Trial Lawyers Mobilize for Democrats
A dust-up in Iowa reveals just howworried the tort bar is about a Senate setback in the fall.
April 3, 2014 6:43 p.m. ET
Iowa Democratic Rep. Bruce Braley is still taking flak for his recent put-down of Sen. Chuck Grassley. That's all wrong. Give the trial lawyer a medal for alerting the electorate to a big—if overlooked—issue in this year's midterm: legal reform.
Mr. Braley, as part of his bid to replace retiring Sen. Tom Harkin, found himself at a fundraiser full of Texas trial attorneys. He scornfully warned that a GOP Senate would put the Judiciary Committee in the hands of "a farmer from Iowa [Mr. Grassley] who never went to law school." His own three years of legal education apparently did not teach Mr. Braley the inadvisability of smearing the chief occupation of citizens in his home state, while in the company of Texas millionaires. He was instantly labeled elitist and anti-Iowa, and Republicans began wondering if the Hawkeye State wasn't a November prospect after all.
So loud was the uproar that few noted it was no gaffe. Mr. Braley knew exactly what he was doing by bringing up Mr. Grassley; he was conjuring the plaintiffs bar's biggest nightmare. Under attack in the judiciary and state legislatures, under threat from a GOP House, the tort bar is terrified of losing a Democratic majority in the Senate. Mr. Braley promised that his victory would guarantee a new Iowa senator who has "been literally fighting tort reform for 30 years."
After a decade of bad headlines and curbs on the trial bar's business model, Mr. Braley's words were music to their ears. Famous tort litigators like Dickie Scruggs and Bill Lerach went to federal prison after corruption and kickback convictions. A federal judge busted up a silicosis legal racket, courts have started questioning asbestos scams, and the Supreme Court has reined in class-action and securities litigation. Businesses have started fighting back, successfully winning racketeering suits against lawyers—as Chevron CVX -0.20% did recently against Steven Donziger, or as rail company CSX Transportation did in 2012 against plaintiffs lawyers.
Republican governors and legislatures have led a tort-reform renaissance. Since 2009, states have enacted a whopping 125 substantive civil justice reform statutes, according to the American Tort Reform Association. They range from new transparency in hiring contingency-fee lawyers, to new standards for expert evidence, to medical malpractice reforms. Wisconsin last week joined Ohio and Oklahoma in passing legislation that requires greater transparency in asbestos trust funds, to cut back on trial lawyers who simultaneously fleece those bankruptcy trusts and existing companies.
House Republicans may be focused on ObamaCare, but they still had time in November to pass legislation putting teeth back into Rule 11 of the Federal Rules of Civil Procedure, letting judges sanction lawyers who file phony lawsuits. The same month the House passed its own federal asbestos-trust transparency legislation.
In December the House also passed the Innovation Act, a patent-litigation reform that contains a "loser pays" provision (a precedent that terrifies the trial bar). By February, it had passed Georgia Rep. Doug Collins's Sunshine for Regulatory Decrees and Settlements Act, which prevents federal regulators from signing secret deals with friendly outside lawyers—a practice known as "sue and settle."
Majority Leader Harry Reid has kept House legal reforms at bay. President Obama in his early days relied on the Senate to pass lawyer payoffs like the Lilly Ledbetter Act, which purported to guarantee women equal pay. The Senate later rubber-stamped department and agency nominees who would lay the regulatory groundwork for litigation: dreaming up disparate-impact theories (for housing and lending lawsuits); rejiggering minimum-wage definitions (for employment lawsuits). Senate Democrats also use committee hearings to soften up litigation targets on behalf of their trial-lawyer pals. (See: Toyota.)
This all ends with a Republican Senate. The GOP, already bitter over Mr. Reid's theft of their filibuster rights, won't be quick to approve lawsuit-happy nominees for executive posts. Mr. Grassley is a long-standing advocate for transparency and legal fairness and is the Senate sponsor of Mr. Collins's Sunshine Act. To the extent his Judiciary Committee holds hearings, they'll be focused on asbestos fraud, the sue-and-settle ruse, and the need for more tort reform.
This last point particularly worries plaintiffs lawyers. The trial bar pays out big to Democrats because it has to. Nobody likes lawyers, and Americans love legal reform. Democrats face huge pressure from home-state constituents and businesses to get on board, and—particularly when the political chips are down (ObamaCare)—are tempted to shore up their fortunes by embracing litigation-reform. The trial bar was horrified when the Innovation Act, with its dreaded loser-pay provision, swept the House 325-91. If Democrats lose in November, what else might happen? If a bipartisan House and Senate send a weakened Mr. Obama legal-reform bills, will he really veto such popular measures?
This is why the tort lobby is pouring millions into Senate races this year, and why Mr. Braley made his purposeful pitch. For them, there would be nothing worse than a "farmer from Iowa who never went to law school" running the Judiciary Committee.