Following up on Walter's July 30 post, "AAJ looking to quietly pass plaintiff lawyer tax break," on the American Association for Justice's attempts to get Congress to pass a $1.6 billion tax break for trial lawyers, we follow the money.
The proposal, introduced as S. 437 and H.R. 2519, would allow the deduction of attorney-advanced expenses and court costs in contingency fee cases. But it's too politically toxic to move as a stand-alone bill so the AAJ is hunting for an appropriate legislative vehicle.
It's certainly a lobbying priority for the group. Not only does the AAJ list the issue on its 2nd Quarter 2009 lobbying disclosure form, they also hired outside lobbying firms to work on it.
- The illustrious Patton Boggs includes the proposal in its disclosure. Total AAJ-related lobbying expenditures in 2Q for AAJ - $140,000).
- And The Palmetto Group listed the two tax deduction bills as the only issue the lobbying firm worked on for AAJ to the tune of $65,000. That's a big lobbying bill for working just one issue. (Up from $30,000 in the first quarter.)
Legislation to end medical device preemption gains a lot of attention among Congress watchers, and it's definitely a heavily lobbied issue, but as Victor Schwartz of Shook, Hardy & Bacon tells us, the bill would only benefit a small percentage of AAJ member attorneys. But deductions for contingency fee lawsuits? The benefit cuts across the entire membership, helping small firms and big ones. For a $1.6 billion tax break, you spend a little money.