The litigation industry in America had a lot riding on last Tuesday’s elections. In addition to running a personalâ€“injury lawyer—almost wholly financed by plaintiffs’ attorneysâ€”for the second highest office in the land, Trial Lawyers, Inc. faced several state referenda and key judicial races that were bellwethers for tort reform. Although the lawyers scored a couple of small victories, they by and large were trounced in what amounted to a very bad night for America’s avaricious legal vultures. Businesses, doctors, and grassroots activists combined to lay the groundwork for both state and federal legal reform.
By selecting trial lawyer John Edwards as his viceâ€“presidential nominee, John Kerry gave an unprecedented tip of the hat to the plaintiffs’ bar. As I noted in NRO this summer, “19 of Edwards’s top 20 donors were plaintiffs’ lawyers, 86 percent of his Senate campaign contributions came from personalâ€“injury lawyers, and almost twoâ€“thirds of his fieldâ€“leading presidentialâ€“campaign contributions last spring came from trial lawyers, their families, and their staffs.” In the Senate, Edwards consistently opposed any efforts at litigation reform.
Without Kerry and Edwards in the executive, federal tort reform has a real chance in the upcoming legislative session. President Bush has given strong lip service to cleaning up our litigation mess, and his record as governor in Texas, where he successfully passed comprehensive tort reform, gives reason for hope.
At least as important as the presidential results were Republican pickups in the Senate, where Democrats—led by Tom Daschle—have filibustered any and all efforts to clean up our civilâ€“justice system. Daschle of course went down to defeat, and Edwards’s seat, along with that of trialâ€“lawyer waterboy Fritz Hollings, went to reformâ€“minded Congressmen Richard Burr and Jim DeMint. With 55 Republicans in the upper chamber, plus a handful of redâ€“state Democrats sympathetic to the tortâ€“reform cause (and presumably anxious to avoid Daschle’s fate), we may at last see federal action to curb frivolous classâ€“action lawsuits and interstate suits against gun manufacturers, to solve our nation’s asbestos litigation crisis, and perhaps even to stem the escalating costs of medicalâ€“malpractice liability.
Tuesday’s election was also a big win for tort reform at the state level, where most litigation occurs. State to state, in downâ€“ballot initiatives and judicial races, tort reformers won most major battles against the litigation industry’s wellâ€“heeled political machine.
In Florida, voters overwhelmingly passed a medicalâ€“malpractice liability reform limiting lawyers’ contingency fees. A similar measure won handily in Nevada, where voters also rejected two ballot initiatives advanced by trial lawyers that were essentially designed to undermine or invalidate the successful reform referendum. Colorado voters rebuffed a trialâ€“lawyerâ€“backed initiative that would have significantly expanded the ability to sue builders over alleged construction defects.
In California, voters by a broad margin passed Proposition 64, which helped to repair the Golden State’s infamous “unfair business practices” law that has permitted lawyers to shake down smallâ€“business owners without actually representing an injured client. Only in two states were trial lawyers actually successful in defeating tortâ€“reform ballot measures: Oregon, where medicalâ€“malpractice reform lost in a virtual tie; and Wyoming, where the litigation industry was aided by the unusual state rule that counts ballots uncast for referendum measures as “no” votes.
Tort reformers also scored big wins Tuesday in state judicial races. Judicial elections are a key component of litigation reform: Not only do judges make decisions on litigation, but “creative” judges in many states have struck down tortâ€“reform laws passed by state legislatures.
In the granddaddy of all state judicial races, Republican Lloyd Karmeier defeated Democrat Gordon Maag for the Illinois supreme court. The race cost over $9 million, a national record; and Judge Maag, a former plaintiffs’ attorney, raised direct and indirect contributions totaling over $4 million from trial lawyers.
Why would this sleepy race in the rural tip of Illinois and East St. Louis attract so much attention from Trial Lawyers, Inc.? Well, Maag’s home county and former place of practice—Madison County, Illinois—is a “magnet court,” what billionaire Mississippi plaintiffs’ lawyer Dick Scruggs calls a “magic jurisdiction” where “the judiciary is elected with verdict money.” The American Tort Reform Association calls the county the top “judicial hellhole” in the nation. Such jurisdictions soak up classâ€“action and asbestos cases from around the nation, constitute a drag on the nation’s interstate commerce, and even interfere with the legislative prerogatives of Congress and other states.
Since state supreme courts police their locales, having the right judges on the appellate benches is crucial to controlling magic jurisdictions. Illinois’s supreme court, while hardly a model, has improved in recent years, and Maag’s defeat is a continuation of that trend. Illinois voters not only elected Karmeier decisively, they voted Maag off the court of appeals by failing to give him sufficient ballots to win his “retention” election. (Maag is the first judge not to be retained by Illinois voters since the retention system was installed in 1964.)
Voters in other states around the country also voted out judges financed by the litigation industry. In Mississippi, where state supremeâ€“court composition is crucial to the success of tortâ€“reform measures passed last year under the leadership of Governor Haley Barbour, the plaintiffs’ bar saw three of its candidates lose outright and faced a runoff by an incumbent in the fourth. Mississippi, a site of many magic jurisdictions itself, is well on the way to escaping its reputation as the worst tort regime in the country.
The state with the secondâ€“worst reputation for torts, West Virginia, threw out incumbent supremeâ€“court justice Warren McGraw—who authored a decision directly impacting claims in the billions of dollars brought by his son, a plaintiffs’ lawyer in the state. And Ohio, which has seen its high court teeter back and forth between accepting and reversing tortâ€“reform measures, voted against three supremeâ€“court candidates who had received millions in trialâ€“lawyer financing.
Make no mistake about it: The fight to curb America’s litigation explosion is just beginning. The lawsuit industry is more generous than any other when it comes to injecting cash into the political process, and the plaintiffs’ bar won’t go down without a fight.
But on Election Day, at least, the people spoke. They turned back judges who fostered lawsuit abuse, supported referenda that will cut litigation costs, and backed a president committed to tort reform. Trial Lawyers, Inc. is the most profitable business in the country, but after Tuesday’s decisions, expect its stock to plunge.