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Plaintiffs Bar Pushes Capitol Hill AgendaWith friends in power, lawyers mount effort to expand litigation front lines
Trial lawyers are preparing for a fight in Congress, testing whether they can translate their newfound political capital into legislative victories. They have a wish list that includes expanded opportunities for state litigation, a ban on mandatory arbitration for consumer contracts, and a new way to exempt early litigation costs from taxes. The proposals have been overshadowed by the economy, but the start of hearings as soon as today signals that lawmakers are starting to shift their attention.
Legal Times2009-03-31 12:00:00 AM
Trial lawyers are preparing for a fight in Congress over proposals that would open new areas for civil litigation, testing whether they can translate their newfound political capital into legislative victories.
This week, they'll begin a public relations push starring a kindergartner and a former Major League Baseball umpire who say they were injured by faulty medical devices -- a defibrillator and a replacement hip, respectively. They'll be joined by others from 14 states to lobby for allowing state-level lawsuits against device manufacturers.
The question of whether to roll back federal pre-emption has simmered since last year's Supreme Court decision in Riegel v. Medtronic, in which the Court ruled that federal law barred state-level claims for defective devices.
The plaintiffs bar is in its best position on Capitol Hill in almost two decades, with allies -- whose campaigns they helped pay for -- in control of Congress and the White House. Led by their trade group, the American Association for Justice, they have a wish list that begins with expanded opportunities for state litigation and continues with a ban on mandatory arbitration for consumer contracts, changes to when settlements can be sealed, and a new way to exempt early litigation costs from taxes.
The proposals have been overshadowed by the economy and presidential nominations, but few expect that to last. The start of hearings as soon as today signals that lawmakers are starting to shift their attention.
"This is going to be the most active Congress that we've seen in a long time," says Linda Lipsen, chief lobbyist and senior vice president for the American Association for Justice. The association's political arm ranked 14th in giving to 2008 political campaigns with $3.5 million, according to the Center for Responsive Politics. Banks and other businesses made up most of the top of the list.
Lipsen says consumers would be the primary beneficiaries of the proposed legislation and possible changes in agency rule-making. "If you look at what occurred over the last eight years, it really was a return to the notion of caveat emptor -- let the buyer beware," she says.
Victor Schwartz, general counsel of the American Tort Reform Association and a partner at Shook Hardy & Bacon, says consumers' lawyers stand to benefit, too. "For years, all the trial lawyers did was play defense. They stopped bills," he says. "Now, they're going to pass stuff."
The House Judiciary Committee had a preview of the coming fight last week, when a subcommittee held a hearing on legislation that would allow active-duty members of the military to sue the federal government for medical malpractice. No such right exists now as a result of the Supreme Court's interpretation of federal tort law in a 1950 ruling, but supporters of a change have been energized by the case of a Marine who died because his doctor never told him he had been diagnosed with melanoma.
Debate on the bill turned on the potential effects of having more plaintiffs lawyers involved in the military's medical system. "Creating a special right to sue is not what will improve medical benefits," said John Altenburg Jr., a retired Army major general who previously represented the Army before Congress. Now of counsel with Greenberg Traurig's D.C. office, he spoke against the bill. (The Defense Department has declined to comment on the bill.)
Judiciary Chairman John Conyers, D-Mich., who will play a key role in the passage of any changes to the legal system, sided with the bill's supporters, who include the American Association for Justice. "I don't know what some lawyers have against other lawyers," he told Republicans on the committee. "When you want a lawyer, you want a tough, aggressive lawyer, but when someone else wants a lawyer, it's 'Here we go into litigation again.'"
Lawmakers have not held hearings this year on most of the items on the plaintiffs lawyers' agenda. But beginning this week, repealing pre-emption of medical device lawsuits is likely to move to the top of the list. Supporters note the momentum they gained March 4 when the Supreme Court, in Wyeth v. Levine, ruled that federal law does not pre-empt state torts against pharmaceutical manufacturers. The ruling, which plaintiffs' lawyers cheered, created a contrast with last year's Riegel decision.
"There's no real reason to draw a distinction between medical devices and the medication that's approved by the FDA," says Patrick Regan, name partner in Regan Zambri & Long in D.C.
Supporters of pre-emption argue that manufacturers need to be able to rely on one national standard for safety so that they know when they've met their obligations under the law.
The proposed ban on mandatory arbitration for consumers has the potential to be a much larger fight. Provisions requiring arbitration are often included in standard service contracts, whether the contracts are for telephone service or for care of a relative in a nursing home. Businesses see them as a more efficient way of resolving disputes, while consumer advocates say most people never realize what they're committing to.
"There's unequal footing when a consumer signs one of these agreements. They're long, they're in fine print, and they're complicated, and the consumer has no bargaining power," says Wayne Cohen, managing partner of Cohen & Cohen and past president of the D.C. trial lawyers association.
Two main bills would approach the arbitration issue differently. One sponsored by Rep. Hank Johnson, D-Ga., would institute a broad ban on mandatory arbitration for contracts involving consumers and employment. Another sponsored by Rep. Linda Sanchez, D-Calif., would apply the ban only to nursing home contracts -- what some business advocates consider the start of a piecemeal approach designed to divide industries.
"The trial lawyers do better when they try to isolate parts of the business community," Schwartz says. "They pick the business community apart in little places."
Lipsen doesn't deny the strategy. "The more bills you have introduced on a certain topic, the more interest there is," she says. "It encourages potential hearings on the subject."
THE RECESSION STRATEGY
Helping with the trial lawyers association's lobbying efforts last year were a handful of outside firms, including Patton Boggs, Palmetto Group, and Forscey & Stinson.
Affecting the strategy for all bills about litigation will be the recession, which each side is looking to turn to its advantage.
"In these tough economic times the last thing we need is more lawsuits," says Harold Kim, senior vice president at the Institute for Legal Reform, which is affiliated with the U.S.
Chamber of Commerce. "Our legal system is already the most expensive in the world. The transaction costs are high, and they are extremely inefficient when measured against other dispute resolution alternatives."
Lipsen says families are looking for safe products more than ever. "These are issues that don't cost the taxpayer anything," she says. "There are some real thorny issues with the economy that are being dealt with, but these issues of fairness and accountability and responsibility, these are issues that aren't going to bankrupt the country. They're just going to add fairness back."