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After back-to-back victories on long-stalled legal reform legislation, the business community might have paused for a congratulatory break. But even after the passage of major bills that would send more class actions into federal court, and give the bankruptcy code a decidedly more pro-corporate tilt, that hasn’t been the case. An enduring image in the legal reform community is trial lawyers as a vast insect horde, ceaselessly picking their targets � tobacco, asbestos, fast food, guns � filing their lawsuits, making their billions, and moving on to the next tort. And that image gives tort reformers little chance to rest. “Trial lawyers are a business,” says Lisa Rickard, president of the U.S. Chamber of Commerce’s Institute for Legal Reform, which spearheaded the coalition backing the class action bill. “And people need to understand they’re a business.” Remaining on the table, of course, is the complex asbestos bill, which was voted out of the Senate Judiciary Committee last month and is still being fiercely negotiated. In addition to asbestos, the legal reform community has turned its attention to smaller, narrowly tailored legislation, which includes bills designed to further punish plaintiffs who file frivolous lawsuits, to ban certain lawsuits against specific industries, and to mount attacks on state attorneys general. One bill that has a chance of passing � it’s backed by a coalition of some 160 groups and has a catchy acronym, LARA � is the Lawsuit Abuse Reduction Act, a six-page bill that would purportedly reduce frivolous lawsuits, but which opponents say would merely increase litigation and has serious constitutional problems, as well. The bill was voted out of the House Judiciary Committee last week, although it is still searching for a Senate sponsor. “The thing I love about this bill is that it’s very simple,” notes James Anderson, the chief lobbyist at the National Association of Wholesaler-Distributors, which is a founding member of the Lawsuit Abuse Reform Coalition. “It sanctions a lawyer who files a frivolous lawsuit. How do you argue against the fairness of that?” LARA is designed to put more teeth into Rule 11, the Federal Rule of Civil Procedure dealing with frivolous lawsuits. And it is bitterly opposed by the federal judiciary. Rule 11 was rewritten in 1983, explains Thomas Willging of the Federal Judicial Center, the research arm of the federal courts, in order to mandate sanctions against attorneys who filed frivolous lawsuits in federal court. Those sanctions could include the awarding of attorney fees to the other side. As a result, says Willging, well-heeled defendants who won their cases, or whose cases were dismissed, would automatically file a motion for a Rule 11 sanction in order to recoup their attorney fees. “Cases that judges thought they were disposing of on the merits now came back in the form of claims for attorneys fees,” says Willging. And those claims were then litigated themselves, because no attorney wanted a Rule 11 violation on their record. “Suddenly, judges were reporting, and we documented, a large amount of satellite litigation,” he says. So in 1993, the rules were rewritten again, making the sanctions discretionary and adding a 21-day safe harbor, during which time a litigant could, without penalty, withdraw a complaint or rewrite a motion if it was challenged on Rule 11 grounds, and the matter would end there. The upshot, says Willging, was a sharp reduction in Rule 11 litigation. The current legislation would eliminate the safe-harbor provision and for the first time make sanctions mandatory in the form of attorney fees � if a Rule 11 violation was determined. That means deep-pocketed defendants could use the rule as a weapon to ward off suits, and plaintiffs and their lawyers could face judgments if their cases were thrown out. The bill also forces state judges to determine whether a particular case has any interstate commerce connections. If it does, the state judge must apply the federal Rule 11 standard. “There’s no constitutional authority for Congress to order a state judge to hold that hearing to determine if there’s a federal question in a state court case,” notes Christopher Fairman, a professor at the Ohio State University Moritz College of Law. Still, says Fairman, LARA could be a tough bill to defeat. “Who could be against frivolous litigation, especially when Congress is OK with ignoring the one group of people who know about this: federal judges?” he says. INDUSTRY PROTECTION Capping punitive damage awards in medical malpractice cases remains a big favorite of the congressional leadership, but with the proposed cap now set at $250,000, instead of $500,000, for example, that measure has almost no chance of getting out of the Senate. But small tort reform measures have managed to sneak into a host of bills, including a measure Americans for Tax Reform is pushing that would cap awards and legal fees for whistle-blowers and their attorneys at $1 million. Under current law, a judge can award informants up to 30 percent of any money recouped by the government, although such awards rarely, if ever, reach that level. There’s also a gun liability bill, which would prevent people from seeking damages from gun-makers when their products are “misused” by others, including maiming and killing bystanders and children. The bill also moved out of the House Judiciary Committee last week and is expected to easily pass the full House. But unlike last year, it may in fact make it out of the Senate, as well. “It’s an uphill battle,” notes Eric Howard of the Brady Campaign, which is strongly opposed to the legislation. And there’s the “cheeseburger bill,” formally known as the Personal Responsibility in Food Consumption Act of 2005, which would ban lawsuits against fast-food companies for selling food that makes people fat. A coalition, led, not surprisingly, by the National Restaurant Association, is heading up the lobbying effort on the bill. The cheeseburger bill is now making its second attempt at becoming law. Last year it passed the House by a 276-139 margin, but died in the Senate Judiciary Committee. According to a press release from its Senate sponsor, Assistant Majority Leader Mitch McConnell (R-Ky.), a similar bill has already passed in 17 states and is pending in 28 others. Yet according to the Association of Trial Lawyers of America, the lead advocacy group fighting changes in tort law, lawsuits filed against fast-food outlets for making their customers fat are virtually nonexistent. “The U.S. Congress is talking about passing a law, spending taxpayers’ time and money to intervene in a single extant case, one pending case,” notes ATLA Vice President of Policy Carlton Carl. “And there’s only been a grand total of seven of these cases, anyway.” The others, he adds, have either been dismissed, settled, or withdrawn. But while ATLA believes it can make a compelling case against such “bulleted” legislation as the cheeseburger bill, seasoned veterans of the tort reform fights note that it is these very anecdotes that fuel much of the legal reform debate. Indeed, Shook, Hardy & Bacon partner Mark Behrens says trial lawyers may be better off leaving the cheeseburger bill alone, rather than give tort reform efforts even greater momentum. “Fast-food lawsuits are widely seen by Americans as junk lawsuits,” he says. “That McDonald’s coffee case did more to facilitate tort reform than anything else,” he notes, referring to the celebrated 1992 case in which a New Mexico jury awarded Stella Liebeck $2.7 million in punitive damages after she spilled a cup of McDonald’s coffee on her lap. (The award was subsequently reduced to $480,000, and McDonald’s lowered the temperature of its coffee.) “No amount of money corporate America could spend would replicate the soundbite ordinary people got when they heard about the McDonald’s coffee case,” Behrens says. SET ON STATE AGS Away fom Washington, the U.S. Chamber of Commerce � still upset over the billions of dollars in fees pocketed by plaintiffs attorneys who helped state AGs negotiate the landmark $206 billion settlement with tobacco-makers in 1998 � is targeting fee deals struck between state attorneys general and private plaintiffs attorneys. Earlier this month, the Chamber filed an amicus brief with the Rhode Island Supreme Court, urging the court to prevent Rhode Island’s attorney general from entering into contingent fee deals with private attorneys in ongoing litigation against the lead-paint industry. The Chamber has also launched an information campaign criticizing the state AGs. “The overly zealous plaintiffs bar is allied with the attorneys general and shopping concepts to them,” says Rickard of the Institute for Legal Reform. “Is the appropriate role of the attorneys general trying to change national business practices?” Attorneys general say such talk is simply fear-mongering and a convenient way to raise money for business groups that need to attract a strong donor base. Besides, they say, since the tobacco litigation of the late 1990s, the trial bar and attorneys general have rarely worked in tandem. “The fact that we used private counsel [in the tobacco litigation] got a lot of attention. It ties into the tort reform thing,” notes the outgoing president of the National Association of Attorneys General, Vermont Attorney General William Sorrell. “So suddenly it was, ‘Ah, those activist AGs, who’s next � the beef industry, dairy, firearms, lead paint, automotive, alcohol? The reality is that with very limited exceptions, it hasn’t happened.” T.R. Goldman can be contacted at [email protected].

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