The Trial Lawyer Underground: Covertly Lobbying the Executive Branch

From the US Chamber Institute for Legal Reform

As opportunities for advancing their liability-expanding agenda in Congress have dimmed, plaintiffs’-lawyer lobbyists have focused their influence on the Executive Branch, starting with the current Administration. Very quietly, but rather successfully, the lawsuit industry has pursued its policy goals through federal agencies while attracting very little attention. We call this effort the Trial Lawyer Underground. The purpose of this report is to shine a public light on a hidden practice that affects all Americans.

The lobbying efforts of the American Association for Justice (AAJ), the organization that protects and works to grow the profits of plaintiffs’ lawyers, have paid dividends. An early victory for the trial bar was keeping any substantive medical liability reform out of the comprehensive healthcare bill. Another early reward for the trial bar was an Executive Memorandum issued from the President to agency heads warning them to avoid new regulations that could preempt lawsuits by establishing definitive federal standards for health and safety. It also required agencies to consider reversing rules that had such an effect. As a result of the memo, several agencies altered regulations, encouraging lawsuits even when product manufacturers have done exactly what the federal government has told them to do.

More recently, the trial bar has made progress with the Administration in reducing a considerable threat to the lawsuit industry: pre-dispute arbitration agreements. Naturally, the trial bar favors lengthy and expensive litigation over less formal and faster dispute resolution that works efficiently in the interests of both consumers and businesses. Last year, President Obama issued an Executive Order prohibiting federal contractors from using arbitration to resolve employment disputes. This year, the Consumer Financial Protection Bureau (CFPB) chimed in, publishing a study that could lay the groundwork for the CFPB to restrict arbitration of disputes involving consumer financial contracts. Most recently, in July 2015, the Centers for Medicare and Medicaid Services (CMS) slipped an antiarbitration provision into a proposed overhaul of nursing home regulations.

As the Administration moves into its closing days, the trial bar is likely to shift its underground efforts into high gear.

This report is not comprehensive, but it highlights examples of the quiet and effective influence the plaintiffs’ bar exerts within the Executive Branch. It brings together information from publicly available, if not widely reported, sources, such as lobbying reports filed by AAJ staff and retained lobbyists, and failed AAJ-supported legislation that gave rise to its underground alternative.

“The plaintiffs’ lawyers have become very adept at making end runs around Congress to the back rooms of federal agencies, where the rules are written and where there is little media scrutiny,” said ILR President Lisa A. Rickard.



Editorial: Legal Reform Requires Careful Negotiations

From the Bloomington Pantagraph and Decatur Herald & Review

The state of Illinois either has one of the nation’s worst judicial climates, or is a state where the ordinary plaintiff has a fair chance to win against corporate giants.

It just depends on who you ask. More importantly, it depends on where the money is located.

That’s the result of the news last week that the U.S. Chamber of Commerce was proclaiming the Illinois lawsuit climate was one of the worst in the nation.

According to a survey conducted for the Chamber’s Institute for Legal Reform by Harris Poll, the chamber said only Louisiana and West Virginia have worse lawsuit climates.

The results are based on questionnaires asked of senior company attorneys about how a state’s lawsuit environment is likely to affect important business decisions. So, at best, the results of the survey were pretty predictable.

However, Gov. Bruce Rauner lent his support to the issue, saying the lawsuit environment in the state is hampering economic growth.

“You come here, you open yourself up to attack and excessive judgment against your company,” the governor said.

Rauner has proposed legislation that he says will put the system more into balance. Those reforms include medical awards based on charges rather than actual payments, changing overly inclusive liability standards and limiting venue shopping by plaintiffs.

View the full editorial at the Bloomington Pantagraph…

News Update

Illinois Will Delay Pension Payment, Citing Cash Shortage

From Crain’s Chicago Business

Illinois will delay payments to its pension fund as a prolonged budget impasse causes a cash shortage, Comptroller Leslie Geissler Munger said.

The spending standoff between Republican Governor Bruce Rauner and Democratic legislative leaders has extended into its fourth month with no signs of ending. Munger said her office will postpone a $560 million retirement-fund payment next month, and may make the December contribution late.

“This decision is choosing the least of a number of bad options,” Munger told reporters in Chicago on Wednesday. “For all intents and purposes, we are out of money now.”

Munger said the pension systems will be paid in full by the end of the fiscal year in June. The state still is making bond payments, and retirees are receiving checks, she said.

“We prioritize the bond payments above everything else,” Munger told reporters.

The pension payment delay was inevitable, said some who have been watching the budget gridlock.

“This is just the tip of the iceberg,” said Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, which monitors Illinois finances.

“Every month they go without resolving the impasse on the budget means it’ll cost more to ultimately resolve it,” Martire said. “This is a natural, predictable consequence if you do something called math.”

Read more in our daily News Update…