| It's Over: Tort
reformers, business interests, and plaintiffs lawyers themselves have
helped kill the mass torts bonanza
By Alison
Frankel
The American Lawyer
December 1, 2006
"The power of the plaintiffs bar is on the wane in this country, and
will be for a long time to come.
You won't hear many tort reformers admit it. They've done too good a job
demonizing trial lawyers to let their bogeymen fade away. Twenty years
ago, tort reform was an obscure movement with a funny name; today,
politicians speak of "ending lawsuit abuse" or "eliminating frivolous
lawsuits"-tort reform by more felicitous names-whenever they need a
failsafe applause line. The movement's success has been a public
relations masterpiece. Beginning at a time when plaintiffs lawyers,
flush from the fat years of asbestos revenues, seemed to have the money,
brainpower, and political alliances to cripple any defendant of their
choosing, tort reformers engineered a billion-dollar anti-trial lawyer
campaign: They produced and promulgated scholarly papers on the economic
consequences of litigation; they sponsored grassroots groups to lobby
state legislatures and campaign for business-backed state judicial
candidates; they even hit upon such innovations as the publication of
newspapers supported by the U.S. Chamber of Commerce to report on
litigation in plaintiffs-friendly southern Illinois and West Virginia.
Plaintiffs lawyers, accustomed to thinking of themselves as champions of
the people, fighting big business on behalf of the little guy, seethed
at the vulturous image tort reformers created for them, but didn't grasp
its implications. They were, by their own admission, so slow to respond
to what Robert Jenner of Janet, Jenner & Suggs calls "the ridiculous
propaganda" of their opponents that they permitted the chamber of
commerce and the American Tort Reform Association to co-opt the very
language of the debate. "Reform" is one way to describe the
business-backed changes in product liability litigation in the last
decade. Trial lawyers would choose another, something along the lines of
an unconscionable abrogation of plaintiffs' rights.
Neither, however, would deny that the
civil justice system looks drastically different than it did even two
years ago. The true triumph (or tragedy, depending on your perspective)
of the tort reform movement has been its ability to leverage the success
of its public relations campaign into concrete and hard-to-reverse
changes. State legislatures have passed laws that undercut the trial
lawyers' successes in Washington, D.C.-especially in the asbestos
litigation, which has declined precipitously since the early 2000s [Bar
Talk, "Asbestos Removal," July]. Tort reformers have packed state
judiciaries with judges amenable to their agenda. Federal and state
courts overseeing multidistrict cases have become more vigilant about
policing their dockets. And defendants, no longer as terrified of
runaway punitive damages, "hellhole" jurisdictions, and unmanageable
trial schedules, are refusing to settle cases en masse. Such plaintiffs
giants as Motley Rice; Waite, Schneider, Bayless & Chesley; and Lieff,
Cabraser, Heimann & Bernstein are reconsidering their caseloads and
edging away from mass torts. "I do not believe the next ten years will
be a repeat of the last ten," says Joseph Rice, one of the shrewdest
businessmen practicing law. "There will not be a repetition of the
personal injury practice. Congress will not allow another tobacco. The
courts will not allow multiple-jurisdiction litigation over products."
To be sure, plaintiffs lawyers and mass torts aren't going to
disappear-witness the furor over newly hatched global warming suits,
which, despite legal theories that are speculative at best, have forced
oil companies, coal manufacturers, and utilities to begin planning a
defense. Asbestos will continue to generate about 10,000 cancer cases a
year, and plaintiffs firms are still pushing to lasso peripheral
defendants into asbestos liability. Motley Rice's eight-year investment
in lead paint litigation, which finally yielded a jury verdict on
liability in Rhode Island in February, may yet pay off. Weitz &
Luxenberg and Baron & Budd see promise in multidistrict litigation over
the gasoline additive MTBE, in which oil company defendants face more
than $1 billion in claims of water contamination by municipalities and
water districts. And Vioxx lawyers Christopher Seeger and W. Mark Lanier
maintain that Merck & Co., Inc., will eventually begin settling cases,
as almost all of the pharmaceutical defendants have. There will always
be people injured by the products or actions of big corporations, and
there's still money to be made representing them. But the bonanza-the
Wild West era in which mass torts was an unfettered frontier and
plaintiffs lawyers seemed to have all the firepower-is over. If you're a
plaintiffs lawyer and you haven't already bought the plane and the yacht
of your dreams, well, sorry, pal. You're too late.
It's the States, Stupid
George Christian, a lawyer and lobbyist in Austin, remembers without
fondness Texas's litigation situation in the early 1980s. Juries in
places such as Beaumont and Corpus Christi were doling out
million-dollar verdicts like lollipops on Halloween, drawing thousands
of out-of-state plaintiffs to Texas courts and transforming a coterie of
plaintiffs lawyers into multimillionaires with the power to influence
state judicial elections. In 1986 the Texas Supreme Court handed down a
ruling that ended contributory negligence in state courts, allowing
plaintiffs to recover damages even when juries found them to be
partially responsible for their own injuries. "It was a major change in
state policy and got people's attention," Christian says. In response, a
coalition of businesses and doctors formed the Texas Civil Justice
League, a lobbying group with the sole objective of making the state's
civil justice system less friendly to plaintiffs. Christian became the
group's general counsel.
The league had its first success right away, when the Texas legislature
passed a cap on punitive damages in 1987. Christian's group then pressed
for changes in venue rules and for product liability reform. The
legislature obliged in 1993, and Democratic governor Ann Richards signed
the tort reform bills into law. "Republican winds were blowing, and we
took advantage of that," says Christian. "[But] Governor Richards was
part of it. Because of the reputation of the state, she felt, 'I need to
address this.' " The issues weren't politically sexy-joint and several
liability doesn't exactly bring voters streaming to the polls-but the
coalition lobbying for change was influential and well financed.
Those early tort reform advances, which were taking place not only in
Texas but also in other state legislatures, did not take the organized
plaintiffs bar by surprise. Beginning in about 1990, AAJ began
developing an expertise in state constitutional law, working under the
umbrella theory that legislative meddling in the judicial process
violated states' separation-of-powers doctrines, says Robert Peck of the
Center for Constitutional Litigation, a spin-off of the American Association for Justice. In 1995 AAJ hired Peck to head its legal
department, and he launched challenges to sweeping tort reform laws in,
among other states, Ohio and Illinois. In both, Peck eventually
prevailed: The Ohio and Illinois supreme courts threw out the
legislation.
But Peck's wins proved temporary. Business interests learned that if
state judges didn't vote their way, they could replace those judges with
others who would. The Texas Civil Justice League offered an exemplar for
tort reformers attempting to influence judicial elections. In 1988 a
Texas supreme court justice appointed by Republican governor Bill
Clements was opposed for election by a candidate running with the
support of Texas's plaintiffs lawyers. "We spent a lot of time creating
voters' guides," says Christian. "They went out by the millions." The
league distributed its playing card-sized guides through its membership,
asking doctors and local businesses to hand stacks of cards to patients
and customers. "We were trying to build on people who already had an
interest in the issue," Christian says. "We were able to win in 1988,
then we got a couple more [justices] in 1990, 1992, and 1994. By 1994
the old court was pretty much replaced." The new Texas court showed its
allegiance quickly, with pro-business rulings on punitive damages and
expert witnesses in 1995.
Following the Texas Civil Justice League model, the Washington,
D.C.-based American Tort Reform Association (ATRA) and Institute for
Legal Reform began in the mid-1990s to nurture statewide groups that
would simultaneously lobby in state legislatures and campaign against
judges backed by trial lawyers. "Nobody had [previously] paid too much
attention to the judiciary," says Edward Murnane of one such group, the
Illinois Civil Justice League. "We realized we needed to expand our
sphere of activity." In Mississippi, Ohio, Alabama, and Arkansas-states
once considered plaintiffs havens-business interests succeeded in
shifting the balance of power in state judiciaries. Five of the seven
justices now serving on the Illinois Supreme Court received the support
of the Illinois Civil Justice League, including the justice who holds
the seat reserved for Illinois's notoriously plaintiffs-friendly
southern counties. He prevailed against the trial lawyer-backed
candidate in the most expensive state judicial contest in U.S. history
in 2004; between them, the candidates raised an estimated $9 million.
Nationwide, according to Governing magazine, spending in state judicial
elections has exploded in the last decade, jumping 61 percent from 1998
to 2000 alone; in 2004 the average cost of winning a judicial seat was
$650,000.
The impact of the dual judicial-and-legislative attack has been
profound. In Mississippi the newly constituted supreme court played
tag-team tort reform with state law makers, each branch rushing to
ratify the other's advances; the state has gone from being "the poster
child of litigation abuse," wrote Shook, Hardy & Bacon partner (and ATRA
counsel) Mark Behrens in a 2005 law review article, to "a shining
example of how a state can join the legal mainstream and foster economic
growth through legal reform." Both the silica and asbestos dockets in
Mississippi have been slashed, according to defense lawyer Brian Hannula
of Jackson's Forman Perry Watkins Krutz & Tardy: silica from more than
21,000 to fewer than 4,000 cases; asbestos from more than 60,000 to
fewer than 10,000. In Illinois, where Democrats in state government have
stalled tort reform laws, the new supreme court issued a series of
pro-business rulings, overturning a $10 billion verdict against Philip
Morris USA Inc. and acting to restrict class actions and out-of-state
filings. "I don't want to take credit," says Murnane of the Illinois
Civil Justice League. "But I definitely think our activities and the
involvement we've had, helping good people get on the court, [meant] we
were able to break the stranglehold. We helped the court become more
independent." Texas remains the most dramatic state transformation. In
the last ten years, the legislature passed law after law, knowing that
the court would approve them: punitive damages and liability reform in
1995; caps on medical malpractice damages in 2003; and restrictions on
asbestos litigation in 2005. Personal injury filings statewide dropped
about 30 percent after the 2003 reforms. "We hemmed [them] in pretty
good," says Christian of the Texas Civil Justice League. "We've become a
pretty unfriendly place for mass torts."
AAJ kept abreast of what was happening in the states, says
communications vice president Chris Mather, but the national group's
orientation has always been Washington, D.C, where, since 2000, it has
been plenty busy warding off federal laws intended to restrict
litigation. (AAJ's only significant defeat in Washington was the Class
Action Fairness Act of 2005, which assured that most big class actions
would be litigated in federal, not state, court.) State trial lawyer
associations fought state-based tort reform groups in the legislatures
and in judicial elections, but even with AAJ's assistance, they were
outmatched and outspent. The judicial situation is now so unpromising
that Robert Peck, the onetime AAJ lawyer who was so effective in the
1990s at persuading state justices to overturn tort reform laws, says he
has decided against challenging new laws in some states with hostile
supreme courts. "The moment we won in Ohio, they began campaigning
against the author of the opinion," says Peck, who spun off the Center
for Constitutional Litigation from AAJ in 2001. "There was nothing I
could do as a law firm." (The justice, Alice Resnick, was reelected but
recently announced that she will not run again.) Peck does have a
challenge pending in Ohio, where the legislature passed a new, but
hardly changed, tort reform bill after the old law was struck down. His
briefs cite some of the same constitutional deficiencies that led the
Ohio Supreme Court to overturn the original law, but he doesn't know how
effective they'll be this time: Only two of the justices who ruled in
his favor in 1997 are still on the court.
Volume Kills
In the early days of the asbestos litigation, which is to say, the early
days of mass tort litigation, what so unnerved judges and defendants was
volume: There seemed to be too many cases to litigate within the routine
procedures of the civil justice system. Corporations said they couldn't
defend themselves simultaneously in dozens of trials all over the
country, particularly when plaintiffs lawyers could file those cases in
jurisdictions inclined to award crippling punitive damages. Judges said
they couldn't manage dockets with hundreds-then thousands-of cases, and
pressed for block settlements and group trials. Volume shifted the focus
of litigation away from the facts of any one particular case, which
meant that plaintiffs lawyers were able to generate fees from cases
without compelling facts. In one oft-employed asbestos strategy, now
banned in Texas, plaintiffs lawyers would bundle a strong case, one
involving the asbestos-linked lung cancer called mesothelioma, with many
cases of lesser injury or shakier causation, and demand settlement of
all of them at the same time.
As mass tort litigation spread beyond asbestos to other environmental,
product liability, and pharmaceutical cases, the plaintiffs bar
developed a system that institutionalized the advantage of volume.
Lawyer advertising and labor unions produced potential clients, whose
initial lawyer contact might well have been with a firm that functioned
only as a referral clearinghouse. Client files would be passed to one of
a couple dozen large, well-financed plaintiffs shops operating in
jurisdictions where juries could be counted upon to reward plaintiffs
claims. Those firms, through their referral networks, would wind up with
tens of thousands of cases-and they understood how to leverage those
numbers into settlements. (The big firms, in turn, directed a percentage
of their contingency fees to the referring firms.) Volume permitted
plaintiffs lawyers to make money from little more than nothing. "They
have a long history of making easy profit by jamming the system," says
Theodore Mayer of New York's Hughes Hubbard & Reed, spokesman for Merck
in the Vioxx litigation. "Courts threw up their hands and forced
settlements in the interest of clearing dockets."
Volume frightened defendants into overvaluing finality. The personal
injury class action vogue of the 1990s, in which mass tort defendants
attempted to settle huge numbers of individual cases through global
class actions, developed because defendants were more anxious to define
the limits of the litigation they faced than to test plaintiffs cases
one at a time. Paying weak claims seemed preferable to litigating
endlessly. The corrupting power of volume was displayed most egregiously
in the 1999 settlement of the diet drug litigation against American Home
Products Corporation (now Wyeth). Wyeth believed that it could resolve
the litigation through a global settlement (carefully crafted to comply
with the restrictions on personal injury class actions established by
the U.S. Supreme Court's rulings in the Amchem and Georgine cases of the
1990s). But Wyeth knew that the $3.75 billion class action fund it was
proposing could not receive the necessary judicial approval if enough
plaintiffs objected to it. So to minimize objections to the global deal,
Wyeth lawyers paid billions to settle thousands of untested cases. That
free spending, as well as the settlement's concession of causation,
turned the diet drug litigation into a $20 billion debacle of dubious
claims ["Still Ticking," March 2005].
In recent years, however, the federal judiciary has quietly mitigated
the power of volume in mass torts, most frequently through the use of
the MDL, or multidistrict litigation, vehicle. The MDL process has
existed since 1971. A panel of six federal judges, who are selected by
the chief justice of the U.S. Supreme Court, decides whether cases
involving similar claims but filed in multiple federal courts should be
transferred to a single federal judge for consolidated pretrial
discovery and motions practice. At first, according to a report prepared
by the MDL panel's statistical analyst at the request of The American
Lawyer, the MDL judges appeared skeptical about using the vehicle to
manage product liability mass torts. In the panel's first 15 years of
existence, the judges heard arguments to transfer 32 mass torts matters.
They denied the transfer of 19 of them-including several proposed
asbestos MDLs and at least a half-dozen pharmaceutical cases-leaving the
cases to be litigated in multiple courtrooms. Then trends changed. As
mass tort litigation burgeoned, the MDL panel judges not only heard more
requests, they also transferred a higher percentage of them. From 1986
through 2000, the panel denied only nine of the 68 MDL motions it heard.
And in the last six years, only six of the 62 cases the panel considered
were denied MDL status. "The MDL panel is so quick to jump in today,"
says Rice of Motley Rice. "Too quick. If there's a [product] recall,
before suits are even filed it's an MDL."
Mass tort lawyers on both the defense and plaintiffs sides used to
debate whether the MDL process helped or hurt defendants. Transferring
all federal cases to a single judge reduced the chaos of mass tort
litigation and lifted the defense burden of fighting the same discovery
and motions battles in multiple courtrooms. But MDLs also permitted
plaintiffs lawyers to pool resources, spreading the expense of working
up the litigation to several firms-and spreading damning documents
turned up in discovery across the country. Moreover, when a case was
deemed an MDL, the litigation gained credibility in the plaintiffs bar.
The MDL panel's imprimatur was a signal that a case was officially a
mass tort, so MDLs attracted additional filings, thus magnifying the
risk to defendants of adverse rulings by the MDL judge.
The debate should now be over: The MDL process has proved to be more of
a boon to defendants than plaintiffs, thanks to several rulings by MDL
judges aggressively policing the mass torts transferred to their
courtrooms. The most famous MDL ruling was the 2005 opinion of Corpus
Christi federal district court judge Janis Graham Jack in the silicosis
litigation, which at one time was considered to have asbestos-sized
potential. After Judge Jack held hearings on the qualifications of the
plaintiffs' expert witnesses under the Supreme Court's Daubert "junk
science" decision, she found enough evidence of malfeasance by doctors
and plaintiffs lawyers that Texas prosecutors convened a grand jury.
Jack's ruling effectively halted the silica litigation, and, at least in
the view of defense lawyers, sent a strong message to plaintiffs lawyers
about the scrutiny they could expect in other mass torts as well.
No other federal judge has written a decision as devastating as Judge
Jack's, but in both the Rezulin and Meridia MDLs, for instance, pretrial
proceedings resulted in rulings that made the cases manageable for
defendants. Judge Lewis Kaplan's 2005 Daubert hearings in the
23,000-case Rezulin litigation, which involved a Warner-Lambert Company
drug to treat diabetes, persuaded about 80 percent of the plaintiffs to
settle or voluntarily dismiss their claims. Kaplan severely restricted
the litigation, holding that only plaintiffs who could prove their
livers were affected while they were taking Rezulin-not those whose
livers were damaged before or after they took the drug-had
scientifically valid claims. Warner-Lambert's successor, Pfizer Inc, was
subsequently able to dispose of the cases that survived Judge Kaplan's
ruling. The Meridia diet drug ruling was more drastic: Judge James Gwin
dismissed the entire federal litigation on a summary judgment motion by
the defendant, Abbott Laboratories, which argued that the drug's warning
label protected it from liability. Gwin's ruling helped convince Stanley
Chesley, who headed the Meridia plaintiffs steering committee, that mass
torts were no longer a reliable source of business. "Looking at our past
experience in mass torts," says Chesley, a pioneer in the litigation,
"I'm [now] very picky before I get into them. . . . We've moved into
securities and antitrust [instead]." (Chesley is not guaranteed success
in those areas, either: The number of securities class action filings is
down in the last two years, and, according to plaintiffs lawyer Steven
Toll of Cohen, Milstein & Hausfeld, the dismissal rate is on the rise.)
In addition to scrutinizing the claims of masses of plaintiffs, more
state and federal MDL judges are demanding evidence of injury from
individual claimants early in the litigation, says O'Melveny & Myers
partner John Beisner, a mass tort defense specialist. "It used to be
that all the time up front, the discovery, everything was on the
plaintiffs side," Beisner says. "Now judges are saying, 'We're going to
work on both sides of this. . . . What is the evidence that you, Mr. or
Ms. Smith, were injured?' " In the litigation over Baycol, a
cholesterol-reduction drug produced by Bayer AG, the state court judge
overseeing all of the Baycol cases in Pennsylvania required each
plaintiff to submit an expert report on his or her injury; as a result,
says Baycol defense counsel Philip Beck of Bartlit Beck Herman Palenchar
& Scott, plaintiffs lawyers dropped weak claims that plumped the
purported size of the litigation. "Judges have seen what happens when
the mass tort process gets abused, when it gets out of control," says
Beck, who, like Beisner, is on Merck's Vioxx defense team. "They're
doing something about it."
The MDL vehicle is now common in state courts. Pennsylvania, New Jersey,
and Texas, for instance, have established state-court mechanisms that
parallel federal MDLs: Cases are consolidated before a single state
judge for pretrial hearings (many states have adopted stringent Daubert-like
standards for expert witnesses) and docket management. State MDLs have
also served mass tort defendants well, says O'Melveny's Beisner. "One of
the plaintiffs tactics was to get an early trial, to get the best case
set for trial in a place like Texas. Now, with [state] MDL proceedings,
their capacity to walk to the courthouse and get a trial date is
limited. There aren't many states anymore where you can get cases on a
fast track to trial." Texas's asbestos litigation, says Christian, of
the Texas Civil Justice League, was tamed only after the cases, at the
behest of tort reformers, were transferred to a Houston state MDL.
State and federal MDL judges are increasingly likely to work together to
manage mass tort litigation. Federal judges can decide when and whether
to remand cases to state courts; some mass torts lawyers say there's
growing federal court resistance to the plaintiffs tactic of naming a
local doctor or pharmacy as a defendant in order to keep a case in state
court. State judges often wait for federal rulings on Daubert and other
motions to conduct their own hearings. Judges on both levels coordinate
trial dates. In the manganese welding rod mass tort, for instance,
federal court judge Kathleen McDonald O'Malley and various state judges
have scheduled only 12 trials in almost four years of litigation, says
lead defense counsel Beisner: one in the federal MDL and 11 in state
courts. The defendants have had time to prepare for each trial, and have
won all but one of them. A litigation that, according to Beisner,
started off with about 7,000 cases is "diminishing rapidly," he says.
"The numbers are down 40-45 percent. The winnowing has been successful."
Playing Defense
When Phil Beck began advising Bayer in the Baycol litigation in the
early 2000s, he says, Wyeth's diet drug experience loomed large. "That
was the prototype for disaster," he says. "We looked very closely at
fen-phen and other mass tort situations and saw how things had gone
awry. . . . We made a very conscious decision to take a different
approach."
That new defense attitude, pioneered by Bayer in the Baycol litigation
and spreading fast ever since, may be the most significant obstacle that
plaintiffs lawyers will face in future mass torts. Of course, Beck says,
Bayer could not have engaged plaintiffs lawyers so aggressively had it
not been for state tort reform and activist MDL judges. But the Baycol
litigation emboldened defendants-and chastened plaintiffs
lawyers-because it showed both sides that defendants could seize control
of a mass tort litigation from the plaintiffs in a way that had rarely
happened before.
After Bayer voluntarily withdrew Baycol from the market in 2001 because
of a side effect called rhabdomyolysis, a potentially fatal muscle
deterioration, the company faced the onslaught of suits that seems to
follow every drug recall. Some of the cases involved claims of rhabdo,
as the condition is known; other plaintiffs claimed different Baycol-related
injuries. The company believed, based on epidemiological evidence, that
it knew the universe of Baycol users who had developed rhabdo-and that
it could afford to settle their cases. The uncertainty lay in the
thousands of cases in which the plaintiffs' evidence of rhabdo was weak,
or in which plaintiffs claimed non-rhabdo injuries. And it was in these
cases, says Beck, that Bayer took a radical position.
Early in the litigation, the federal MDL judge, Michael Davis of
Minneapolis, called a meeting of Bayer defense lawyers, plaintiffs
lawyers, and state judges with large Baycol dockets. "At that big
meeting," says Beck, "I stood up and said, 'I have an announcement. We
recognize that some people who took Baycol experienced the side effect
[of rhabdomyolysis]. We think we have a good defense on the merits,
[but] if you can show your client was taking Baycol contemporaneously
with contracting rhabdo, we're willing to settle every case. We're going
to be fair and reasonable.' " Beck recounts. " 'But on the flip side, if
you demand a premium [because] you have a trial in a plaintiffs-friendly
jurisdiction, we're going to fight you to the death. And most of your
cases are not rhabdo. We're not going to pay a penny on those.' "
Plaintiffs lawyers put Bayer to the test in both of the situations Beck
cited. In 2003 Bayer went to trial on a rhabdo case in Corpus Christi,
Texas, against noted plaintiffs lawyer Mikal Watts. "He had over 1,000
Baycol cases and was trying to put pressure on us to settle globally,"
Beck says. "[Watts] told us he wouldn't settle the rhabdo cases without
the others. And he was out there telling the financial press that Baycol
was going to cost Bayer $50 billion." (Watts did not respond to phone
and e-mail messages requesting comment.)
Beck won the trial in Texas. "That was the big turning point," he says.
"Plaintiffs lawyers said, 'Why do I want to invest the time and the
money litigating when they're willing to settle the rhabdo cases?' "
Then, after Bayer won four non-rhabdo trials, including three in
Mississippi, plaintiffs lawyers began dropping those cases. With the
litigation now winding down, Beck says, Bayer has settled 3,050 Baycol
cases for $1.15 billion-a tiny fraction of what fen-phen, with its
failed attempt at a global settlement of all claims, cost Wyeth.
In a series of mass torts since Baycol, defendants have taken a similar
approach, settling the strongest cases but refusing to pay for weaker
claims, even if that means going to trial. "The paradigm definitely
shifted," says plaintiffs lawyer Jenner, a lead counsel in the
litigation over Prempro, Wyeth's hormone replacement therapy drug.
"Plaintiffs lawyers are not taking cases with nominal injuries. People
are not taking a broad inventory of cases." In his litigation, for
instance, there are about 5,000 cases-far fewer than Wyeth faced in the
fen-phen litigation-but almost all of them involve such serious side
effects as breast cancer or stroke.
The most prominent example of defense intransigence right now is Merck's
proclamation in the Vioxx litigation that it will try every case (24,000
have been filed). "Ten years ago," says plaintiffs lawyer Seeger of New
York's Seeger Weiss, "this case would already be over. It wouldn't be
dragging on like this. It would be over." Lanier agrees: "If Vioxx
predated [fen-phen], you would see Merck more willing to settle instead
of trying every case. Instead, they're following the tobacco model: Try
every case, take no prisoners." Merck, according to Securities and
Exchange Commission filings, has set aside about $1 billion to defend
Vioxx cases. It spent $325 million in the first three quarters of 2006,
but none of that money went to Vioxx claimants or their lawyers.
Merck counsel Mayer of Hughes Hubbard is circumspect to the point of
impenetrability, but he does allow that state tort reforms have factored
in Merck's strategy. "They help the courts do justice in individual
cases," he says. So far, the judges overseeing Vioxx cases in state and
federal courts-there is not only a federal MDL, but also state
court-coordinated proceedings in jurisdictions with busy Vioxx
dockets-have permitted what Mayer calls "a very rational program of
trials" involving plaintiffs claiming serious injuries. The company may
yet request judicial orders demanding proof of injury from plaintiffs,
which could serve to weed out weaker claims. Until then, Merck plans to
proceed with trials scheduled in New Jersey, California, and Texas. "We
believe in our defense," says Mayer. "We believe it's important to put
plaintiffs to the test. We're going to continue to take cases as they
arise." (It's worth noting that in the long run, tort reform hurts the
defense bar as well as the plaintiffs bar, except when mass tort
defendants resolve to try lots of cases. "It's in our interest to have a
broken system," says Beck. "I have one view of what's good for the
country, and another of what's good for me. A system that is slightly
out of control is good for me.")
Back to the Future
Perry Weitz of New York's Weitz & Luxenberg, an accomplished mass tort
strategist, maintains that all of tort reform's gains can still be
undone. "If we get a new president, a new Congress, everything is up for
grabs again," he says. In fact, even in the crucible of the Bush
administration, the trial lawyers have been remarkably effective at
blocking federal legislation intended to curtail litigation. With AAJ's
lobbying expertise and their own contributions to Democratic
politicians, they defeated attempts to shut down litigation over MTBE,
guns, and certain vaccines-and, in the biggest and hardest-fought
battle, asbestos. Weitz and a dozen or so other asbestos lawyers
fiercely opposed a plan to remove all asbestos cases from the courts and
place them instead in an extrajudicial federal trust. The asbestos bar
placed its trust in Democratic politicians, to whom it made lavish
campaign contributions. In the midterm elections of 2002, with the
asbestos issue gaining attention in Congress, nine of the 20 biggest law
firm campaign contributors were asbestos firms, according to data
compiled by opensecrets.org, the Web site of The Center for Responsive
Politics. In 2004, when the asbestos bill was before the Senate, AAJ
was once again the largest contributor in the legal industry, with 92
percent of the group's $2.6 million in campaign contributions going to
Democrats. Since 2003, according to opensecrets.org, AAJ has spent
$13.9 million on federal lobbying, to apparently good end: The Senate
killed the asbestos bill earlier this year.
But the success was Pyrrhic-and it shows why, even though the Democrats
have regained much of their political power, they probably won't be the
saviors of the trial bar. Weitz and his brethren beat back the asbestos
legislation only at the expense of repeated vilification. Congressional
asbestos hearings spotlighted the most egregious mass tort litigation
excesses, such as the roving X-ray vans that generated tens of thousands
of cases on behalf of plaintiffs whose lungs showed evidence of asbestos
exposure, but who suffered no impairment. Defendants and insurers blamed
plaintiffs lawyers for driving dozens of companies, some of which were
far removed from asbestos manufacturing, into bankruptcy, where those
same plaintiffs lawyers, running creditors committees, established
trusts that even now provide them with a continuing stream of
contingency fees. The asbestos debate fed tort reform's campaign against
the trial bar, helping make plaintiffs lawyers a big, fat, juicy target.
So as states passed legislation to restrict suits by unimpaired asbestos
claimants and jurisdictions with heavy asbestos caseloads shifted
unimpaired plaintiffs onto inactive dockets-essentially accomplishing,
piecemeal, what the federal legislation intended-no one stood up to
defend trial lawyers. And even if Democrats backed by the plaintiffs bar
win additional state and federal offices, it's impossible to imagine
them rushing to reverse tort reform. It requires great political resolve
to repeal legislation that has survived judicial review, as much state
tort reform has. Mustering that resolve at the behest of trial lawyers
is unthinkable. "It used to be that when you walked around, people on
the street thought you were their lawyer," says Chris Seeger. "The
Republicans have convinced people on the street that we're the bad guys,
that they're paying more because of us."
Until trial lawyers win back those people on the street, the people who
have deflated mass torts-lobbyists, legislators, and judges on both the
state and federal level-have no reason to permit mass torts to balloon
once again. AAJ is at least, and at last, trying. Last summer the group
announced that it was changing its name. Its board had imported a new
chief executive officer, Washington, D.C., public relations executive
and presidential campaign veteran Jon Haber, and he "got people together
to talk about the fight we're in," says Chris Mather, AAJ's vice
president of communications and another of the group's new, politically
tested advisers. The result of AAJ's soul-searching was not only a new
name-the American Association for Justice-but also a public relations
campaign called "The Fight for Justice."
"We are in a battle for justice," says the relentlessly on-message
Mather. "We fight for justice. The other side doesn't." AAJ intends its
"Fight for Justice" effort to remind Americans of the rights they've
lost through tort reform. "I think people are starting to catch on to
the motives of our opponents," says Mather. "The commitment from trial
lawyers to fight back has never been greater."
Tort reformers are hardly sitting back and enjoying their gains, though.
They're targeting West Virginia, which has proved resistant, so far, to
business-backed attempts to change the laws and the judiciary;
California, where asbestos cases have migrated and claims under
disability statutes are on the rise; and Delaware, where there's talk of
an influx of class actions now that the old class action haven, Madison
County, Illinois, has been shut down. The relatively sleepy Wisconsin
Coalition for Civil Justice Reform was just energized by a series of
pro-plaintiff state supreme court rulings, and plans to campaign in
nonpartisan judicial elections in April.
The best hope of the plaintiffs bar may lie in, of all places, Texas-the
very state that first made tort reform politically popular. George
Christian, the general counsel of the Texas Civil Justice League, says
that Texans are beginning to have second thoughts about some of the
legislation his group lobbied for (though not enough to suggest rolling
back the laws). "To be honest, in the medical area there have been some
instances that have made people stop and look," he says. "In the 1980s
and 1990s we were able to show that the pendulum had swung too far to
the trial lawyers. Has it swung too far in the other direction?"
Plaintiffs lawyers launched the mass tort era by exposing the grave
wrongs that defendants inflicted on ordinary people. To revive it,
they'll have to show those people that it's still the defendants-and not
they-who are at fault."
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