Blog
Striking Down Medical Liability Reforms Another Blow to Illinois' Poor Lawsuit Climate
Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR), made the following statement on the February 4th ruling by the Illinois Supreme Court which struck down the state's medical malpractice law:
"Today's ruling by the Illinois Supreme Court is yet another blow to the state's reputation as a haven for lawsuit abuse. This decision only benefits the plaintiffs' lawyers who have long preyed upon doctors, hospitals and other health care providers in the state. Patients are the losers in this case.
"The court's decision is also a repudiation of Illinois' duly-elected legislature, which passed these vital liability reforms under intense pressure from their constituents in order to protect access to quality health care for their citizens."
West Virginia, Mississippi, Alabama, Louisiana, & California Ranked Worst Lawsuit Climates in the Nation
The U.S. Chamber’s Institute for Legal Reform (ILR) today released its survey ranking the states with the best and worst legal climates in the country. According to the survey, the states with the worst legal climates are California (46th), Alabama (47th), Mississippi (48th), Louisiana (49th), and West Virginia (50th). The states with the best legal climates are Delaware (1st), North Dakota (2nd), Nebraska (3rd), Indiana (4th), and Iowa (5th).
The survey also shows that a state’s legal climate affects how and where a company does business and creates jobs. Two-thirds, or 67%, of the 1,482 corporate lawyers and executives contacted say a state’s lawsuit environment is likely to impact important business decisions at their company, such as where to locate or expand their businesses. That is up 10% from just three years ago.
ILR Launches National Advertising Campaign: 'Jobs, Not Lawsuits'
With the release of Lawsuit Climate 2010: Ranking the States, ILR also announced a new national advertising campaign called “Jobs, Not Lawsuits,” which will include movie trailers to be shown on more than 300 movie screens throughout the country. The two-minute trailers feature the stories of businesses that were the subject of costly lawsuits substantially impacting their companies. In one story, an after-school youth basketball facility in Sacramento, California, was forced to close after legal bills from fighting a lawsuit drained the company’s finances.
With the release of Lawsuit Climate 2010: Ranking the States, ILR also announced a new national advertising campaign called “Jobs, Not Lawsuits,” which will include movie trailers to be shown on more than 300 movie screens throughout the country. The two-minute trailers feature the stories of businesses that were the subject of costly lawsuits substantially impacting their companies. In one story, an after-school youth basketball facility in Sacramento, California, was forced to close after legal bills from fighting a lawsuit drained the company’s finances.
“The silver screen is the perfect place to tell these true stories of businesses that have been victimized by an unfair legal system,” ILR President Lisa Rickard said. “We want people to see the real life consequences of these lawsuits.”
New York and Florida Theaters Debut Movie Trailer of Small Business Victimized by Lawsuit Abuse
The U.S. Chamber Institute for Legal Reform (ILR) announced the launch of a movie trailer in Albany, Tampa, and Orlando as part of its nationwide Faces of Lawsuit Abuse public awareness campaign, which aims to show how abusive lawsuits affect small businesses and workers in very real ways.
The nationwide campaign includes a collection of video stories of lawsuit abuse victims. The trailer features a family-owned Michigan foundry that was sued by a man who had filed 23 previous lawsuits.
Florida's New 'Sunshine' Law will Shine Light on Contingency Fee & 'Pay-to-Play' Lawsuits
Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR), made the following statement in response to the signing today of Florida’s Transparency in Private Attorney Contracting Act (TPAC):
“With the signing of the TPAC legislation today, the Sunshine State becomes a model to the nation. This law will shine a much-needed light on the process that Florida attorneys general must follow when they hire private plaintiffs’ law firms under a contingency fee arrangement to sue on behalf of the state...."
Small Businesses Share Stories of Frivolous Lawsuits
Two small business owners and the founder of a nonprofit organization—all targets of abusive lawsuits—are speaking out about their legal ordeals at www.FacesOfLawsuitAbuse.org as part of a nationwide public awareness campaign launched today by the U.S. Chamber Institute for Legal Reform (ILR). The new campaign aims to demonstrate how abusive lawsuits affect real people in very real ways.
Two small business owners and the founder of a nonprofit organization—all targets of abusive lawsuits—are speaking out about their legal ordeals at www.FacesOfLawsuitAbuse.org as part of a nationwide public awareness campaign launched today by the U.S. Chamber Institute for Legal Reform (ILR). The new campaign aims to demonstrate how abusive lawsuits affect real people in very real ways.
“At a time when we are relying on small businesses to create jobs and help our economy recover, many are being burdened by the weight of abusive, costly lawsuits,” said ILR President Lisa Rickard. According to the Small Business Administration, 52% of lawsuits target small business, the economic engine that creates 64% of America’s jobs.
The campaign, supported by a national television, radio, and online advertising effort and movie theater trailers in targeted cities throughout the country, will run through early 2010.
Read More: Small Businesses Share Stories of Frivolous Lawsuits
Florida Theaters Debut Movie Trailer of Small Business Victimized by Lawsuit Abuse
The U.S. Chamber Institute for Legal Reform (ILR) announced the launch of a movie trailer in Tampa and Orlando as part of its nationwide Faces of Lawsuit Abuse public awareness campaign, which aims to show how abusive lawsuits affect small businesses and workers in very real ways.
The most recent Lawsuit Climate poll conducted by ILR ranks Florida as one of the worst states in the nation for the fairness of its litigation environment. ILR President Lisa Rickard said, “We are bringing these stories to the public in Florida, which faces high unemployment and a bad litigation climate, as a reminder that lawsuits can hold back the small businesses that we are relying on to create jobs.”
Who Really Speaks for Consumers in the Arbitration Debate?
Bank of America, the nation’s largest bank, this month made a watershed change in how its millions of customers resolve their disputes when it eliminated arbitration clauses from their credit card contracts.
BofA’s announcement came on the heels of a legal settlement reached between the Minnesota attorney general and the National Arbitration Forum, one of the largest arbitration firms in the nation. The NAF agreed to cease all consumer arbitrations as a result of the lawsuit.
Just days later, the American Arbitration Association halted consumer debt collection arbitrations pending a review of their practices and procedures.
These events will make arbitration less available for consumers. You would think trial lawyers and consumer groups who have long opposed arbitration would be joyful. But instead of popping champagne corks, the opponents are grousing. And this is more telling than the rhetoric employed in all the years of their so-called “principled” fight on behalf of the consumer.
A recent opinion piece by David Lazarus in the Los Angeles Times (“Got a Complaint against BofA? You’re on your own” August 23, 2009) sheds light upon, and calls into question whether the self-proclaimed advocates for consumers actually speak in their interest. Mr. Lazarus writes, “Most media outlets characterized BofA’s move as good for consumers and bad for the bank’s lawyers, who now face a deluge of lawsuits.”
But far from proclaiming the consumers’ victory over arbitration clauses, Mr. Lazarus’ piece presents the recent events as a battle won but with the war still in the balance.
He quotes Gail Hillebrand of Consumers Union, a major opponent of consumer arbitration: “Dropping the arbitration requirement is a useful step, but it’s only half a step.”
For arbitration’s opponents, ensuring that consumers can go to court is not the end goal. It is actually the first step of a two-step dance at the plaintiffs’ lawyer prom.
The second step is to allow these consumer cases to become large class actions—the kind that are famous for making a relatively few plaintiffs’ lawyers rich while giving the consumer masses pennies on the dollar, or even coupons, for their trouble.
To understand the plaintiffs’ lawyers’ true class-action-enabling motive, one need look no further than Representative Hank Johnson (D-Ga.), the primary sponsor of the House version of the Arbitration Fairness Act and a plaintiffs’ lawyer.
Last year, during a House Judiciary Committee markup of an anti-arbitration bill, Mr. Johnson said that his 27 years as a trial lawyer taught him that “it behooves you to be very careful in your selection of cases.” He observed that “most lawyers are not going to take a case that is either so small that they won't be able to get a reasonable contingent fee or if the chances are that the case is . . . not going to prevail.”
But, he reasoned, while a small-dollar consumer case “would not present a[n] adequate claim to a lawyer looking to present that case into court,” that could change “if we have the ability to file a class action lawsuit, then a number of parties similarly situated can take that same issue to court.”
Perhaps inadvertently, Mr. Johnson, representing the view of most plaintiffs’ lawyers and the consumer advocates aligned with them, spoke the truth: consumers won’t be able to sue for most disputes because the dollars in question are so low.
So Mr. Johnson, with his plaintiffs’ bar and “consumer advocate” friends, want to bundle these small claims into large class action lawsuits.
But here’s the ultimate truth about consumer lawsuits – the vast majority of consumer disputes are inherently dissimilar and not eligible for class certification.
If you have a billing dispute with your credit card company for an errant charge for $800, for example, that charge is unlikely to be a “systematic” error affecting thousands of other customers. Therefore, a judge will not certify your dispute as a class action. Your amount in dispute is too low for a lawyer to take your case. And now, thanks to the consumer advocates (who are working with the plaintiffs’ lawyers), you may have lost your ability to go to arbitration to settle your dispute.
The goal was never to create more lawsuits for consumers – it was to create more large class action lawsuits for the trial bar.
This is why those who praise the Bank of America development in one breath continue to voice an urgency to pass the Arbitration Fairness Act in the next. This bill in effect will both eliminate consumer arbitration and will allow class actions to be created in these cases.
The American Association for Justice, the plaintiffs’ lawyer lobby group formerly known as the Association of Trial Lawyers of America, said in response to Bank of America’s announcement:
“While the decision by Bank of America to no longer rely on forced arbitration in consumer disputes is a positive step, it’s clear that Congress must intervene to protect consumers . . . That is why Congress must pass the Arbitration Fairness Act and prohibit this abusive practice.”
Arbitration has been helping consumers for more than 83 years. It has proven to be an invaluable resource for solving disputes, especially the vast majority of the small-dollar consumer suits that lawyers wouldn’t (and won’t) take.
Numerous studies have shown that arbitration gives the consumer a better chance at a favorable outcome than going to court. And it has been shown to be faster than going to court. But arbitration generally does not need to be done with the services of a trial lawyer.
So naturally, the plaintiffs’ lawyers want first to cripple consumer arbitration. And next, they want to skim those few lucrative class action lawsuits from the sea of consumer disputes.
If you are one of the sliver of “lucky” consumers who do qualify to be part of a class action, after a few years, you may be able to recover a few dollars (or maybe a coupon) while a plaintiffs’ lawyer whom you’ve never met walks away with millions of dollars. Otherwise, you’re on your own.
That may be “justice” for the plaintiffs’ lawyers, but hardly so for the consumer.
Death, Taxes ... and Lawsuits?
In 1789, American forefather Benjamin Franklin wrote, “In this world nothing can be said to be certain, except death and taxes.” Fast forward to 2009, and it seems that some of our elected officials are trying to amend Franklin’s two certainties by adding a third: lawsuits.
The U.S. is already the most litigious country in the world, imposing a tort cost of around a quarter of a trillion dollars each year.
In this day and age where billion dollar price tags are tossed around D.C. without the bat of an eye, the cost of America’s lawsuit system still hits home – a 2008 study revealed that every family of four pays more than $3,300 every year due to our out-of-control lawsuit system.
With unemployment climbing and household budgets being stretched thin, you might think that lawmakers would try to fix our damaged civil justice system that rewards plaintiffs’ lawyers at the expense of everyone else. But you would be wrong.
In fact, some in Congress are attempting to pass laws allowing trial lawyers to file even more lawsuits in courtrooms across the country. In major pieces of legislation introduced this session of Congress, provisions have crept in to expand the cost and reach of America’s lawsuit system.
Legislation to overhaul the U.S. financial sector? Check.
In order to increase government oversight of consumer financial products, such as mortgages and credit cards, a bill was introduced this summer to establish the Consumer Financial Protection Agency, or CFPA. Among numerous other powers, the legislation would grant CFPA the ability to restrict or ban mandatory arbitration clauses in consumer financial services contracts – forcing more disputes into an already overburdened court system and giving trial lawyers a new source of revenue.
The climate change bill? Check.
The House-passed cap-and-trade energy bill would allow lawsuits to be filed against makers of home appliances, lighting products, plumbing fixtures, and heating and air conditioning products for violations of the sweeping new energy conservation standards created under the bill.
Medical device legislation? Check.
Those who create life saving medical devices would be forced to spend more of their time in the courtroom and less of it in the lab because some in Congress are trying to undermine the federal government’s authority to set the safety standards for their products. Under one bill making its way through Congress, doctors and scientists would no longer be the ultimate authorities for setting national safety standards for medical devices like artificial hip joints or heart stents. Instead, trial lawyers and lay juries would be enlisted to establish safety standards through lawsuits on the state level decided on a case-by-case basis.
All in all, at least 36 liability expanding bills and provisions have already been introduced this Congress – putting it on track to be the most pro-lawsuit session in recent memory. The U.S. Chamber Institute for Legal Reform is keeping tabs on all of these measures on the website www.TrialLawyerEarmarks.com.
As the economic downturn stretches on, businesses are doing all they can to retain workers and stay afloat. Unfortunately, some lawmakers, oblivious to their struggles, are trying to pile on even more potentially door-shuttering causes of action that enrich trial lawyers and put our brittle economy at further risk.
Death and taxes are inevitable. Lawsuits don’t need to be.
'Pay to Play': The Plaintiffs' Lawyer Scandal that Shouldn't be Ignored
This week, the trial lawyer “pay to play” scandal continues to unfold, ratcheting up the public attention and the impetus for Congress and the S.E.C. to act.
Yesterday’s New York Times editorial, lauding the S.E.C.’s new rules to end pay to play for public pension funds and 529 college savings plans invested by states, also concluded that, “There is also another very large loophole that needs to be closed: lawyers make huge fees negotiating contracts for the state and the S.E.C. has no control over lawyers unless they are fronting for investors.” Read the full editorial here.
Today, the Wall Street Journal editorializes for the sixth time on the scandal that has exposed the broad extent of the problem of trial lawyers making campaign contributions to elected officials and then being hired by those same officials to bring lucrative contingency fee lawsuits on behalf of the state. In this case, it’s the Commonwealth of Pennsylvania, and the official in question is the governor, Ed Rendell. The Journal points out that it is unusual for a state supreme court to take up a case from the appellate level before it has been concluded. The fact that the Pennsylvania Supreme Court is doing so here underscores the seriousness of the issue.
These editorials should bolster Senator Bennett of Utah’s efforts to shed light on this unseemly practice. He sent a letter to the S.E.C. this month urging that its rules include trial lawyer “pay to play.” Other members of Congress concerned about this practice should do the same.
