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Hypocrites of Tort Reform: Long Version!

The Hypocrites Of Tort Reform Advocates Who Changed Their Tunes

Emily Gottlieb
Deputy director of the Center for Justice & Democracy.

No one likes a hypocrite. Yet one would be hard pressed to find more hypocrites than in the “tort reform” movement. Take a look at the record of a host of lawmakers, lobbyists and even journalists who complain about lawsuits and argue that the rights of injured consumers to go to court should be scaled back because we are too “litigious.”

When they or family members are hurt and need compensation for their own injuries, often minor ones, these same individuals do not hesitate to use the courts to obtain compensation, to right a wrong, to hold a wrongdoer accountable or to obtain justice. The same is true for corporations that have funded the “tort reform” movement. These companies support efforts to immunize themselves from liability for harming consumers. But when these same companies believe they have been wronged by a business competitor, they are the first to sue.

In this report we take a look at the cases of several proponents of tort restrictions who do not “practice what they preach.” We examine individuals who have sued sometimes for millions of dollars while at the same time championing damage caps and other severe liability restrictions for others. We also look at corporate litigants who have lent financial or other support to groups like the American Tort Reform Association, the Manhattan Institute and state business coalitions like New Yorkers for Civil Justice Reform.

Notably, tort restrictions advocated by these organizations virtually never limit the rights of corporations to sue business competitors for commercial losses. This list is by no means exhaustive but merely representative of businesses and other “tort reformers” who say one thing but do another when it comes to the civil justice system.

George W. Bush
As Texas Governor, George W. Bush was one of the “tort reform” movement’s biggest proponents. One of Bush’s first acts as governor in 1995 was to meet with representatives of nine Texas Citizens Against Lawsuit Abuse (CALA) chapters in a salsa factory outside of Austin, after which he declared a legislative “emergency” on “frivolous lawsuits.” Over his two terms, Bush signed a series of brutal bills that severely reduced injured consumers’ rights to go to court.

However, when it comes to solving problems involving his own family, Bush heads straight to court. In 1999, Bush sued Enterprise Rent-A-Car over a minor fender-bender involving one of his daughters in which no one was hurt. Although his insurance would have covered the repair costs, making a lawsuit unnecessary, Bush sought additional money from Enterprise, which had rented a car to someone with a suspended license. In this case, Bush seemed to understand one of the most important functions of civil lawsuits — to deter further wrongdoing. The case settled for $2,000 to $2,500.

U.S. Senator Rick Santorum, R-Pa.
As a United States Senator, Rick Santorum has repeatedly supported limits on consumers’ rights to seek compensation in the courts. In 1994, Santorum sponsored the Comprehensive Family Health Access and Savings Act that would have capped non-economic damages at $250,000. In a 1995 floor speech supporting damages caps, Santorum said, “We have a much too costly legal system. It is one that makes us uncompetitive and inefficient, and one that is not fair to society as a whole. While we may have people, individuals, who hit the jackpot and win the lottery in some cases, that is not exactly what our legal system should be designed to do.”

But the same rhetoric does not seem to apply to Senator Santorum. In December 1999 Santorum supported his wife’s medical malpractice lawsuit against her chiropractor for $500,000. At trial, the Senator testified that his wife should be compensated for the pain and suffering caused by a botched spine adjustment, claiming that she had to “treat her back gingerly” and could no longer accompany him on the campaign trail. After the verdict, Santorum refused to answer phone calls asking what impact the case had on his views of “tort reform.” According to his spokesman Robert Traynham, “Senator Santorum is of the belief that the verdict decided upon by the jury during last week’s court case of his wife is strictly a private matter. The legislative positions that Senator Santorum has taken on tort reform and health care have been consistent with the case involving Mrs. Santorum.” In January 2000, a judge set aside the $350,000 verdict, deeming it excessive, and offered a reduced award of $175,000 or a new trial on damages only.

“Lawsuit Abuse” Group Founder and Trustee, Sterling Cornelius
Sterling Cornelius, owner of Cornelius Nurseries and Turkey Creek Farms in Houston and a trustee of the corporate front-group, Citizens Against Lawsuit Abuse (CALA), is one of the most vocal businessmen complaining about lawsuits and advocating tort restrictions in Texas. With the help and support of the Texas CALA group, Texas enacted a series of “tort reforms” in 1995, including caps on punitive damages and severe restrictions on lawsuits filed under Texas’ Deceptive Trade Practices Act.

But in 1993, Sterling filed a $100 million lawsuit against DuPont, claiming that its fungicide, Benlate, damaged his companies’ crop and nursery. Among the damages Cornelius sought were $75.3 million in punitive damages under the Deceptive Trade Practices Act as well as additional punitive damages. Because his lawsuit was filed before enactment of the 1995 legislation, his lawsuit was not affected by the “tort reforms” that passed.

Florida State Representative Mark Flanagan
As a member of the House Civil Justice and Claims Committee, Mark Flanagan was a major force behind severe tort restrictions that were enacted in Florida in 1999, sponsoring and co-sponsoring bills that protect manufacturers of defective products, while calling Florida “the most litigious society in the world.”
But it was a different story when his own daughter fell from a daycare center’s jungle gym and broke her leg in 1995. Flanagan sued both the day care center and the manufacturer of the jungle gym, alleging that the manufacturer “negligently and carelessly designed” the apparatus and that the preschool failed to properly supervise his daughter. Like many injured victims whose rights Flanagan’s legislation decimates, the lawsuit alleged that his daughter suffered from “severe pain” and “lost the capacity to enjoy life.” After 18 months of litigation — and two months before his bid for re-election — Flanagan settled for an undisclosed amount.
Texans for Lawsuit Reform Board Members

In April 1995, Texans for Lawsuit Reform (TLR) helped lobby for legislation that capped punitive damages, limited governmental and professional liability, undermined joint and several liability and decimated Texas’ Deceptive Claims Practices Act.

Yet at the time this legislation passed, TLR Board members Leo Linbeck, Richard Trabulsi and Richard Weekley had themselves filed over 60 lawsuits either personally or as business owners. Between 1978 and 1995, Leo Linbeck’s construction company was the plaintiff in at least 37 lawsuits. In one suit, which was settled confidentially, his company sued its own insurance company for triple damages stemming from the deaths of three workers in a construction accident. In another case, settled in November 1988, Linbeck sued for punitive damages.

By 1995, Board member Richard Trabulsi had also filed suit numerous times. In 1986, as the owner of Richard’s Liquor and Fine Wines, Trabulsi sued Walgreen’s to force it to stop selling alcohol in Texas. He also filed a personal-injury suit against his company in which the company prevailed. He told the Houston Post, “I have had access to the courts a number of times I had forgotten.” As of 1995, TLR President and co-founder Richard Weekley, head of Weekley Properties and Weekley Development and a partner of David Weekley Homes, had sued six times; his companies had sued 14 times.

West Virginia Supreme Court Justice Richard Neely
In January 1994, West Virginia Supreme Court Justice Richard Neely testified before the New Jersey Senate Commerce Committee as it considered bills designed to abolish the state’s tort system. Appearing as a paid spokesman for the corporate front-group, New Jersey Citizens Against Lawsuit Abuse, Neely attacked every player in the civil justice system, from lawyers to judges to injured victims who sue.

Those pronouncements were surprising given Neely’s personal history with the civil justice system. In 1986, he reportedly sued TWA because his bags arrived 70 minutes late. He demanded $38,000, $3,000 of which was a “speaker’s fee” for telling other passengers about the delay. Three years later, the case settled for $12,500. In 1993, Neely sued Goodyear Tire after a wheel fell off his father’s Cadillac. He sought $49,000 that included $2,000 for himself for five-hours worth of telephone calls to his parents. As Neely testified before the New Jersey Senate, the case was dismissed.

Corporate Hypocrates

The following corporations have funded or are members of either national or state organizations that advocate “tort reform.” Tort reforms are always aimed at curbing litigation by sick and injured consumers against corporations, hospitals and other wrongdoers. Such “reforms” rarely affect “business-to-business” litigation, leaving corporations with unfettered use of the courts to obtain compensation for their commercial losses from trademark infringements, breach of contract, patent infringements, unfair completion or a host of other commercial claims. Sometimes the targets of their lawsuits are much smaller businesses or even consumers. The following are a few examples:

Enterprise Rent-A-Car
In 1998, Enterprise Rent-A-Car began litigation against Rent-A-Wreck — a company 25 times smaller than Enterprise — over Enterprise’s trademarked phrase, “We’ll Pick You Up.” Rent-A-Wreck had used radio ads that contained the phrase “And of course, they’ll pick you up.” Later, after a purported settlement between the companies, Enterprise tried to stop Rent-A-Wreck from obtaining a trademark for the phrase, “We’ll Give You A Lift.” In 2000, Enterprise sued Rent-A-Wreck for civil contempt for using “We’ll Give You a Lift.” The contempt motion was dismissed.

Exxon Corporation
Major corporations like Exxon support laws to limit the ability of average consumers to sue their insurance companies when those companies unfairly deny claims. But when Lloyds of London refused to pay Exxon $250 million for losses it suffered as a cargo owner resulting from the Valdez oil spill in Alaska, Exxon did what all consumers should have the right to do. Exxon sued its insurance company. In this case, Exxon won.
Exxon has used the courts for other purposes well. For example, in August 1998, Exxon sued Mobil Oil Corp. for patent infringement involving a catalyst that makes better plastics. A jury awarded Exxon $171 million and a judge issued an order prohibiting Mobil from infringing on Exxon’s patent.

Johnson & Johnson
Johnson & Johnson, makers of Mylanta in partnership with Merck, sued Smithkline Beecham Corporation for false advertising regarding the nutritional benefit of Tums over Mylanta. The court dismissed Johnson & Johnson’s complaint. The lower court’s decision was upheld on appeal.

In 1995, Johnson & Johnson/Merck filed another false advertising suit against SmithKline over claims that Tums and Tagamet HB were superior to Pepcid AC. The court issued a preliminary injunction, ordering SmithKline to suspend the ads. In 1999, Johnson & Johnson sued Bausch & Lomb for making claims about the superiority of its extended wear contact lenses.

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Conclusion
In 1975, Indiana lobbyist Frank Cornelius, whose clients included the Insurance Institute of Indiana, helped secure passage of a $500,000 cap on medical malpractice awards and elimination of all damages for pain and suffering in Indiana. As he wrote in the New York Times on October 7, 1994, he now “rue[s] that accomplishment.” Beginning in 1989, Frank Cornelius experienced a series of medical catastrophes that resulted in his wheelchair confinement, respirator-assisted breathing and constant physical pain.

When he turned to the Indiana courts to provide a remedy, to compensate him for his massive injuries and hold the negligent health care providers accountable, the law was no longer there for him. The Indiana legislature had taken his rights away. Though his medical expenses and lost wages amounted to over $5 million, his claims against both the hospital and physical therapist at fault settled for a mere $500,000 — the limit on damages for a single incident of malpractice.

In some ways, the hypocrites of “tort reform” are an amusing list. But tragedy for them lurks just around the corner, just like it did for Frank Cornelius.