Tort Law's Unprecedented Role in the 2004 Election:
By ANTHONY J. SEBOK
Monday, Nov. 15, 2004
Compared to the war in Iraq and "moral values," tort law may not have seemed to a large role in the election this year. Yet, from a historical perspective, it did: On the national level, voters were asked to think about civil liability to an unprecedented extent.
Meanwhile, real changes in tort law were effected on the state level - through judicial elections and state referenda.
The phrase "tort reform," as currently used, refers to a campaign by allies of corporations, the medical profession, and insurers to reduce the amount of private litigation in U.S. federal and state courts. Tort reformers contend that the tort system has gone off the rails, and must be returned to its previous normal, "healthy" state. In a prior column, I discussed whether this contention is accurate. In this column, however, I want to simply consider the role tort reformers' tactics played in the election.
The Medical Malpractice Reform Issue: Focusing In On Senator Edwards
Before he took office, Senator John Edwards was one of America's most successful medical malpractice trial lawyers in America before he entered politics. (In a previous column, I discussed Edwards's background at greater length.) Thus, one could argue that, by nominating Edwards, the Democrats ensured that tort reform would play a role - though perhaps a subtle one -- in the election.
Democrats may have hoped Edwards' background would prove an advantage. His smooth-talking, charming manner, developed in the courtroom, may well have been a plus: Couldn't someone so persuasive to juries, persuade voters, too? And perhaps some Democrats hoped Edwards would talk about the values implicit in his work: of helping the underdog, and of investigating and proving wrongdoing.
In fact, however, Edwards never spoke with any special eloquence about what trial lawyers do - nor of the moral purpose behind helping victims of professional and corporate wrongdoing secure compensation. He therefore failed to appeal, in this way, to those voters who cited "moral values" as their key voting concern.
Meanwhile, the Republicans continued to portray contingency-fee lawyers like Edwards as immoral. And President Bush and Vice President Cheney occasionally raised the issue of medical malpractice on the campaign trail. This argument may have been helpful in states like Pennsylvania, which had recently seen dramatic increases in medical malpractice premiums for certain specialties.
Tort reform did not play a large role in Congressional races. There is some evidence that suggests that Tom Daschle was targeted by interest groups who saw him as an obstruction to national tort reform. Interestingly, though, Daschle was more willing than many other Democrats to see some version of the Protection of Lawful Commerce in Arms Act pass the Senate. This bill, which never became law, would have preempted state tort litigation against gun manufacturers and distributors.
A Vote For A Republican Was, Generally, A Vote For Tort Reform
While tort reform was not much of a debate issue, it may yet prove to be a key legislative issue. The Republicans' recent gains in the Senate mean that, whether voters wanted it or not, federal tort reform, imposed on the states, is more likely than ever to become a reality.
For example, Senate Republicans have been hoping to pass a class action reform bill that would make it easier for defendants to remove class actions from the state courts to the federal courts, where--it is believed, at least--defendants might receive a more sympathetic hearing.
To take another example, Senate Republicans may finally try to introduce nationwide limitations on all medical malpractice litigation - which would supersede, or add to, some state-by-state limitations that are already in place.
If Democrats respond by filibustering, they will have to start explaining why they are opposed to the nationalization of state tort law - when it has traditionally been Republicans who have tried to preserve a larger role for the states. They have not yet even begun to make that argument.
How State Judicial Elections, and State Referenda, Will Change Tort Law
The most dramatic tort reforms ushered in by the 2004 election, however, may prove to be the ones indirectly, or directly, affected in the states.
With more money than ever being poured into judicial elections this year, the tort reformers' favored candidates won in many jurisdictions. Most significantly, a Republican candidate prevailed in southern Illinois, home of Madison County, a jurisdiction long considered a "judicial hellhole" by critics of the tort system.
Meanwhile, a variety of ballot referenda and propositions restricting tort law passed in the various states. Most of these referenda related to medical malpractice actions: Florida now limits the contingency fee paid to lawyers in such suits; Nevada now allows the state to limit pain and suffering awards in such suits; and Wyoming now requires pre-trial certification of such suits. (Wyoming and Oregon, in contrast, rejected attempts to limit damages in such suits.)
A Key Referendum: California's Proposition 64
Most important and interesting of all, however, is California's successful Proposition 64 in California. It takes aim at one of the country's most controversial consumer fraud statutes in the country, commonly known as the Unfair Competition Law ("UCL").
California's UCL - unlike other states' similar statutes -- allowed anyone to sue a business that violated a state business or licensing regulation even if the plaintiff was not harmed. If the plaintiff won, the company paid a $2500 fine for the violation, and the plaintiff's attorney's fees - which could amount to much, much more.
According to critics, the result was to incentivize public interest groups and lawyers to ferret out even essentially victimless corporate wrongdoing - consisting of minor, technical infractions. Whereas a government prosecutor would have exercised discretion to decide not to sue in these trivial cases, private lawyers might be champing at the bit to do so.
Critics claimed that it was so expensive for a small firm to hire a lawyer to defend against a UCL suit, that firms had to settle even meritless suits. That means unscrupulous (or underemployed) lawyers can make a practice of filing bogus UCL suits against small companies, and then settling them for a few thousand dollars.
For instance, in 2002 the California Attorney General (AG) sued the Trevor Law Group in Beverly Hills for sending thousands of letters to small, Los Angeles area companies, threatening UCL suits unless the recipient settled. The principals of the firm resigned from the bar rather than face disciplinary action.
Interestingly, though, the case may have uncovered the proverbial few "bad apples," rather than showing an Achilles' heel of the UCL itself. It seems this was the AG's view -- for argued that going after corrupt lawyers, not changing the UCL, was the right way to deal with the risk that lawyers would try to bully firms into settlement.
Critics of the UCL also cited the case of Benson v. Kwikset Corp.. There, in which a California company was forced to reimburse a group of law firms $3 million in legal fees after it won a UCL suit. The suit had targeted Kwikset because though its door locks were labeled "Made in America," not all of the hardware within them actually was.
Critics saw this as minor mislabeling. The FTC, however, though the violation was serious enough to force Kwikset to change its labeling. So it is not clear whether the Benson case represented such an abuse, after all.
That brings us to Proposition 64. It limited UCL actions. Now, they can be brought only by the state or by parties who were actually harmed by violations of the law. That brings California's law into line with most other states' consumer fraud regimes.
Of course, there were other, far less extreme changes that could have been adopted that would have dealt with the concerns raised by Proposition 64. For example, if one merely wanted to deal with the problem of bogus UCL suits, the obvious solution would have been to introduce a "loser pays" rule. Such a rule wouldn't have solved companies' fear of incurring litigation costs. But it could, at least, have deterred law firms from sending UCL threats on the rationale that they had nothing to lose.
The Election's Lesson: Tort Reform Is Now Thoroughly Politicized
The success of Proposition 64 and other state tort reform referenda on November 2 suggests to me that the politicization of tort reform is now complete. The two parties, for better or for worse, have become identified with two visions of tort law.
The Republicans, for the moment, are using the concept of tort reform strengthen their larger social vision. That vision tends to be pro-business, pro-doctor, pro-insurance company, anti-tort plaintiff, and - especially - anti-contingency attorney.
The question for the Democrats, as they face elections over the next four years, is whether they will be able to develop a concept of tort litigation which will also capture their social vision. It shouldn't be too difficult. After all, the bare facts are these: Our system is the only recourse for seriously injured plaintiffs. And contingency lawyers are the only lawyers such plaintiffs often can retain. Any time the tort system is limited, it tends to hurt the very weakest among us.
If Democrats cannot put forward this - or another - vision of the values behind tort law, then the right to sue will probably continue to shrink over the next four years, at both the federal and state level.