A Message from the Director

Trial Lawyers, Inc.: Illinois is the Manhattan Institute’s fourth full-length report examining the workings of the litigation industry and the second such report focusing exclusively on a single state, following Trial Lawyers, Inc.: California, published in April 2005.[1] Illinois is a logical subject for our second state study: the fifth-most populous state, Illinois is home to a plaintiffs’ bar whose aggressive tactics have had a far-reaching national—and even international—impact.

As we have documented throughout this publication series, today’s American trial bar has thrown off its traditional strictures of legal professionalism and ethics and now wrings dollars from the U.S. economy using a business model at least as advanced—if not nearly as wholesome —as those of the large corporations off which it feeds. “Trial Lawyers, Inc.,” as we call this sue-for-profit behemoth, differs from traditional big businesses in two important ways. First, Trial Lawyers, Inc.’s revenues are extracted from unwilling defendants, rather than paid by willing customers. Second, the tort industry is in many respects immune from outside regulation: since the bar associations police themselves, Trial Lawyers, Inc. plays by its own rules.

Since we launched our Trial Lawyers, Inc. series in September 2003,[2] the litigation industry’s growth has slowed in key areas such as mass torts and class actions—owing to federal class action reform and prosecutorial and judicial investigations into criminal wrongdoing by the plaintiffs’ bar.[3] Nevertheless, Trial Lawyers, Inc.’s overall profits have continued their long-term trend: over the last three years for which data are available, litigation industry revenues have grown by over 26 percent, or almost twice as fast as the U.S. economy as a whole.[4] Viewed as a corporation, Trial Lawyers, Inc. has enjoyed annual domestic revenues that exceed those of every single publicly held company headquartered in Illinois: it grosses over $49 billion—more than the U.S. operations of Walgreens, Boeing, or Allstate, over twice as much as Archer Daniels Midland, over three times as much as Motorola, and fully seven times as much as McDonald’s.[5]

It would be difficult to overstate the importance of Illinois’ courts to this massive litigation business. Relative to the size of its economy, Illinois has more lawyers than any American state except New York and Massachusetts.[6] Tort costs for medical-malpractice liability are a greater share of Illinois’ economy than of any state’s save New York’s.[7] Illinois’ companies fare little better than its doctors: its corporations’ self-insured liability costs are third-highest in the nation.[8] Little wonder, then, that for each of the last three years, corporate attorneys and general counsels have ranked Illinois’ litigation climate 44th or worse among the 50 states.[9]

Trial Lawyers, Inc. has prospered in Illinois by developing lucrative “lines of business” that parallel its national case portfolio: medical malpractice, whose liability costs have sent doctors scurrying out of the state; class actions, which have made the judges of Madison County infamous; and asbestos, the nation’s longest-running—and horribly corrupt—mass tort. Illinois courts have made fortunes not only for the state’s own tort kings but also for lawyers nationwide who have sought out the Prairie State’s “magic jurisdictions,” those county courts where judges are elected with “verdict money” funneled to their campaigns by the plaintiffs’ bar.[10] For although Illinois’ litigation business is broad-based in terms of caseload, it is narrowly focused in geography: these select courts—including Madison and St. Clair Counties, east of St. Louis, and Chicago’s Cook County—attract cases from around the state and nation hoping to cash in on the venues’ trademark jackpot justice.

To maintain these magic jurisdictions, the Illinois division of Trial Lawyers, Inc. supports relentless government-relations efforts targeting both the legislature in Springfield and courthouses throughout the state. The stakes have gotten so high for the trial bar and its legal victims that in the 2004 election for a single state supreme court seat in southern Illinois, the two candidates and their supporters together spent over $9 million, a mind-boggling sum unprecedented in American judicial-election history.[11] Such heavy investment in the state’s high court makes sense when you consider that in 1997, the litigationfriendly court overrode as unconstitutional the tort-reform measures that the state legislature had just enacted.[12]

Fortunately, the tide in Illinois may be starting to turn. In that $9 million judicial race, Gordon Maag, the trial bar’s candidate, not only lost the supreme court election but also lost his retention election to the court of appeals, becoming the first judge to receive a no-confidence vote since retention-election rules were adopted in 1984.[13] The state supreme court seems to be improving, as it recently reversed a class action decision that intruded on other states’ laws and regulations[14] and threw out an egregious multibillion-dollar verdict issued under a misuse of the state’s consumer-protection laws.[15] And just last year, the state legislature enacted comprehensive medical-malpractice liability reform, which has already led to a 25 percent drop in Cook County medical-malpractice case filings.[16]

Whether the Illinois Supreme Court behaves responsibly and allows these reforms to stand will go a long way toward determining whether the state can lift itself out of the national basement in medicalmalpractice law, a necessary step in improving access to health care and lowering its cost. Still, Illinois’ overall legal climate badly trails that of neighboring states, and its economic future depends on enhancing its attractiveness to job-creating businesses. We hope that this latest iteration of our Trial Lawyers, Inc. series will help illuminate how Illinois’ legal barons enrich themselves at their home state’s expense.

James R. Copland
Director, Center for Legal Policy
Manhattan Institute for Policy Research

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1. The Manhattan Institute, Trial Lawyers, Inc.: California (Apr. 2005), available at http://www.triallawyersinc.com/ca/ca01.html.
2. The Manhattan Institute, Trial Lawyers, Inc. (Sept. 2003), available at http://www.triallawyersinc.com/html/part01.html.
3. See Paul Davies, Plaintiffs’ Lawsuits Against Companies Sharply Decline, Wall St. J., Aug. 26, 2006, at A1.
4. See Tillinghast -Towers Perrin, U.S. Tort Costs and Cross-Border Perspectives: 2005 Update 6 (2006), available at http://www.towersperrin.com/tillinghast.
5. Based on the most recent annual reports from the respective companies, available at http://www.sec.gov/edgar/searchedgar/companysearch.html (last visited Oct. 5, 2006).
6. See Lawrence J. McQuillan & Hovannes Abramyan, Pacific Research Institute, U.S. Tort Liability Index: 2006 Report, underlying data available at Tort Reform Index Data Table, http://www.pacificresearch.org/pub/sab/entrep/2006/tort_reform/Tort_Index_Data.xls, at Column AB.
7. See id. at Column N.
8. See id. at Column X.
9. See ILR/Harris Poll, 2006 U.S. Chamber of Commerce State Liability Systems Ranking Study 15, 97 (Mar. 17, 2006), available at http://www.instituteforlegalreform.com/harris/index.html.
10. Richard Scruggs, Asbestos for Lunch, panel discussion at the Prudential Securities Financial Research and Regulatory Conference (May 9, 2002), in Industry Commentary (Prudential Securities, Inc., New York), June 11,
2002, at 5.
11. See Paul Hampel, Big Money Race Sets Record for a U.S. Judicial Contest, St. Louis Post-Dispatch, Nov. 1, 2004, at A01.
12. Best v. Taylor Machine Works, Inc., 689 N.E.2d 1057, 1104 (Ill. 1997).
13. See Steve Gonzalez, Gordon Maag Comes Up Short on Retention, Madison County Rec., Nov. 3, 2004.
14. Avery v. State Farm Mutual Auto. Ins. Co., 805 N.E.2d 801 (Ill. 2005).
15. Price v. Phillip Morris, Inc., No. 96236, 2005 Ill. LEXIS 2071 (Ill. 2005).
16. See 2005 Ill. Laws 677; Mike Colias, Cook Med Mal Suits Down 25%, Crain’s Chicago Bus., Sept. 18, 2006, available at http://www.chicagobusiness.com (subscription required).