The Big Business of “Tort Reform”

The word “tort reform,” a term used by the legal teams of insurance companies and Fortune 100 companies, is a misnomer. By using the word ‘reform’ they are attempting to convey the idea that they want to make tort law more efficient but the legislation they advocate is actually aimed at tying Tort law into knots. Tort law certainly is not perfect yet the leaders of the “tort reform” movement would have you believe that America’s judicial system is as bad as it has ever been and is constantly getting worse. They paint a false picture of endless files of frivolous lawsuits tying up the courts and raising insurance premiums. Nothing could be further from the truth. The Federal Judicial Center reports that the number of lawsuits that Americans file has decreased dramatically over the years.

Despite the facts, the “tort reform” movement has made significant ground in recent years thanks to a large, multi-tiered campaign funded by billions of dollars from major corporations. Far from improving America’s legal system, the campaign has misled the public about civil justice.

One of the key tactics these groups use to garner public support is the use of something called “Astroturf organizing,” the name given to movements that are created to appear as if they have grassroots support. The best example of this is the group called Citizens against Lawsuit Abuse. Despite its name, this group is actually funded in large part by associations that include major corporations such as Chevron, Exxon and State Farm to name a few. Instead of seeking to champion the cause of regular US citizens, this group regularly limits Americans’ legal rights through legislation.

As the example of the Citizens against Lawsuit Abuse shows, the leaders of the “tort reform” movement are constantly seeking to paint taxpayers and small businesses as the poster children of this campaign. Unfortunately these “poster children” are largely excluded from the process. So what appears to be a widespread grassroots campaign is actually a very small group of executives from Fortune 100 companies that control multiple interest groups, creating the appearance of meaningful support.

A good example of the influence of these groups dedicated to “reforming” tort law is seen in the asbestos legislation they are trying to push through federal and state governments. Because of sicknesses caused by asbestos, Congress set aside a certain amount of money to provide compensation to present and future asbestos victims. The money indirectly comes from corporations that have been sued and so the “reformists” have sought to make it more difficult for people with asbestos-related diseases to receive money from the asbestos bankruptcy trust system.

The movement for “tort reform” can be divided into a few different groups even though they are all connected each group serves a different purpose in their effort to protect big business from litigation.

Civil Justice Reform Group

The head of the movement is the Civil Justice Reform Group or CJRG. The members of the CJRG consist of the legal teams of the largest and most profitable corporations in the world. These companies include the likes of AT&T, BP, Bristol-Myers Squibb, Caterpillar, Chevron, Chrysler, Citibank, DuPont, Exxon, Ford, General Electric, General Motors, Johnson & Johnson, Pfizer, PricewaterhouseCoopers, Procter & Gamble, State Farm and Texaco.

The goal of these companies is to make it harder for injured plaintiffs to hold them accountable for their actions. Their combined resources and organization make the CJRG one of the most influential “tort reform” groups in the country.

Institute for Legal Reform

A large portion of the CJRG’s resources are funneled through third-party interest groups like the Institute for Legal Reform (ILR). The ILR spends about $30 million each year on lobbying the federal government. The group often portrays itself as an advocate for small businesses, but the average contribution to ILR hovers around $600,000; hardly an indication that small businesses are the principle supporters of the organization.

American Legislative Exchange Council

At the state level the CJRG has an ally in the American Legislative Exchange Council (ALEC). ALEC is another secretive group of corporate lobbyists who write model legislation and then incentivize state legislators to introduce it in their statehouses.

Civil justice legislation drafted by ALEC and introduced in state legislatures includes bills that would make it harder for people with asbestos-related diseases to receive compensation for their injuries.

ALEC also wrote another piece of legislation that would restrict the ability of state attorneys general to contract with plaintiff attorneys. By attempting to sever the ties between plaintiff attorneys and state attorney generals, ALEC is attacking the kind of legal partnership that most efficiently protects American citizens from corporations. It was the partnership of these two groups that led to the Tobacco Master Settlement agreement in 1998, finally holding tobacco companies accountable for the cost of treating tobacco-related illnesses.

American Tort Reform Association (ATRA)

ATRA, which receives about 20% of its annual budget from the CJRG, was founded in 1986 and primarily functions as the main public relations arm for the tort reform movement. For years ATRA has produced its annual Judicial Hellholes project. This project attempts to identify judicial systems around the country that are unfair to businesses. Unfortunately, the labeling of unfair court systems is only what they claim to do, in actuality the report is simply a list of courts where ATRA members have recently lost cases.

Searle Civil Justice Institute

This institution, headed by Henry Butler, is focused on generating support for the tort reform movement among academia. The group is primarily funded by the CJRG and is dedicated to creating research that supports tort reform-related legislation. They do this primarily by spending $70,000 to $100,000 to pay authors to conduct studies on their behalf.

An example of the kind of research being performed on their behalf is a report by Victor Schwartz and Mark Behrens claiming there was rampant fraud in the asbestos bankruptcy trust system despite an Government Accountability Office study that revealed that 98% of asbestos bankruptcy trusts have audit control systems in place and so far no instance of fraud has been reported.

What it all means

The goal of these groups is to make it harder for the companies they represent to be sued when the actions of those companies are endangering American lives. These companies thus far have been successful in controlling the public dialogue and are, in large part, responsible for the smear campaign that has given lawyers such a bad name over the years. If enough people do not push back against their efforts then in the future these corporations may become untouchable even when they are acting irresponsibly.

Christensen & Hymas, a Utah-based personal injury law firm, specializes in wrongful death, brain and spinal cord injuries, and bicycle accidents, among other things.

Source:

Mary H. Graffam, “The Web of Tort Reform,” Trial, December 2012, 15.

Image courtesy: George Hodan

Ken Christensen
Partner, Founder at Christensen & Hymas
Ken Christensen is the founding partner of Christensen & Hymas. He is an avid cyclist, loves baseball, and enjoys spending time with his family in the outdoors.

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