Corp Reform - Not Tort Reform

Don't Let Tort Reformers Take You For A Ride

I grew up in Las Vegas, Nevada, a town that personifies the term “desert oasis.” If you go for a drive during the winter in Las Vegas, you’re likely to find a lot of things on the road: Drunks, trash, automotive fluids, blown tires, and even the occasional mattress. But one thing you absolutely won’t find is salt. Our winters are mild enough that they neither need salt nor sand to stay snow and ice free. A nice benefit of living in a town that doesn’t salt the roads is that your car won’t turn into a rusted-out claptrap, no matter how many winters it endures. Even if you’ve never been to Las Vegas, you probably didn’t need me to tell you rust isn’t a problem there. Anyone with even a small measure of common sense knows that cars don’t rust in the desert.

So imagine my surprise some years ago when I was looking at buying a new car in Las Vegas and the car salesman strongly suggested I invest in the factory undercoating to protect my car from rust. When I politely declined the rust protection, the salesman patiently explained to me how expensive rust is to repair, and again suggested I save myself money by spending a little bit of money now to prevent rust, rather than paying the much higher cost later. He looked me in the eye and told me that he was truly concerned about rust forming on the car, so he offered to cut the price of the undercoating by several hundred dollars; he wasn’t trying to rip me off, he was trying to protect me!

Anyone with even a small measure of common sense knows that car salesman don’t try to protect their customers. The only problem the car salesman was trying to solve was the fact that he wasn’t making enough money. I didn’t need the rust protection package, but he needed me to buy it so he used scare tactics to try and manipulate me into buying it out of fear. I saw through his ruse and bought neither the rust protection package nor the car.

I see more than a little similarity between that car salesman and groups like the American Tort Reform Association (ATRA). The ATRA is made up of a broad spectrum of corporations, ranging from auto manufacturers to cigarette makers to petroleum refiners and pharmaceutical companies. They have little in common except for one shared problem: the civil justice system doesn’t let manufacturers get away with selling products that injure or kill consumers.

To solve their shared problem, they need legislation that makes it harder to sue manufacturers of defective products, and even harder to make them pay for the damages those products cause. Just like that car salesman, they’re first trying to scare us by making us believe that the civil justice system is driving up the costs of products and sending manufacturing jobs overseas. Then, they offer to protect us from the civil justice system by selling us tort “reform” legislation.

Use your common sense for a minute. Which is more likely: That Philip Morris (a major financer of the ATRA and the tort reform movement) wants to protect us from the civil justice system… or that Philip Morris wants us to protect them from the civil justice system?

Philip Morris, Merck, Firestone, and many of the other corporations behind the tort reform movement have repeatedly been found liable for knowingly selling defective products that have injured or killed consumers. In criminal law, there’s a term for that: repeat offenders.

What would you think if a group of criminal repeat offenders suggested “reforming” the criminal justice system by reducing prison terms and making it harder to issue arrest warrants? Anyone with even a small measure of common sense would see such “reforms” as an attempt to reduce the criminal justice system’s ability to hold criminals accountable for breaking the law.

But for some reason, when repeat civil defendants offer comparable suggestions on how to “reform” the civil justice system, those suggestions are sometimes called “common-sense” reforms!

The corporations behind the tort reform movement simply have too much to gain to be trusted with something as crucial to our democracy as the civil justice system. By their own admission, the civil justice system costs corporate defendants billions of dollars per year. With billions of dollars at stake, why wouldn’t tort reformers try and pass legislation that will let them off the hook when they break the law?

The civil justice system belongs to and benefits all of us. Any legitimate effort to reform the justice system must then involve all of us, and not just large corporations. If the ATRA truly wanted to reform the civil justice system, they would work with injured consumers, consumer advocates, and yes, even trial lawyers, to help pass legislation that ensures justice for us all. Instead, the ATRA works tirelessly to pass legislation that will deny justice to many injured consumers. And no one with even a small measure of common sense would call that “reforming” the justice system.

This article is also cross-posted to www.tortdeform.com, an excellent resource in fight to preserve and protect our civil justice system.

A Spotter's Guide to Tort Reformers

Just about anyone who knows me knows I have a passion for protecting the justice system from being systematically dismantled for corporate gain.  One sometimes inconvenient side effect of my passion is that I find a way to turn just about any subject into a debate on tort reform.  Just the other night, for example, a class discussion over the merits of Stephen Covey turned into a heated exchange over Stella Liebeck’s lawsuit filed due to her disfigurement by a defective product.  What had been a cordial conversation ended with one woman dropping an f-bomb and storming out of the room.  I was shocked – her behavior was neither “principle-centered” nor an “effective habit.”

Within 30 seconds of the debate, I knew with certainty that she was a lost cause, and that nothing would ever change her mind about the civil justice system.  Least of all, the facts.  How could I tell so quickly?  Because I know her type.  You see, over the years, I’ve found that many supporters of tort reform fit neatly into specific categories.  For your convenience and amusement, here is a spotter’s guide to three types of tort reformers you may encounter in the wild.

Bitter Blue Collar Worker

The Bitter Blue Collar Worker is a man or woman who is solidly middle class.  He or she has worked hard to get where they are in life, and are justifiably proud of their accomplishments.  They never shy away from hard work, detest laziness, and love their country.  With apologies to H.L. Mencken, their only fault is that they’re desperately afraid that somewhere, someone is getting something for nothing.  They hear anecdotes about our justice system, like “Remember that woman who got $2 million bucks for spilling a cup of coffee?” or, “Didja hear about that drunk guy who got a bajillion dollars when he wrecked his car?” and get downright angry at the mere thought that someone received a large sum of money for something as trivial as pain, suffering, or the loss of a loved one.  Even talking about multimillion dollar jury verdicts outrages them so much that they’re unable to engage in productive debate.  Why, I even had one such person angrily declare she would gladly give herself third-degree burns to her genitals in exchange for a million dollars.  Any lengthy discussion with the Bitter Blue Collar Worker will likely end badly.  Ironically, the Bitter Blue Collar Worker tends to be the worst kind of personal injury client to deal with, as their misperception of the justice system causes them to demand outrageous sums of money when tragedy finally strikes them.

Corporate Sock Puppet

The Corporate Sock Puppet is generally employed by a so-called “think tank” organization, a lobbying firm, or a Chamber of Commerce.  They’re neither interested in nor capable of a serious discussion about the civil justice system.  They prefer using sound-bite worthy phrases like “tort tax” and “lawsuit lotto.”  All style and no substance, the Corporate Sock Puppet is little more than a actor or actress, paid to recite someone else’s script.  One such example was Frank Cornelius, an insurance company lobbyist who was brutalized by the very laws he helped pass. 

Shortsighted Defense Lawyer

Once upon a time, Texas had a robust workers’ compensation system that fairly compensated workers for on-the-job injuries.  As a result of the strength of the system, both plaintiffs’ and defense firms were able to build lucrative workers’ compensation law practices.  In the mid-nineties, the insurance industry suffered another downturn, and in turn raised their rates.  Texas employers were particularly hurt by these rate increases, and for a time, Texas had some of the highest workers’ compensation premiums in the country.  Texas insurers used the increase in premiums to fund an all-out assault on the workers’ compensation system.  Some of their foot soldiers in this battle were the same attorneys they hired to contest fraudulent workers’ compensation claims.  The defense lawyers got their way, and the Texas workers’ compensation system was “reformed” in much the same way Dresden was “reformed” by the Allies during World War II.  For a short time, the defense bar celebrated their “victory.”  But then reality set in – they had swung the pendulum so far in favor of employers, that many injured workers found it difficult to find an attorney to contest their legitimate claims.  Without contested claims, these defense lawyers saw their once-lucrative workers’ compensation business dramatically shrink.  In the end, they learned the hard way that the insurance industry looks out only for the insurance industry, and sees defense lawyers not as friends to be embraced, but as expenses to be eliminated.

While this guide is more than a little tongue-in-cheek, it's also intended to point out that not everyone who lobbies for "reforming" the justice system does so with good intentions.  Some do it out of jealousy, some do it out of greed, and others do it simply because they're paid to.  If you've ever visited this site before, you'll know that I fight to preserve our unique civil justice system because I strongly believe that if the Colt 45 was "the great equalizer" in the 19th century, the civil justice system is the great equalizer in the 21st.  For that reason, I hope you'll join with me in my fight to preserve the only weapon that the poor and the powerless can use to hold the rich and the powerful accountable for their actions.

Who Does Tort Reform Hurt?

Among others, the police and firefighters involved in the rescue and cleanup operations of 9/11.  Cyrus over at TortDeform.com has an excellent post about the hoops injured 9/11 workers are having to jump through just to get medical treatment.

"• A mass of workers compensation claims, which were the only route to benefits for many cleanups workers, are filed by sick workers in the years after the attacks. Many of these claims denied based on both an inability to meet the high burden of proof required to show medical causation, and an overly restrictive statutes of limitations. In addition, many of the claims were contested and became stalled in an appeals process which kept victims from getting benefits for months or years.

• These claims are delayed and denied out of hand because of a shortage of funds to cover all of these claims. Instead of attempting to secure more funding to address these workers compensation claims, the state-run (and largest) workers compensation insurer simply denied meritorious claims.

• City officials went so far as to deny and contest the workers compensation claim of its own former Deputy Mayor (Rudy Washington), who was responsible for coordinating the immediate response to 9/11 on the ground in the days immediately after the attack.

• Similarly, in a workers compensation hearing, the city went so far as to argue that the fact that 9/11 happened needed to be proven to the judge." (Emphasis added.)

I generally keep my emotions in check, but I think I would have had a hard time doing so if someone suggested to me that I needed to prove 9/11 happened.  Especially if I was representing someone who was injured during the cleanup process.

Say what you want about "greedy trial lawyers," but there's not a single one of them trying to deny the medical claims of 9/11 rescue workers.  That sort of evil only can come from an insurance adjuster.

You know it must be bad...

When Insurance Journal posts an article critical of the effects of tort reform.

The article tells the story of a 68-year-old former librarian who was severely injured through no fault of her own by a negligent police officer.  Because of tort reform passed in 1977, the city is liable for a maximum of $100,000 - less than half of her medical bills.  Why such a small amount?

"The little known act, Alabama Code Section 11-93-2, caps dollar awards in lawsuits against local governments at $100,000 per plaintiff and $300,000 per incident, while preventing suits against individual employees.

When it was adopted in 1977, the cap was worth almost four times more than today. But because it was not indexed to the cost of living or inflation, its value has stagnated, falling among the lowest such caps in the country.

In three-quarters of U.S. states and half of the Southeast, Roy would be able to seek greater damages."

There are two lessons to be learned from this story:

1. When tort reformers say they don't want to cap economic damages, they're lying.  This law has been on the book for nearly thirty years, and many tort reformers cite Alabama as an example of tort reform's success. 
2. Another nasty little tort reform trick is to try and pass a law with a damage cap that sounds high, like $500k or $750k... and not allow it to be indexed to inflation.  I would imagine that in 1977, when this law was passed, the $100k cap sounded pretty high, too.

I'm not unsympathetic to the fact that since the city is liable in this case, it's really the taxpayers who foot the bill.  But isn't it sad that if this woman had been shot during the commission of a crime, the taxpayers would have to pay 100% of her medical bills as opposed to only half?  And isn't it also sad that in all likelihood the doctors who treat(ed) this woman will have to eat $50,000 or more in bills?  When I say "eat" I of course mean they'll be forced to pass the costs on to other patients in the form of higher prices... which will no doubt be blamed at least partially on the tort system.  For once, the blame will be well-placed.  Any tort system that allows a wrongdoer to not even pay the medical bills of the injured party is tragically broken and desperately in need of reform.

Taking Another Look At The "Tort Tax"

(As my first post for TortDeform.com, I thought I'd revist the "tort tax" argument that's sure to make the rounds in time for the November elections.) 

I’ve previously explained why the “tort tax” argument is a fallacious argument that falls apart under even casual analysis. But let’s put reality aside for a moment (as tort reformers often do) and pretend that all of the costs of the civil justice system are indeed a tax.

In case you’ve never heard it before, the “tort tax” argument claims that since roughly 2% of America’s Gross Domestic Product is related to the legal system, every U.S. citizen pays about $800 per year in “tort tax”. Of course, we don’t write a check to the IRS to pay our “tort tax” bill. Instead, this “tax” purportedly comes in the form of higher prices on goods we purchase. In other words, the “tort tax” is really a consumption tax.

While there has been a lot of debate about the real effects of consumption taxes, one thing is agreed upon by all sides: How much consumption tax an individual pays is in direct proportion to how much he or she consumes. Thus, any attempt to quantify the costs of our civil justice system on a per-person basis without looking at the expenditures of every person is doomed to failure, as no two persons consume the same amount of goods. So when a tort reformer claims every family of four pays about $3,200 per year in “tort taxes” you know that he or she either doesn’t understand how consumption taxes work, or that he or she is more interested in clever sound bites than the truth.

The “tort tax” argument may be flawed and misleading, but it can be used to rebut another common argument for tort reform: That our tort system is inherently unfair because juries in different communities may award very dissimilar compensation to individuals with very similar injuries. Tort reformers argue that fairness requires similar injuries be compensated similarly. Is this true? Not if we’re to believe the “tort tax” argument.

Check Out Tortdeform.com!

Tired of reading the same tired arguments for tort reform from the same tired pro-business, anti-consumer websites?  Then check out www.tortdeform.com!  It's a new site created by the Drum Major Institute for Public Policy, and has tons of potenential.  And I'm not just saying that because I'm one of the contributors to the site!

In addition to posts from me, look for posts from a wide variety of other authors.  In the words of Cyrus Dugger:

"This blog is being launched to right this imbalance, and to affirmatively engage the "tort reform" movement's ideas in a popular medium that is accessible to lawyers and non-lawyers alike."

I'll continue to post here at Corpreform, and will also post at Tortdeform.com.  Sometimes the content will be duplicated, and other times each site will get an exclusive.  The really good news is that Cyrus has promised to poke me with sharp objects if I don't start making weekly posts.

Spread the word.

Got Asbestosis?

Apparently, low-wage workers in India do:

"The dangers faced by the 5,000 workers at the yard on the shores of the Gulf of Cambay in the western state of Gujarat were spotlighted in February when protests by environmental groups forced the French and Indian governments to call off plans for the decommissioned French aircraft carrier Clemenceau to be broken up at Alang.

The environmentalists said the ship was filled with up to 1,000 tons of asbestos, along with other toxic waste.

The expert committee, appointed by the Supreme Court during the controversy over the Clemenceau, found 16 percent of the workers at Alang suffer from an early stage of asbestosis — an irreversible lung condition that could lead to lung cancer, according to the Indian Express, which obtained a copy of the unpublished report.

The Gujarat Maritime Board, which oversees Alang, has told Greenpeace that 372 workers have died there since the ship-breaking industry first was developed in 1982."

India's culture differs from America's in many ways.  One trait that apparently crosses culture lines is greed:  Just as American companies knowingly let workers contract asbestos-related illnesses in order to make a few bucks, so too are Indian companies. 

Isn't it tragic that even today, workers are dying from asbestos exposure?  And isn't it disgusting that groups like the U.S. Chamber of Commerce are more upset about the deaths of the companies that knowingly exposed their workers to asbestos without providing proper protection to them?