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A REPORT ON THE LITIGATION LOBBY 2010 A Message from the Director merica’s litigation-friendly legal system continues to im- law is, for the most part, crafted by state judges rather than en- A pose a heavy burden on our economy. The annual direct acted by state legislatures, these efforts have centered on ensuring cost of American tort litigation—excluding much securities liti- a friendly judiciary, whether appointed or elected. gation, punitive damages, and the multibillion-dollar settlement With business groups now fighting back against Trial Lawyers, reached between the tobacco companies and the states in 1998— Inc.’s longtime grip on state judiciaries, the litigation lobby has exceeds $250 billion, almost 2 percent of gross domestic prod- turned its attention to state legislatures, where it is not only block- uct.1 The indirect costs of excessive litigiousness (for example, the ing tort reforms but working to expand its portfolio of litigation unnecessary tests and procedures characterizing the practice of opportunities. Among other things, state legislators are authoriz- “defensive” medicine, or the loss of the fruits of research never ing new kinds of lawsuits, raising damage caps, and giving private undertaken on account of the risk of abusive lawsuits) are prob- lawyers authority to sue on behalf of the state. ably much greater than the direct costs themselves.2 Of course, the growth in federal regulation and law has made Of course, tort litigation does do some good, and it does deter it necessary for Trial Lawyers, Inc. to lobby Congress as well. some bad behavior. The problem is that it deters a lot of good Thanks to large contributions, both to the Democratic Party and behavior, too. Indeed, the legal system does such a poor job of to individual legislators, lawyers have not only blocked most fed- distinguishing between good and bad behavior that the high cost eral efforts at tort reform but are also working to coax goodies of litigation is effectively a “tort tax” paid by every American. The from Congress that pad their bottom line. Such efforts include: share of America’s economy devoted to lawsuits is far higher than • Lengthening statutes of limitations in employment law to that of other developed nations such as Germany and Japan (see make it easier to file discrimination suits;4 graph below, left). Yet America is hardly safer as a result. • Spurring securities litigation by allowing suits to be filed As this report details, the causes of the staggering growth in against the vendors of corporations accused of fraud;5 the overall economic costs of litigation in America (see graph be- • Cutting contingent-fee lawyers a tax break worth over a low, right) are somewhat complex. A series of writings by academ- billion dollars;6 ics and decisions by judges from the 1930s through the 1960s— • Gutting arbitration contracts designed to encourage resolu- many of which were well-intentioned—changed our legal rules to tion of disputes that are too expensive to take to trial;7 and make it much easier to file and win lawsuits.3 • Allowing state juries to override federal regulations.8 Alongside these doctrinal changes, the modern trial-lawyer The litigation industry isn’t making political headway because lobby emerged. As the plaintiffs’ bar became wealthier, more it is popular. Eighty-three percent of Americans think that the organized, and more like an industry—we like to call it Trial legal system makes it too easy to assert invalid claims.9 The plain- Lawyers, Inc.—it grew into a major political force. Combining tiffs’ bar became so nervous about its public image that it changed large-scale political giving with K-Street lobbying sophistica- its name: in 2006, the Association of Trial Lawyers of America tion, the lawyers worked to maintain the legal shifts that had rebranded itself the American Association for Justice.10 enriched them, as well as to initiate changes that would enrich But general public unease over the conduct of litigation today them still more. cannot combat the overwhelming influence that Trial Lawyers, The litigation industry’s political strategy is multifaceted. Be- Inc. has obtained in the halls of power. In the last decade, lawyers cause tort law is state law in the United States, the states have been and law firms—excluding lobbyists—have injected $780 million the focus of Trial Lawyers, Inc.’s political efforts. And because tort into federal campaigns,11 on top of $725 million donated to state

Tort Litigation Consumes Much More of America’s Since 1950, U.S. Tort Costs Have Risen Economy than of Other Developed Nations’ Much Faster than GDP

16,000

U.S. 2.2 e 14,000 Italy 1.7 ng e 12,000 ha C Germ any 1.1 v 10,000 la ge 8,000 ta

Japan 0.8 m u 6,000 Tort Costs Cu France 0.7 cen 4,000 GDP

U.K. 0.7 Per 2,000 0 0 0.5 1 1.5 2 2.5 19 50 19 60 19 70 19 80 19 90 20 00 Tort Costs, Percent GDP, 2003 19 55 19 65 19 75 19 85 19 95 20 05 Source: Towers Perrin Source: Towers Perrin

 www.TrialLawyersInc.com K STREET Tort Costs Have Risen More Slowly of Late Table of 20.0

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Pe 0.0 2001 2002 2003 2004 2005 2006 2007 2008 Introduction 4 (5.0) (5.6) The King of Torts 5 (10.0) The Law Expands 6 Source: Towers Perrin Public Relations 9 races.12 Lawyers’ giving is so lavish that it exceeds all other industries’, State Government Relations 12 and likely would do so even if donations by defense firms were backed Suing for the State 13 out of total contribution figures (see note 36).13 Moreover, the plain- tiffs’ bar strategically concentrates its giving, wielding disproportionate Justice for Sale 15 influence in contested state supreme court elections and over the lead- ership of both the U.S. Senate and key state legislatures. Federal Government Relations The progress of the plaintiffs’ bar has not been entirely unimpeded. Expanding Liability 16 Since the Manhattan Institute issued, in 2003, its first report entitled Trial Lawyers, Inc., major tort-reform legislation in states such as Texas Deputizing Trial Lawyers 17 and Mississippi has forced plaintiffs’ lawyers to look for friendly new Attacking Arbitration 20 jurisdictions.14 Judges such as Janis Graham Jack have blown the doors The Anti-Federalist Congress 20 off a program of manufactured testimony and medical examinations in the asbestos-lawsuit industry, producing a sharp drop in new case Toy Story 22 15 filings in that line of litigation. From 2004 through 2008, the cost A Trial-Lawyer Tax Break 23 of litigation to the economy rose more slowly than overall economic growth (see graph above). And four key members of our original Trial Conclusion 24 Lawyers, Inc.’s “leadership team” have left the business altogether: fed- eral prosecutors uncovered bribery and kickback schemes that led to Appendix 25 the imprisonment of Dickie Scruggs,16 Bill Lerach,17 and Mel Weiss;18 Endnotes 26 and former U.S. Senator John Edwards has retreated from the public scene in ignominy.19 Other Resources 31 But make no mistake: trial lawyers are re- acting to recent setbacks not by licking their wounds but by flexing their political muscle. Newly enlarged Democratic majorities—swept into office by financial crisis, disaffection with the war in Iraq, and enthusiasm for “hope and change”—seem intent on rewarding their po- litical benefactors. I hope that this report, by shedding light on their shenanigans, can help stem the damage. Visit TrialLawyersInc.com for online versions of this report, previous James R. Copland Director, Center for Legal Policy editions in the series, updates, and Manhattan Institute for Policy Research other resources.

C L P CENTER FOR LEGAL POLICY  AT THE MANHATTAN INSTITUTE Introduction Political Power How Trial Lawyers, Inc. Became Washington’s Most Influential Business Lobby

The late Fred Baron, one The Rise of the Plaintiffs’ Bar of the litigation industry’s most Although the legal profession and the successful asbestos lawyers, was Anglo-American system of tort law long never bashful about acknowledging predate the United States itself, an or- trial lawyers’ political influence. In ganized plaintiffs’ bar—and the rise in 2002, in reaction to a recent Wall political influence of trial lawyers like Street Journal editorial claiming that Fred Baron—are relatively recent de- “the plaintiffs bar is all but running velopments. As noted by legal historian the Senate,” Baron quipped, “I John Fabian Witt, “For the first century really, strongly disagree with that. and a half of U.S. history, the plaintiffs’ Particularly the ‘all but.’ ”20 lawyer barely existed as a category.”24 A past president of Trial Law- Until the late nineteenth century, torts yers, Inc.’s political wing—known was not recognized as a discrete branch when he headed it as the Associa- of law; the first American treatise on the tion of Trial Lawyers of America— subject was not published until 1859.25 Baron had personally donated mil- Early-American accident lawyers “shifted lions of dollars to political causes.21 back and forth between representing de- For his friend and fellow trial law- fendants and plaintiffs,” and “[t]hrough Fred Baron

yer John Edwards’s 2004 and 2008 Times Josh Merwin/New York the first half of the twentieth century, runs for national office, Baron di- plaintiffs’ lawyers remained for the most rected fund-raising operations, lent the campaign his private part diffuse and unorganized.”26 jet, and infamously paid to relocate the candidate’s mistress, However, amid and following the upheavals of the Indus- who was pregnant.22 trial Revolution, reformers during the Progressive era and the Baron was but one of many heavy-hitting plaintiffs’ law- New Deal came to believe that the old common-law tort system yers who have ponied up big cash to political campaigns. In- was ill equipped to handle proliferating workplace injuries and deed, at the time Baron retired from his old firm Baron & thus promoted the establishment of a regulatory system. Bor- Budd, in 2002, there were seven trial-bar contributors to fed- rowing from Germany, American states began to enact workers’ eral campaigns that had given more than his firm: the indus- compensation laws that handled employees’ injury claims out- try’s political action committee; three fellow Texas personal- side the tort system: “Between 1910 and 1921, forty-two states injury firms, Williams & Bailey, Nix, Patterson & Roach, and passed industrial injury legislation, replacing tort law with an Provost Umphrey; and the law firms of asbestos kingpins Ron administrative system affording compensation for accidental Motley (who also led the states’ multibillion-dollar litigation injuries arising on the job.”27 against tobacco companies), Peter Angelos (who now owns the From among the lawyers who handled these new workers’ Baltimore Orioles), and the recently deceased John O’Quinn compensation claims arose the trial-lawyer bar and its lobby- (who also made a fortune on breast-implant suits).23 ing arm. In 1946, Sam Marcus, a Detroit workers’-comp lawyer

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The King of Torts

f Trial Lawyers, Inc. had a single founder, it would have to be San Melvin Belli, the King of Torts IFrancisco personal-injury lawyer Melvin Belli, dubbed the “King of Torts” by Life magazine in 1954.44 Belli was “a man of scarlet silk-lined suits, of multi-colored Rolls Royces, of courtroom theatrics and Hollywood high- jinks.”45 His clients included the Rolling Stones, Lee Harvey Oswald killer Jack Ruby, and Hollywood stars Mae West and Errol Flynn.46 Belli also wrote several books, including the three-volume treatise Modern Trials, which earned him over $1 million in royalties.47 Other lawyers had reason to buy Belli’s book, which explained the tactics he had used to revolutionize the world of tort law. Belli had been the trial attorney in the famous 1944 case Escola v. Coca-Cola Bottling Co.,48 which laid the foundation for strict liability—liability without fault— in product defect cases (see box, next page). In the 1950s, Belli launched modern pharmaceutical litigation with his successful case against a manufacturer of polio vaccines.49 A seminal law review article he wrote,50 along with his aggressive advocacy, helped increase substantially the amounts awarded for “intangible” injuries like pain and suffering. And to play upon jurors’ heartstrings and put them in a more generous mood, he pioneered the use of “demonstrative evidence”—photographs and props that depicted and dramatized his clients’ suffering.51 Many of Belli’s theatrics seem AP Photo/Paul Sakuma AP Photo/Paul bold even today: in one case, he arranged to have “an injured, 680- pound client [hoisted] through the courthouse window,” and in another, he shocked a 1940s jury “by having a client bare her chest to show scars from an injury. She then shed tears that landed right on her scars.”52

representing the Congress of Industrial Organizations, met Sam Because the regulated world of workers’ compensation of- Horovitz, a Boston employee-claims attorney who represented fered attorneys far less upside than did the open and rapidly the American Federation of Labor.28 In August of that year, the expanding world of tort law, the NACCA soon found itself two formed the National Association of Claimants’ Compensa- departing from its original purpose. “Within just a few short tion Attorneys (NACCA). Initial membership was eleven, and years, the NACCA had become an organization dedicated not Marcus was the group’s first president. In 1949, NACCA began to the improvement of the workmen’s compensation system, to take on its current form, when the nation’s most prominent but to its rollback. By the early 1950s, NACCA advocated the personal-injury lawyer, Melvin Belli (see box), persuaded the abolition of workmen’s compensation.”32 group to admit all tort lawyers rather than merely those repre- Membership in the lawyer lobby swelled, and in 1960, senting injured workers.29 the organization changed its name to the National Association Although Horovitz initially opposed Belli’s entreaties, he of Claimants’ Counsel of America, which better reflected its soon embraced the group’s expanded mission with gusto, and in new mission. Four years later, the group adopted the catchier- 1949, he “took his family on a three-month, 10,800-mile tour sounding American Trial Lawyers Association (ATLA), then across the South and Southwest in a silver aluminum Airstream switched again in 1972 to a similar name, Association of Trial trailer to establish local branches and chapters of the NACCA.”30 Lawyers of America.33 The government-relations arm of Trial Dubbed the Silver Bullet Tour by the trial lawyers, Horovitz’s Lawyers, Inc. would keep this moniker for thirty-four years, mission was wildly successful, bringing hundreds, and then before deciding in 2006 to disguise its mission by adopting the thousands, of new recruits to the lawyer-lobby cause.31 innocuous-sounding American Association for Justice.34

L C P  CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Introduction

The Law Expands

rial Lawyers, Inc. could never have of Torts,62 which greatly influences state Roger Traynor Tgrown into the big business it is supreme courts around the country. if the traditional legal rules limiting (Prosser had argued for strict product the scope of litigation had not first liability in his 1941 torts treatise.63) The been loosened. In 1944, pioneering Second Restatement also legitimized trial lawyer Melvin Belli represented other theories of liability that have come Gladys Escola, a waitress who had to dominate product-liability litigation: suffered severe hand injuries when “design defects” (which asks juries to a bottle of Coca-Cola exploded as play scientist and determine whether she was putting it into a refrigerator.53 an alternative product design would Under traditional doctrines, in order have reduced or avoided injuries) and to establish liability, Belli would have “failure to warn” (which asks juries to had to prove negligence on the part determine whether products’ warning of the bottling company.54 However, labels—which have, understandably, the bottle’s pieces had been discard- proliferated as the result of application ed, and he had no evidence of error of the legal rule—are sufficient to notify in the manufacturing process.55 customers of product risks).64 Courtesy of The Bancroft Library, University of California, Berkeley Courtesy of The Bancroft Library, Belli persuaded the California In parallel with this expansion of Supreme Court to discard the existing legal standard and the substantive law of tort, the procedural law went through a hold that a jury could deem the bottler negligent under major overhaul, and this also facilitated a surge in litigation. the doctrine of res ipsa loquitor (“the facts speak for them- Under both the common law and various state codes, filing selves”), permitting the court to infer and assign fault purely a lawsuit required pleading a case with particularity—that is, on the basis of evidence of the explosion.56 Escola ushered meeting certain thresholds before a legal claim would be al- in the era of modern product-liability law; Belli remarked, lowed to proceed.65 These pleading rules were “criticized for thirty years later, “If there is one legal decision upon which overemphasizing form over substance,”66 and when Yale Law Ralph Nader built, this was it.”57 School dean Charles E. Clark set about drafting the first Fed- The Escola case is remembered less for its holding—few eral Rules of Civil Procedure during the New Deal, under au- today would argue that it is unreasonable to hold a manu- thority delegated to the judicial branch by the Rules Enabling facture liable for an exploding soda bottle—than for its con- Act,67 he effectively gutted the old rules. currence,58 written by Justice Roger Traynor, who had taught Code pleading had controlled the volume of litigation not Belli at the University of California at Berkeley’s Boalt Hall only by requiring plaintiffs to plead facts with particularity but School of Law. Traynor argued that the court should dis- by requiring them to give notice to a defendant that a suit had pense with negligence altogether and instead embrace the been filed, to narrow the legal issues, and to exclude meritless doctrine of “strict liability,” that is, “an absolute liability when claims.68 The new 1938 Federal Rules, however, dispensed an article that [a manufacturer] has placed on the market, with all such requirements save notice.69 Clark’s vision was knowing that it is to be used without inspection, proves to to allow virtually any claim to have its day in court—where have a defect that causes injury to human beings.”59 Traynor the truth of the matter would be determined—but it failed to would enshrine strict liability in the law of California in the anticipate the economic realities that the new system would 1963 case Greenman v. Yuba Power Products,60 which, ac- create. The Federal Rules’ new, open-ended discovery process cording to a 1996 poll of the membership of the Association enabled wildly expensive fishing expeditions and—in combi- of Trial Lawyers of America, was the most significant change nation with the “American rule” that each side in litigation must made to tort law in the previous fifty years.61 bear its own costs70—encouraged shakedown suits and other In 1965, a scant two years after Yuba Power was decided, forms of what was, in effect, legal extortion. Later procedural William Prosser, a University of California, Hastings College of changes, including a shift to “opt out” class actions in a 1966 the Law professor, would incorporate Yuba Power’s strict-liability amendment of the Federal Rules,71 gave even more power to standard into the American Law Institute’s Second Restatement plaintiffs and the lawyers who represented them.

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The Trial Lawyer PAC, Now Named the American SinceSi nc1990,e 1990 Lawyers, Lawyers HaHaveve Gi Givenven Over Over $1 Billio $1n Billion Association for Justice, Is Regularly Among the to Federalto Fede raCampaigns—Morel Campaigns--More Than Than Any Ot Anyher Other Top Donors to Federal Campaigns IndustryIndustr yin in EachEach El Electionecon Cycl Cyclee

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It’s All about the Money Committee in the last campaign were plaintiffs’ law firms— When ATLA first set up the Attorneys Congressional Cam- New York asbestos and class action giant Weitz & Luxenberg paign Trust, in 1979, it was a relatively small player, giving only ($505,400) and Illinois asbestos powerhouse Cooney & $400,000 to campaigns that year.35 It quickly became a much Conway ($326,500).39 Over the last five years, Weitz & more powerful force: since 1990, the group’s PAC contributions Luxenberg has also been the third-largest contributor to Senate to federal campaigns have exceeded $33 million, and lawyers al- majority leader Harry Reid (D-Nev.), who counts plaintiffs’ together, excluding lobbyists, have contributed $1.05 billion to firms as four of his top seven contributors.40 The top two, and federal candidates (see graphs above).36 Not only have lawyers’ seven of the top twenty, donors to Senate majority whip Dick campaign contributions exceeded those of every other industry Durbin (D-Ill.) are plaintiffs’ law firms, including Cooney & or profession over the last two decades; they have exceeded those of every other one in each two-year political cycle.37 Trial Law- yers, Inc.’s ability to keep tort reform off the table in the recent discussions over health-care reform is not surprising in light of the fact that lawyers’ congressional-campaign contributions in the last election cycle substantially exceeded the combined total of political donations from doctors, pharmaceutical companies, HMOs, hospitals, and nursing homes.38 As Fred Baron suggested, the plaintiffs’ bar has a stranglehold over the U.S. Senate. Two of the top five private contributors to the Democratic Senatorial Campaign

Lawyers’ campaign contributions exceeded those of every other

industry over the last two decades. istockphoto.com/Ben Thomas

L C P  CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Introduction

Senate Majority Leader Harry Reid Receives Much of His Funding From Trial Lawyers, Inc.... AP Photo/Jim Mone Lawyers/Law Firms 2,108,723

Securies & Investment 885,460

Lobbyists (All Industries) 753,196

Casinos/Gambling 700,300

Health Professionals 684,575

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Campaign Dona�ons to Harry Reid, $, 2005-2010 Source: Center for Responsive Politics Senate Majority Leader Harry Reid

Senate Majority Whip Dick Durbin ... As Does Senate Majority Whip Dick Durbin

Lawyers/Law Firms 2,448,107

Securies & Investment 766,512

Real Estate 506,396

Lobbyists (All Industries) 380,255

Pro-Israel 373,712

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Campaign Donaons to Dick Durbin, $, 2005-2010 Source: Center for Responsive Politics AP Photo/Charles Rex Arbogast AP Photo/Charles Rex

Conway and fellow in-state firms Simmons Cooper (his largest tribute hefty sums to state legislators, attorneys general, and donor), Korein Tillery (his second-largest donor), Clifford Law other statewide officials. In some cases, leaders in part-time Offices, Corboy & Demetrio, and Power, Roger & Smith—all state legislatures are themselves plaintiffs’ lawyers or affili- featured in Trial Lawyers, Inc.: Illinois.41 In total, Trial Lawyers, ated with personal-injury firms. In New York, for example, Inc. dwarfs all other industries in contributing to the Senate State Assembly Speaker Sheldon Silver and State Senate leadership (see graphs above). Democratic Conference Leader John Sampson each have “of Since tort law exists primarily at the state level, Trial counsel” relationships with major asbestos- and personal- Lawyers, Inc. has of necessity been a force in state elec- injury-litigation firms, Weitz & Lexenberg and Belluck & tions as well, giving almost $725 million over just the past Fox, respectively.43 The lititgation industry’s massive con- decade.42 The trial bar works feverishly to control state tributions and web of financial ties to state political leaders supreme courts, and spending on many of these races, in have enabled it not only to block tort-reform efforts but states where they are held, has exploded since business be- also, increasingly, to craft an affirmative state-level agenda gan fighting back (see box, page 15). Trial lawyers also con- to expand litigation opportunities. TLI

 www.TrialLawyersInc.com Public Relations

K STREET Attorney image Makers The Litigation Industry Works Through the Academy, Media, and Surrogate Groups to Burnish Its Perception

The litigation industry realizes that it has a popularity former dean of Harvard Law School.75 Pound later penned problem, as evidenced by its recent decision to change the a glowing introduction to Belli’s best-selling book Modern name of its top industry association from the Association of Trials.76 An early critic of the common law, Pound in his later Trial Lawyers of America (ATLA) to the American Association years had become a fierce opponent of the New Deal, and he for Justice72—a moniker less suggestive of a lobbying group came to view the common law of tort as a substitute for the for plaintiffs’ lawyers than of the Justice League of America, bureaucratic state.77 Pound thus became a leading advocate for the team of superheroes in the 1970s Saturday-morning Su- the plaintiffs’ bar and, by doing so, gave it an air of academic per Friends cartoons.73 Lawyers will never be popular—doubts legitimacy. The Harvard professor’s legacy continues to aid the about barristers predate the American republic74—but the trial litigation industry: the Pound Civil Justice Institute, a think bar has much to gain from obfuscating its avaricious business tank founded by the plaintiffs’ bar in 1956, conducts seminars, model and perpetuating its image as a loose cadre of individual including some for judges, and publishes papers to promote the advocates who simply hang their shingles and stand up for the interests of Trial Lawyers, Inc.78 little guy against corporate predators. The tort bar continues to cultivate relationships with aca- To meet its public-relations aims, Trial Lawyers, Inc. sup- demics who are willing to speak on its behalf. Drawing upon plements its government-relations efforts with a strong web of their august institutions’ reputations for seriousness and their ties to the academy, media, and various “consumer” groups. By encouraging law-review articles and amicus briefs; news stories, movies, and television programs; and studies and state- ments from purportedly independent nonprofit organizations, the trial bar works to reinforce its mythical identity—and thus head off and disarm popular opposition.

Ivory-Tower Advocates As the organized plaintiffs’ bar developed, its leader, Melvin Belli, befriended septuagenarian law professor Roscoe Pound,

Many law professors can earn hefty sums as “expert” witnesses by giving an

academic seal of approval to litigation. istockphoto.com/Micheal O Fiachra

L C P  CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Public Relations

own for independence, many of them profit handsomely from This partnership between reporters and trial lawyers their ties to the trial bar. Law professors can earn hefty sums is not a good thing, but it’s hard for us reporters to resist, as “expert” witnesses by giving an academic seal of approval to because trial lawyers are a perfect source. They do most mass-litigation settlements, dodgy fee arrangements, and ques- of the work for us. We don’t need to make phone calls to tionable theories of injury. search for victims; the lawyers identify the most telege- Law professors’ work is regularly cited in support of pro- nic of them, the people whose stories make you cry, and litigation positions, notwithstanding conflicts of interest. they’ll bring them right to our office. Consider Jones v. Harris Associates,79 a case for which the U.S. Then they identify the “bad guy” for us. We don’t Supreme Court heard oral arguments on November 2, 2009. need to do much original investigating, since the lawyers In Jones, the trial bar is seeking greater latitude to sue mutual use their subpoena power to force companies to turn over funds over their management fees. A group of law professors just about every record they’ve ever produced. The lawyers signing a friend-of-the-court brief on behalf of the plaintiffs usually find some dirt (bet they’d find dirt on you if they cited the work of three other professors who had already got all your papers) and hand it to us. We double-check it, served as expert witnesses in the same case.80 Such practices but we’re following the lawyers’ script.84 are often undisclosed; the same trial bar that attacks any study even partly funded by industry tries to obscure its own role in Consumer Group Surrogates enriching its ivory-tower advocates. Trial Lawyers, Inc. often works with allied groups to cul- tivate an air of legitimacy in promoting its agenda to the press An Unsuspecting Media and general public. Chief among these are the Naderite con- Trial lawyers have also aggressively courted the media. The sumer groups that purport to protect the public from alleged little-guy-against-corporate-evildoer makes for good theater, corporate abuses. The innocuous-sounding Citizens for Justice so the trial lawyers’ mythology finds its way regularly into the and Democracy, headed by Nader disciple Joanne Doroshow, popular media, for instance in the books and movies written exists exclusively to fight efforts at reforming the civil justice by John Grisham and in television shows produced by David system.85 The group produces scores of position papers and E. Kelly.81 Grisham is himself a former plaintiffs’ lawyer who “studies” designed to confuse the facts about the civil justice makes no secret of his friendship with his fellow Mississip- system; and through a subsidiary organization, Americans for pian Dickie Scruggs,82 a leader of Trial Lawyers, Inc. before he Insurance Reform,86 it makes a practice of blaming the high pleaded guilty to conspiring to bribe a judge.83 price of medical-malpractice and other liability insurance on Trial lawyers also work the news media to stir up pub- the greed and mismanagement of insurance companies rather lic fear, primarily by funneling victim stories to consumer re- than on the underlying litigation being insured against. porters. News analyst John Stossel, who earlier won nineteen Other Naderite organizations—such as the Center for Emmy Awards as a consumer reporter, notes that trial lawyers the Study of Responsive Law,87 the Public Interest Research are the reporter’s “perfect source”: Group,88 and Public Citizen89—are less single-minded in their support of the trial bar, though their public positions signifi- cantly overlap. Public Citizen, for example, pushes Trial Law- yers, Inc.’s agenda directly, through its Litigation Group, which fights preemption of tort claims, arbitration clauses, and other issues adverse to interests of the plaintiffs’ bar;90 and indirectly, through its Health Research Group, which publicly attacks the safety of hundreds of drugs and medical devices that are the bread and butter of the mass-tort bar.91 A Harvard-trained lawyer, Ralph Nader rose to fame in 1965, when the then-thirty-one-year-old published the book Unsafe at Any Speed,92 an attack on the automobile industry and its products. Nader focused his criticism particularly on the Chevrolet Corvair, an economy car that drew upon de- Dickie Scruggs Associated Press/Rogelio V. Solis V. Associated Press/Rogelio sign features of European car models and thus differed from

10 www.TrialLawyersInc.com K STREET

Prominent plaintiffs’ attorneys have supported Ralph Nader’s consumer Ralph Nader and Joan Claybrook crusades “in every way possible.”

its American competitors. Although some of Nader’s safety criticisms doubtless had merit, the federal National High- way Transportation and Safety Administration (NHTSA)— founded by Congress in 1966, partially in response to Nader’s book—ultimately determined that “the 1960–63 Corvair compares favorably with contemporary vehicles used in the tests” and that “the handling and stability performance of the AP Photo/Barry Thumma 1960–63 Corvair does not result in an abnormal potential for loss of control or rollover, and it is at least as good as the of its largesse. In a 1999 interview, Joan Claybrook, president performance of some contemporary vehicles both foreign and of Public Citizen at the time, admitted that her group received domestic.”93 Unfortunately, lay juries are unable to engage in “about $200,000” per year from plaintiffs’ attorneys.95 Because the sort of comparative and cost-benefit analysis employed by the contributions it receives are not disclosed in public filings, the NHTSA. Nader’s attacks on the auto industry, in combi- it is impossible to determine whether other trial-lawyer money nation with substantive shifts in legal doctrine, helped gener- is funneled indirectly into its coffers. The comments of some trial lawyers would suggest that the sum Claybrook mentions is just part of the story: prominent California plaintiffs’ at- torney Herb Hafif has said that the trial bar supported Nader

AP Photo/stf “overtly, covertly, in every way possible,” and the late Texas tort king Pat Maloney noted that the litigation industry supported Nader’s efforts “for decades,” contributing “a huge percentage of what he raises.”96 Although there is no reason to suspect that “Saint Ralph”97 and his organizational offspring operate from venal motives— many of “Nader’s Raiders” and their successors are true believ- ers in their cause—his crusades seem to have provided him with a good living: the financial disclosure forms that he re- leased during his 2004 presidential campaign showed him as A Chevrolet Corvair on display at the 1959 Paris Auto Show having over $4 million in net liquid financial assets.98 So appreciative of consumer groups is the plaintiffs’ bar ate waves of automobile “design defect” cases. Before long, the that in 1986 ATLA attorneys set up their own charitable public was left with the impression that “all economy cars are trust—the Civil Justice Foundation—to support those that inherently defective for tort purposes.”94 are dedicated to furthering the trial bar’s interests.99 As for Nader and the organizations he founded were of great use Nader, he plans to build an American Museum of Tort Law 100 to the litigation industry, which in turn made them recipients in his hometown. TLI

L C P 11 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE State Government Relations State Shenanigans State by State, the Litigation Industry Works to Establish New Lines of Business

n America’s federal system, common law is state law. The the case to proceed, the plaintiffs’ attorney will happily find I 104 litigation industry spends heavily on state elections to protect himself playing on home turf. itself. Over the last decade, lawyers and law firms have given almost $725 million to state political campaigns (see graph). LawyersLawy anders a ndLaw Law Firms Firms HaHaveve Cont Contributedributed Over Over Whereas trial lawyers’ giving at the federal level tends to $700$700 Million Millio nto to State State ElElectionsecons Sinc Sincee 2000 2000

focus on Congress, at the state level the money is spread among 180 165 all three branches of government. Because state judiciaries 160

ns 147 , ,

make most tort law—and have the power to invalidate statu- illio 135 ns 140 M o $,

tory tort reforms as unconstitutional—the plaintiffs’ bar has bu 120 s, ri 103 long concentrated on getting its allies onto the state bench (see rm Fi 100 w box, page 15). State legislatures, as the source of statutory tort n Cont 80 La

o 80 d ec

reform, are another arena of interest: any state legislator who an El 60 ys ys e at

tries to advance tort-reform legislation immediately becomes a ne St or 40 29 22 25

target of the trial bar and can expect a very expensive reelection A 14 campaign. The litigation industry has even begun to turn its 20 0 attention to the executive branch, since state attorneys general 2000 2001 2002 2003 2004 2005 2006 2007 2008 can farm out representation of the state’s civil lawsuits to attor- Source: National Institute on Money in State Politics neys in private practice, and state treasurers and comptrollers, who control public-employee pension funds, can hire outside Even if a state improves the quality of its elected and ap- lawyers to initiate securities-fraud lawsuits (see box, opposite pointed officials or enacts legislation that levels the playing page). Such litigation can make plaintiffs’ lawyers millions of field, the federal system allows many plaintiffs to move their dollars through contingent-fee contracts, as it has already done cases to some other, more sympathetic state. When the judicial in actions against tobacco and pharmaceutical companies.101 leadership in Madison County, Illinois, for example, decided to combat the county’s reputation as the nation’s worst “judi- Federalism and Litigation cial hellhole,”105 a powerhouse local law firm then known as Though federal courts can hear cross-state disputes, they Simmons Cooper started shifting its caseload to Delaware.106 must be guided by each state’s underlying substantive legal After tort reforms in Texas made its asbestos cases less profit- rules,102 and tight limits on federal courts’ jurisdiction enable able, Dallas plaintiffs’ giant Baron & Budd began directing its clever plaintiffs’ lawyers to keep many of their cases within cases to California.107 Reforming the tort system state by state state judicial systems. For Trial Lawyers, Inc., the federal sys- is thus very similar to a game of Whack-a-Mole: when trial tem creates a powerful “race to the bottom” effect. Lawyers lawyers are knocked down in one place, they inevitably pop can shop their case to a favorable court—seeking out a county back up somewhere else. judge who is an ally of the plaintiffs’ bar, or a locality that has a jury pool with a proven propensity for awarding big verdicts. An Aggressive Legislative Agenda The odds are low that a defendant will succeed in getting its Historically, the trial bar’s political efforts vis-à-vis state case removed to federal court;103 so once the local court allows legislatures were defensive. The courts, not the legislatures,

12 www.TrialLawyersInc.com K STREET Suing for the State

ncreasingly, Trial Lawyers, Inc. to his reelection campaigns to sue West Virginia Attorney General Iis profiting from its government- Darrell McGraw Oxycontin manufacturer Purdue relations efforts in the executive Pharma; the $10 million settlement branches of state governments. the firms secured netted them $3 In 1994, asbestos lawyer Dickie million in fees.136 Scruggs of Mississippi joined forces In addition to these collabora- with Mississippi attorney general Mike tions with state attorneys general, Moore to sue tobacco companies trial lawyers are working with state for any additional Medicaid costs treasurers and comptrollers, who that the state had incurred as the control public-employee pension result of health problems of its funds, either directly or as ex officio citizens induced by tobacco use.129 board members, and are therefore in Though he was representing the state a position to initiate lawsuits on the government, Scruggs did his work funds’ behalf. Because the 1995 Pri- on the basis of a fee arrangement vate Securities Litigation Reform Act that promised him a share of any (PSLRA)137 specified that the “lead eventual proceeds.130 Scruggs later plaintiffs” in securities class actions brought in veteran South Carolina should be those “most capable of

trial attorney Ron Motley to assist, AP Photo/Bob Bird adequately representing the interests and Moore won the cooperation of class members”138—that is, they of the attorneys general of other states.131 Eventually, all should be the members of the class with the “largest finan- fifty states became participants in the litigation, and the cial interest” in the litigation —pension funds, as the largest private attorneys they retained profited handsomely from the investors in the market, especially those based in populous contingent fees they scored on the states’ behalf, netting as states such as California and New York, typically control much as $30 billion from settlements reached in 1998 with such litigation. After the PSLRA became law, Trial Lawyers, the major tobacco businesses.132 Inc. set its sights on influencing the public officials who con- In the years since Scruggs, Motley, and other attorneys trol such funds by donating generously to their campaigns. in the tobacco litigation pocketed those windfalls, plaintiffs’ Investing in officials with control over public pensions attorneys around the country have worked to secure similar has proved to be profitable indeed for firms practicing se- arrangements with state attorneys general, who collect hefty curities law. In New York, for example, two law firms gave a campaign donations from lawyers to whom they later farm combined $121,800 in campaign funds to Alan Hevesi,139 out the state’s work. While some states have adopted eth- who, as state comptroller, was the sole trustee and manager ics rules to govern such contingent-fee contracts, including of its public pension funds.140 Hevesi subsequently asked ones requiring competitive bidding and disclosure of con- the same firms to handle the state pension funds’ lawsuits tract terms, others have put off doing so.133 Darrell McGraw, against Citigroup stemming from the collapse of MCI West Virginia’s attorney general since 1992, was criticized WorldCom.141 The attorneys collected over $300 million by a judge and the state auditor for the contracting out of in contingent fees when the case settled in 2004.142 This state legal business in the tobacco litigation;134 but in recent sort of success has been repeated in other states, such as years, he has given no-bid contracts to private lawyers des- Louisiana, three of whose public-employee pension funds ignated “special assistant attorneys general.”135 In 2001, are among the five most active lead plaintiffs in securities McGraw hired four private firms that had given $47,500 lawsuits around the United States.143 took the major steps in expanding liability (see box, page 6). Over time, while heightened political competition has In state assemblies, the trial-lawyer lobby largely contented lowered the litigation industry’s ability to determine the com- itself with blocking legislative reforms, depending on state su- position of state judiciaries (see box, page 15), shifting political preme courts to invalidate, on constitutional grounds, those trends have produced or increased majorities of trial-lawyer- that somehow achieved enactment.108 friendly Democrats in state legislatures.109 In turn, Trial Law-

L C P 13 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE State Government Relations

yers, Inc. has worked to increase its profits by encouraging leg- islators to draft statutes that generate more lawsuits, increase recoverable damages, or weaken or eliminate statutes of limita- tion and legal defenses. Some of the bills and enactments pushed by Trial Lawyers, AP Photo/Mike Groll Inc. at the state level in recent years include: • Authorizing lead-paint litigation. One of the litigation industry’s new business lines involves suing paint manufacturers over the “public nuisance” of having to eliminate lead-based paint from homes—paint that the manufacturers stopped producing over thirty years ago.110 In Maryland—where asbestos lawyer Peter Angelos, owner of the Baltimore Orioles, pioneered such litigation111—a legislature historically beholden to Angelos’s interests continues to flirt with legislation that would authorize 112 such suits. Sheldon Silver, Speaker of the New York State Assembly Peter Angelos York Assembly Speaker Sheldon Silver, who moonlights as “of counsel” for the mammoth plaintiffs’ asbestos firm Weitz and Luxenberg. 120 • Authorizing new whistle-blower lawsuits. In recent years, New Mexico, New Jersey, and Oklahoma have all adopted new qui tam statutes, which deputize plaintiffs’ lawyers as “private attorneys general” (see box, page 17).121 Many other state legislatures have considered whistle-blower bills without (yet) passing them.122 • Expanding recovery of noneconomic damages. Lawyers have worked aggressively to overturn various state limitations on AP Photo/ H. Rumph, Jr. Rumph, AP Photo/ H. recovery of noneconomic damages. In 2007, Illinois passed • Expanding consumer-fraud litigation. In response to the a law permitting recovery for “grief, sorrow, and mental enactment of tort reforms, trial lawyers have resorted suffering.”123 Also in 2007, Iowa extended recovery for “loss to the private-enforcement mechanisms of many state of consortium” from parents of minor children to parents of consumer-protection acts, which often require no showing adult offspring.124 In New Jersey, an effort to create the new of actual injury for plaintiffs to recover.113 Iowa, the last damage categories of “mental anguish, emotional pain and holdout against this tide, finally relented, in 2009, under suffering, and loss of companionship” passed the legislature pressure from trial lawyers.114 Washington broadened its but was defeated by a pocket veto.125 consumer-fraud statutes last year.115 And lawyers have • Increasing damage caps. In 2009, Oregon raised its tried, unsuccessfully, to broaden consumer-fraud laws in limitations on recoverable damages against the state.126 Michigan and New Hampshire.116 Trial lawyers have tried to get other states to raise damage • Expanding securities litigation. In New York, a group of limits, albeit without significant success.127 legislators tried to add a private right to sue to the state’s • Eliminating or extending statutes of limitation. Many state Martin Act117—the state’s securities-fraud statute that legislatures have attempted to eliminate or lengthen the Eliot Spitzer, as attorney general, controversially used to time limits within which plaintiffs must file tort claims. reshape the nation’s finance and insurance industries.118 In California last year, only a gubernatorial veto stopped In 2009, the American Tort Reform Association gave the a bill that would have allowed “fair pay” employment amendment its Silver Award for being that year’s worst claims to be filed, regardless of how much time had 119 128 civil-justice bill; the award is named, ironically, for New passed since the matter in question occurred. TLI

14 www.TrialLawyersInc.com K STREET

Justice for Sale

wenty-one states have popularly elected supreme courts, generally left-leaning Detroit Free Press—but was undone in Tand thirty-nine states elect judges at some level.144 Since part by a late “dirty tricks” television commercial that ac- most tort law reposes in judicial decisions, not legislative en- cused him of sleeping on the bench.153 actments, Trial Lawyers, Inc. has long understood state judi- The unseemly nature of high-dollar state supreme court ciaries to be essential to its business, and has accordingly elections drew the attention of the U.S. Supreme Court in spent big bucks on judicial races to ensure that its favorite Caperton v. A.T. Massey Coal Co.,154 which was decided last sons join or remain on the bench. Inevitably, the business year. A divided court determined that Caperton’s constitu- lobby started fighting back, and expensive—and often ugly— tional due-process rights had been violated when West Vir- campaigns were the result. Just as inevitably, conflicts of in- ginia Supreme Court Justice Brent Benjamin heard his case terest have arisen between judges’ role as neutral interpreters after receiving over $3 million in campaign contributions of the law and their status as elected officials with a need to from the chairman of the coal company opposite Caperton fund-raise for campaigns. in the legal dispute.155 The facts of Caperton tested the outer In the 1980s, Texas emerged as a hotbed of political bounds of propriety, but the conflict of interest they posed activity in judicial races, and the home of the first million-dol- was hardly isolated; as Chief Justice Roberts noted, “‘Con- lar campaigns. After “business” scored a win over “lawyers” sumers for Justice’—an independent group that received in the 1988 elections, plaintiffs’ lawyer Pat Maloney defiantly large contributions from the plaintiffs’ bar—spent approxi- asserted: “We are resilient, and we will bounce back.”145 In mately $2 million” on the same judicial campaign.156 1990, another trial lawyer brazenly told Forbes magazine: Caperton notwithstanding, it is unlikely that the courts “[U]ntil last year the plaintiff bar owned and controlled the will venture often or more deeply into such a thorny thicket. Texas Supreme Court.”146 Judicial elections compromise impartiality, or at least cast Both sides continue to struggle for dominance, in Texas suspicion upon it, but there are no easy solutions. Judicial and elsewhere. From the 1990s to the past decade, cam- appointment systems can be highly political themselves— paign contributions to judicial races nationwide doubled, witness the federal nomination and confirmation process— and judges raised over $200 million in the decade leading and in states with judicial “nominating boards,” the up to the 2008 elections.147 In many states, multimillion-dol- plaintiffs’ bar has often worked to stack such committees lar judicial elections have become the norm (see graph). In with its allies.157 In 2009, the U.S. Chamber of Commerce some hotly contested races, expenditures of independent in- Institute for Legal Reform—a major player in state judicial terest groups on television commercials have exceeded the campaigns—published a report on such bodies, with an entire spending of the campaigns themselves.148 eye toward developing “best practices” that would curb In the 2009 elections, the judicial race to watch was political influence.158 the Pennsylvania Supreme Court contest between Democratic incumbent Jack Panella and Republican Joan Orie Melvin.149 Melvin won the race, but not before being outspent by Pan- Multimillion-Dollar Campaigns Have Become the Norm in Contested Judicial Elections ella more than two to one.150 Panella’s $1.85 million cam- paign war chest received hundreds of thousands of dollars Alabama 40.9 in contributions from the plaintiffs’ bar, including $500,000 Ohio 21.2 from the Philadelphia Trial Lawyers Association alone.151 Illinois 20.9 Although it failed to get Panella reelected, Trial Lawyers, Texas 18.4 Inc., in concert with the Michigan Democratic Party, did suc- Pennsylvania 16.1 ceed at its top priority of the previous year: defeating Michi- Michigan 13.0 gan Supreme Court Chief Justice Cliff Taylor, who had pre- 0.0 10.0 20.0 30.0 40.0 50.0 152 sided over a divided court. Taylor was a highly respected Candidate Fundraising, State Supreme Court Elecons, jurist—the author of the state’s definitive, three-volume text 2000-08, $, Millions Source: Justice at Stake on Michigan personal-injury law, he was endorsed by the

L C P 15 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Federal Government Relations: Expanding Liability Sue You, Sue Me Congress Is Working to Undo Limits on How, When, and Whom Lawyers Can Sue

ntil recently, the main purpose of Trial Lawyers, Inc.’s steered comprehensive tort reform through the Texas Legisla- U 164 involvement in federal politics was to block reform legislation ture. But with one exception, he was unable to get traction that would deny it various lucrative lines of business. In 1995, against the lawyer lobby’s Washington power, which doomed his for example, Bill Clinton, an ally of trial lawyers, vetoed the efforts to reform medical-malpractice law by imposing national Private Securities Litigation Reform Act (PSLRA),159 which caps on damages,165 as it did his efforts to shift thousands of was designed to stop class action “strike suits” against compa- questionable, if not fraudulent, asbestos claims out of the courts nies whenever their stock’s price sharply declined. But Con- and into an administrative system.166 Bush’s one success was the gress overrode the veto,160 and the new law has helped improve Class Action Fairness Act of 2005 (CAFA),167 which prevented the securities litigation climate.161 plaintiffs’ lawyers from “shopping” large, national class actions When, in 1996, Congress tried to pass a product-liabil- to the most lawsuit-friendly jurisdictions in the country by al- ity law designed to curb frivolous suits by limiting punitive lowing defendants to remove them to federal court. damages, it, too, met with a Clinton veto,162 even though he With the Democratic Party currently controlling both had supported such legislation as governor of Arkansas.163 This Congress and the White House, the litigation industry is tak- time, however, Congress lacked the votes to override. ing a somewhat different tack. No longer satisfied with fend- Clinton’s successor, George W. Bush, was a president friend- ing off efforts to reform lawsuit abuse, the plaintiffs’ bar is ly to litigation reform: as governor of Texas, he had successfully now actively seeking to expand its business opportunities. One of the bills backed by Trial Lawyers, Inc.—the first passed by the new Congress—extends the time that plaintiffs have to file suit, allowing attorneys to dredge up long-dormant claims.168 Other legislation would facilitate legal “fishing expeditions” by permitting claims to go forward that rested upon the shakiest of allegations.169 Still other proposed acts of Congress would expand the universe of parties that plaintiffs can sue.170 One of them would lift a prohibition against suing the government itself, at considerable cost to the taxpayer.171

Led by Ledbetter Perhaps the clearest evidence of Congress’s new penchant for generating litigation is the transformation of Lilly Ledbetter, a former employee at a Goodyear Tire plant in Gadsden, Ala- bama,172 into a Democratic symbol of victimization by corpora- tions. Invited to speak on the second night of the 2008 Demo- cratic National Convention, right before keynote speaker Mark Warner, the former governor of Virginia,173 Ledbetter was the subject of a 2007 decision by a divided U.S. Supreme Court that Lilly Ledbetter AP Photo/Charles Dharapak denied her sex-discrimination claim against her former employer

16 www.TrialLawyersInc.com K STREET Deputizing Trial Lawyers

of fraud suits actually intended to defraud the government—as Senator Dick Durbin (left) and Senator Patrick Leahy the U.S. Supreme Court did in its unanimous 2008 decision in Allison Engine Co. v. United States.211 The Fraud Enforcement and Recovery Act of 2009,212 signed into law in May 2009, overturns Allison Engine, even with respect to those cases that stem from conduct that occurred before the act’s passage. The new law dramatically expands the plaintiffs’ bar’s reach in qui tam suits by allowing lawyers to go after subcontractors to businesses that do government work, though they never worked directly for the government themselves or intended to commit fraud.213 The bill’s sponsor, Senate Judiciary Committee chairman Patrick Leahy (D-Vt.), has received more than twice as

AP Photo/Lauren Victoria Burke AP Photo/Lauren much money from lawyers since 2005 as he has from any other industry, and those donations overwhelmingly come from the f the legislative gifts that Congress has bestowed on plaintiffs’ bar.214 Two of Leahy’s top four donors are California OTrial Lawyers, Inc., one of the most bounteous is the plaintiffs’ firms—toxic-tort giant Girardi & Keese and personal- right—inscribed in qui tam, or “whistle-blower” statutes—to injury powerhouse Cotchett, Pitre & McCarthy—and he’s also police frauds allegedly committed against the federal gov- received hefty sums from the American Association for Justice, ernment. After the False Claims Act (FCA),206 enacted in the political action committee of the plaintiffs’ bar.215 1863, was expanded in 1986,207 it became big business for An even more audacious power grab for Trial Lawyers, the plaintiffs’ bar. Since then, whistle-blower actions have Inc.’s qui tam business was attempted by Rep. Lloyd Doggett produced more than $20 billion in claim payments.208 (D-Tex.) during the markup of health-care reform legislation The qui tam provisions of the FCA permit private attor- in the House. Doggett tried to insert language into the bill neys representing whistle-blowers to obtain damages, on the that would allow suits involving Medicare to be filed on behalf government’s behalf, of three times the amount of money lost of the U.S. government, even when it objected. Fortunately, in the alleged fraud. The whistle-blower and his attorney can Republicans on the committee insisted on removing the provi- collect up to thirty percent of these sums.209 The resulting wind- sion.216 Like Leahy, Doggett received campaign contributions falls can total tens of millions of dollars.210 from lawyers in this electoral cycle that were at least double Because of the potential for abuse of such statutes, the those from any other industry, his largest donor being Nix, Pat- courts have worked to limit their reach by insisting that the targets terson & Roach, the giant Texas asbestos-litigation firm.217 on the grounds that she had filed her complaint too late.174 The tion testimony that “[d]ifferent people that I worked for along Ledbetter decision prompted a media outcry—“Injustice 5, Jus- the way had always told me that my pay was extremely low” tice 4” declared a New York Times editorial175—and then-candi- relative to the pay of other workers.179 Ledbetter further noted date Barack Obama adopted Ledbetter’s cause as his own.176 that she had learned from a superior of a pay discrepancy in The Lilly Ledbetter Fair Pay Act, which reversed the Su- 1992, some six years before taking early retirement and filing preme Court’s decision, and made that reversal retroactive to her lawsuit;180 and that she had learned the specific amount she the day before the decision was issued, became law in January was underpaid in 1995, three years before filing, at which time 2009.177 It was the first piece of legislation signed by the new she complained that she “needed to earn an increase in pay . . . president, who proclaimed that Ledbetter was “just a good to get in line with where my peers were.”181 hard worker who did her job . . . for nearly two decades before In determining that Ledbetter’s claim was filed outside the discovering that for years, she was paid less than her male col- six-month statute of limitations specified by Title VII of the leagues for doing the very same work.”178 1964 Civil Rights Act, the Supreme Court noted that Ledbet- The president’s statement—like most media accounts of ter had failed to argue that the statute of limitations should the case—is simply false. In fact, Ledbetter admitted in deposi- have started running only after she learned of her injury, an

L C P 17 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Federal Government Relations: Expanding Liability

“equitable tolling” rule long recognized in other contexts by with new, liberal discovery rules that enabled plaintiffs’ law- the Court.182 The Court’s decision also emphasized that Led- yers to demand essentially any document or file that might be better might have had a valid discrimination claim under an- remotely relevant to a lawsuit,188 licensed “fishing expeditions” other statute—the Equal Pay Act—that has a longer statute of in federal courts: plaintiffs could file first, seek documents at limitations.183 Thus, Ledbetter probably did have some legal defendants’ expense, and determine whether they actually had recourse, notwithstanding her failure to sue earlier—and the a case once the documents came in.189 fact that her former supervisor, a key witness in the case, had In recent years, the Supreme Court has tried to place outer died while she delayed in pursuing her claim.184 boundaries on these expeditions. In a 2007 case, Bell Atlantic v. Politicians under the sway of Trial Lawyers, Inc., how- Twombly,190 plaintiffs’ lawyers filed a class action alleging that ever, were undeterred by these facts. The law enacted in Led- local telephone companies had conspired to restrain trade in better’s name could have clarified the period in which a Title violation of the antitrust laws. The Court determined that the VII suit can be filed by stating that it would start only upon plaintiffs’ allegations, even if true, could not sustain a valid discovery of the alleged discrimination, a rule that would not claim because the plaintiffs did not allege “enough factual mat- have been in conflict with the Court’s actual decision. In- ter (taken as true) to suggest that an agreement was made” stead, the first act of the 111th Congress gutted the statute among the phone companies—a legal requirement for finding of limitations in pay-discrimination claims entirely. It now such an antitrust violation.191 effectively allows potential plaintiffs to wait years before su- In May 2009, the Supreme Court considered another ing, as paycheck after insufficient paycheck piles up, adding case, Iqbal v. Ashcroft,192 in which a Pakistani Muslim detained to the damages that can be claimed and forcing employers to after the September 11, 2001, terrorist attacks alleged that he maintain old employment records indefinitely.185 Moreover, had been mistreated while in custody. Iqbal’s lawsuit targeted the new law dramatically expands the class of potential liti- various federal officials, including the attorney general of the gants in such suits by changing the long-standing rule that United States and the director of the Federal Bureau of In- a claimant had to be an actual victim of discrimination; the vestigation. The Court determined that Iqbal’s complaint was new law states that anyone “affected by” the discrimination insufficient to support a claim under Twombly, since the legal being alleged can sue.186 standard required proof of intentional discrimination by the individuals named, who would have had to be driven by ani- Going Fishing mus toward the plaintiff, and Iqbal alleged no facts that would In addition to extending the period in which employ- permit even an inference of discriminatory intent.193 ees may file pay-discrimination claims, the new Congress is Needless to say, Twombly and Iqbal, though cases of limit- considering legislation that would make it dramatically easier ed applicability, sent shock waves through the plaintiffs’ bar by to file suits across the board. As noted on page 6, the 1938 threatening to imperil lawyers’ strategy of launching fishing ex- Federal Rules of Civil Procedure abolished traditional plead- peditions. To “fix” this problem, Pennsylvania Democrat Arlen ing requirements for filing a civil lawsuit and implemented a Specter—whose son Shanin is a major Philadelphia plaintiffs’ system of “notice” pleading whereby a litigant merely has to lawyer and a vocal public critic of tort reform194—introduced place a defendant “on notice” of being sued and of the factual a bill, the Notice Pleading Restoration Act of 2009,195 which and legal claims against him.187 Notice pleading, combined would overturn the Supreme Court’s decisions in Twombly

The new Congress is considering legislation that would make it dramatically easier to file suits across the board.

18 www.TrialLawyersInc.com K STREET and Iqbal. Even critics of those decisions, however, have noted that Specter’s poorly drafted bill would likely interfere with Over the Last Ten Years, Securities Class statutory pleading requirements well beyond the scope of the Action Settlements Have Skyrocketed Court’s recent decisions.196 ns 20,000 18,262 illio M

Security-Suit Schemes $, , , Senator Specter has not limited himself to protecting Trial ts 15,000

Lawyers, Inc.’s fishing license; he has also been working hard emen

l 9,989 to ensure that plaintiffs’ lawyers can cast their lines in new Se 10,000 n 7,186 waters. Notwithstanding stricter rules imposed on securities o 197 Ac 5,154 suits by the 1995 PSLRA and the “kickback” conspiracy ss a 5,000 3,517 Cl 2,949 3,094

s s 2,642 convictions that put the two most prominent securities 2,067

e 1,231 class action attorneys, Mel Weiss and Bill Lerach, in federal ri cu 0

198 Se prison, recent financial crises—the bursting of the dot-com 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 bubble, the subprime-mortgage debacle, and the subsequent Source: Cornerstone Research collapse of major financial institutions—have left ample opportunity for the securities litigation industry to thrive (see of being a publicly traded company under our law,” and “shift graph, right). securities offerings away from domestic capital markets.”200 Indeed, securities class actions do little more than arbi- trarily shift dollars from one group of shareholders to another. In such suits, one group of shareholders, which bought or sold shares in a given time period, sues the company whose shares they own. Unfortunately, suing the company means essential- ly suing all the other shareholders. Generally speaking, then, small, diversified shareholders, who are about as likely to be holders as buyers of any given security, particularly if they are invested in pension or mutual funds, are also as likely to be defendants as plaintiffs in such litigation.201 In addition to fail- ing to compensate the victims of a successfully executed fraud, securities class actions are ineffective at deterring fraud, since research shows that securities class actions’ settlement values 202 AP Photo/Khue Bui Mel Weiss are unrelated to the merits of the underlying cases. Securities lawsuits, therefore, serve mainly to enrich the plaintiffs’ bar by In 2008, however, the Supreme Court decided not to ex- extracting massive settlements from companies experiencing tend the judicially created “right to sue” over alleged securities stock-price turbulence.203 fraud to plaintiffs suing third parties.199 In that case, Stoneridge Nevertheless, last summer Senator Specter introduced the v. Scientific Atlanta, the Court considered a class action filed by Liability for Aiding and Abetting Securities Violations Act of the stockholders of a cable company that had inflated its books. 2009,204 which would overturn Stoneridge and create an ex- However, their suit was not against the cable company itself plicit, open-ended private right of action against anyone who but rather its vendors. The Court noted there was no evidence provided “substantial assistance” to anyone else guilty of vio- that Congress intended to authorize private securities litigation lating “any rule or regulation” under any of the vast number of against third parties under an “aiding and abetting liability” the- securities laws.205 Specter’s bill would go far beyond the narrow ory and that doing so would “expose a new class of defendants” facts of the Stoneridge case to create a whole new class of secu- to litigation risks, raise “the costs of doing business,” deter rities class action defendants—and a whole new spectrum of “[o]verseas firms . . . from doing business here,” “raise the cost legal shakedown opportunities for Trial Lawyers, Inc. TLI

L C P 19 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Federal Government Relations: Attacking Arbitration Contract Killing Trial Lawyers, Inc.’s Allies in Congress Are Trying to Scale Back Private Arbitration

The Democrats in Washington can’t seem to decide many industries—they are indeed the only way that small in- what they think about arbitration. On the one hand, one of juries can ever get compensated, given the expense of litiga- the top legislative priorities of the congressional leadership and tion that often makes legal representation unavailable, because the White House is the Employee Free Choice Act (EFCA),218 such cases offer plaintiffs’ attorneys only paltry contingent which calls for mandatory arbitration of all union disputes. fees. But arbitration and other forms of alternative dispute So deep is the EFCA-backers’ faith in arbitration that the law resolution remove the middleman—the trial lawyer—which, would even empower government-appointed arbitrators to to the plaintiffs’ bar’s political patrons, makes such extralegal write labor contracts from scratch when newly formed unions approaches unthinkable. cannot agree to terms with management—in effect, to dictate the terms of a labor “contract” without reference to any actual The Value of Arbitration underlying contract into which the parties freely entered.219 In contrast to the EFCA’s heavy-handed provisions, On the other hand, congressional leaders are waging an standard employment and consumer arbitration contracts all-out war to eliminate all arbitration clauses in consumer operate against a backdrop of preexisting contractual norms and and employment contracts. Such provisions are standard in rules of law. Professional arbitrators—usually senior attorneys The Anti-Federalist Congress

rom the time of the New Deal onward, the Left has Court noted, however, Riegel’s doctor failed to heed these Fgenerally favored a strong national regulatory regime, warnings.246 The artery into which the doctor inserted the while conservatives have generally fought its relentless catheter was “heavily calcified,” yet he attempted to force a expansion. It is therefore curious that the Democratic majority full ten atmospheres of pressure through it.247 in Congress should be considering bills permitting tort actions Fortunately, Congress included express language in 1976 to be brought under state law against the financial242 and statutory amendments that forbade the states from setting automobile243 industries, for example—even if such state tort standards for medical devices beyond those required by the claims conflict with the federal regulatory regime. FDA.248 On that basis, the Court made the commonsense State tort litigation can make a mess of the federal ruling that Riegel’s lawsuit against the manufacturer was regulation of interstate commerce. Consider the situation in barred.249 Unfortunately, the express preemption language health care, one of the most heavily regulated—and litigated— that governs medical devices does not apply to all FDA- industries. In 2008, the U.S. Supreme Court considered a case, regulated products. Indeed, such clauses are rare within the originating in New York, in which a patient had been injured federal code, much of which was written before the litigation by the bursting of a balloon catheter during surgery.244 The explosion of the last five decades. patient alleged that Medtronic, the device’s manufacturer, was Perhaps unsurprisingly, the lawyer-dominated Congress at fault. The facts of the case, however, told a different tale: the is working to eliminate the statutory provision that barred catheter’s labeling—as required by the U.S. Food and Drug Riegel’s product-liability claim. Worse, the bill in question, Administration (FDA)—indicated that it should not be used the Medical Device Safety Act of 2009,250 would permit suits in “calcified” arteries and that it was designed to withstand to proceed that stem from injuries that originated long before only “eight atmospheres” of “rated burst pressure.”245 As the the law’s effective date, if otherwise valid under state law.

20 www.TrialLawyersInc.com K STREET

Senator Al Franken’s first legislative Senator Al Franken success was an amendment expanding civil liability.

or retired judges—resolve claims without incurring the time and expense of civil litigation, which takes, on average, more than two years220 and can cost thousands of dollars. Thus, arbitration has served as a major avenue for provid- ing justice to small claimants. In 2002, the American Arbitra- tion Association handled more than 200,000 claims—a figure corresponding to roughly 80 percent of all federal civil cases.221 In 2006, the National Arbitration Forum handled 214,000 ar- bitrations dealing solely with debt collection.222

Although you wouldn’t know it from the criticisms issue AP Photo/ Jim Mone from the trial bar and its allies, these private arbitration systems are not tilted in business’s favor. A November 2009 study re- On October 1, Senator Franken took to the Senate floor leased by the Searle Center on Law, Regulation, and Economic to relate the sad plight of Jamie Leigh Jones, who claimed that Growth at Northwestern University School of Law examined she was harassed, drugged, and gang-raped four days after ar- comprehensive data sets of consumer arbitrations and found riving in Iraq to work for Kellogg Brown & Root (KBR).228 that after controlling for variations in case characteristics, con- Jones initially filed an arbitration complaint, then sought to sumers were more likely to prevail in arbitration than in court sue her employer in court. KBR tried to consolidate the com- and that there was “no statistical difference in the amount they plaint before the arbitration panel, which Jones opposed. After were awarded as a percentage of the amount sought.”223 three years of legal wrangling, the Fifth U.S. Circuit Court Americans in general realize the value of arbitration. When of Appeals held the arbitration clause unenforceable in Jones’s asked whether they would choose litigation or arbitration if case because her claimed injury was not “related to” her em- they could “choose the method” of resolving “any serious dis- ployment, and the court gave Jones the go-ahead to proceed pute” between themselves and a company, 82 percent of those with her civil claim.229 surveyed said that they would opt for arbitration.224 And 71 Franken said on the floor of the Senate that three years percent said that they opposed Congress’s “remov[ing] arbitra- was “simply too long for a rape victim to wait, just to have her tion agreements from contracts consumers sign with compa- day in court.”230 He therefore proposed an amendment to an nies.”225 Unfortunately, such consumer sentiment may not be appropriations bill for the Defense Department that would, sufficient to hold back Congress’s assault on contract, which is he said, “extend much of the Fifth Circuit’s reasoning to gov- propelled by the lobbying clout of Trial Lawyers, Inc. ernment contractors who continually subject workers to these so-called mandatory arbitration clauses.” But it would do so, Funny Business he said reassuringly, only by “narrowly target[ing] the most Before he was a senator, Al Franken (D-MN) entertained egregious violations.”231 the public as a writer and performer on the sketch comedy When thirty Republican senators voted against Frank- show Saturday Night Live. Perhaps it’s fitting, then, that Fran- en’s amendment, they became fodder for comic ridicule. The ken’s first legislative success,226 an amendment supported by Daily Show’s Jon Stewart exclaimed, on the air, “I understand Trial Lawyers, Inc.,227 became the premise of comedians’ jokes we’re a divided country, some disagreements on health care. and spoof websites. How is anyone against this?”232 A video posted on the web-

L C P 21 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Federal Government Relations: Attacking Arbitration

TOY STORY

n October 12, 2009, lawyers concerns that provoked the health Oat the class action firm Cough- scare. Anne Northup, a commis- lin Stoia Geller Rudman & Robbins sioner of the federal Consumer reached a settlement with toy maker Product Safety Commission (CPSC), Mattel and its Fisher-Price subsidiary observes that the law reaches prod- resolving a suit over the 2007 recall of ucts “that do not create a lead haz- 967,000 toys, manufactured in China, ard for children” and that “such that may have contained lead-based ordinary items as zippers, buttons, paint.251 The lawyers stand to pocket belts, the hinge on a child’s dress- a hefty $12.9 million in fees252—likely er—and even that bicycle from San- to be a high percentage of the total ta Claus—are outlawed,”258 mak- settlement value253—but the litigation ing any manufacturer or retailer of overall is hard to condemn: a major such products subject to a lawsuit manufacturer distributed products that premised on an alleged violation of contained a dangerous substance the statute’s provisions. banned under U.S. law. To make things easy for the law- Notwithstanding the righteous yers, the statute authorizes an open

concern about Mattel’s potentially Stefan Zaklin/epa/Corbis House Speaker Nancy Pelosi website for reporting violations— dangerous products, the congressional which attorneys will doubtless use response to the public panic over the lead-containing toys—the both to identify claims and “establish” purported wrong- Consumer Product Safety Improvement Act (CPSIA),254 signed doing.259 Also waiting in the wings are suits by pioneer- into law on August 14, 2008—is a regulatory nightmare and ing, politically ambitious state attorneys general (see box, litigation time bomb that threatens to place virtually every page 13), who are authorized to enforce the law alongside producer of items for children on the wrong side of the law. the CPSC.260 As reported in Crain’s Chicago Business, suits Hawked by lawyer-allied consumer groups like the Public Interest arising from the CPSIA are among the “most likely” suc- Research Group,255 and pushed by House Speaker Nancy Pelosi cessors to the litigation industry’s long-standing asbestos- (D-Cal.), the bill was drafted in the House under the watchful lawsuit profit center.261 eye of Energy and Commerce Committee Chairman Henry The CPSIA’s costs are not conjectural—the CPSC esti- Waxman (D-Cal.), a longtime ally of trial lawyers whose second- mates that the law cost toy manufacturers $2 billion in the largest campaign donor over the last twenty years has been eight months following its enactment262—and they will grow the plaintiff’s bar’s political action committee, now known as exponentially once all of the statute’s testing requirements the American Association for Justice.256 That same lawyer PAC come into effect. Economies of scale permit large manufac- once employed as a registered lobbyist David Strickland, who turers like Mattel to meet the CPSIA’s onerous testing and developed the CPSIA in the Senate, where he served as counsel labeling requirements, but the prohibitive cost of complying to the Commerce Committee.257 (Strickland now oversees with these rules has prompted small manufacturers and re- American automobile regulation as the head of the National tailers of toys to shut their doors.263 Although the CPSIA has Highway Transportation Safety Administration.) generated many a public outcry, Congress has predictably With such a cast of characters drafting the bill, it is resisted holding hearings to learn about the grievances of unsurprising that the CPSIA goes beyond the lead-paint those affected.

site of MSNBC’s Rachel Maddow went viral, the Democratic ed.” Rather, Franken’s legislation makes any arbitration clause in Senatorial Campaign Committee went on the attack,233 and the employment contracts of any defense contractor inapplicable the Republican senators were mocked on a spoof Internet to “any claim under Title VII of the Civil Rights Act of 1964” or site, www.republicansforrape.org. “any tort related to or arising out of” an “intentional infliction The problem with the comedic and political reaction is that of emotional distress” or “negligent hiring, supervision, or reten- Franken’s amendment was not, as he claimed, “narrowly target- tion.”234 In essence, Franken’s amendment prevents every defense

22 www.TrialLawyersInc.com K STREET contractor from contracting with its employees to choose private tives, would make unenforceable arbitration clauses in arbitrators over the civil courts to resolve virtually any kind of any mortgage loan or home-equity line of credit.237 employment dispute—a far broader provision than Franken’s • The Payday Loan Reform Act (H.R. 1214) would pres- invocation of the gruesome allegations in Jones’s case would sug- ent challenges to arbitration clauses in “payday loans,”238 gest. But given the public caricature of Franken’s amendment, it and the Taxpayer Abuse Prevention Act (S. 585) would is unsurprising that it made it into the final law.235 prohibit arbitration clauses in loans given in anticipation of tax refunds.239 An Assault on Contract • The Consumer Fairness Act (H.R. 991) would make Senator Franken’s amendment is but one of the litigation consumer-arbitration contracts unenforceable,240 industry’s attacks on private arbitration. Other such bills be- while the Arbitration Fairness Act (H.R. 1020, S. ing pushed in Congress by Trial Lawyers, Inc. include: 931) would go even further and make unenforceable • The Fairness in Nursing Home Arbitration Act (H.R. arbitration clauses in all employer, franchise, and 1237, S. 512) would make unenforceable all arbitration consumer contracts.241 clauses regulating disputes between nursing homes and Each of these pieces of legislation would reduce consumer their boarder-patients.236 choice, increase costs, and deny compensation to many truly • The Mortgage Reform and Anti-Predatory Lending Act injured individuals. But they would all help the bottom line of (H.R. 1728), which passed in the House of Representa- Trial Lawyers, Inc. TLI A Trial-Lawyer Tax Break

ne way that Trial Lawyers, Inc. is exploiting its con- Senator Arlen Specter Ogressional influence is by seeking an old-fashioned tax break. A group of legislators led by Republican-turned- Democrat Arlen Specter—“the favorite senator of the trial lawyers”264—has introduced a bill giving the plaintiffs’ bar a $1.6 billion cut in its taxes.265 Under the traditional common law, “maintenance” and “champerty” were crimes (and torts). Generally speaking, it was illegal for anyone, including an attorney, to maintain, support, or promote another’s litigation (maintenance), whether or not an agreement existed to pay the supporter a portion of a lawsuit’s proceeds (champerty), should there AP Photo/Gene J. Puskar AP Photo/Gene J. be any.266 On its face, the personal-injury bar’s financing structure—the “contingent fee,” the share of the proceeds that Specter’s bill would change the IRS rule and allow all a winning client pays his attorney, who has fronted the cost litigation costs to be expensed immediately, even though of the litigation—runs afoul of the historical understanding other kinds of loans generally are not. This tax break would of champerty. Therefore, expenses in contingent-fee cases encourage lawyers to file both a greater number of cases have been treated by courts not as support of litigation per and weaker cases, and “the federal government [would], se but rather as loans to clients, to be repaid upon a winning for all intents and purposes, share in the cost and risk of lawsuit’s resolution.267 bringing the initial litigation. Under current and certainly The IRS has thus forbidden plaintiffs’ lawyers working potential future tax laws, this could be as much as [forty on the basis of contingent-fee arrangements to deduct, for percent] of the cost of bringing litigation.”269 tax purposes, litigation costs as “expenses” when they are Unsurprisingly, the trial bar’s advocates in Congress incurred. Rather, such expenses are treated as loans, to be would prefer to avoid an up-or-down vote on the legislation expensed as “losses” only in the event that the loan is “uncol- on its own. Thus, lawyer-lobbyists have worked to “tuck it into lectible” after a losing case has been closed (or, alternatively, something”270 else—for example, a 2008 bill that extended to be deducted from the sum of taxable proceeds following (but did not change) various research-and-development profitable verdicts or settlements).268 and energy tax credits.271

L C P 23 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Conclusion PUSHING BACK Achieving Meaningful Liability Reform Is Difficult but Not Impossible

The academics and judges who transformed American tort law and civil procedure in a relatively brief period of time did not anticipate the full consequences of the changes they wrought, though they received fair warning from a few of their colleagues that some of the changes would prove calamitous.272 Even defensible expansions of liability had the unhappy effect AP Photo/J. Scott Applewhite AP Photo/J. of creating a litigation industry that has depressed economic growth and impeded American competitiveness. As Harvard Business School professor Michael Porter has observed, the competitive advantage of U.S. companies is hampered by a tort-law system that is “extreme compared [with that of] other nations” because “[t]he risk of lawsuits is so great and the con- sequences so potentially disastrous.”273 Reforming the liability system should be a political prior- ity, especially in a deep recession like the present one, with double-digit unemployment, but it has proved difficult, given livelihoods depend, opposing factions, like business and the the litigation lobby’s clout. Last fall, former Democratic Na- medical profession, have interests that are diffuse. In the pub- tional Committee chairman Howard Dean candidly admitted, lic-policy universe, doctors care about liability but are more “The reason why tort reform is not in the [health-care reform] worried about the repercussions of health-care reform and the bill is because the people who wrote it did not want to take size of Medicare reimbursements; car companies care about on the trial lawyers.”274 In December, the president of the trial liability but are more anxious about cap-and-trade legislation lawyers’ lobbying group, the American Association for Justice, and fuel-efficiency standards. In some instances, industries can declared the organization’s lobbying effort on health care “a be at cross-purposes; efforts at asbestos-liability reform, for ex- stunning victory,”275 as well he should have: neither the House ample, were stymied in part by a conflict of interest between nor Senate health-care bills dared to tackle liability reform, and insurers and manufacturers.278 the version that passed the House contained provisions that, In addition to holding these systemic advantages, lawyers perversely, would impede liability reform (by discouraging state have shown themselves to be peculiarly capable of navigating reforms adverse to the litigation industry’s interests)276 and ex- the waters of modern political influence. Campaign finance pand litigation opportunities (by empowering state attorneys laws that limit contributions (to $2,400 per candidate at the general to enforce federal regulatory provisions, which could federal level)279 frustrate concentrated giving in many indus- involve the hiring of private lawyers on a contingent-fee basis tries, but the organized plaintiffs’ bar has proved adept at coor- to help them do so).277 (At the time this report went to print, dinating its giving, both within firms and across states. it was unclear whether these provisions would be included in Notwithstanding the power of the lawyer lobby, efforts at the final House-Senate bill.) reform are not futile. Even in the current political environment, It is unsurprising that the litigation industry has evolved some states have been working to restore sanity to their own into such a powerful political force. Whereas trial lawyers’ in- liability systems. In 2009, for instance, Oklahoma’s legislature terests are concentrated in the issue of liability, on which their passed a comprehensive package of tort reforms that included

24 www.TrialLawyersInc.com K STREET stricter evidentiary standards, caps on noneconomic damages, age caps, his rhetoric and his record suggest that, were congres- and limitations on a lawyer’s ability to “shop” cases to the most sional leadership to change, he might be open to the funding favorable forum.280 Over time, states that rein in lawsuit abuse of state-level experiments in reform or supporting legislation have an advantage in attracting businesses and doctors. that, like CAFA, tightens federal procedural rules. Furthermore, only five years ago, a differently constituted Reforming America’s liability rules is not easy: the lawsuit Congress did pass a major liability reform, the Class Action lobby is unusually strong, and America’s system of government Fairness Act (CAFA),281 that limited lawyers’ ability to bring is structured to make change difficult. But the very reason that large national class actions in the most favorable state courts. Trial Lawyers, Inc. devotes so many resources to its government- Barack Obama, then the junior senator from Illinois, voted relations and public-relations efforts is that the political objective for CAFA, unlike his major rivals for the Democratic presi- for which it is fighting—the maintenance of the oversized law- dential nomination.282 The president has, in fact, expressed suit industry—is both harmful and unpopular. In recent years, an understanding of the problems of lawsuit abuse,283 and his proponents of legal reform have made progress, if haltingly, and large and diverse base of campaign donors has made him less the American public does want to curb lawsuit abuse. So while dependent on Trial Lawyers, Inc. than congressional leaders the litigation industry today is aggressively leveraging its politi- such as Senators Harry Reid of Nevada and Dick Durbin of cal power to advance its self-interested legislative agenda, change Illinois. Although the president has voiced opposition to dam- for the better may not be too far beyond the horizon. TLI Appendix

The following federal legislation is mentioned in this report: Expanding Liability • Lilly Ledbetter Fair Pay Act (H.R. 11, S. 181) (employment discrimination) (enacted 1/29/2009 as Public Law 111-2) • Notice Pleading Restoration Act (S. 1504) (lawsuit-filing standards) • Liability for Aiding and Abetting Securities Violations Act (S. 1551) (securities lawsuits) • Carmelo Rodriguez Military Medical Liability Act (H.R. 1478) (medical-malpractice lawsuits) • Fraud Enforcement and Recovery Act (S. 386) (whistle-blower lawsuits) (enacted 5/20/2009 as Public Law 111-21)

Restricting Private Arbitration • “Franken Amendment” (SA 2588) (defense contractors) (enacted 12/19/2009 as Public Law 111-118) • Fairness in Nursing Home Arbitration Act (H.R. 1237, S. 512) (nursing homes) • Mortgage Reform and Anti-Predatory Lending Act (H.R. 1728) (mortgages and home-equity lines) • Payday Loan Reform Act (H.R. 1214) (payday loans) • Taxpayer Abuse Prevention Act (S. 585) (tax-refunds loans) • Consumer Fairness Act (H.R. 991) (consumer contracts) • Arbitration Fairness Act (H.R. 1020, S. 931) (employer, franchise, and consumer contracts)

Prohibiting Federal Preemption • Consumer Financial Protection Agency Act (H.R. 3126) (national banks) • Right to Clean Vehicles Act (H.R. 609) (automobile emissions standards) • Medical Device Safety Act (H.R. 1346, S. 540) (medical devices)

Facilitating Consumer and Health-Care Lawsuits • Consumer Product Safety Improvement Act of 2008 (lead standards) (enacted August 14, 2008 as Public Law 110-314) • Affordable Health Care for America Act (H.R. 3962) (state attorney-general lawsuits)

Cutting Lawyer Taxes • “Trial-Lawyer Tax-Break Bill” (H.R. 2519, S. 437) (contingent-fee deductibility)

For a full and updated listing of pending trial-lawyer “earmarks,” visit www.triallawyerearmarks.com, sponsored by the U.S. Chamber of Commerce Institute for Legal Reform. L C P 25 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Endnotes

1. See Towers Perrin, 2009 Update on U.S. Tort Cost Trends 5 (2009), 21. See Jason Embry, Baron’s Rebuilding Efforts Already Showing Results, Austin http://www.towersperrin.com/tp/getwebcachedoc?webc=USA/2009/ Amer.-Statesman, Nov. 12, 2006. 200912/2009_tort_trend_report_12-8_09.pdf (costs as of 2008). As noted 22. See Brian C. Mooney, Candidates Got Around with a Little Help From Their Friends, by Manhattan Institute fellow Walter Olson: Boston Globe, Dec. 18, 2007; Gromer Jeffers, Jr., Dallas Lawyer Fred Baron Paid [The Towers Perrin] studies are particularly useful in assessing long- for Edwards’ Mistress To Relocate, Dallas Morning News, Aug. 9, 2008. term trends in liability-cost burdens (since long-term data will tend to 23. See Center for Responsive Politics, http://www.opensecrets.org/industries/ transcend the vagaries of passing hard/soft markets) and in international contrib.php?ind=K01&cycle=2002 (last visited Jan. 13, 2010). comparisons (since well-defined liability insurance markets exist in other 24. John Fabian Witt, The Political Economy of Pain 20, Apr. 2, 2008, http:// advanced countries and can be subjected to comparable metrics). Perhaps commongood.org/assets/attachments/Witt.pdf. for those very reasons, and because the figures are widely acknowledged 25. See G. Edward White, Tort Law in America: An Intellectual History 3 within the industry as having a high degree of accuracy in measuring what (1980). they set out to measure, the [Towers Perrin] numbers have been furiously 26. See Witt, supra note 24, at 20-21. attacked by organized trial lawyers and their allies. 27. Robert L. Rabin, Some Reflections on the Process of Tort Reform, in Posting of Walter K. Olson to PointofLaw.com, http://www.pointoflaw. Perspectives on Tort Law 284 (Rabin ed., 3d ed. 1990). com/archives/2008/11/tillinghasttowe.php (Nov. 21, 2008, 11:14 EST). 28. See American Association for Justice, An Expanded History of ATLA/AAJ, http:// For a response to these criticisms, see Posting of James R. Copland to www.justice.org/cps/rde/xchg/justice/hs.xsl/2079.htm (last visited Jan. 13, 2010). PointofLaw.com, http://www.pointoflaw.com/archives/000877.php (Jan. 19, 29. See id. 2005, 19:11 EST); see also Towers Perrin, Corrections and Clarifications 30. John Fabian Witt, Patriots and Cosmopolitans: Hidden Histories of (2005), http://www.towersperrin.com/tillinghast/pdf/response_0517.pdf. American Law 241 (2007). 2. See, e.g., Ronen Avraham et al., The Impact of Tort Reform on Employer- 31. See id. Sponsored Health Insurance Premiums (Nat’l Bureau of Econ. Research, 32. Witt, supra note 24, at 23. Working Paper No. 15371, 2009), available at http://ssrn.com/ 33. John Fabian Witt, First, Rename All the Lawyers, N.Y. Times, October 24, 2006. abstract=1478789 (finding that various state-level tort reforms reduce 34. See Kamen, supra note 10. employer-sponsored health-plan premiums one to two percent each). 35. See Neil Hrab, Association of Trial Lawyers of America: How It Works with 3. See infra p. 6. Ralph Nader Against Tort Reform 2 (Jan. 2003), http://www.heartland. 4. See Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (2009). org/custom/semod_policybot/pdf/11566.pdf. 5. See Liability for Aiding and Abetting Securities Violations Act of 2009, S. 36. See Center for Responsive Politics, http://www.opensecrets.org/industries/ 1551, 111th Cong. (2009). indus.php?ind=K01 (last visited Jan. 13, 2010). Data include contributions 6. See H.R. 2519, 111th Cong. (2009); S. 437, 111th Cong. (2009). from lawyers in defense-oriented and generalist firms, not simply those of 7. See, e.g., Arbitration Fairness Act of 2009, H.R. 1020, 111th Cong. (2009); plaintiffs’ lawyers. Thus, contributions from what we call Trial Lawyers, S. 931, 111th Cong. (2009). Inc. constitute only a portion of these dollars. However, even if plaintiffs’ 8. See, e.g., Medical Device Safety Act of 2009, H.R. 1346, 111th Cong. lawyers give only half of all such contributions (according to Towers Perrin, (2009); S. 540, 111th Cong. (2009). a consulting firm, plaintiffs’ lawyers collect about 57 percent of litigation 9. See Press Release, Common Good, New Survey Finds That Only Sixteen dollars that go to attorneys), such contributions would generally exceed those Percent Of American Adults Trust The Legal System To Defend Them from most other industries. In the last political cycle, lawyers gave more than Against Baseless Claims (June 27, 2005), available at http://commongood. twice as much to federal campaigns as any other industry save securities/ org/assets/attachments/140.pdf. investment (and lawyers gave 97 percent more than that industry). See id. at 10. See Al Kamen, Just Don’t Call Them the Suers, Wash. Post, July 14, 2006, at A19. http://www.opensecrets.org/industries/mems.php?party=A&cycle=2008 (last 11. See Center for Responsive Politics, http://www.opensecrets.org/industries/ visited Jan. 13, 2010). indus.php?ind=K01 (last visited Jan. 13, 2010). There is good reason to believe that bundled contributions from the 12. See National Institute on Money in State Politics, Table 1: Attorneys & plaintiffs’ bar well exceed those from the defense bar. Big corporate-defense Law Firms Contributions to All Candidates and Committees, http://www. firms do show up on contributions tables, but that is primarily because of their followthemoney.org/database/IndustryTotals.phtml?f=0&s=0&b%5B%5D= size. The average lawyer at the giant defense firm DLA Piper has contributed K1000 (last visited Jan. 13, 2010). $118 to federal campaigns, and at peer firms K&L Gates and Hogan & 13. See Center for Responsive Politics, supra note 11. As the “Rank” column Hartson it has been $232 and $264, respectively; by comparison, the average indicates, lawyers and law firms, not including lobbyists, rank first for every lawyer at the plaintiffs’ firm Simmons Cooper gave $4,231, at Girardi & Keese election cycle, except for 2004 and 2008. The “industry” ranking first in $7,917, and at Clifford Law Offices $14,175.See id. at http://www.opensecrets. those cycles is “retired persons,” so lawyers are the largest givers among org/industries/contrib.php?cycle=2010&ind=K01 (last visited Jan. 13, 2010) industries and professions in each election cycle. See also infra note 36. (denominators—number of attorneys—taken from firms’ websites). 14. In 2003, Texas passed comprehensive tort reform, the Med-Mal & Tort Moreover, the defense bar and plaintiffs’ bar have congruent economic Reform Act of 2003, H.B. 4, 78th Leg. (Tex. 2003) (enacted), and Mississippi interests when it comes to litigation: loose substantive liability rules, loose passed comprehensive reform in 2004, see H.B. 13, 2004 Ext. Sess. (Miss.) pleading standards, and open-ended discovery rules increase the defense bar’s (enacted). Both states have seen a subsequent reduction in excessive litigation. profits. While defense lawyers are less likely to lobby aggressively against tort- See, e.g., James Tanella, Presentation at Mealey’s Asbestos Super Conference, reform legislation—out of a desire not to antagonize their clients—very few Sept. 26, 2007, p. 11 of hard copy and Oct. 11, 2007 e-mail correspondence. lawyers, whether representing plaintiffs or defendants, advocate litigation reform. 15. See In Re: Silica Products Liability Litigation, MDL No. 1553 (S.D. Tex.) 37. See id. at http://www.opensecrets.org/industries/indus.php?ind=K01 (June 30, 2005) (Order No. 29 at 116) (“[T]hese diagnoses were driven (last visited Jan. 13, 2010). Figures for lawyers include all non-lobbyist by neither health nor justice; they were manufactured for money.”). New contributions from lawyers and law firms.See also supra note 13. asbestos filings fell dramatically: from a high of 70,412 nonmalignant 38. See id. at http://www.opensecrets.org/industries/memsphp?party=A&cycle= and 6,435 malignant claims filed in 2002 to 2,462 malignant and 2,596 2008 (last visited Jan. 13, 2010). nonmalignant claims in 2007. See Tanella, supra note 14 at 12 and e-mail. 39. See id. at http://www.opensecrets.org/parties/contribphp?cmte=DSCC& 16. See Richard Fausset, Bribery Case Brings Down Legal Legend, L.A. Times, cycle=2008 (last visited Jan. 13, 2010). A third top-five contributor, Fortress Mar. 15, 2008. Investment Group, is a New York–based financial company that employed 17. See Michael Parrish, Leading Class-Action Lawyer Is Sentenced to Two Years in plaintiffs’ lawyer John Edwards. The other two top-five contributors are Kickback Scheme, N.Y. Times, Feb. 12, 2008. financial giants Goldman Sachs and JPMorgan Chase. 18. See Jonathan D. Glater, High-Profile Trial Lawyer Agrees to Guilty Plea, N.Y. 40. See id. at http://www.opensecrets.org/politicians/contrib.php?cycle=2010&ci Times, Mar. 21, 2008. d=N00009922&type=C&mem= (last visited Jan. 13, 2010). The other large 19. See Neil A. Lewis, For Edwards, Drama Builds Toward a Denouement, N.Y. plaintiffs’ bar contributors to Sen. Reid have been the Law Offices of Peter Times, Sept. 19, 2009. G. Angelos, Simmons Cooper LLC, and Girardi & Keese. 20. John Fund, Have You Registered to Sue?, Wall St. J., Nov. 6, 2002, available 41. See id. at http://www.opensecrets.org/politicians/contrib.php?cycle=2010 at http://www.opinionjournal.com/diary/?id=110002581. &cid=N00004981&type=C&mem= (last visited Jan. 13, 2010). “Retired

26 www.TrialLawyersInc.com K STREET persons” have given more collectively to Sen. Durbin than has Korein Tillery, 77. See Witt, supra note 30, at 252-58. though not more than has Simmons Cooper. 78. See Pound Civil Justice Institute Home Page, http://www.roscoepound. 42. See National Institute on Money in State Politics, http://www. org/about.aspx (last visited Jan. 13, 2010). followthemoney.org/database/IndustryTotals.phtml?f=0&s=0&b%5B%5D= 79. 527 F.3d 627 (7th Cir. 2008), cert. granted, 129 S. Ct. 1579 (March 9, K1000 (last visited Jan. 13, 2010). 2009) (No. 08-586). 43. See Brendan Scott, Sampson Playing a Law-Firm Shel Game, N.Y. Post, Jan. 4, 2010. 80. See Brief of Law and Finance Amici Curiae in Support of Respondent at 5 44. See Robert Wallace, The King of Torts, Life, Oct. 18, 1954, at 71. n.4, Jones v. Harris Associates, 527 F.3d 627 (7th Cir. 2008), cert. granted, 45. See Witt, supra note 24, at 24–25. 129 S. Ct. 1579 (Mar. 9, 2009) (No. 08-586). 46. See Jim Herron Zamora, “King of Torts” Belli Dead at 88, S.F. Chron., July 81. Grisham’s books have often developed themes of small-scale crusading 10, 1996. lawyers taking on big corporations. See, e.g., John Grisham, The Rainmaker 47. See Melvin M. Belli, Modern Trials (1954); see also Zamora, supra note 46. (1995); Grisham, The Runway Jury (1996). But see Grisham, The King of 48. 24 Cal.2d 453 (1944). Torts (2003). Kelly’s television shows, such as Ally McBeal, The Practice, and 49. See generally Paul A. Offit, The Cutter Incident: How America’s First Boston Legal have often reinforced these themes. Polio Vaccine Led to The Growing Vaccine Crisis (2005). 82. See, e.g., Posting of Peter Lattman to WSJ Law Blog, http://blogs.wsj.com/ 50. See Melvin M. Belli, The Adequate Award, 39 Cal. L. Rev. 1 (1951). law/2007/12/03/the-dickie-scruggs-case-a-qa/ (Dec. 3, 2007, 20:45 EST). 51. See Witt, supra note 24, at 30. 83. See Ashby Jones & Paulo Prada, Richard Scruggs Pleads Guilty, Wall St. J., 52. See Zamora, supra note 46. Mar. 15, 2008. 53. See Escola v. Coca-Cola Bottling Co., 24 Cal.2d 453, 456 (1944). 84. John Stossel, Give Me a Break: How I Exposed Hucksters, Cheats, and 54. See id. at 459. Scam Artists and Became the Scourge of the Liberal Media 158 (2004). 55. See id. at 456. 85. See Center for Justice & Democracy Web Page, http://www.centerjd.org/ 56. The doctrine of res ipsa loquitor dates to the 1863 British case Byrne v. about.php (last visited Jan. 13, 2010). Boadle, 2 H. & C. 722, 159 Eng. Rep. 299 (holding that evidence that a 86. See Americans for Insurance Reform Web Page, http://www.insurance- barrel of flour had dropped from a store window onto a passerby’s head was reform.org/about/index.html (last visited Jan. 13, 2010). sufficient on its face to permit an inference of negligence). 87. See Center for the Study of Responsive Law Web Page, http://www.csrl.org/ 57. See Offit,supra note 49, at 159. (last visited Jan. 13, 2010). 58. Escola, 24 Cal. 2d at 461-68 (Traynor, J., concurring). 88. See U.S. PIRG Web Page, http://www.uspirg.org/about-us (last visited Jan. 59. Id. at 461. 13, 2010). 60. Greenman v. Yuba Power Products, Inc. 59 Cal. 2d 57 (1963). 89. See Public Citizen Web Page, http://www.citizen.org/about/ (last visited Jan. 61. Jeffrey Robert White, Top 10 in Torts: Evolution in the Common Law, Trial, 13, 2010). July 1996, at 50-53. 90. See Public Citizen Litigation Group Web Page, http://www.citizen.org/ 62. See Restatement (Second) of Torts § 402A (1965). litigation/index.cfm (last visited Jan. 13, 2010). 63. See William L. Prosser, Prosser on Torts, 688-89 (1941). 91. See Public Citizen Health Research Group Web Page, http://www.citizen. 64. See Restatement, supra note 62, at § 402A & comment j (“In order to org/hrg//drugs/index.cfm (last visited Jan. 13, 2010). prevent the product from being unreasonably dangerous, the seller may be 92. Ralph Nader, Unsafe at Any Speed (1965). required to give directions or warning, on the container, as to its use.”). 93. See Bob Helt, Government Tests Prove the Corvair Does Not 65. See Charles Alan Wright & Mary Kay Kane, Law of Federal Courts 471 Have a Handling or Stability Problem, http://www.corvaircorsa.com/ (6th ed. 2002); see David M. Roberts, Fact Pleading, Notice Pleading, and handling01.html (last visited Jan. 13, 2010). Standing, 65 Cornell L. Rev. 390, 395–96 (1980). 94. Peter W. Huber, Liability: The Legal Revolution and Its Consequences 66. See Christopher M. Fairman, The Myth of Notice Pleading, 45 Arizona L. 42 (1988). Rev. 987, 990 (2003). 95. See Hrab, supra note 35, at 4. 67. Pub.L. 73-415, 48 Stat. 1064 (1934). 96. Peter Brimelow & Leslie Spencer, The Plaintiff Attorneys’ Great Honey Rush, 68. See 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Forbes, Oct 16, 1989. Procedure § 1202, at 68 (2d ed. 1990). 97. Michael Kinsley coined the term “Saint Ralph” in reference to Nader in a 69. See Fed. R. Civ. P. 8(a)(2). December 6, 1985, article in The New Republic. 70. Unlike in most other countries in the world, the longstanding American rule 98. See Center for Responsive Politics, http://www.opensecrets.org/pfds/ has been that each party normally must pay its own fees and expenses. See, e.g., pfd2003/N00000086_2003.pdf. Arcambel v. Wiseman, 3 U.S. (3. Dall.) 306 (1796). For a discussion of the 99. See Civil Justice Foundation Web Page, http://civiljusticefoundation.org/ policy relevance of this rule, and how to incorporate loser-pays principles into aboutus.html (last visited Jan. 13, 2010). American law, see Marie Gryphon, Greater Justice, Lower Cost: How a “Loser Pays” 100. See Laura Longhine, Display Cases, Legal Aff., Nov.-Dec. 2005, available Rule Would Improve the American Legal System, Manhattan Inst. Civ. J. Rep. at http://www.legalaffairs.org/issues/November-December-2005/scene_ No. 36 (2008), available at http://www.manhattan-institute.org/pdf/cjr_11.pdf. longhine_novdec05.msp. 71. See Fed. R. Civ. P. 23(c)(3)(B). By shifting from an “opt in” to an “opt out” 101. See, e.g., Robert A. Levy, The Great Tobacco Robbery: Lawyers Grab rule, the advisory committee effectively created modern class action litigation. Billions, Mar. 6, 1999, http://www.cato.org/dailys/03-06-99.html; text Because class members are included in such litigation unless they request accompanying note 136. exclusion, these types of cases are essentially lawyer-driven. Securities class 102. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). action attorney Bill Lerach once boasted, “I have the greatest practice of law 103. See 28 U.S.C. §§ 1441, 1446 (2008) (defining removal jurisdiction). in the world. I have no clients.” See Neil Weinberg, Shakedown Street, Forbes. 104. Plaintiffs’ home turf can be quite favorable. Plaintiffs’ lawyer Dickie com, Feb. 11, 2008, http://www.forbes.com/2008/02/11/lerach-milberg- Scruggs once candidly admitted that there are “magic jurisdiction[s]” in weiss-biz-cz_nw_0211lerach.html. which “the judiciary is elected with verdict money,” and he noted that “it’s 72. See Kamen, supra note 10. almost impossible to get a fair trial if you’re a defendant in some of these 73. The Justice League of America first appeared in DC Comics in 1960.See places.” Richard Scruggs, Asbestos for Lunch, Prudential Securities Financial The Comic Book Database, http://comicbookdb.com/issue.php?ID=11725 Research and Regulatory Conference (May 9, 2002) (on file with author). (last visited Jan. 13, 2010). The fictional group starred for several seasons 105. Every year, the American Tort Reform Foundation (ATRF) publishes a beginning in 1973 on a Saturday-morning television cartoon, Super Friends. study listing the nation’s worst jurisdictions for being a civil defendant— See The Internet Movie Database, http://www.imdb.com/title/tt0069641/ venues it calls “judicial hellholes”—such as Madison County, Illinois. (last visited Jan. 13, 2010). American Tort Reform Foundation, Judicial Hellholes (2009-2010). 74. See, e.g., Jonathan Rose, Medieval Attitudes Toward the Legal Profession: The Madison County has improved its legal climate in recent years. See id. Past as Prologue, 28 Stetson L. Rev. 345 (1998). 106. See Allen Adomite, Watch Out Delaware: We’re Chasing Them Out 75. See Witt, supra note 30, at 246-52. of Illinois (July 18, 2005), http://www.legalreforminthenews.com/Op- 76. See Belli, supra note 47. Ed/Op_Ed-ICJL-SimmonsCooper.html; Steve Korris, Asbestos Shift to

L C P 27 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Endnotes

Delaware Is Sign of Distinction for Madison County, Madison-St. Clair appropriation of state funds); Phil Kabler, Legislative Audit Questions Rec., July 7, 2005. Attorney General’s Authority, Charleston Gazette, Jan. 8, 2002, at 5A. 107. Telephone Interview, In-House Counsel of Defendant Industry (Mar. 31, 135. Chris Dickerson, AG’s Practices Questioned by House Committee, W. Va. 2008) (notes on file with author). Rec., Feb. 2, 2007. 108. See Victor E. Schwartz, Judicial Nullification of Tort Reform: Ignoring History, Logic, 136. See West Virginia Citizens Against Lawsuit Abuse, Special Report: Flaunting and Fundamentals of Constitutional Law, 31 Seton Hall. L. Rev. 688 (2001). [sic] Laws You Are Charged to Protect—A Critical Look at Fourteen Years in 109. Cf. 2008 Post-Election Partisan Composition of State Legislatures, http:// the Office of Attorney General Darrell McGraw 6 (June 2007),available at www.ksefocus.com/pdf/2008Post-ElectionChart.pdf. http://www.wvrecord.com/content/img/f196361/CALAreport.pdf; Lawyer 110. See CPSC Rel. 77-096 (Sept. 2, 1977) (banning lead-based paint). Receives $3.85 Million; Attorney Was Only Briefly Involved in Tobacco Lawsuit, 111. See Peter G. Angelos Web Page, http://www.angeloslaw.com/pga.htm (last Charleston Daily Mail, June 27, 2002. visited Jan. 13, 2010) (noting that Angelos “made history . . . when he 137. Private Securities Litigation Reform Act, Pub. L. No. 104-67, 109 Stat. 737 became one of the first to move against the [paint] industry . . . . ” Recently, (1995). Angelos’s firm withdrew from participation in individual suits against paint 138. See id. at § 27(a)(3)(B)(iii)(I)(bb). manufacturers. See Posting of Jane Genova to Law and More, http:// 139. See Editorial, Hevesi vs. the Holdouts, N.Y. Sun, July 26, 2004, available at lawandmore.typepad.com/law_and_more/2009/03/another-lead-paint-war- http://www.nysun.com/editorials/hevesi-vs-the-holdouts/78541/. Note that over-this-one-endured-10-years.html (Mar. 13, 2009, 2:11 EST). although Hevesi subsequently pleaded guilty to a felony relating to his conduct 112. See Baltimore City Lead Poisoning Recovery Act of 2009, H.B. 1156, 2009 in public office,see Michael Cooper, Hevesi Pleads Guilty to a Felony and Sess. (Md. 2009); see also Daniel LeDuc & Michael E. Ruane, Orioles Owner Resigns, N.Y. Times, Dec. 23, 2006, the allegations of wrongdoing leading to Masters Political Clout, Wash. Post, Mar. 28, 1999, at C1. that guilty plea are unrelated to his handling of the MCI WorldCom litigation. 113. See American Tort Reform Foundation, Private Consumer Protection 140. See New York State Retirement Fund Web Page, http://www.osc.state. Lawsuit Abuse (2006), available at http://www.atra.org/reports/consumers/ ny.us/pension/index.htm (last visited Jan. 13, 2010). consumer_protection.pdf. 141. See Editorial, supra note 39. 114. See Press Release, Office of the Attorney General, Consumer “Private 142. See Editorial, Hevesi, Round II, N.Y. Sun, July 19, 2007, available at http:// Right of Action”: What Consumers Need to Know (July 1, 2009), available www.nysun.com/editorials/hevesi-round-ii/58725/. at http://www.iowa.gov/government/ag/latest_news/releases/july_2009/ 143. See Laura E. Simmons & Ellen M. Ryan, Securities Class Action private_right_of_action.html. Settlements: 2006 Review and Analysis 11 & fig. 10 (Cornerstone Research, 115. See S.S.B. 5531, 61st Legis., Gen. Sess. (Wash. 2009) (codified as amended 2006), available at http://securities.stanford.edu/Settlements/REVIEW_ Rev. Code Wash. 19.86). 1995-2006/Settlements_Through_12_2006.pdf. 116. See Tiger Joyce, “Defensive Efforts” Largely Successful but Litigation Industry 144. See Justice at Stake, http://www.justiceatstake.org/issues/state_court_issues/ Lobbying Will Remain Relentless, Metro. Corp. Couns., Aug. 2009, available index.cfm (last visited Jan. 13, 2010). at http://www.metrocorpcounsel.com/pdf/2009/August/11.pdf. 145. See Brimelow & Spencer, supra note 96. 117. See A. 8646, 230th Legis. Sess. (N.Y. 2009); cf. N.Y. Gen. Bus. L. § 352-c. 146. See id. 118. See James R. Copland, Spitzer’s Sins in the Spotlight, Nat’l Rev. Online, Mar. 147. See Justice at Stake, http://www.justiceatstake.org/resources/facts_stats_ 11, 2008, http://www.manhattan-institute.org/html/miarticle.htm?id=5267. and_quotes/ (last visited Jan. 13, 2010). 119. See Press Release, American Tort Reform Association, ATRA Awards Medals 148. See, e.g., Press Release, Independent Expenditures Defined 2006 for “Best” and “Worst” State Civil Justice Legislation in 2009 (Sept. 1, Washington Supreme Court Races, Justice at Stake (May 17,2007), available 2009), http://www.atra.org/newsroom/releases.php?id=8408. at http://www2.justiceatstake.org/contentViewer.asp?breadcrumb=7,55,978. 120. See Scott, supra note 43. 149. See Posting of Carter Wood to PointofLaw.com, http://www.pointoflaw. 121. See A. 3428, 212th Legis., Reg. Sess. (N.J. 2008) (enacted Jan. 15, 2008); com/archives/2009/11/most-important.php (Nov. 2, 2009, 10:21 EST). S.B. 889, 51st Legis., 1st. Sess. (Okla. 2007) (enacted Apr. 25, 2007); H.B. 150. See National Institute on Money in State Politics, http://www. 770, 48th Legis., Reg. Sess. (N.M. 2007) (enacted Mar. 15, 2007). followthemoney.org/database/StateGlance/state_candidates. 122. See, e.g., H.B. 2600, 86th Gen. Assem., Reg. Sess. (Ark. 2007); H.B. 1144, phtml?s=PA&y=2009&f=J (last visited Jan. 13, 2010). 66th Gen. Assem., 1st Reg. Sess. (Colo. 2007); H.B. 551, 149th Gen. 151. See National Institute on Money in State Politics, http://www. Assem. (Ga. 2007); H.B. 631, 82nd Gen. Assem., 1st Sess. (Iowa 2007); followthemoney.org/database/StateGlance/candidate.phtml?c=116295 H.B. 483, 85th Legis. Sess. (Minn. 2007); S.B. 1244, 93rd Gen. Assem., (last visited Jan. 13, 2010). Interestingly, the Philadelphia Trial Lawyers 2d Reg. Sess. (Mo. 2006); A.B. 4308, 230th Legis. Sess. (N.Y. 2007); S.B. Association hedged its bets and also gave $125,000 to winning candidate 179, 2007 Gen. Assem. (N.C. 2007); S.B. 2126, 60th Legis. Assem. (N.D. Melvin. See National Institute on Money in State Politics, http://www. 2007); H.B. 329, 190th Gen. Assem., Reg. Sess. (Pa. 2007); S.B. 82, 117th followthemoney.org/database/StateGlance/candidate.phtml?c=116282 (last Gen. Assem., 1st Reg. Sess. (S.C. 2006); S.B. 1309, 80th Legis. (Tex. 2007). visited Jan. 13, 2010). 123. H.B. 1798, 96th Gen. Assem., Reg. Sess. (Ill. 2007) (codified as amended 152. See Press Release, Michigan Democratic Party Highlights Cliff Taylor as Top 740 Ill. Comp. Stat. 180/2 (2008)). Target in 2008, Michigan Democratic Party (May 29, 2008), available at 124. See S.F. 538, 82nd Legis., 1st Sess. (Iowa 2007) (enacted May 9, 2007). http://www.michigandems.com/newsroom.php?id=44. 125. See A. 1511, 212th Legis., Reg. Sess. (N.J. 2007). 153. See Editorial, Despite His Agenda, Retain Chief Justice Clifford Taylor, Det. 126. See S.B. 311, 75th Legis., Reg. Sess. (Ore. 2009) (enacted Apr. 15, 2009). Free Press, Oct. 14, 2008. 127. See, e.g., S.B. 5815, 60th Legis., Reg. Sess. (Wash. 2007) (calling for 154. See Posting of Walter K. Olson to PointofLaw.com, http://www.pointoflaw. increase in maximum damages in consumer-protection lawsuits). com/archives/2008/11/election-result-2.php (Nov. 5, 2008, 2:55 EST). 128. See A.B. 793, Reg. Sess. (Calif. 2009) (vetoed Oct. 11, 2009: “as drafted, 155. No.08-22, slip op. (U.S. June 8, 2009), available at http://www. this measure is far more expansive than the federal law and could pose supremecourtus.gov/opinions/08pdf/08-22.pdf. unreasonable and unlimited liability for California employers”). 156. See id. at 13 (Roberts, C. J., dissenting). 129. For a thorough account of the state tobacco litigation, see Walter Olson, 157. See Michael DeBow et al., The Case for Partisan Judicial Elections The Rule of Layyers: How the New Litigation Elite Threatens (Federalist Society 2003), available at http://www.fed-soc.org/publications/ America’s Rule of Law 25-72 (2003). PubID.90/pub_detail.asp. 130. See id. 158. See U.S. Chamber of Commerce Institute for Legal Reform, Promoting 131. See id. “Merit” in Merit Selection: A Best Practices Guide to Commission-Based 132. See Levy, supra note 101. Judicial Selection (2009), available at http://www.instituteforlegalreform. 133. See Jeffrey S. Nielsen & Jeffrey P. Yushchak, Report on Policies and Practices com/images/stories/documents/pdf/research/meritselectionbooklet.pdf. of State Attorneys General in Initiating and Conducting Investigations and 159. Private Securities Litigation Reform Act, Pub. L. No. 104-67, 109 Stat. 737 (1995). Litigation (2007), available at http://www.instituteforlegalreform.com/ 160. See Doug Abrahms, Veto Override Makes High-Tech Firms Happy, Wash. component/ilr_issues/29/item/AAG.html. Times, Dec. 23, 1995, at A13. 134. See McGraw v. American Tobacco Co., No. 94-C-1707 (W. Va. Cir. Ct. 161. See, e.g., Marilyn F. Johnson et al., Do the Merits Matter More? The Impact of Nov. 29, 1995) (holding that a contingent-fee arrangement is an unlawful the Private Securities Litigation Reform Act, 23 J.L. Econ. & Org. 627 (2002).

28 www.TrialLawyersInc.com K STREET 162. See Common Sense Product Liability Legal Reform Act of 1996, H.R. 956, 195. S. 1504, 111th Cong. (2009). 104th Cong. (1996) (vetoed May 2, 1996). 196. See Michael C. Dorf, Should Congress Change the Standard for Dismissing 163. See Pamela Becker, Congress and States Take Action on Tort Reform, a Federal Lawsuit?, Findlaw.Com, July 29, 2009, http://writ.news.findlaw. Mechanical Engineering, Apr. 1, 1995. com/dorf/20090729.html. 164. See, e.g., H.B. 668, 75th Legis., Gen. Sess. (1995) (codified as Tex. Bus. & Com. 197. See Pub. L. No. 104-67, 109 Stat. 737 (1995). Code art. 17.42-.50 (2008)) (deceptive trade practices); H.B. 971, 75th Legis., 198. See Jonathan D. Glater, High-Profile Trial Lawyer Agrees to Guilty Plea, N.Y. Gen. Sess. (1995) (codified as Tex. Rev. Civ. Stat. art. 4590i) (medical malpractice Times, Mar. 21, 2008. and expert witness qualifications); S.B. 25, 75th Legis., Gen. Sess. (1995) 199. See Stoneridge Investment Partners v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008). (codified as Tex. Civ. Prac. & Rem. Code art. 41) (punitive damages); S.B. 28, 200. Id. at 163-64. 75th Legis., Gen. Sess. (1995) (codified as Tex. Civ. Prac. & Rem. Code art. 33, 201. See, e.g., Donald C. Langevoort, Capping Damages for Open-Market 95) (joint and several liability and premises liability); S.B. 32, 75th Legis., Gen. Securities Fraud, 38 Ariz. L. Rev. 639, 646–57 (1996) (“[B]uy and hold Sess. (1995) (codified as Tex. Civ. Prac. & Rem. Code art. 15 ) (venue). strategies make it somewhat more likely that [small, diversified investors] 165. Cf. Help Efficient, Accessible, Low-cost, Timely Healthcare Act, H.R. 534, will be non-trading shareholders of an issuer defendant . . . than members of 109th Cong. (2005). the plaintiff class who stand to gain from the settlement or judgment.”). 166. Cf. Fairness in Asbestos Injury Resolution Act, S. 3274, 109th Cong. (2005). 202. See, e.g., Janet Cooper Alexander, Do the Merits Matter? A Study of Settlements 167. S. 5, 109th Cong. (2005) (codified as 28 U.S.C. §§ 1332(d), 1453, 1711- in Securities Class Actions, 43 Stan. L. Rev. 497 (1991) (concluding that 1715 (2006)). settlement value in securities fraud cases is not a function of merit). 168. See Lilly Ledbetter Fair Pay Act of 2009, S. 181, 111th Cong. (2009) (enacted). 203. See, e.g., John C. Coffee, Jr., Memo to Congress: Reform and Its Perils, 169. See Notice Pleading Restoration Act of 2009, S. 1504, 111th Cong. (2009). N.Y.L.J., Nov. 15, 2007, at 5 (asserting that transaction costs in securities 170. See Liability for Aiding and Abetting Securities Violations Act of 2009, S. litigation consume approximately 50 percent of recoveries). 1551, 111th Cong. (2009). 204. S. 1551, 111th Cong. (2009). 171. See Carmelo Rodriguez Military Medical Liability Act of 2009, H.R. 1478, 205. See id. at § 2. 111th Cong. (2009). 206. 31 U.S.C. § 3729–3733 (2008). 172. Cf. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), 207. See False Claims Act Amendments of 1986, Pub. L. 99-562, 100 Stat. 3153 superseded by statute, Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111- (1986). 2,123 Stat. 5 (2009). 208. See Bill Myers, Blowing Whistle Pays Off Big for Fortunate Few, Wash. 173. See Posting of Carter Wood to PointofLaw.com, http://www.pointoflaw. Examiner, May 28, 2009. com/archives/2008/08/lilly-ledbetter.php (Aug. 26, 2008 10:32 EDT). 209. See 31 U.S.C. § 3730 (d)(2). 174. See 550 U.S. at 628-29. 210. See Myers, supra note 208. 175. Editorial, Injustice 5, Justice 4, N.Y. Times, May 31, 2007. 211. 128 S. Ct. 2123 (2008), superseded by statute, Fraud Enforcement Recovery 176. See Stephanie Mencimer, Lilly Ledbetter: Obama’s Newest Ad Star, Mother Act of 2009, Pub. L. 111-21, 123 Stat. 1617 (2009). Jones, Sept. 23, 2008. 212. Pub. L. 111-21, 123 Stat. 1617. 177. See Pub. L. No. 111-2, § 5 (“This Act, and the amendments made by this 213. See id. at §§ 4(b)(1)(B), 4(b)(2)(A)(ii). Act, take effect as if enacted on May 28, 2007 . . . .”). 214. See Center for Responsive Politics, http://www.opensecrets.org/politicians/ 178. Obama Signs “Lilly Ledbetter Fair Pay Act”, USA Today, Jan. 29, summary.php?type=C&cid=N00009918&newMem=N&cycle=2010 (last 2009, available at http://content.usatoday.com/communities/theoval/ visited Jan. 13, 2010). post/2009/01/62099146/1. 215. See id. at http://www.opensecrets.org/politicians/contrib.php?cycle=2010&c 179. Joint Appendix at 233, Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. id=N00009918&type=C&mem= (last visited Jan. 13, 2010). 618 (2007) (No. 05-1074), available at http://www.lawmemo.com/docs/us/ 216. See Walter Olson, Inside the Health Care Bill, Forbes.com, July 22, 2009, ledbetter/appendix.pdf. http://www.forbes.com/2009/07/22/medicare-republicans-reform-bill- 180. See id. opinions-contributors-walter-olson.html. 181. Id. at 231-32. 217. See Center for Responsive Politics, http://www.opensecrets.org/politicians/ 182. The Supreme Court first recognized the equitable tolling doctrine inBailey summary.php?cid=N00006023&cycle=2010 (last visited Jan. 13, 2010). v. Glover, 88 U.S. (21 Wall.) 342, 348 (1874). 218. H.R. 1409, 111th Cong. (2009). 183. See 550 U.S. at 639-40 & n.9 (“Ledbetter originally asserted an EPA claim, 219. See id. at § 3. but that claim was dismissed by the District Court and is not before us. 220. See, e.g., Lynn Langton & Thomas H. Cohen, Civil Bench and Jury Trials If Ledbetter had pursued her EPA claim, she would not face the Title VII in State Courts, 2005 8 (Bureau of Justice Statistics, 2008) (finding in jury obstacles that she now confronts.”). trials an average of 26 months from filing to disposition). 184. See id. at 630-31 n.4 (“Ledbetter’s claims of sex discrimination turned 221. See Deborah R. Hensler, Our Courts, Ourselves: How the Alternative Dispute principally on the misconduct of a single Goodyear supervisor, who, Resolution System Is Reshaping Our Legal System, 108 Penn St. L. Rev. 165, Ledbetter testified, retaliated against her when she rejected his sexual 167 n.11 (2003). advances during the early 1980’s, and did so again in the mid-1990’s when 222. See Interim Report on Creditor Claims in Arbitration and in Court, Searle he falsified deficiency reports about her work. . . . Yet, by the time of trial, Center on Law, Regulation, and Economic Growth at Northwestern Law 1 this supervisor had died and therefore could not testify. A timely charge (2009), available at http://www.law.northwestern.edu/searlecenter/uploads/Credi might have permitted his evidence to be weighed contemporaneously.”). tor%20Claims%20Interim%20Report%2011%2019%2009%20FINAL2.pdf. 185. See 42 U.S.C. § 2000e–5(e)(3)(A) (2008). 223. See id. at 27. 186. See id. 224. See Bill McInturff et al., Key Findings from a National Survey of Likely Voters 7 187. See Fed. R. Civ. P. 8(a)(2). (2008), http://www.instituteforlegalreform.com/component/ilr_issues/29/item/ 188. See Fed. R. Civ. P. 26, 34. ADR.html (follow “View the survey results (PDF)” hyperlink) (discussing 2007 189. See, e.g., United States v. AT&T Co., 461 F. Supp. 1314, 1341 (D.D.C. survey of 800 registered voters). 1978) (“If the purposes of the Rules, and of pretrial discovery generally are 225. See id. at 11. to be effectuated, actual discovery must be expected to be somewhat of a 226. See Sam Stein, Franken Gets His First Amendment Passed by Roll Call Vote, ‘fishing expedition’ . . . .”). Huffington P., Oct. 7, 2009, http://www.huffingtonpost.com/2009/10/07/ 190. 550 U.S. 544 (2007). franken-gets-first-amendm_n_312399.html. 191. See id. at 553. 227. See S. Amdt. 2588, 111th Sess. (2009). 192. 129 S. Ct. 1937 (2009). 228. See 155 Cong. Rec. S10028 (daily ed. Oct. 1, 2009) (statement of Sen. 193. See id. at 1951. Franken); see also Posting of Ted Frank to Overlawyered.com, http:// 194. See Larry Rulison, Lawyers, Malpractice and Money, Philadelphia Bus. J., overlawyered.com/2007/12/halliburton-gang-rape-and-fear-of-arbitration- June 11, 2004, available at http://philadelphia.bizjournals.com/philadelphia/ the-jamie-leigh-jones-case/ (Dec. 12, 2007). stories/2004/06/14/story1.html. 229. See Jones v. Halliburton Co. No. 08 20380, 2009 U.S. App. LEXIS 20543, L C P 29 CENTER FOR LEGAL POLICY AT THE MANHATTAN INSTITUTE Endnotes at *19-20 (5th Cir. Sept. 15, 2009), available at http://www.ca5.uscourts. 265. See S. 437, 111th Cong. (2009). gov/opinions/pub/08/08-20380-CV0.wpd.pdf. 266. See Black’s Law Dictionary 231 (6th ed. 1994). 230. See 155 Cong. Rec. S10028. 267. See, e.g., Silverton v. Commissioner, 36 T.C.M. (CCH) 817 (1977), aff’d, 647 231. See id. F.2d 172 (9th Cir. 1981). 232. See Alex Leo, Jon Stewart Takes on 30 Republicans Who Voted Against Franken 268. See Priv. Ltr. Rul. 94-32-002 (Mar. 30, 1994) (“[P]ayment by one taxpayer of Rape Amendment, Huffington P., Oct. 15, 2009, http://www.huffingtonpost. the obligation of another taxpayer is not considered an ‘ordinary and necessary’ com/2009/10/15/jon-stewart-takes-on-30-r_n_321985.html. expense for purposes of section 162(a).”). 233. See Manu Raju, Dems Jam GOP with Al Franken Vote, Politico, Nov. 12, 269. Victor E. Schwartz & Christopher E. Appel, Federal Government Bailout for 2009, available at http://www.politico.com/news/stories/1109/29439.html. Trial Lawyers, Wash. Leg. Found. Leg. Opinion Ltr. 1 (May 22, 2009). 234. See S. Amdt. 2588, 111th Sess. (2009). 270. See Chris Rizo, Lobbyist: AAJ Looking To Quietly Pass Plaintiff Lawyer Tax 235. See Pub. L. No. 111-118, § 8116 (2009). Break, Leg. Newsline, July 29, 2009, available at http://www.legalnewsline. 236. See H.R. 1237, 111th Cong. (2009); S. 512, 111th Cong. (2009). com/spotlight/222204-lobbyist-aaj-looking-to-quietly-pass-plaintiff-lawyer-tax- 237. See H.R. 1728, 111th Cong. (2009). break (quoting Linda Lipsen, senior vice president of public affairs, American 238. See H.R. 1214, 111th Cong. (2009). Association for Justice). 239. See S. 585, 111th Cong. (2009). 271. See Posting of Carter Wood to PointofLaw.com, http://www.pointoflaw.com/ 240. See H.R. 991, 111th Cong. (2009). As of this writing, the consumer- archives/2008/06/tax-break-for-trial-lawyers-mo.php (June 7, 2008, 15:15 EDT). arbitration market is in serious jeopardy. In July 2009, Minnesota attorney 272. In 1958, Roscoe Pound, see supra page 9, worried aloud that those pushing for general Lori Swanson sued the National Arbitration Forum, alleging expansive strict product liability were “not looking squarely at all the facts” and deceptive trade practices. To settle the charges, the National Arbitration that such a program would have “consequences beyond the law of torts.” Roscoe Forum, the largest provider of these services, agreed to stop processing Pound, The Ideal Element in Law 340 (1958). new consumer-arbitration claims. The American Arbitration Association 273. Michael Porter, The Competitive Advantage of Nations 525 (1990). announced its own moratorium on hearing most consumer-debt disputes. 274. Mark Tapscott, Dean Says Obamacare Authors Don’t Want to Challenge Trial 241. See H.R. 1020, 111th Cong. (2009); S. 931, 111th Cong. (2009). Lawyers, Wash. Examiner, Aug. 26, 2009. 242. See Consumer Financial Protection Agency Act, H.R. 3126, 111th Cong. (2009). 275. Letter from Anthony Tarricone, president, American Association for 243. See Right to Clean Vehicles Act, H.R. 609, 111th Cong. (2009). Justice, http://images.magnetmail.net/images/clients/ATLA/attach/ 244. See Riegel v. Medtronic, Inc., 128 S. Ct. 999 (2008). SENATEPASSESHISTORICHEALTHCAREREFORM.pdf (last visited Jan. 13, 2010). 245. Id. at 1005. 276. See Affordable Health Care for America Act, H.R. 3962, 111th Cong. § 2351 246. See id. (2009); see also James R. Copland, Tort-Bar Treat, N.Y. Post, Nov. 3, 2009. 247. See id. 277. See id. at § 257; see also Chris Rizo, House Health Care Bill Expands State AGs’ 248. See Medical Device Amendments of 1976, 21 U.S.C. § 360k(a) (2008). Powers, Leg. Newsline, Nov. 24, 2009, available at http://www.legalnewsline. 249. See 128 S. Ct. at 1008. com/news/224232-house-health-care-bill-expands-state-ags-powers. 250. H.R. 1346, 111th Cong. (2009); S. 540, 111th Cong. (2009). 278. See Stephen Labaton, Asbestos Bill Is Sidelined by the Senate, N.Y. Times, Feb. 15, 251. See Notice of Class Action and Proposed Settlement, In re Mattel, Inc., Toy 2006. Lead Paint Products Liability Litigation, MDL No. 1897 (C.D. Cal., Oct. 279. See 14 U.S.C. §§ 441a(a)(1), 441a(c) (2008). 23, 2009), available at https://www.mattelsettlement.com/Prod/Content/ 280. See H.B. 1603, 52nd Legis., 1st Reg. Sess. (Okla. 2009) (enacted May 29, 2009). PDF/exC.pdf; John Kell, Mattel Settles Suit Over Lead in China-Made Toy, 281. S. 5, 109th Cong. (2005) (codified as 28 U.S.C. §§ 1332(d), 1453, 1711-1715 Wall St. J., Oct. 14, 2009; Louise Story, Lead Paint Prompts Mattel to Recall (2006)). 967,000 Toys, N.Y. Times, Aug. 2, 2007. 282. See U.S. Senate Roll Call Votes 109th Congress, 1st Session, http://www.senate. 252. See Stipulation of Class Action Settlement at 35, In re Mattel, Inc., Toy Lead gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session Paint Products Liability Litigation, MDL No. 1897 (C.D. Cal., Oct. 23, 2009), =1&vote=00009 (last visited Jan. 13, 2010). Sens. Hillary Clinton (D-N.Y.) and available at https://www.mattelsettlement.com/Prod/Content/PDF/mattelstip.pdf. Joe Biden (D-Del.) both opposed CAFA; Sen. Chris Dodd (D-Conn.), as well as 253. The ratio of attorneys’ fees to actual settlement value depends on the responses Sen. Obama (D-Ill.), did vote for the bill. Dodd was not generally considered a of class members. Mattel’s liability to claimants is $10.875 million or less from “major” presidential aspirant. certain claimants; plus a sticker-price voucher for each toy or valid proof of 283. See President Barack Obama, Address to a Joint Session of Congress on Health purchase returned; plus no more than $10 to each responding individual who Care (Sept. 9, 2009), available at http://blogs.wsj.com/washwire/2009/09/09/ had already submitted a recalled toy for a voucher. Given the number of toys prepared-text-of-obamas-speech-on-health-care/. affected (about 967,000), the relatively modest price of most of the eligible toys (see Lead Paint Toy Settlement, List of Recalled Toys, In re Mattel, Inc., Toy GRAPHS Lead Paint Products Liability Litigation, MDL No. 1897 (C.D. Cal., Oct. 23, 2009), available at https://www.mattelsettlement.com/Prod/Content/PDF/ Page 2: “Tort Litigation,” see Towers Perrin (Tillinghast), U.S. Tort Cost and Catalog-ALL_TOYS.pdf), and the probability that a high percentage of eligible Cross-Border Perspectives: 2005 Update 4 tab. 2 (2005). “Since 1950,” see class members will not file for recovery, the lawyers’ take seems likely to be an Towers Perrin, supra note 1, at 13 app. 1A. inordinately high proportion of the payments made to the class. Page 3: See Towers Perrin, supra note 1, at 13, app. 1A. 254. Consumer Product Safety Improvement Act of 2008, Pub. L. 110-314, 122 Page 7: “The Trial Lawyer PAC,” see Center for Responsive Politics, http://www. Stat. 3016 (2008). opensecrets.org/industries/contrib.php?ind=K01&cycle=2008 (and other cycles) (last 255. See Walter Olson, A Destructive Toy Story Made in Washington, Wall St. J., visited Jan. 13, 2010). “Since 1990,” see id. at http://www.opensecrets.org/industries/ Sept. 13, 2009. indus.php?cycle=2008&ind=K01 (last visited Jan. 13, 2010). 256. See Center for Responsive Politics, supra note 11, http://www.opensecrets. Page 8: “Harry Reid,” see id. at http://www.opensecrets.org/politicians/summary. org/politicians/contrib.php?cycle=Career&cid=N00001861&type=C (last php?type=C&cid=N00009922&newMem=N&cycle=2010 (last visited Jan. 13, visited Jan. 13, 2010). 2010). “Dick Durbin,” see id. at http://www.opensecrets.org/politicians/summary. 257. See Posting of David Ingram to The BLT, http://legaltimes.typepad.com/ php?type=C&cid=N00004981&newMem=N&cycle=2010 (last visited Jan. 13, blt/2009/12/senate-lawyer-chosen-to-lead-highway-safety-agency.html (Dec. 2010). 7, 2009, 13:05 EST). Page 12: See National Institute on Money in State Politics, http://www. 258. See Anne M. Northup, There Is No Joy in Toyland, Wall St. J., Dec. 24, 2009. followthemoney.org/database/IndustryTotals.phtml?f=0&s=0&b%5B%5D=K100 259. See Pub. L. 110-314, § 212. 0 (last visited Jan. 13, 2010). 260. See id. at § 218. Page 15: See Justice at Stake, http://www.justiceatstake.org/media/cms/JAS_ 261. See Steven R. Strahler, Asbestos and the Legal Black Hole, Crain’s Chicago 20002008CourtCampaignExpenditur_63951A4654869.pdf (last visited Jan. 13, 2010). Bus., Sept. 28, 2009. Page 19: See Ellen M. Ryan & Laura E. Simmons, Securities Class Action Settlements: 262. See Northup, supra note 258. 2008 Review and Analysis, Cornerstone Research 1 fig. 1 (2009),available at 263. See id. http://securities.stanford.edu/Settlements/REVIEW_1995-2008/Settlements_ 264. See Timothy P. Carney, Specter’s Voting Record, Wash. Times, Nov. 11, 2004. Through_12_2008.pdf.

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