How Your Elected Legislators Have Chiseled Away Your Legal Rights

Posted November 21, 2011 in Consumer Law by Keith Ecker

Part one of a three-part series. To read Part Two, visit How the Health Care and Insurance Industries Work to Limit Your Legal Rights. To read Part Three, visit Tort Reform: Fighting Back for Consumers.

There is a battle being fought at the highest levels of government over your right to file a medical malpractice or defective drug lawsuit. On the one hand are pro-business groups that seek protection from crippling multi-million dollar jury awards. On the other hand are pro-consumer groups that work to restore a person’s right to a full and fair trial of his or her case.

The business lobbies have dominated your elected senators and representatives, pushing through laws that:

  • Limit your access to get into court
  • Restrict the types of claims you can assert once you’re in court
  • Cap the recoveries you can obtain in court

On the federal level, a well-known example is H.R.5, a measure in Congress named the HEALTH bill, which seeks to cap non-economic damages at $250,000 and would shield pharmaceutical and medical device makers from punitive damages.

Similarly, on the state level, Wisconsin Senate Bill 13 would protect drug makers and medical device manufacturers from responsibility for defects in their products as long as the product was approved by the Food and Drug Administration (FDA).

The elected officials who support these measures claim they are creating jobs and improving consumer access to health care services. However, the legislation accomplishes its goals by cutting away the rights of consumers to file legal claims against negligent doctors and makers of defective drugs.

The success of tort reform

The battle is over “tort reform,” which grew in response to the perception that juries and courts are wildly out of control and are ordering companies to pay excessive amounts. The pro-business American Tort Reform Association (ATRA), reports that:

  • 39 states have modified joint and several liability, a legal rule that empowers a winning plaintiff to collect from multiple wrongdoers in case one of them can’t pay.
  • 33 states have altered punitive damages laws.
  • 23 states have modified the rules for awarding non-economic damages, like pain and suffering.
  • 20 states have enacted laws to restrict consumer rights against the maker of a defective product.
  • 11 states have enacted laws to restrict consumers from joining together to file a “class action.”

The states where consumers have lost the most legal rights are Colorado, Florida, Ohio and Texas.

Christine Hines

“Politicians and industries call this kind of legislation ‘tort reform,’” says Christine Hines, consumer and civil justice counsel at Public Citizen. It is one of a handful of nonprofit consumer advocacy groups that is attempting to tip the scales of justice back in favor of the consumer. “I stay away from using that term ‘tort reform’ to refer to the practice of restricting access to the courts. It’s denying people’s rights.”

Tort reform advocates argue that the restrictions reduce the risk of frivolous lawsuits and large jury awards and benefit individuals as well as big corporations. For decades, tort reform initiatives have been pushed by companies from nearly every industry, including tobacco, manufacturing, food, automobiles, chemicals, telecommunications, banking, insurance and health care. But those who oppose it say tort reform takes away consumers’ rights to file lawsuits and minimizes industry’s payouts for their own harmful actions.

“This has been a long-term process,” says Gary M. Paul, president of the American Association of Justice (AAJ), also known as the Association of Trial Lawyers of America. The organization supports consumers and their attorneys in their efforts to seek justice in court. “I have been involved in trying cases for more than 35 years. There has been an ongoing effort for many years to affect public opinion, the courts and legislatures. Ultimately, it will have a dramatic effect on consumers in this country.”

Gary Paul

In a well-organized tort reform initiative, corporations and trade associations pool their money and funnel it through a variety of channels to influence politicians. This is perfectly legal and is done by hundreds of lobbyists nationwide. As a result, the pro-business groups have successfully persuaded politicians to change the legal rules in their favor.

Vast sums of corporate money are used to sway politicians. Although no exact numbers are available because most lobbying efforts remain undisclosed to the public, a conservative estimate puts the annual amount spent on corporate political financing well into the hundreds of millions, if not the billions.

A pro-business organization

The leading organization supporting tort reform is the U.S. Chamber of Commerce. This national business federation represents many major companies whose brands are household names. To advance tort reform, the Chamber has established a separate arm known as the Institute for Legal Reform (ILR). ILR’s priority is to stop “lawsuit abuse.” It does this by spending millions each year to spread anti-consumer messages to make the legal system “simpler, fairer and faster for everyone.” According to its 2009 financial statement, the ILR has a budget of more than $37 million.

“The funding for tort reform is coming from a small number of wealthy industries, and the U.S. Chamber of Commerce is one of their biggest mouthpieces,” says Craig Holman, government affairs lobbyist for Public Citizen and an expert on campaign finance.

The ILR did not respond after repeated requests for comment.

It has become increasingly difficult to understand exactly who is funding these tort reform initiatives and how much money is being spent, since the landmark Supreme Court decision known as Citizens United. This ruling allows corporations, trade associations and rich individuals to direct unlimited funds into special nonprofit organizations, such as the ILR. These nonprofits are dubbed Super PACs (political action committees). There are no disclosure rules around Super PACs. This means that a corporation can donate millions of dollars to an organization whose sole purpose is to pay for ads in favor of tort reform and none of the transaction will be visible to the public. The company can even withhold news of its contributions from its shareholders.

“We now have a lobbying campaign that has largely gone underground,” Holman says. “The small number of very wealthy industries that are funding tort reform campaigns are funneling their money through a series of nondescript foundations and organizations. Additionally, when the money goes through a nonprofit, it becomes difficult to trace how the money is being used.”

These Super PACs often use consumer-friendly names. For example, Americans for Job Security sounds like an organization that works to improve the job market. But one of the organization’s biggest initiatives is to limit consumers’ access to the courts and to restrict compensation for injuries. After the Citizens United ruling, Americans for Job Security saw a dramatic jump in its funding, up from $3.5 million in 2009 up to nearly $12.5 million in 2010.

And when money talks, your elected representatives listen.

Return to the Lawyers.com blog tomorrow to read Part 2 of this 3-part series.

Keith Ecker is a reporter for Lawyers.com.

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