ bidding in unprecedented fashion.

#ad#For example, in 2008, Congress responded to public outcry over reports that some children’s toys imported from China contained lead paint, in violation of federal laws. To deal with the problem, Congress passed legislation that beefed up the budget and power of the Consumer Product Safety Commission, which has federal regulatory authority over such matters.

But Reid’s Senate left drafting decisions for the Consumer Product Safety Improvement Act (CPSIA) in the hands of the Commerce Committee’s counsel, David Strickland. He had earlier served as a registered lobbyist for the main political arm of the plaintiffs’ bar, then called the Association of Trial Lawyers of America. Unsurprisingly, the bill ended up as a bonanza for the litigation industry, with provisions that enable state attorneys general to hire plaintiffs’ counsel to sue manufacturers that allegedly fail to comply with its many provisions. Crain’s Chicago Business named suits stemming from the CPSIA among the most likely successors to asbestos litigation as the trial bar’s chief profit center.

The litigation lobby also had its way in crafting the Lilly Ledbetter Fair Pay Act of 2009, the first act passed by the 111th Congress. The Ledbetter Act overturned a controversial, divided Supreme Court decision that applied a 180-day statute of limitations to employment-discrimination claims arising under Title VII of the 1964 Civil Rights Act.

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A case can be made that the Supreme Court’s standard should have been altered, but the bill that came out of Congress went much further, effectively gutting the statute of limitations in pay-discrimination claims entirely. The new law allows potential plaintiffs to wait years before su­ing, as paycheck after insufficient paycheck piles up. The Ledbetter Act also changed longstanding laws that permitted only the victims of discrimination to sue; now, anyone “affected by” the discrimination can sue — a rule that opens up many new litigation opportunities.

In yet another example of Congress doing the litigation industry’s bidding, the 2009 Fraud Enforcement and Recovery Act overturned unanimous Supreme Court precedent to permit lawyers to pursue whistleblower suits against government contractors who never intended to defraud. Indeed, if there’s a basic rule of thumb for the current Democratic leadership, it’s that they’ll insert provisions into virtually any bill to expand the trial bar’s profits.

#ad#And the personal-injury lawyers aren’t about to stop. Recent political trends may block card check, cap-and-trade, and (let’s hope) health-care reform, but the litigation lobby still hopes to move several more items through Congress before the November elections. Their wish list includes sharp limits on private arbitration agreements that call for out-of-court dispute resolution, changes in legal pleading standards to better enable lawyers’ “fishing expeditions,” and rollbacks of preemption rules that prevent state-court juries from interfering with federal regulatory schemes. To help make their case, congressional leaders are staging show trials against car manufacturer Toyota in which a parade of plaintiffsexperts tell stories of sudden acceleration that are all too reminiscent of phony claims made against Audi and GM decades ago.

These efforts aren’t popular: 83 percent of Americans think invalid claims are too easy to file in our legal system. But the lawsuit lobby is banking on passing its goodies under the radar. Let’s hope the media — and the voters — don’t let them.

– Jim Copland is the director of the Center for Legal Policy at the Manhattan Institute and the author of a new report, Trial Lawyers, Inc.: K Street — A Report on the Litigation Lobby 2010.

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