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Trial Lawyers Inc.

   Trial Lawyers Inc.: Health Care
    The Lawsuit Industry's Effect on American Health, 2005


The Lawsuit Industry's Effect on American Health: Condition Critical?
Trial Lawyers Inc. Health Care
A Message from the Director

Focus: Lines of Business
Drugs and Medical Devices
Special Focus: Vaccines
Medical Malpractice
Special Focus: Hospitals
Health Maintenance Organizations

Government Relations/Public Relations
Outlook and Conclusion

Other Resources
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The Manhattan Insitute's Center for Legal Policy.
Walter Olson's OverLawyered.com.



Trial Lawyers, Inc. finds politics a lucrative investment.

Tort reform is a bitter pill for Trial Lawyers, Inc. to swallow, and the litigation industry gives lavishly to buy the support of legislatures and judges. At the national level, Trial Lawyers, Inc. wins over politicians with concentrated political-action-committee giving and bundled individual contributions. In the last political cycle, lawyers and law firms again led all industries in federal political giving, spending a staggering $182 million on federal campaigns alone—outspending the corporate health-care sector by more than 50 percent (see graph, p. 19).[222] Although no comprehensive numbers are available for state-by-state trial-lawyer giving, anecdotal evidence from some of the nation's largest states suggests that the litigation industry’s political influence at the state level exceeds, if anything, its influence at the federal level.[223]

Federal Giving: Trial Lawyers, Inc. Stands Apart

PAC donations from the Association of Trial Lawyers of America (ATLA)—Trial Lawyers, Inc.'s government-relations "home office"—are perennially among the nation's highest to the Democratic Party.[224] Democrats receive 93 percent of ATLA's contributions, which helps explain why every Democratic senator opposed the president's medical-malpractice reform bill in the last Congress.[225]

PAC gifts, however, only scratch the surface of litigation-industry giving, which Trial Lawyers, Inc.'s leaders and their firms bundle and distribute directly to candidates. Senator John Edwards's presidential campaign was almost wholly funded by the lawsuit industry,[226] and when he joined John Kerry's ticket, much of that fund-raising apparatus followed: the Texas law firm of Fred Baron, who chaired the Kerry-Edwards campaign's fund-raising efforts, has made a princely fortune in Fen-Phen litigation.[227] Other major 2004 contributors included Waters & Kraus, a firm whose suits have targeted Vioxx, vaccines containing thimerosal, and the cholesterol-lowering drug Crestor;[228] and SimmonsCooper, a firm in Madison County, Illinois (the nation's worst jurisdiction, according to the American Tort Reform Association),[229] which has a major practice suing the manufacturers of painkiller OxyContin and hormone-replacement therapy Prempro.[230]

While 74 percent of lawsuit-industry contributions go to Democrats[231]—including almost all those given by the large donors mentioned above[232]—Trial Lawyers, Inc.'s health-care division funds key Republicans, as well. The Senate judiciary committee chairman, Republican Arlen Specter, has been called "the favorite senator of the trial lawyers."[233] Small wonder: Specter's son Shanin (pictured with his parents below)—one of Pennsylvania's most successful medical-malpractice lawyers—is also one of Trial Lawyers, Inc.'s top fund-raisers.[234] Florida's newest senator, Mel Martinez, is also a former plaintiffs' lawyer, as are his fellow Republican senators Lindsey Graham of South Carolina and Mike Crapo of Idaho.[235] And Trial Lawyers, Inc. is keen to recruit more GOP candidates, particularly in the populist, socially conservative South.[236]

A Multipronged State-by-State Attack

Tort law is largely in the jurisdiction of the states, and the trial bar has diligently cultivated its influence over state legislatures. West Virginia’s legislature is so beholden to the trial bar that the American Tort Reform Association calls its entire legal system a "judicial hellhole."[237] In larger states, the litigation industry targets political giving to maximize influence. Trial lawyers gave $10 million to legislative and statewide-office candidates in California's last two political cycles, including over $1 million for state attorney general Bill Lockyer's last two campaigns.[238]

When Trial Lawyers, Inc. loses in the legislature, it falls back on the courts, using its most seasoned strategy—litigation—to block reform. For years, the lawsuit industry has packed the courts with friendly judges who not only liberally interpret rules to the trial bar's advantage but also unabashedly engage in judicial activism to strike down tort-reform measures as unconstitutional, often on tendentious legal grounds. Just this summer, the Wisconsin Supreme Court struck down the state's statutory $350,000 cap on noneconomic damages in medical-malpractice actions.[239] Why? In an opinion authored by chief justice Sarah Abrahamson—who receives almost half her campaign funding from the trial bar[240]—the court found the statute to be "unreasonable and arbitrary because it is not rationally related to . . . lowering medical malpractice insurance premiums."[241] The court disregarded the General Accounting Office's explicit finding that "medical malpractice suits are one of the leading costs for insurance carriers."[242]

While 74 percent of lawsuit-industry contributions go to Democrats, Trial Lawyers, Inc.'s health-care division funds key Republicans as well.

Frustrated by Trial Lawyers, Inc.'s influence over both the legislatures and the courts, reformers in states with referendum and initiative powers have taken to the ballot box to attempt to reduce lawsuit abuse. These efforts sometimes succeed —e.g., last year in California, where citizens reformed the state's notorious "shakedown statute," despite the $4 million Trial Lawyers, Inc. spent trying to drum up opposition.[243] Also last year, Nevada citizens voted in limits on pain-and-suffering awards and contingency fees in malpractice cases.[244]

While voter-referendum drives have met with success, the litigation industry often counters with initiatives of its own. Last year, for example, Florida's citizens passed an initiative limiting excessive contingency fees in medical-malpractice suits.[245] Trial lawyers responded with two succesful initiatives, including a "three-strikes" rule that strips the license of doctors who lose three malpractice suits.[246] A three-strikes provision sounds sensible—until one considers that doctors already settle thousands of groundless suits and that legal outcomes in medical-malpractice cases bear little or no relationship to actual doctor error, so that doctors who wish to stay in practice face a powerful incentive to settle even the weakest claims, for sizable amounts. While it's unclear whether the trial bar will generate enough new settlements to recoup its lost contingency fees, experts like law professor Lester Brickman argue that, with this counter-initiative, the lawyers have "trumped the doctors."[247] As the Florida story shows, Trial Lawyers, Inc.'s sophisticated government-relations operations make it difficult for reformers to keep the upper hand for long.


Trial Lawyers, Inc.'s medical-malpractice operations today include suits against not only individual doctors but also health-care facilities such as hospitals, nursing homes, and clinics. Juries tend to have less sympathy for what they perceive to be impersonal, faceless institutions. Accordingly, hospitals lose over half of malpractice cases—doctors lose only one-third—and the average compensation in suits against hospitals is over $6 million, a healthy 225 percent more than the average verdict against doctors.[183]

ATo block reform, Trial Lawyers, Inc. goes beyond its direct political contributions to influence public, legal, and academic opinion with its well-oiled public-relations machine. Trial Lawyers, Inc. targets the media with allied "consumer groups" bearing innocuous names like Consumers Union, Public Citizen, the Center for Justice and Democracy (CJD), and CJD's subsidiary, Americans for Insurance Reform. But these "public interest" groups have deep connections to the litigation industry. Consumers Union receives between 9 and 20 percent of its budget from unclaimed class-action funds.[248] Public Citizen Foundation's board looks like a Trial Lawyers, Inc. leadership meeting, including Lisa Blue of plaintiffs' firm Baron & Budd and Joseph Cotchett, who's also on the Association of Trial Lawyers of America board;[249] Public Citizen boasts its own litigation division,[250] and group founder Ralph Nader has come under fire from other consumer advocates for his deep financial ties to the trial bar.[251] While the CJD closely guards its donor list, its sole stated mission is to "educate the public about the importance of the civil justice system and the dangers of so-called 'tort reforms,'"[252] and its board is populated with the trial bar's most zealous advocates in the academy, as well as media hounds Michael Moore and Erin Brockovich.[253]

In taking on big pharmaceutical companies, the lawsuit industry is helped immeasurably by Public Citizen's scare tactics. They led the fight against breast implants and Bendectin, both of which have been shown repeatedly to pose little health risk. Sidney Wolfe,[254] the director of Public Citizen's Health Research Group, calls prescription drugs a "massive public health problem" costing 100,000 lives per year[255]—without mentioning the millions more lives saved and improved by modern drug technology. Public Citizen produces an annual report, "Worst Pills, Best Pills," which paints scores of prescription and over-the-counter medications as too dangerous for public use: their "do not use" list now numbers 185 and includes such medicine-chest standbys as the cough syrup Robitussin, the decongestant Sudafed, and the antacid Mylanta.[256] While urging consumers to avoid these common medicines "under any circumstances" may seem bizarrely extreme, consider that Public Citizen's "health letter" last year extravagantly suggested that "[w]eapons of mass destruction are hard to find in Iraq [but] in modern medicine they are abundant."[257]

Beyond attacking pharmaceuticals, Public Citizen and its allies issue disingenuous reports designed to obscure the very real danger posed by medical-malpractice litigation. Since April, Public Citizen, CJD, and Americans for Insurance Reform have each issued separate "studies" that blame the med-mal liability crisis on insurance companies.[258] Long-term statistical analysis of the groups' own numbers, however, shows that medical-malpractice payouts have risen far faster than insurance premiums (see graph, p. 14).[259] While these "public interest" groups resort to statistical misrepresentation to make their case, their reports are still uncritically trumpeted by mainstream media outfits like the New York Times[260]—lending unearned credibility to Trial Lawyers, Inc.'s public-relations flacks.

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222. Data taken from the Center for Responsive Politics, available at http://www.opensecrets.org/industries/index.asp.
223. See, e.g., Illinois Civil Justice League, JusticCe For Sale: The Judges of Madison County (2002), available at http://www.icjl.org/resources_studies.htm; Civil Justice Reform Association of California, Plaintiffs' Lawyers Campaign Spending, at http://www.cjac.org/research/index.cfm.
224. For the 2004 cycle, see http://www.opensecrets.org/pacs/index.asp.
225. See id.; Jim Drinkard, Dems Defeat Bill to Curb Awards in Malpractice Suits, USA Today (July 9, 2003), available at http://www.usatoday.com/news/washington/2003-07-09-malpractice_x.htm.
226. See Thomas B. Edsall & Dan Balz, 3-Month Push Gave Edwards Democratic Fundraising Edge: Trial Lawyers Are Key Contributors to $7.4 Million Total, Wash. Post, Apr. 17, 2003, at A8; Editorial, Favorite Son Candidacy, Wall St. J., Apr. 21, 2003, at A12.
227. See Walter Olson, Edwards & Co., Wall St. J., July 12, 2004, available at http://www.manhattaninstitute.org/html/_wsj-edwards_and_co.htm; http://www.baronandbudd.com/DRUGS_ FENPHEN.html ("Baron & Budd represents many individuals injured by [Fen-Phen] that have claims filed with the class action settlement trust or who 'opted out' of the class action settlement to pursue a remedy in a court of law.").
228. See the Waters & Kraus firm website, http://www.asbestos-lawyer.com/CM/Custom/TOC PracticeAreaDescriptions.asp, which lists thimerosal-containing vaccines, Vioxx, and Crestor as practice areas.
229. See American Tort Reform Association, Judicial Hellholes 2004, available at http://www.atra.org/reports/hellholes/report.pdf.
230. The SimmonsCooper website, http://www.simmonscooper.com/CM/Custom/TOCFirmOverview.asp, lists OxyContin and Prempro as major practice areas.
231. Figures are for the 2004 cycle; see http://www.opensecrets.org/industries/index.asp.
232. In the last political cycle, Baron & Budd gave 97 percent of its contributions to Democrats, SimmonsCooper 100 percent, and Waters & Kraus 99 percent. See id.
233. Timothy P. Carney, Specter's Voting Record, Wash. Times, Nov. 11, 2004, available at http://www.washtimes.com/op-ed/20041110-102002-3431r.htm.
234. See id.; Larry Rulison, Lawyers, Malpractice and Money, PhILadeLPhIa Bus. J., June 11, 2004, available at http://philadelphia.bizjournals.com/philadelphia/stories/2004/06/14/story1.html.
235. See Walter Olson, The Next Sandra Day, Wall St. J., July 7, 2005, available at http://www.manhattan-institute.org/html/_wsj-sandra_day.htm.
236. See Ramesh Ponnuru, Social Injustice: Trial lawyers Woo Social Conservatives, PointofLaw.com, Sept. 15, 2005, available at http://www.pointoflaw.com/columns/archives/001595.php (reprinted from Nat’l Rev.). Among the plaintiffs' attorneys whom trial lawyers have been recruiting for runs at higher office are cable-TV personality and former Congressman Joe Scarborough; see Lesly Conn, Scarborough for Senate?, PensacoLa News J., Aug. 17, 2005, available at http://www.pensacolanewsjournal.com/apps/pbcs.dll/article?AID=/20050817/NEWS01/508170327/1006, and Texas Vioxx lawyer and evangelical minister Mark Lanier, see Alex Berenson, Vioxx Verdict Raises Profile of Texas Lawyer, N.Y. Times, Aug. 22, 2005, at C5.
237. See American Tort Reform Association, supra note 229.
238. See Press Release, Civil Justice Association of California, Personal Injury Lawyers' Political Spending Political Money a Shade under $10 Million in 2001-02 Cycle (Mar. 19, 2003), at http://www.cjac.org/research/index.cfm; Civil Justice Association of California, California Statewide Races: Total Trial Lawyers Contributions 97-98, at http://www.cjac.org/research/index.cfm.
239. See Ferdon v. Wisconsin Patients Compensation Fund, No. 2003 AP 988 (Wis. July 14, 2005), available at http://www.wisbar.org/res/sup/2005p/2003ap000988.pdf.
240. Contributions listed for Shirley Abrahamson can be found at http://www.opensecrets.org/wdc/otherlist.asp.
241. No. 2003 AP 988, slip op. at 53.
242. Id. at 60 n.141.
243. Statement of John Sullivan, President, Consumer Attorneys of California (Mar. 3, 2005); see also Walter Olson, Stop the Shakedown, Wall St. J., Oct. 29, 2004, available at http://www.manhattan-institute.org/html/_wsj-stop_the_shakedown.htm.
244. See Jim Copland, Turning Out Trial Lawyers, Inc., Nat'l Rev. Online, Nov. 8, 2004, at http://www.nationalreview.com/comment/copland200411080818.asp.
245. See Walter Olson, Florida Three-Strikes, Cont'd, PointofLaw.com, Nov. 29, 2004, at http://www.pointoflaw.com/archives/000747.php (citing Associated Press).
246. See id.
247. Id.
248. See Max Boot, Guardian of the Lawyers' Honey Pot, Wall St. J., Sept. 19, 1996, at A22.
249. See http://www.citizen.org/documents/Form9902003Foundinc.pdf.
250. See http://www.citizen.org/litigation/index.cfm.
251. See Lisa Chamberlain, The Dark Side of Ralph Nader, salon.com, July 4, 2004, at http://www.salon.com/news/feature/2004/07/01/nader_jacobs/index_np.html.
252. See http://www.centerjd.org/about/index.html.
253. See http://www.centerjd.org/about/board.htm.
254. See http://www.nader.org/history/bollier_chapter_7.html.
255. Todd Zwillich, Watchdog Group: Avoid 181 Prescription Drugs, Webmd Med. News, Jan. 12, 2005, at http://my.webmd.com/content/article/99/105189.htm.
256. See http://www.worstpills.org (medicines cited only available to site members).
257. See Public Citizen Health Research Group, Health Letter (Sidney Wolfe, ed., Sept. 2004), at 12, available at http://www.citizen.org/documents/hl_september2004.pdf.
258. See Jay Angoff, Falling Claims and Rising Premiums In the Medical Malpractice Insurance Industry (July 2005), available at http://www.centerjd.org/ANGOFFReport.pdf; Americans For Insurance Reform, Measured Costs (July 2005), available at http://insurance-reform.org/measured_costs.pdf; Public Citizen, Medical Malpractice Payout Trends, 1991–2004: Evidence Shows Lawsuits Haven't Caused Doctors' Insurance Woes (Apr. 2005), available at http://www.citizen.org/documents/Malpracticeanalysis_final.pdf.
259. For full discussions of the Public Citizen and CJD reports, see James R. Copland, How to Lie with Med-Mal Statistics: The Public Citizen Version, PointofLaw.com, May 6, 2005, at http://www.pointoflaw.com/archives/001132.php; James R. Copland, CJD's Med-Mal Math, PointofLaw.com, July 8, 2005, at http://www.pointoflaw.com/columns/archives/001347.php.
260. See, e.g., Jenny Anderson, Study Says Malpractice Payouts Aren't Rising, N.Y. Times, July 7, 2005, at C1.





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