Class-Action Warfare

During the second presidential debate last year, audience member Norma-Jean Laurent posed a tough question for Democratic challenger John Kerry. Laurent noted that Kerry had bemoaned the rising cost of health care for Americans. So how, she wanted to know, could he reconcile this campaign plank with his choice of a running mate who had made millions of dollars successfully suing medical professionals?

The question presented Kerry with a tremendous opportunity for a spirited defense of that great bedrock of American democracy, the civil-justice system. He could have championed his faith in the good sense of American voters who serve on juries and who know a frivolous lawsuit when they see one, without needing the heavy hand of Washington to tell them what to do. He might even have braved a response suggesting that it's the doctors who commit malpractice who drive up health costs rather than the lawyers who represent their victims.

Instead, Kerry simply said, “John Edwards and I support tort reform.” Kerry then referred Laurent to his Web site, where he said she could find a “tort-reform plan” outlining his proposals for reining in lawsuits.

It was a telling moment in the nation's conversation about the civil-justice system, and a sign of just how far the debate had swung. In putting himself and Edwards on record as tort-reform supporters, Kerry was explicitly endorsing the conventional wisdom put forth by George W. Bush and his business backers that Americans are too litigious, that too many frivolous lawsuits are driving doctors out of business, and that lawsuits are hindering America's economic progress. By embracing the term “tort reform,” Kerry was agreeing that Americans need to have their legal rights restricted, a view quite at odds with most of the core values traditionally expressed by Democrats, who like to campaign on their support of “the people, not the powerful.”

But it's not just Democratic values that Kerry betrayed in the fall campaign. It's also his party's financial viability. Along with unions, trial lawyers have long been the Democratic Party's most reliable and generous donors, and without them, the party, both at the state and federal level, would have few other funding options. Every time Kerry spoke up in favor of lawsuit restrictions, he risked cutting off what amounted to $36 million in contributions from lawyers to the national Democratic Party in 2004 and a whopping $123 million to individual Democratic candidates, $22 million of which went to Kerry's own presidential campaign, according to the Center for Responsive Politics.

Nor was Kerry's tort-reform embrace a renegade notion that put him at odds with the Democratic establishment. In February, 18 Democratic senators voted in favor of a sweeping bill to restrict consumer class actions against large corporations, including the party's new all-star, Barack Obama, and former presidential candidate Joe Lieberman. (Despite his declaration during the debate, Kerry voted against the bill.) Thirty-two Democrats in the House have also voted in favor of restricting class actions. Democratic governors in conservative states like West Virginia, Mississippi, and Alabama have all signed tort-reform legislation in recent years as well, primarily to restrict patients' rights to sue for medical malpractice.

Democrats leaning toward tort reform have been egged on by their policy-generating institutions, such as the Democratic Leadership Council (DLC). These New Democrats, led by former Solicitor General Walter Dellinger, have been cheerleaders for the class-action bill. Dellinger, of course, now works for Exxon and other large companies backing the tort-reform movement. Likewise, the DLC's Progressive Policy Institute recently teamed up with Common Good, a corporate-funded tort-reform group that refers to the justice system as “a tool for extortion,” to push a measure that would take malpractice lawsuits out of the hands of juries.

These groups insist that the current legal system is “indefensible” and unpredictably chaotic. Yet few of the Democratic tort reformers seem to have read the comments by Republicans lately openly acknowledging that they support lawsuit restrictions, not primarily as a good policy measure but as a mechanism for depriving Democrats of their funding base. If votes for tort reform are, in effect, votes against their party's survival, why are so many Democrats in favor of it?

The easiest answer is simply that Democrats actually believe that what they're voting for is in the national interest. “Call me naive, but you have to believe they're voting out of conscience,” says Republican political consultant John Weaver, who worked on Kerry's campaign. “And if they really believe in limiting victims' rights, then that's how they should vote.”

More cynically, the biggest tort reformers among the Democrats also get significant campaign contributions from insurance companies, a key beneficiary of restrictions on lawsuits. Senator Ben Nelson, for instance, is a conservative Democrat and a tort-reform supporter whose largest donors are companies such as AIG, Allstate, Aflac, and Mutual of Omaha. Likewise, Senator Christopher Dodd voted with his donors on the class-action bill. Metropolitan Life, a life-insurance company that recently settled a class action for $120 million for overcharging African American policyholders, has showered Dodd with its largesse. Dodd was also an original co-sponsor of the 1995 securities litigation “reform” act, which restricted shareholder lawsuits, and worked to override Bill Clinton's veto of the bill.

Neil Vidmar, a professor at Duke Law School who studies juries and is frequently called upon to testify on tort-reform measures in the North Carolina Legislature, says that one big problem with legislators on both sides of the issue is that they rarely have a firsthand view of the system, even though many of them are lawyers. “A lot of politicians are incredibly naive,” says Vidmar. “They don't really understand the process about how these things work.”

Politicians, like the rest of the general public, have been influenced by a sophisticated media campaign waged by the insurance and tobacco industries and other large companies to help insulate themselves from liability for injuries to consumers. They've heard the story of the McDonald's coffee lawsuit.

“It's the result of 30 years and hundreds of millions of dollars by the business community to convince people that tort reform is right,” says Pamela Gilbert, a Washington attorney who served as the executive director of the Consumer Products Safety Commission during the Clinton administration and has lobbied for consumer groups against tort reform. “The public is beginning to believe that we have too many lawsuits and the people to blame are the ones suing, not the wrongdoers. The Democrats who vote for tort reform should know better.”

Sober government data lend credence to what Gilbert is saying. Despite Bush's frequent characterization of the legal system as “out of control,” his own Justice Department notes that lawsuit filings are on the decline and jury awards are down. The Government Accountability Office has concluded that doctors aren't leaving medicine because of lawsuits.

But as with Iraq and Social Security, the Democrats are deferring not to the facts on tort reform but to some political calculus defined by their opponents. “They've gotten into this losing mind-set that they're constantly playing defense,” Weaver says. “They're constantly giving up ground to the Republicans over what were once their core principals.”

Gilbert believes the move by Democrats to embrace tort reform is shortsighted, because despite what they may think, it doesn't protect them from attacks by Republicans and big business. Take Nelson, the Nebraska senator, she says. “The Republicans will go after him anyway,” Gilbert says. “They're not going to reward him for those tort-reform votes.”

Indeed, the state of Mississippi provides a case study in how Republicans have effectively used tort reform to regain political dominance in once-Democratic strongholds, where many Democrats attempted to find “middle ground” on tort reform and still got clobbered for it in elections. In the state's 2003 gubernatorial race, Washington über-lobbyist Haley Barbour effectively pummeled Ronnie Musgrove as a shill for trial lawyers, even though Musgrove had actually signed into law sweeping tort reform a year earlier in an attempt to mollify the business community. Democratic Lieutenant Governor Amy Tuck, due to her embrace of tort reform, lost her trial-lawyer support and was forced to switch to the Republican Party to save her political career; there was simply nowhere else to turn for campaign donations as a Democrat. In Mississippi, like in many states, trial lawyers are the only source of significant campaign funding for progressive candidates.

Pam Johnson, a lobbyist for the Mississippi Trial Lawyers Association, says that the Republicans, aided by outside money and resources from the U.S. Chamber of Commerce, did such a good job of demonizing trial lawyers and candidates who took their money that Democrats felt like challenging the tort-reform myths outright was a losing battle. As a result, she says, “Nobody will come out and say it's a big lie.”

Stephanie Mencimer is an Alicia Patterson fellow and a contributing editor at the Washington Monthly.

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