As he was making the transition from portraying Stuart Smalley to portraying a Democratic Senator, Al Franken penned a 2003 left-wing screed entitled Lies (And the Lying Liars Who Tell Them). Ironically, Franken’s first legislative accomplishment—a sop to the personal-injury bar—has formed the punch-line for late-night comedy skits as well as yet more lies from the lawsuit industry and its apologists.
The Litigation Lobby’s Attacks
Before turning to Mr. Franken’s legislation, some background is in order. As the director of the Center for Legal Policy at the Manhattan Institute, I oversee the nation’s leading policy center devoted to reforming lawsuit abuse in America. One of our series of publications, satirically entitled Trial Lawyers, Inc., exposes the litigation industry’s business model—which taxes Americans to the tune of $250 billion annually in direct costs alone. As a percentage of GDP, America spends twice as much on tort litigation as Germany and three times as much as Britain or France.
To maintain the lawsuit lottery, the trial bar pours unrivaled sums into political campaigns. Last week, we released a new report, Trial Lawyers, Inc.: K Street—A Report on the Litigation Lobby 2010, which describes just how much influence the trial lawyers have in Washington. Our report also gives several examples of what the lawsuit lobby’s influence is buying in Congress, including Senator Franken’s amendment mentioned above.
The organized personal-injury bar was none too pleased. For their initial response, the lawyers resorted to their favorite tried-and-true tactic: ad hominem attack. Speaking to the D.C. newspaper The Hill, the communications director of the trial lawyers’ chief lobbying organization characterized the Manhattan Institute, where I work, as a “front group” for “insurance companies and Wall Street banks.” Without bothering to rebut any of our substantive claims, the lawyer lobbyist merely proclaimed, “the Manhattan Institute is a well-known defender of corporate negligence and misconduct.”
The lawyers weren’t done there. In a pro-lawyer puff piece posted this Wednesday to the left-leaning online tabloid The Huffington Post, a woman named Joanne Doroshow recapitulated the same trial-bar talking points, as she slurred the Manhattan Institute as an organization that “exist[s] to give voice to . . . tobacco companies, gasoline conglomerates, and insurance providers.”
Just who is Joanne Doroshow? A lawyer groomed by Ralph Nader, she runs an outfit styled the Center for Justice and Democracy (CJD). The CJD’s name is designed to obscure its actual mission, much like the trial lawyers have done by renaming their lobbying arm, formerly the Association of Trial Lawyers of America, as the innocuous-sounding American Association for Justice. Who, really, could be against justice or democracy? But the Center for Justice and Democracy, it turns out, is an organization that exists for the exclusive purpose of preserving the status quo system of tort litigation in America.
When I first met Doroshow on a panel in 2003, she made the same attacks calling the Manhattan Institute a “front group” for corporations. When I explained to the panel’s audience just how much money my employer gets from corporations (it’s less than ten percent), and challenged her to reveal how much hers got from lawyers, she demurred—replying with apparent pride that some of her initial seed money came from filmmaker Michael Moore. (Moore continues to sit on Doroshow’s board of advisors, and Doroshow was an associate producer of Fahrenheit 911 and a coordinating producer of SiCKO.)
Who bankrolls CJD is not a matter of public record. While we can’t know for sure, it’s a safe bet that much of the money flowing into CJD’s coffers originates from the plaintiffs’ bar, like it does for many Naderite groups. As we note in our new report, “prominent California plaintiffs’ attorney Herb Hafif has said that the trial bar supported Nader ‘overtly, covertly, in every way possible,’ and the late Texas tort king Pat Maloney noted that the litigation industry supported Nader’s efforts ‘for decades,’ contributing ‘a huge percentage of what he raises.’ ”
Failing the Truth Test
But focusing on who pays CJD’s bills is somewhat beside the point. Doroshow and the trial bar like to resort to attacking their opponents’ motives precisely because they want discourse over legal reform to devolve into a money-on-your-side, money-on-our-side caricature. If dialogue becomes mere finger-pointing—with corporations on one side and lawyers on the other—it distracts from the truth.
And whoever funds CJD, its track record for truth-telling is abysmal. As legal reformer Ted Frank and law professor Martin Grace observe in an AEI report picking apart a few of CJD’s “studies”:
CJD and its sibling organization Americans for Insurance Reform are anti-liability reform organizations that regularly issue manifestos masquerading as studies that blame insurers for the medical-malpractice crisis. Their accusations are frequently picked up by newswires, but months later someone looks at the actual study and finds that CJD cherry-picked or otherwise manipulated data to reach invalid conclusions. The refutations, however, never get the play of the original claims.
Doroshow’s Huffington Post riff similarly fails the truth test. She slips and slides all over the place in trying to rebut our claims about trial lawyer political influence. In the Trial Lawyers, Inc.: K Street report, I note that over “the last decade, lawyers and law firms—excluding lobbyists—have injected $780 million into federal campaigns.” Doroshow responds with a three-pronged attack—and every prong is deceptive.
First, Doroshow claims that my facts are wrong, and that “it’s more than that but the Manhattan Institute decided not to discuss donations to Republicans.” Well, no, Joanne. It is true that the vast majority of money that lawyers give to federal candidates goes to Democrats, but the $780 million figure we gave for all lawyer giving from 2000 to 2010 is accurate and encompasses both Republicans and Democrats (it’s actually grown a bit now since we sent our report to the printer; the precise amount is $793,359,532).
It’s also true that the lawyers gave more to candidates than any other industry or profession—not only over the whole 2000 to 2010 time span but in every two-year political cycle over the last two decades. To understand why tort reform is not in the Democrats’ health-care bills, consider that in the last electoral cycle, lawyers gave more money than the combined total given by doctors, pharmaceutical companies, hospitals, and nursing homes.
Doroshow’s second retort is also deceptive. She claims that our figures are exaggerated because we “lump together the contributions of plaintiffs’ lawyers, who are trying to preserve corporate liability, with those of corporate lawyers, who generally want to do the opposite, and say they’re the same thing.” But we don’t. We explicitly note in our report, “Data include contributions from lawyers in defense-oriented and generalist firms, not simply those of plaintiffs’ lawyers. Thus, contributions from what we call Trial Lawyers, Inc. constitute only a portion of these dollars.” We also explain that plaintiffs’ lawyers give far greater sums (an estimated 16 to 120 times more per lawyer, depending on the firm).
And Doroshow’s notion that defense lawyers’ contributions somehow offset the largesse of the plaintiffs’ bar is simply wrong. Again, as we explain in our report:
[T]he defense bar and plaintiffs’ bar have congruent economic interests when it comes to litigation: loose substantive liability rules, loose pleading standards, and open-ended discovery rules increase the defense bar’s profits. While defense lawyers are less likely to lobby aggressively against tort-reform legislation—out of a desire not to antagonize their clients—very few lawyers, whether representing plaintiffs or defendants, advocate litigation reform.
Doroshow’s third retort mixes truth and falsehood. She argues that corporate interests also give large sums to the political process, which is unambiguously true. But Doroshow then tries to argue that corporate influence overwhelms lawyers’ influence through a clever sleight of hand: she points to tables listing lobbying expenditures rather than campaign donations, which is what we’re talking about in our report. They’re not the same thing, and Doroshow almost certainly knows that, since the Center for Justice and Democracy—unlike the Manhattan Institute—reports lobbying activities on its own 990 federal tax returns.
To be sure, lobbying matters. Lobbying expenditures include the salaries paid to consultants who walk around Capitol Hill, informing legislators (or twisting their arms, depending on one’s point of view); and “grassroots” expenditures that organize ordinary citizens. But lobbying dollars are no substitute for cold, hard campaign cash; and that, as I note above, is where the trial bar excels.
Federal campaign finance rules prohibit corporations from giving to candidates’ campaigns altogether and limit individuals’ gifts to relatively modest sums (currently $2,400 per candidate). Neither of these rules was changed by the Supreme Court’s recent, controversial decision in Citizens United v. Federal Election Commission.
This campaign-finance regime creates an enormous structural advantage for the trial bar, which coordinates its efforts. As I noted in a column in last week’s Wall Street Journal, “contribution limits favor those best able to ‘bundle’ donations,” and “the plaintiffs’ bar, with thousands of well-heeled members willing to write $2,000 checks, is well-situated to play this game.”
Although it’s certainly the case that lawyers’ campaign contributions aren’t greater than those linked to all other businesses in the aggregate, lawyers’ contributions and their interests are more concentrated. Top Congressional leaders, especially in the Senate, raise their biggest sums from plaintiffs’ lawyers: four of the top seven donors to Senate Majority Leader Harry Reid (D-Nev.) are out-of-state plaintiffs’ law firms. And as we explain in our report:
Whereas trial lawyers’ interests are concentrated in the issue of liability, on which their livelihoods depend, opposing factions, like business and the medical profession, have interests that are diffuse. In the public-policy universe, doctors care about liability but are more worried about the repercussions of health-care reform and the size of Medicare reimbursements; car companies care about liability but are more anxious about cap-and-trade legislation and fuel-efficiency standards. In some instances, industries can be at cross-purposes; efforts at asbestos-liability reform, for example, were stymied in part by a conflict of interest between insurers and manufacturers.
The Deceptive Franken Amendment
Doroshow also objects to our report’s detailed recitation of the trial bar’s unprecedented efforts to get the current session of Congress to expand liability—and in the process, she mischaracterizes most of the federal legislation she describes. Most egregiously misleading is her description of the Franken amendment: “Al Franken’s amendment to the defense appropriation bill ensured that women who serve as military contractors and get brutally drugged and raped by their co-workers ought to be able to seek legal recourse in court.” Did Franken’s amendment do that? Well, yes—but it did much more, too; and Doroshow is merely recycling the lie fed by the trial lawyers to late-night talk shows, the blogosphere, and an uncritical media.
When he introduced his amendment on October 1 of last year, Mr. Franken claimed that it was inspired by what appears to be a horrific crime perpetrated against a woman named Jamie Leigh Jones. On April 15, 2004, Ms. Jones was hired by Kellogg Brown & Root (KBR), a construction and engineering company. In July 2005, Ms. Jones requested to transfer to Iraq, where she would work for the company’s overseas subsidiary; her request was granted, and she began work in Baghdad’s Green Zone on July 25 that year. Her stay in Iraq would be tragically cut short: Ms. Jones alleges that three days after beginning her new assignment in Iraq, she was drugged and raped in the co-ed barracks where she was housed.
If Ms. Jones’s allegations are true, her perpetrators obviously deserve to be brought to justice. And in February 2006, Ms. Jones sought to obtain at least some measure of justice by claiming injury and demanding arbitration before the American Arbitration Association. She pursued this remedy under an arbitration clause in her employment contract, which stipulated that “any and all personal injury claim arising in the workplace . . . must be submitted to binding arbitration instead of to the court system.”
Such commonplace arbitration clauses do not limit any substantive rights or limit any available damages; they do serve to reduce legal maneuvering and place cases before professional arbitrators (typically senior attorneys or retired judges) rather than lay juries. Employers like arbitration clauses because they help them avoid costly legal wrangling and class-action shakedowns; employees, in turn, get their claims resolved more expeditiously and cheaply (civil litigation can take years and cost thousands of dollars). Trial lawyers obviously hate these clauses, for essentially the same reasons, and they are currently engaged in a full-scale effort to get the Democratic Congress to forbid them.
Fifteen months after beginning to pursue arbitration, and after having worked to select an arbitrator and gathered information from her former employer through a process of legal discovery, Ms. Jones filed a separate lawsuit in federal court. Her new suit made many of the same allegations against many of the same parties, as well as a few new defendants, including the United States government.
KBR moved to consolidate Jones’s new complaint under the already-proceeding arbitration claim. After a preliminary determination by the trial judge and an appeal—a process that stretched over two years—the federal appellate court determined that Jones could proceed with her separate lawsuit, because the core of her allegations were not “related to” her employment and “arising in” the workplace as required under the arbitration provision of her contract.
As Ms. Jones’s case awaited disposition, it became the cause célèbre used by the trial lawyers in their efforts to persuade Congress to outlaw employment-arbitration clauses broadly. Ms. Jones herself testified before Congress on December 20, 2007. When Mr. Franken took the Senate floor to offer his amendment to the Defense Department’s appropriations bill last October, he held up Ms. Jones’s case as justification. Franken claimed that his amendment would forbid employment-arbitration clauses in cases like Ms. Jones’s, and he insisted that his proposed legislation “narrowly target[ed] the most egregious violations.” Given how Mr. Franken characterized his proposal, it was hardly objectionable; as the federal court had reasonably determined, rape falls outside what anyone would normally consider activity related to employment.
The problem is, Franken’s amendment was not, as he claimed, “narrowly targeted.” Rather, Franken sought to make arbitration clauses in the employment contracts of all defense contractors inapplicable to “any claim under Title VII of the Civil Rights Act of 1964” or “any tort related to or arising out of” an “intentional infliction of emotional distress” or “negligent hiring, supervision, or retention”—a sweeping list of potential lawsuits that effectively forbade arbitration clauses in defense contracts altogether.
Franken’s rule would thus increase the cost of doing business with the Defense Department—costs passed along to you and me the taxpayer—and at least arguably hurt many employees, with grievances far short of rape, who might be better off in arbitration than in court. No matter how much we might sympathize with Ms. Jones, it’s not hard to understand why some legislators might in good faith vote against Franken’s proposal.
And thirty senators, all Republicans, did. At that point, a violent tragedy and an appropriations amendment would morph into a deceptive farce. Picking up the trial-lawyer talking point that to vote against the Franken Amendment was to support rape, late-night fake newsman Jon Stewart exclaimed, on the air, “I understand we’re a divided country, some disagreements on health care. How is anyone against this?” MSNBC’s Rachel Maddow, who’s technically not a comedienne, also ran with the story; the Democratic Senatorial Campaign Committee went on the attack; the Republican senators were spoofed on an Internet site, www.republicansforrape.org; and then Ms. Doroshow recycled the same dishonest meme Wednesday night.
The story of the Franken amendment, and the deceptive claims of the Center for Justice and Democracy’s Joanne Doroshow, are good object lessons in how the trial bar feeds a gullible media to further its own political objectives. The Manhattan Institute’s Trial Lawyers, Inc.: K Street report is intended to set the record straight; and we’ll continue to do so, no matter what names and lies the personal-injury lawyers and their apologists throw our way.