Lawyers Inc. Update No 4, June 2008
Litigation Industry Looks to Recapture the Great Lakes State
Twenty-five years ago, Michigans lawmakers looked at
a state in legal crisis. Plaintiffs attorneyswhom
the Manhattan Institute calls Trial Lawyers, Inc.had
made the state one of its favorite jurisdictions in the nation.
To restore some sanity to the civil justice system, Michigan
passed a round of legal-reform legislation in 1986, a second
round in 1993 (which strengthened medical-malpractice law),
and a third, more comprehensive, round in 1995.
As we shall see, these steps have been highly successful at
curbing lawsuit abuse. Little wonder, then, that Trial Lawyers,
Inc. is now committing its powerful lobbying and public-relations
resources to rolling back laws that have put a dent in the
litigation industrys bottom line.
A State in Legal Crisis
By the mid-1980s, trial lawyers had begun to exert such control
over Michigans legal system that their industry was
having a deleterious effect on the finances of the state government.
The state faced 1,400 lawsuits claiming $2.4 billion, an amount
equivalent to half of the general budget.
In 1984, payouts by the state transportation department, to
give just one example, equaled 30 percent of its outlays on
road building and improvement. Municipalities
were also being hammered: a village with just over 1,500 residents
was stuck with $480,000 of a $500,000 jury verdict in a case
in which a driver struck a pedestrian. The jury found that
the village was 10 percent at fault for failing to mark the
side of the road adequately, but because the driver had only
$20,000 in insurance, the village had to pay most of the damages.
A 1985 report issued by the state senate declared: Liability
has reached epidemic proportions and presents an emergency
situation to the Legislature.
Michigan legislators concerns went beyond the threat
to the public fisc. They were also worried about medical-malpractice
liability, which was curtailing access to care. Medical-malpractice
claims in the state had spiraled upward from ten per 100 doctors
in 1979 to 25 per 100 by 1985an increase of 150 percent
in just six years. From 1970 to 1984,
the large Detroit metro-area counties of Wayne, Oakland, and
Macomb had seen their malpractice filings jump an astounding
1,100 percent. Unsurprisingly, medical-malpractice
insurance costs had also doubled in the period 198084
and grown even faster in the riskiest specialties.
Michigan doctors took notice: 42 percent of Michigan family
physicians reported that they had ceased delivering babies
or reduced the number they delivered, and an even higher percentage
of such doctors reported that they had cut back on surgery
and treating patients likely to require intensive care.
The Michigan Legislature Responds
In response to these developments, the Michigan legislature
in 1986 passed legislation that became a blueprint for other
states trying to curb lawsuit abuse. Action was necessarily
bipartisan: Republicans controlled the Senate by a narrow
2018 margin, and Democrats had to contend with a similarly
narrow 5753 majority in the House. Each body set up
special investigative committees, which held extensive public
hearings and heard expert testimony. These committees crafted
what became Public Act 178, which introduced major changes
to Michigan tort law generally, as well as to medical-malpractice
law per se (see box "Key Legal Reforms in Michigan",
THE FACE OF TRIAL LAWYERS, INC.
Geoffrey Fieger might be said to be the president of
Trial Lawyers, Inc.s Michigan operations. The
Southfield-based attorney is perhaps best known for
defending assisted-suicide doctor Jack Kevorkian, but
he earns his keep as a plaintiffs lawyer: Fieger
claims to have won more multimillion-dollar verdicts
than any other attorney in the country.
His big verdicts have come in medical-malpractice, civil
rights, and sexual-harassment cases, as well as in sensational
trials, like the one he conducted against the Jenny
Jones Show for failing to screen properly a guest who
later killed a homosexual man, supposedly because the
latter revealed on a taping of the show that he secretly
admired the killer.
has been at the forefront of the Michigan trial lawyers
public- and government-relations activities. Fieger
ingratiated himself with Michigan State Universitys
law school by giving it $4 million to establish the
Geoffrey Fieger Trial Practice Institute.
In politics, Fieger was the Democratic Partys
nominee for governor in 1998; in that campaign, he asserted
that the incumbent, John Engler, was the offspring of
Fieger has been no less brazen in his statements about
state supreme court justices who have ruled against
him. He has called them jackasses, Hitler,
Goebbels, and Eva Braun.
The level of hostility between Fieger and some of the
justices led him brazenly to challenge four of the seven
justices to recuse themselves from all his casesa
step that would assure him victory before the high court.
Most recently, Fiegers political efforts got
him into hot water. He was indicted by a federal grand
jury for conspiring to make more than $125,000
in illegal contributions to presidential candidate John
Edwardss 2004 campaign.
The ten-count indictment alleged that Fieger and his
law partner recruited straw donors to make
contributions to Edwards, a former trial lawyer himself,
and then reimbursed them in an effort to evade federal
campaign limits. On June 2,
a jury acquitted Fieger of the charges.
By 1993, the Michigan legislature had determined that its
medical-malpractice reforms needed to be strengthened, and
so it passed a new round of bipartisan measures. The reforms
it passed next, in 1995, focused on products liability, which
had specifically been exempted from the 1986 legislation.
Michigans political leaders feared that the states
eroding manufacturing base was coming under further threat
from an uncertain legal climate, particularly now that competing
states such as Illinois and Indiana had passed comprehensive
A Record of Results
After the 1993 and 1995 reforms passed, Michigan saw quick
and dramatic results. Filings of tort lawsuits fell over 50
percent in the year after the latter law took effect and have
continued to decline since then; by 2005, tort actions in
Michigan had dropped to a third of their 1996 level (see top
graph, below). Five years after the
reforms, the number of cases that were proceeding to trial
in big counties like Wayne and Oakland had declined by more
than 20 percent, and the average jury verdict in cases that
did go to trial had fallen by 13 to 21 percent, not accounting
for inflation (see bottom graph, below).
KEY LEGAL REFORMS IN MICHIGAN
The state of Michigan has had three rounds of legal
reform: in 1986, 1993, and 1995. Below are some of the
reforms key provisions.
1986: General and Medical Malpractice
- Venue Reform. The Michigan legislature found
that plaintiffs lawyers were shopping their
cases to forums they deemed friendly,
even when their location had little relationship to
the case. It therefore passed a law generally requiring
cases to be filed in the county where the alleged
injury occurred or where the defendant is located.
- Joint-and-Several Liability. In addition,
lawmakers were concerned that the litigation industry
was suing parties with deep pockets but little connection
to a plaintiffs injury. As a consequence, defendants
that juries determined to be as little as 5 percent
at fault were being stuck with 100 percent of the
damages. The new law reformed
the doctrine of joint-and-several liability,
as it applied to areas of tort law other than products
liability, by limiting a defendants damage payouts
to its share of responsibility; special protections
of government bodies were also enacted to cover cases
in which a plaintiff was judged to be partially at
- Medical Malpractice. For medical-malpractice
cases in particular, the 1986 law imposed more stringent
standards on expert-witness testimony, which the state
legislature concluded was being used to bring scientifically
dubious cases. Also, because the legislature found
that a large and increasing share of the payouts in
medical-malpractice suits went for noneconomic damages
such as pain and suffering, the new law
capped them at $225,000 per case, though it provided
for numerous exceptions.
1993: Medical Malpractice
- Evidence and Disclosure. In expanding the
1986 medical-malpractice reforms, the 1993 legislature
revised expert-witness requirements and mandated that
parties to a lawsuit give greater access to each others
- Noneconomic Damages. The 1993 reform package
also extended the cap on noneconomic damages to include
all malpractice cases, though it raised the cap to
$280,000 (or $500,000, depending on the category of
1995: Products Liability and Failure to Warn
- Products Liability. In 1995, the legislature
found that manufacturers were being held liable for
products judged defective even when an alternative
design was not feasible; when the design was in compliance
with state and federal regulation; and even when a
purchaser of the product made modifications to it.
The new law protects manufacturers in such cases,
though the regulatory compliance protection
is only a presumption that can be rebutted with evidence
- Failure to Warn. The legislature also found
that defendants were being held liable for failing
to warn customers even of obvious risks. Such
rulings encourage manufacturers to flood consumers
with ever more warnings, which make real risks harder
to discern. One Michigan legal-reform group has even
begun to hold an annual wacky warnings
contest to parody the practice.
The 1995 law thus protected manufacturers from suits
over a failure to warn of risks that were, in fact,
- FDA Preemption. The legislature also protected
manufacturers of pharmaceuticals and medical products
from failure-to-warn suits if the warnings in question
had been approved by the U.S. Food and Drug Administration.
The FDA closely monitors drug-safety warnings. In
many instances, it has determined that over-warning
can pose significant risks to public health. Michigans
law protects this regulatory scheme from second-guessing
by juries of ordinary Michigan citizens.
The results of this reduction in legal activity were salutary
and met the lawmakers goals. As medical-malpractice
insurance rates soared nationwide, those in Michigan remained
stable. And because the reforms have
not been reversed, insurers have even been able to reduce
rates: in 2008, Michigans largest medical-malpractice
insurer of physicians cut its rates an average of 6.5 percent
statewide, with average rates in Wayne County falling 13 percent.
Rates are going down even for the most vulnerable specialists:
by 12 percent for neurosurgeons, by 14 percent for obstetricians,
and by 25 percent for orthopedic surgeons.
These changes not only benefit doctors but also improve patients
access to care. Moreover, they reduce the practice of defensive
medicine, which in turn leads to better and more affordable
As lawmakers anticipated, the reforms also helped to attract
new businesses and allowed Michigan to diversify away from
its traditional manufacturing base. From 1999 through 2002,
more biotechnology companies were started in Michigan than
in any other state in the union.
Trial Lawyers Look to Turn Back the Clock
One business that has not benefited from Michigans
legal reforms, of course, is Trial Lawyers, Inc. The litigation
industry is now flexing its lobbying and public-relations
muscles in an effort to undo the states reforms. The
first stop for Trial Lawyers, Inc., predictably, was the courts.
As part of a nationwide push, trial
lawyers in Michigan sought to have legislatively enacted tort
reforms overturned there, but they were rebuffed by the state
court of appeals in 1996 and the state supreme court in 1999
and again in 2004.
At the same time, the trial lawyers were working diligently
to elect their favored candidates to the bench. Republican
supreme court justice Elizabeth Weaver was elected in 1994,
having raised just $187,000, but campaign-finance records
later showed that the trial bar raised some $500,000 for one
of her opponents. Understandably,
the business community was alarmed. The state chamber of commerce
began working to inform voters about the impact of litigation
on the overall business climate, and business leaders and
reformers formed Michigan Lawsuit Abuse Watch (M-LAW), which
evaluates judges rulings and tries to raise public awareness
through efforts such as a contest to identify the wackiest
TRIAL LAWYERS TARGET TAYLOR
Supreme Court Chief Justice Clifford W. Taylor was appointed
by Governor John Engler to the state court of appeals
in 1992, and then appointed to fill a supreme court
vacancy in 1997. His colleagues elected him chief justice
in 2005 and again in 2007.
Chief Justice Taylor has been at the forefront of the
effort to improve Michigans courts, having served
on the Michigan legislatures Commission on the
Courts in the 21st Century; and he has served as a national
leader in judicial education as a member of the board
of the George Mason University Law and Economics Center.
The chief justice is a particular expert in tort law:
he coauthored the authoritative examination, in three
volumes, of personal-injury law in Michigan.
Trial Lawyers, Inc. has been hoping to replace this
well-schooled and principled jurist; with liberal activist
justices holding three of the seven seats on the court,
replacing Justice Taylor with one of their own would
facilitate a judicial assault on legislatively enacted
tort reforms. The litigation industry has been flexing
its political muscle in the Michigan Democratic Party,
which in May announced that Justice Taylor would be
its Top Target in the 2008 elections.
The press release detailing the Democratic strategy
for unseating Taylor took him to task for writing the
judicial decision upholding Michigans [FDA preemption]
lawa clear sign
that Trial Lawyers, Inc. wants to undo the legislatures
work on legal reform by installing a justice willing
to substitute his policy preferences for those of the
peoples elected representatives.
Strict-constructionist judicial appointments by conservative
governor John Engler and the election of similarly inclined
judges eventually tipped the balance away from the trial lawyers,
who fought back furiously. In 2000, they vigorously backed
three of six judicial candidates seeking three seats on the
state supreme court; all told, the candidates spent a record
$6 million, and independent groups spent an additional $1012
million in a battle royal chronicled by Michigan supreme court
justice Robert Young for the Manhattan Institute in 2001.
Unfortunately for the trial lawyers, their candidates were
all defeated. Even so, strict constructionists today have
a bare majority of four to three, and Trial Lawyers, Inc.
is making a vigorous effort this year to unseat Justice Clifford
Taylor (see box, opposite page).
Having failed in the courts, the litigation industry is now
working to undo Michigans legislative reforms. Spurred
by the Vioxx litigation, the trial bar has been working since
2005 to repeal the states FDA-defense law (see box,
page 4), as we chronicled in a 2006 Trial Lawyers, Inc.
Update. More recently, Trial
Lawyers, Inc. has been working to expand the scope of the
states consumer protection laws, with the intent of
permitting plaintiffs to win damages without meeting the basic
requirements of tort law, such as the occurrence of an actual
injury, and also to extend retroactively various statutes
In its public-relations efforts, the Michigan trial bar has
even been trying to rebrand itself. Taking a cue from its
national counterpart, the Michigan Trial Lawyers Association
renamed itself the Michigan Association for Justice.
Last year, its president made the incredible claim that tort
reforms were somehow responsible for Pfizers decision
to close a plant in the state. He even blamed tort reforms
for the states overall economic woes.
Where Should Michigan Go from Here?
associations president did get one thing right: Michigans
economy is ailing. In April, the states unemployment
rate was 6.9 percent, well above the national average, and
in the past year, the state economy has shed 72,000 jobs.
Year-over-year retail sales growth trails inflation by a substantial
margin, and the states annualized growth rate in the
first quarter of 2008 was an anemic 0.9 percent.
Such economic conditions are precisely why legal reform in
Michigan remains so important: the states legal climate
remains a rare domain of competitive advantage, given the
states relatively high tax rates, as well as labor laws
that hamper local companies ability to compete with
companies doing business in states with right-to-work laws
or in foreign countries. Within the automotive sector, which
is mainly responsible for Michigans economic woes, light-vehicle
sales today are 11.2 percent lower than they were a year ago;
in April, they reached their lowest point since August 1998.
Far from needing decades of legal progress reversed, Michigan
would be wise to go further in the direction of tort reform,
if for no other reason than that other states have begun to
catch up with it. In the U.S. Chamber of Commerces annual
survey of business leaders and counsel on the subject of states
legal climates, Michigan now ranks only 33rd, below its neighbors
Ohio (32nd), Wisconsin (24th), and Indiana (4th) (see graph).
Accordingly, the Michigan Chamber of Commerce is pushing for
a loser pays law, stronger incentives to settle
cases, limitations on trial-lawyer contingency fees, and heightened
sanctions for filing frivolous lawsuits.
Each of these ideas is worthy of serious consideration. If
instead of taking these positive steps, the legislature reverses
course on tort reform, or the trial lawyers seize control
of the state supreme court, the consequences for Michigans
already suffering economy could be severe.
- See Public Act 178 (1986); Public Act 78 (1993);
Public Act 161 (1995); Public Act 249 (1995).
- See Senate Select Committee on Civil Justice Reform:
A Report on Civil Justice in Michigan 5 (Sept. 26, 1985).
- See Michigan Chamber Foundation, Legal Reform
in Michigan: Past, Present, and Future 5 (2007).
- See id. (citing Senate Report, supra note
- Id. at 4 (citing Senate Report, supra note
- See Senate Report, supra note 2, at 12.
- See id. at 4-5.
- See Report of the House Special Committee on Liability
Insurance 2 (Oct.31, 1985).
- See Senate Report, supra note 2, at 2.
- See http://www.fiegerlaw.com/about_geoffrey_fieger.html.
- See id.
- See News Release, Fiegers $4 Million Gift
(Nov. 27, 2001), available at http://newsroom.msu.edu/site/indexer/861/content.htm.
- See Ceci Connolly, Brash Candidate a Problem
in Michigan?, Wash. Post (Sept. 24, 1998), at A8.
- Walter Olson, Mich. High Court Reinstates Geoffrey
Fieger Reprimand, overlawyered.com
(Aug. 2, 2006), available at http://overlawyered.com/2006/08/mich-high-court-reinstates-geoffrey-fieger-reprimand/.
- See Fieger v. Ferry, 471 F.3d 637 (6th Cir. 2006).
- See News Release, U.S. Department of Justice,
Michigan Attorneys Indicted for Alleged Campaign Finance
Violations (Aug. 24, 2007), available at http://www.usdoj.gov/opa/pr/2007/August/07_crm_655.html.
- See id.
- See id.; Jim Irwin, Fieger Acquitted in Detroit
Campaign Finance Violations Case, AP (June 2, 2008).
- See House Report, supra note 8, at 2.
- See http://www.wackywarnings.com/.
- See National Center for State Courts, Examining
the Work of State Courts, 2006 33 (2007), available at
- Compare Bureau of Justice Statistics, Tort Trials
and Verdicts in Large Counties, 2001 12 (2004), available
with Trials and Verdicts in Large Counties, 1996 14 (2000),
available at http://www.ojp.usdoj.gov/bjs/abstract/ttvlc96.htm.
The two years are the most recent to be released by the
- See Michigan Chamber Foundation, supra
note 3, at 10.
- See Press Release, Michigan State Medical Society,
Liability Rate Drop Shows Tort Reform is Working (Nov. 20,
2007), available at http://www.legalreforminthenews.com/News%20Releases/MI_MedSociety_11-20-07.html.
- See id.
- Cf. Daniel Kessler and Mark McClellan, Do Doctors
Practice Defensive Medicine?, Q. Rev. Econ. Fin. (May
- See http://www.michigan.org/medc/ttc/LifeSciences/.
- Press Release, Michigan Democratic Party, Michigan Democratic
Party Highlights Cliff Taylor as Top Target in 2008 (May
29, 2008), available at http://www.michigandems.com/052908prs.html.
- See generally American Tort Reform Foundation,
Defrocking Tort Deform (2008).
- See Heinz v. Chicago Road Investment Co.,
549 N.W.2d 47 (Mich. App. 1996), appeal denied, 567 N.W.2d
250 (Mich. 1997) (upholding collateral source reform); McDougall
v. Schanz, 597 N.W.2d 148 (Mich. 1999) (upholding medical
expert standards); Phillips v. Mirac, Inc., 685 N.W.2d
174 (Mich. 2004) (upholding damage caps).
- See Justice Robert Young, Reflections of a Survivor
of State Judicial Election Warfare, Manhattan Institute
Civil J. Rpt. 2 (June 2001), available at http://www.manhattan-institute.org/html/cjr_2.htm.
- See id.
- See http://www.triallawyersinc.com/updates/tli_update_michigan_0606.html.
- See American Tort Reform Foundation, supra
note 30, at 8, 12.
- See http://www.legalreforminthenews.com/News%20Releases/MI_Chamber-MTLA-NameChange-8-7-07.html.
- See Robert M. Raitt, Dont Buy Into Tort
Reforms Promises, Detroit Free Press (Sept. 7, 2007),
available at http://www.michiganjustice.org/MI/index.cfm?event=showPage&pg=press.
- See Michigan Fast Facts (Apr. 2008), available
- See Senate Fiscal Agency, Michigan Economic Indicators
(Apr. 2008), available at http://www.senate.michigan.gov/sfa/Publications/EconInd/MEI_APR08.PDF.
- See id.
- See U.S. Chamber of Commerce Institute for Legal
Reform, Lawsuit Climate 2008, available at http://www.instituteforlegalreform.com/states/lawsuitclimate2008/index.cfm.
- See Michigan Chamber Foundation, supra
note 3, at 24-25.
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