Results matching “Doroshow”

Citigroup Securities update - PointOfLaw Forum

You may recall my objection to the $100M fee request in the Citigroup Securities case. (Jan. 2; Jan. 7; Jan. 25.)

On February 28, the district court granted in part and denied in part my request for discovery, and ordered the production of the contract attorneys' timesheets and resumes; this generated some not-quite-accurate press coverage from reporters who didn't read the order. Contrary to what the ABA Journal and NALFA said, the plaintiffs' attorneys were allowed to hide what they paid the contract attorneys, what the contracts with the vendors said, and were able to shield everyone—including expert witnesses, contract attorneys, and witnesses submitting declarations—from deposition. [Reuters; Law360]

The discovery was telling. Only two of the contract attorneys were doing substantive work; most of the others had no relevant legal experience, and were billed the same for their time since graduation whether their "experience" involved being unemployed for years because of failure to pass the bar or work at securities litigation forms. (One, being billed at $425/hour, was clearly supervising the so-called experienced "$550/hour" contract attorneys.") The overwhelming majority of contract-attorney time was billed without any contemporaneous description of work: the attorneys hand-wrote the daily hours on the job, and nothing else. The ones who did write descriptions were doing such menial tasks as coding and deposition summaries, and inefficiently at that—one attorney billed 239 hours and over $90,000 to summarize a one-day deposition transcript of under 400 pages. And an extraordinary 30% of the contract-attorneys' lodestar was billed after the case settled—about twenty attorneys didn't even start work on the case until after settlement, and that work didn't change the value of the settlement one iota. I filed a supplemental objection on March 15. We've also moved to strike the expert reports that assert a 16.5% fee is commonplace for a settlement of this size. The actual figure is substantially smaller than that.

Meanwhile, on March 15, the Association of Corporate Counsel submitted an amicus letter brief, noting that the vast majority of corporate counsel pay cost for contract attorneys, and do not tolerate $550/hour markup rates for such low-level work in this legal economy.

Coverage: Fisher @ Forbes; Reuters; ACEDS; Toothman (whom I hired as an expert witness after that blog post); Law360 ($); Law360 ($). In that last story, note how Joanne Doroshow dishonestly misrepresents the question in dispute rather than fairly addresses the actual argument that I make: that lodestar reflects prevailing market rates, and the prevailing market rate for contract attorneys is not $550/hour, much less greater than $1000/hour after a multiplier.

Opponents of federal medical liability reform, that is Democratic politicians and trial lawyers, commonly make two arguments against Congressional action along the lines of the current H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare Act: 1. Liability reform ignores "the real issue", that of medical errors and patient safety, and 2. Federal legislation is an attack against the states, their laws, courts and prerogatives.

The first is an attempt to change the subject, deflecting attention away from the costs of defensive medicine and putting the onus on doctors and insurance companies instead of trial lawyers.

The second serves a political purpose, appealing to federalism-minded House Republicans, especially new members aligned with the Tea Party. There's another advantage, too: The argument has legal and constitutional merit.

Unfortunately, supporters of national medical liability reform rarely engage the federalism issue. Until, that is Wednesday's hearing in a House Energy and Commerce subcommittee, "The Cost of the Medical Liability System Proposals for Reform, including H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011." In testimony on behalf of the Health Coalition on Liability and Access, Dr. Troy M. Tippett argued that activist state courts had overturned reasonable tort reforms enacted by legislatures, and health care fell under the Commerce Cause. From Dr. Tippett's prepared statement:

Enacting a federal statue, we believe, is the most effective avenue available to rein in judicial activism, address the medical liability crisis and ensure patient access to health care. H.R. 5 would level the playing field for doctors, hospitals, patients and attorneys, provide needed consistency to the system and eliminate the patchwork of protections in favor of a federal framework based on fairness and common sense.

There is plenty of legal justification for moving in this direction -- some that goes as far back as James Madison and his persuasive arguments in support of the Commerce Clause. This important provision gives Congress the ability to regulate interstate commerce (a definition which the health care industry clearly meets) when done in the public interest. In a 2003 report, the Congressional Research Service (CRS) confirmed this view, concluding that Congress has the authority to enact tort reform legislation generally, under its power to regulate interstate commerce.4 This legal logic has already been applied to an earlier medical dilemma when Congress passed the National Vaccine Injury Compensation Program, a federal program that preempts state court tort awards to protect vaccine manufacturers from bankruptcy in the face of extreme state tort jury awards. A precedent has been set, and we believe now is the time for Congress to act by passing federal medical liability legislation that protects doctors, patients and the states.

But vaccines are sold into interstate commerce and already regulated by the FDA. How is a doctor botching a procedure similar?

Doroshow's Huffington Puffery - PointOfLaw Forum

As noted yesterday, Joanne Doroshow, executive director of the pro-trial-lawyer Center for Justice and Democracy (CJD), wrote a column in last Wednesday's Huffington Post that took aim at the Manhattan Institute's new Trial Lawyers, Inc.: K Street report. I published a lengthy rebuttal, pointing out just how deceptive Doroshow's hit piece was, and last night Doroshow went back on Huffington to reply, with a new column entitled (appropriately enough) "Huff and Puff."

What does Doroshow say? She makes no effort to resuscitate any of the arguments in her earlier piece that my rebuttal had exposed. (Draw your own conclusions.) Instead, Doroshow's odd reply boils down to one essential defense: "I was joking." (I kid not; take a look at her piece if you think I'm exaggerating.)

Joanne's reaction isn't surprising, I suppose: here at Point of Law, we've long known that Doroshow and her organization were anything but serious. I just hope the word gets out to the mainstream media the next time they uncritically report on one of the CJD's "studies."

Note, however, that Doroshow couldn't help but throw out a couple more deceptive nuggets -- which I'll take the trouble to correct for those interested:

My Townhall.com Response to Doroshow - PointOfLaw Forum

As I noted on Friday, Joanne Doroshow of the Center for Justice and Democracy authored a hit piece in last Wednesday's Huffington Post, which attacked the Manhattan Institute and the Trial Lawyers, Inc.: K Street report. I usually don't comment on the drivel spewed out by the trial-lawyer allied groups, since there's little reason to drive eyeballs to their otherwise lightly trafficked websites. But The Huffington Post has enough readers that I thought it wise to reply, this time. Today, Townhall.com published my lengthy reply, which:

  1. Spells out just what the Manhattan Institute's Center for Legal Policy is, what the Trial Lawyers, Inc. series is, and what the Center for Justice and Democracy is:
    The CJD's name is designed to obscure its actual mission, much like the trial lawyers have done by renaming their lobbying arm, formerly the Association of Trial Lawyers of America, as the innocuous-sounding American Association for Justice. Who, really, could be against justice or democracy? But the Center for Justice and Democracy, it turns out, is an organization that exists for the exclusive purpose of preserving the status quo system of tort litigation in America.

  2. Responds to Doroshow's misleading attacks on the K Street report's accurate claim that "over the last decade, lawyers and law firms--excluding lobbyists--have injected $780 million into federal campaigns":
    [Doroshow] argues that corporate interests also give large sums to the political process, which is unambiguously true. But Doroshow then tries to argue that corporate influence overwhelms lawyers' influence through a clever sleight of hand: she points to tables listing lobbying expenditures rather than campaign donations, which is what we're talking about in our report. They're not the same thing, and Doroshow almost certainly knows that, since the Center for Justice and Democracy--unlike the Manhattan Institute--reports lobbying activities on its own 990 federal tax returns.

  3. Responds to Doroshow's misleading attacks on "our report's detailed recitation of the trial bar's unprecedented efforts to get the current session of Congress to expand liability"--with a particular focus on her characterization of the Franken amendment (which I also discussed in some detail in my Friday post on the K Street report's federal government relations section):
    [Doroshow] mischaracterizes most of the federal legislation she describes. Most egregiously misleading is her description of the Franken amendment: "Al Franken's amendment to the defense appropriation bill[] ensured that women who serve as military contractors and get brutally drugged and raped by their co-workers ought to be able to seek legal recourse in court." Did Franken's amendment do that? Well, yes--but it did much more, too; and Doroshow is merely recycling the lie fed by the trial lawyers to late-night talk shows, the blogosphere, and an uncritical media.

I conclude:
The story of the Franken amendment, and the deceptive claims of the Center for Justice and Democracy's Joanne Doroshow, are good object lessons in how the trial bar feeds a gullible media to further its own political objectives. The Manhattan Institute's Trial Lawyers, Inc.: K Street report is intended to set the record straight; and we'll continue to do so, no matter what names and lies the personal-injury lawyers and their apologists throw our way.

Read the full piece here.

Trial Lawyers, Inc.: K Street -- Federal Government Relations (I) - PointOfLaw Forum

As my last installment on Trial Lawyers, Inc.: K Street, I'm scheduled to discuss the trial bar's federal efforts to expand litigation opportunities. Because the K Street report is national in scope, these efforts are extensively covered, and federal legislation comprises two subsections of the report, roughly twice as much material as is devoted to state activities. Thus, I'm breaking my posts into two parts: first, today, I'm going to go into already-passed legislation. Then, over the weekend, I'm going to do a second post with proposed/pending legislation. Finally, I'll add a brief concluding post, with a roadmap back over where we've been.

As we note in our report, the lawyers' aggressive affirmative agenda in Washington is something of a paradigm shift. "Until recently, the main purpose of Trial Lawyers, Inc.'s involvement in federal politics was to block reform legislation that would deny it various lucrative lines of business" -- such as Bill Clinton's veto of product liability reform legislation and securities class action reform legislation in the 1990s (the latter overridden and enacted), or Senate Democrats' stifling of medical-malpractice and asbestos litigation reforms during the Bush administration.

In the last two years, Congress has acted to expand consumer litigation, expand employment litigation, expand qui tam litigation, and limit private arbitration. Many of the pieces of federal legislation will be familiar to our readers, but a brief summary is still in order:

Trial Lawyers, Inc.: K Street -- State Government Relations - PointOfLaw Forum

In addition to contributing some $780 million to political candidates in federal campaigns over the last decade, lawyers have funneled $725 million to state-level campaigns. As noted in the Trial Lawyers, Inc.: K Street report:

Whereas trial lawyers' giving at the federal level tends to focus on Congress, at the state level the money is spread among all three branches of government. Because state judiciaries make most tort law--and have the power to invalidate statutory tort reforms as unconstitutional--the plaintiffs' bar has long concentrated on getting its allies onto the state bench . . . . State legislatures, as the source of statutory tort reform, are another arena of interest: any state legislator who tries to advance tort-reform legislation immediately becomes a target of the trial bar and can expect a very expensive reelection campaign. The litigation industry has even begun to turn its attention to the executive branch, since state attorneys general can farm out representation of the state's civil lawsuits to attorneys in private practice, and state treasurers and comptrollers, who control public-employee pension funds, can hire outside lawyers to initiate securities-fraud lawsuits . . . .

I'll briefly discuss how trial lawyers play in the political process for each branch of government; further detail can be found in the report itself, here.

  1. Judicial branch. Since tort law is common law governed by the courts, and many states elect their judges (39 in total, and 21 for the highest court), it is hardly surprising that the plaintiffs' bar focused much of its early political efforts on ensuring that its allies filled state supreme courts. In 1990, a trial lawyer "brazenly told Forbes magazine: '[U]ntil last year the plaintiff bar owned and controlled the Texas Supreme Court.' "

    What happened, also unsurprisingly, is that business interests figured out that they could pool their resources and influence judicial elections, too--setting off an arms race that grew increasingly unseemly, the worst excesses of which were exposed in last year's U.S. Supreme Court case, Caperton v. A.T. Massey Coal Co. The need to campaign creates inherent conflicts of interest "between judges' role as neutral interpreters of the law and their status as elected officials with a need to fund-raise for campaigns," and as both Walter and I have noted here in the past, there's much to be said for the decision by the framers of the U.S. constitution to separate the federal judiciary from the electoral process.

    There are no easy solutions, however, and as Ted Frank noted here, much of the campaign for "judicial independence" is little more than a thinly veiled effort by George Soros and others on the left to achieve supremacy. As Ted notes, for these advocates, the "idea that judicial decision-making is beyond questioning by other branches of government . . . . somehow only appl[ies] to criticism of left-wing judges and judicial decisions." Tellingly, these same voices purportedly concerned about any criticism of the judiciary raised not a peep when President Obama upbraided Supreme Court justices for their Citizens United ruling--when the justices were seated before him, surrounded by hostile partisans, in the televised State of the Union address; instead, they were busy decrying the same judicial decision themselves.

  2. Legislative branch. The trial bar has long been giving to state legislative races, too. Historically, these efforts were largely defensive: "the trial-lawyer lobby largely contented itself with blocking legislative reforms, depending on state supreme courts to invalidate, on constitutional grounds, those that somehow achieved enactment." As previously suggested, those efforts are still ongoing (realized most recently in the Illinois supreme court's decision to overturn legislatively enacted medical-malpractice-law reforms, again, on dubious constitutional grounds). But of late, the trial bar has embarked on a more aggressive, affirmative legislative agenda, as they've sought to exploit recent electoral shifts that "produced or increased majorities of trial-lawyer-friendly Democrats in state legislatures."

    Among the trial bar's legislative successes are expansions of consumer-fraud statutes in Iowa and Washington; the creation of new qui tam statutes in New Mexico, New Jersey, and Oklahoma; the addition of new theories of non-economic damages in Iowa and Illinois; and an increase in statutory limits on damages recoverable against the state in Oregon. This legislation, as well as other trial-bar-backed efforts introduced but not passed into law, is summarized in the Trial Lawyers, Inc.: K Street report, as well as recent articles and reports by the American Tort Reform Association (see here and here (PDF)).

  3. Executive branch. Finally, it will come to no surprise to regular readers of this site--or those who have read Walter Olson's The Rule of Lawyers--that lawyers have also become increasingly active in working to influence state attorneys general and others with the capacity to engender litigation from the executive branch. Since Ron Motley and the now-incarcerated Dickie Scruggs pioneered this tactic in the multistate tobacco litigation, it has ballooned into a major part of the business model for the plaintiffs' bar.

    The week before we released the K Street report, this issue got significant media attention: The Washington Times (in an editorial) explored the trial bar's "pay to play" tactics with state AG's who hire outside contingency counsel; and The Wall Street Journal (in an in-depth investigative piece) looked at the securities-class-action bar's political contributions to various state and local politicians who influence or control public employee pension funds (among the biggest investors in the market, and thus the best able to control such lawsuits under the Private Securities Litigation Reform Act of 1995). More detail is available in the full report, here.


(I'd like to apologize to our readers for not posting a summary of our Trial Lawyers, Inc.: K Street's state government relations section before this morning: I got preoccupied penning a lengthy response to a disingenuous hit job on the report, which was written by Joanne Doroshow of the trial-lawyer-allied Center for Justice and Democracy (there's lots of stuff on that outfit and its shoddy and misleading work in our archives, and here); stay tuned for my reply.

Anyway, notwithstanding that I'm just getting around to my state government relations posting, I still intend to wrap this up with a post about the trial-bar's federal government relations activities sometime later today, so stay tuned for that, too.)

Trial Lawyers, Inc.: K Street -- Public Relations - PointOfLaw Forum

For the third installment on the Trial Lawyers, Inc.: K Street report, I'm going to discuss, briefly, the lawyers' public-relations activities. For a fuller discussion, see this section of the report, online.

Trial lawyers realize they aren't popular--as their decision to re-brand themselves the American Association for Justice would suggest. Opinion-poll data suggest that the broader public is largely disaffected with the legal system: "Eighty-three percent of Americans think that the legal system makes it too easy to assert invalid claims." For a group wholly dependent on government power to make its money, a negative public opinion presents a significant problem for the trial bar.

The plaintiffs' bar works to counter public skepticism with a sophisticated public-relations operation. First, the trial bar develops a veneer of legitimacy through its web of ties to the legal academy; although the general public isn't much aware of what legal academics do, they're highly influential over judges, policymakers, and the elite media. Next, lawyers aggressively court the media directly, by feeding them stories that agitate public opinion in favor of litigation. Finally, lawyers heavily fund various purportedly independent "consumer groups" that work in conjunction with media coverage to further drum up public-safety concerns--and directly argue against legal reforms.

  1. Legal academics. The trial bar discovered early on that befriending influential leaders in the legal academy could work to its advantage. The King of Torts Melvin Belli befriended former Harvard Law School dean Roscoe Pound, when the professor was in his 70s. In his later years, Pound had shifted from being a common-law critic to its fiercest advocate, largely because he was skeptical of the New Deal, and "he came to view the common law of tort as a substitute for the bureaucratic state." By 1958, Pound "worried aloud that those pushing for expansive strict product liability were 'not looking squarely at all the facts' and that such a program would have 'consequences beyond the law of torts.' Roscoe Pound, The Ideal Element in Law 340 (1958)." But the damage was done: Pound had penned a "glowing introduction" to Belli's book Modern Trials in 1954, and the trial bar had established a think tank in his name, the Roscoe Pound Civil Justice Institute, in 1956. The organization that bears Pound's name continues to conduct judicial seminars and publish papers supportive of expanded litigation.

    As we note in the K Street report, "The tort bar continues to cultivate relationships with academics who are willing to speak on its behalf." In many cases, professorial apologists for litigation are not the disinterested observers their university affiliations might suggest: "Law professors can [and do] earn hefty sums as 'expert' witnesses by giving an academic seal of approval to mass-litigation settlements, dodgy fee arrangements, and questionable theories of injury." I want to emphasize that I'm not trying to accuse the litigation-industry apologists in the professoriate of venality; most of these law professors are genuine believers in the views they espouse. But the trial-bar regularly levels ad hominem broadsides against its critics: the communications director of the American Association for Justice attacked the K Street report by calling the Manhattan Institute a "front group" for "insurance companies and Wall Street banks." Such attacks are even shallower than they appear when one considers how much money many law professors are getting from their trial-bar ties, often undisclosed: "the same trial bar that attacks any study even partly funded by industry tries to obscure its own role in enriching its ivory-tower advocates."

  2. Media. The trial bar also aggresively works the media to its advantage. Unlike professors, reporters aren't being funneled any money in litigation. But reporters do want to break the next "big story" detailing public danger, which wins them acclaim. For every scare that is legitimate--if often far less dangerous to most consumers than public hysteria would suggest--there are others that are "phantom risks," like breast implants or Bendectin. For the reporter, it matters little if the stories are founded in sound science: they're unable to tell the good from the bad, so they take what the lawyers feed them, uncritically. John Stossel, who won nineteen Emmy Awards as a consumer reporter, details the game:
    This partnership between reporters and trial lawyers is not a good thing, but it's hard for us reporters to resist, because trial lawyers are a perfect source. They do most of the work for us. We don't need to make phone calls to search for victims; the lawyers identify the most telegenic of them, the people whose stories make you cry, and they'll bring them right to our office.

    Then they identify the "bad guy" for us. We don't need to do much original investigating, since the lawyers use their subpoena power to force companies to turn over just about every record they've ever produced. The lawyers usually find some dirt (bet they'd find dirt on you if they got all your papers) and hand it to us. We double-check it, but we're following the lawyers' script.

    These consumer-media reports are reinforced by television and movie scripts that lionize trial lawyers' role in exposing and fighting corporate wrongdoing (think movies like The Rainmaker (1997, with Matt Damon), A Civil Action (1998, with John Travolta), Erin Brockovich (2000, with Julia Roberts), or The Runway Jury (2003, with Dustin Hoffman); or television shows like Ally McBeal, The Practice, and Boston Legal). Although such mythological portrayals do not undo broad public skepticism about our legal system, they do undergird the trial bar's defensive efforts by maintaining the illusion that plaintiffs' lawyers are the last, best, and only reliable protector of a vulnerable public.

  3. Consumer groups. The K Street report also details the symbiotic relationship between the trial lawyers and various "consumer groups" that purport to be independent watchdogs of corporate misbehavior. Some of these groups exist solely to defend tort litigation, like Citizens for Justice and Democracy (which headed by Ralph Nader disciple Joanne Doroshow). But groups with broader missions nevertheless work hard to help the lawyers: "Public Citizen, for example, pushes Trial Lawyers, Inc.'s agenda directly, through its Litigation Group, which fights preemption of tort claims, arbitration clauses, and other issues adverse to the interests of the plaintiffs' bar; and indirectly, through its Health Research Group, which publicly attacks the safety of hundreds of drugs and medical devices that are the bread and butter of the mass-tort bar."

    As the K Street report details, these consumer groups are often heavily funded by trial lawyers: "prominent California plaintiffs' attorney Herb Hafif has said that the trial bar supported Nader 'overtly, covertly, in every way possible.' " Again, I do not mean to suggest that pecuniary interests drive consumer groups' activities--"many of 'Nader's Raiders' and their successors are true believers in their cause"--but the consumer groups can ill-afford to offend their legal benefactors. And the leading consumer advocates' admiration for the trial bar is profound: Ralph Nader has long planned to build an American Museum of Tort Law in his hometown.


The trial bar's public-relations activities blunt public pressure for liability reforms and offer a metanarrative for elected officials who do the tort bar's bidding. Tomorrow, I'll begin to explore just how the tort bar is wielding its political influence, at the state level.

One of the pending cases in five states challenging medical damage caps is Klotz v. Shapiro before the Supreme Court of Missouri. William H. Freivogel, director of the School of Journalism at Southern Illinois University Carbondale, ably describes the case and its Illinois counterpart in the non-profit St. Louis Beacon, "Missouri and Illinois may reconsider medical malpractice caps."

Both the AFL-CIO and the NAACP filed amicus briefs challenging Missouri's caps, making economic arguments -- class-warfare arguments -- that rightly belong in the sphere of politics and policy-making. From the AFL-CIO's brief:

Section 538.210 R.S.Mo., disparately affects the citizens of the State of Missouri that make up the organizations represented by the Missouri AFL-CIO. The noneconomic damages cap has the potential to greatly reduce a verdict given to an individual worker temporarily laid off due to an economic slump in a particular industry. Workers that earn hourly wages are more affected by the non-economic damages cap than workers that earn a salaried wage. The non-economic damages cap protects members of the health care industry from large verdicts based on non-economic damages, while providing no such protection to workers in any other industry.

And, from the NAACP's brief:

Section 538.210 fails both strict scrutiny and rational basis review. It forces minorities, a suspect class, to bear the brunt of the burden of caps. The statute also impedes minorities' fundamental right of access to the courts because their lower economic damages block their legitimate claims. More importantly, Section 538.210's objectives could be accomplished less restrictively and more effectively. As it stands, caps on non-economic damages will not accomplish lower malpractice premiums or increased access to healthcare. Thus, this Court should invalidate Section 538.210 and restore the legal touchstone of fully compensating injured plaintiffs.

Cited in the NAACP's brief is a 2007 paper co-written by a familiar subject here at Point of Law, Joanne Doroshow of the self-styled Center for Justice and Democracy. It's not just specific damage caps, it's the entire tort reform movement that embraces a "racially discriminatory agenda," she and her colleague Amy Widman argue in "The Racial Implications of Tort Reform." Tort reform is also the enemy of civil rights and environmental justice, they contend. Gracious, that's a lot of guilt to bear.

At policyholders' expense - PointOfLaw Forum

The trial lawyers' answer for New York's tanking medical malpractice fund: raise premiums on property, casualty, and health-insurance policyholders to keep the money flowing. At least that's the position attributed in this story to familiar Litigation Lobby figure Joanne Doroshow, whose Center for Justice and Democracy the reporter quaintly labels a "consumer" group despite its eagerness to make blameless consumers pay higher bills in hopes of heading off pressure for litigation reform.

Activist attorneys general are just super! - PointOfLaw Forum

It's a few months old by now, but the report still makes for entertaining reading -- a full-throated defense of activist attorneys general hiring contingency lawyers to sue industry. "State Attorneys General: The People's Champion," comes from the Center for Justice and Democracy, one of the many "consumer" groups financed by the plaintiff's bar. From the news release announcing the report:

In State Attorneys General: The People's Champion, authors Emily Gottlieb and Amy Widman find that state AGs act on behalf of citizens in many diverse areas, including consumer protection, antitrust and utility regulation, and environmental protection. The White Paper delves into many past and current AG lawsuits, including cases where AGs, whose offices may be underfunded and understaffed, work with private outside counsel to accomplish these goals. Outside counsel are hired on contingency at no cost to taxpayers. According to the study, such agreements have been the target of brazen criticism by conservative business groups whose members have often been found liable by state AGs and forced to repay taxpayers millions of dollars.

Gottlieb and Widman write, "When Attorneys General and private attorneys join together, the power of the state is made stronger by the additional resources, manpower and strategic advice provided by private counsel. It increases their access to documents so the state can investigate exactly what was happening behind corporate doors. Also, because the state is involved, it can provide more whistleblower protection to insiders willing to speak the truth about industry misconduct." Moreover, "[S]ettlements and fees are paid for by the wrongdoer, not the taxpayer, and the money is used to cover the costs of the litigation as well as disbursed into public programs related to the lawsuit or funneled back into the Attorney General's office."

All rightee. Walter Olson has written about the group over the years, and Ted Frank* has aptly described CJD as a "trial lawyer front group." It's a 501(c)(3) organization that got out of the lobbying business back in 2006.

*We've updated the post to reflect clearly it was Ted, not Walter, who used the term "trial lawyer front group."

"Front group", nyaah nyaah - PointOfLaw Forum

Allentown, Pa. columnist Paul Carpenter has a bit of fun at the expense of Joanne Doroshow and Laurie Beacham of the misnamed Center for Justice and Democracy, who tend to fling around epithets like "front group" rather freely when criticizing groups that take a point of view different from theirs, such as the Pacific Research Institute.

Set your TiVos; C-SPAN2 will broadcast live the panel that I'm moderating at AEI on the Scruggs and Mississippi AG lawsuits coming out of Katrina, Monday morning at 9:15 am Eastern. There's perhaps $15 billion at stake in the litigation (Sep. 25 and links therein) over the flood exclusion clauses. The speakers will be Robert Klein and Martin Grace of Georgia State University; Adam Scales of Washington and Lee University; and Joanne Doroshow of the Center for Justice & Democracy.

The panel was mentioned by Ron Nessen's Think Tank Town column on washingtonpost.com, which also refers to an Alabama Policy Institute discussion of the litigation. (Gary Palmer, "The Storm After The Storm", Sep. 15).

(Bumped and updated from Sep. 30.)

AEI panel on Katrina insurance lawsuits - PointOfLaw Forum

There's perhaps $15 billion at stake in litigation (Sep. 25 and links therein) over the flood exclusion clauses and their application to damage from Katrina. I'll be moderating a panel discussion Monday morning on the economic and legal issues presented by flood exclusion clauses. The speakers will be Robert Klein and Martin Grace of Georgia State University; Adam Scales of Washington and Lee University; and Joanne Doroshow of the Center for Justice & Democracy. See also Adam Scales, "How Will Homeowners Insurance Litigation After Hurricane Katrina Play Out?", Findlaw, Sep. 19; Kathy Bushouse, "Lawsuits over storm-surge damage put insurance industry on the defensive", Florida Sun-Sentinel, Sep. 27.

Running an insurer, ATLA style - PointOfLaw Forum

Reader Ben Houston writes, regarding Ted's column on how to run an insurance company along Litigation-Lobby-approved lines:

Outstanding article, really enjoyed it. I'm a med mal attorney who has been on both sides of the table, defense now. I would love to represent the underinsured docs of Doroshow Insurance for some cause of action based on the mismanagement of the company (because failure of an insurance company must necessarily result from mismanagement according to ATLA) when some state guaranty fund gets stuck with the inevitable future claims of the failed company.

MALPRACTICE MYTHS - PointOfLaw Columns

By Ted Frank

Opponents of medical malpractice reform make a variety of assertions about the subject in an effort to persuade. But if all of these assertions are true, then trial lawyers are wasting their time lobbying and issuing press releases. They have the power to solve the medical malpractice insurance crisis by themselves�and can make more money doing it.

Joseph B. Treaster�s and Joel Brinkley�s February 22 New York Times article �Behind Those Medical Malpractice Rates� lays out a frequent counter-argument to medical malpractice reform. The medical malpractice insurance crisis, the argument goes, is the fault of the insurance industry. After all, �payments for malpractice claims� haven�t increased as fast as premiums have. (Never mind that those claims statistics omit the amounts that malpractice insurers also have to pay for lawyers and experts to defend against both winning and losing claims�and never mind that the total of all those expenses amounted to $1.375 for every $1.00 of malpractice premiums collected in 2003.) The Times goes on to cite studies that purport to show that caps on non-economic damages in medical malpractice have no effect on insurance rates.

Joanne Doroshow, who is a spokesperson for both Americans for Insurance Reform and its parent Center for Justice and Democracy, two organizations that regularly take the side of trial lawyers, says in one press release that �today�s liability insurance crisis for doctors is not caused by jury verdicts or the legal system. It is driven by the insurance industry�s economic cycle that takes advantage of a weakened economy to price-gouge doctors and make huge profits.� AIR�s web page blames �Poor business practices, shady accounting, money lost in the stock market, not enough profits� and opposes medical malpractice reform in lieu of its proposed eponymous remedy.

Moreover, the New York Times argued in a January 9 editorial ($) that duplicated claims made by Ralph Nader�s Public Citizen, that if the system can be reformed to �weed out the small number of negligent doctors responsible for generating most of the malpractice awards,� the problem will solve itself.

Do trial lawyers believe their own propaganda? I have a modest proposal to find out.

The Association of Trial Lawyers of America, or some other such well-funded trial lawyers� group, should start its own medical malpractice insurance firm. Take some of the billions of dollars won in the tobacco cases, and invest it in offering medical malpractice to the doctors of America. The Sulzbergers, whose family fortunes are suffering with their investment in the New York Times, may wish to chip in as well. If one were to believe the opponents of lawsuit reform, it�s surprising that trial lawyers would want to put their savings anywhere else.

Tort reformers claim that practicing doctors are sued for malpractice indiscriminately. But if it's really true, as Ralph Nader�s Public Citizen claims, that only 5-10% of the doctors are responsible for most or �the bulk� of malpractice, this new insurance firm (let's call it Doroshow Insurance) can undersell other insurers by experience-rating, the practice of using historical data to determine the risk of future claims. Doroshow Insurance will simply offer its lower insurance rates to the other 90-95% of doctors and refuse to ensure the �small number� singled out by the Times. Because this 90-95% will exclude �the bulk� of malpractice claims, Doroshow Insurance and its investors will make even more profits than the �excessive profits� made by the current insurers.

Tort reformers suggest that one way to reduce insurance costs is to cap non-economic damages, where, without caps, only the lawyers� and jury�s imaginations provide a ceiling for pain and suffering awards. But if, as ATLA, AIR, and the New York Times claim, malpractice liability caps do not lower rates, Doroshow Insurance can costlessly promise that it will waive caps for all Doroshow-insured doctors who are sued. If patients care about caps, then this will be a huge marketing advantage for doctors who sign up with Doroshow Insurance. Even if a patient is in a state where lobbying by ATLA and its allies has failed to stop the implementation of caps, those patients can simply choose to have their medical procedures performed by a Doroshow-insured doctor, and avoid caps altogether without changing their jurisdiction. Meanwhile, the non-Doroshow-insured doctors (presumably the ones supposedly causing most of the malpractice) will be driven out of business between facing higher insurance rates and fewer patient visits.

Under this modest proposal of ATLA-sponsored insurance,

  • doctors get cheaper insurance rates;

  • patients both get better health-care and don't have to worry about malpractice caps;

  • lawyers make more money than they ever made before, because they get both the profits from suing doctors and the �huge profits� from running the malpractice insurance industry;

  • and legislators can forget about the malpractice debate and focus on their core mission of investigating Super Bowl halftime shows for indecency.

What a list of winners! Who could possibly be upset by that? Trial lawyers would get the additional benefit that lawsuit-reform advocates would be exposed as charlatans when all that was really needed to solve the malpractice crisis was a trial-lawyer-run insurance industry. The only other losers would be the insurance companies that we're being told are so mismanaged and the small percentage of bad-egg doctors responsible for �the bulk� of malpractice awards.

Indeed, this plan is so profitable, so ingenious, so win-win, that the only reason Trial Lawyers, Inc. could possibly have for rejecting it is if they didn't believe in their own arguments against malpractice reform.

But that couldn't possibly be the case, could it?

Ted Frank is a regular weblog contributor to PointOfLaw.com and an attorney at O'Melveny & Myers in Washington, D.C.

Bob Herbert at it again - PointOfLaw Forum

In today's New York Times, Bob Herbert again trumpets the ATLA line by claiming that President Bush's proposal to prohibit punitive damage against drug companies who had complied with FDA regulations is "both unwarranted and dangerous." (For our previous refutations of Herbert's pro-trial-lawyer claims, see June 22, June 22, June 23, June 28, June 29.) Herbert goes so far as to assert:

[T]he [Bush] administration is like an ardent lover in its zeal to shower the rich and powerful with every imaginable benefit. So tucked like a gleaming diamond in proposed legislation to curb malpractice lawsuits is a provision that would give an unconscionable degree of protection to firms responsible for drugs or medical devices that turn out to be harmful.

Herbert points to Vioxx and Celebrex, and Prozac -- you know, the claim that it increases the likelihood of suicide in teens -- to point to bogeymen that punitive damages would supposedly do a good job of punishing or deterring. He claims, relying on his favorite "consumer" advocate Joanne Doroshow, head of the trial-lawyer-front-group "Center for Justice and Democracy" (check out their site -- the center exists only to support pro-trial-lawyer positions; its backers include Ralph Nader and board members Erin Brockovich and Michael Moore; see Ted's post here on their most recent report): "The whole idea behind punitive damages is to severely punish the most egregious offenders. Huge punitive damage awards are supposed to serve as a deterrent to extremely bad behavior."

But do punitive damages really do that?

ATLA's boast: we shaped press coverage - PointOfLaw Forum

An acquaintance who's a member of the Association of Trial Lawyers of America was kind enough to forward a recent email to supporters from that organization in which ATLA president Todd A. Smith boasts about the lobby's success in getting across its point of view in the press last week during President Bush's well-publicized series of speeches on liability reform. (No online link). Among media "scores" for ATLA: "more than fifteen print stories in national and local media highlighting how caps hurt victims" including articles in the AP/Reuters, St. Louis Post-Dispatch, Washington Post (two of them), with more in the pipeline in Newsday and elsewhere. The letter also speaks of "coordinating efforts" with groups ostensibly representing other than trial lawyer interests, and names a bunch of such groups: old reliables like the Center for Justice and Democracy and Foundation for Taxpayer and Consumer Rights, as well as the up-and-coming Environmental Working Group. Participating in "news conference calls" aimed at the press "were Congresswoman Jan Schakowsky of Illinois, former Missouri Insurance Commissioner Jay Angoff, William McNary of USAction and Citizen Action/Illinois, Doug Heller from the Foundation for Taxpayer and Consumer Rights, Joanne Doroshow from the Center for Justice and Democracy, and an Illinois medical malpractice victim. More than 30 reporters participated in the calls, including ABC, NBC, the New York Times, and the Washington Post."

The New York Times on medical malpractice - PointOfLaw Forum

In yesterday's New York Times, columnist Bob Herbert attacked tort reform as "all about greed." According to Herbert, "[w]hat tort reform will lead to, not surprisingly, is an unwarranted burst of additional profits for the insurance industry, which is why the industry is sinking so much money into its unrelenting campaign for 'reform.'" Herbert repeated the familiar trial lawyer canard that "there is no evidence that soaring malpractice premiums are the result of sharp increases in the amounts of money paid out for malpractice claims."

And the source of information for Herbert's contention? None other than the "Center for Justice and Democracy." Innocently called a "consumer advocacy group" by Herbert, the CJD is a Naderite group (its president, Joanne Doroshow, began working with Nader in 1986), heavily funded by the trial bar, and started with seed money by Michael Moore (yes, that Michael Moore), who remains on the group's board.

Problem is, the CJD's own data refute its claims that the "premium-gouging underwriting practices of the insurance industry have been widely exposed." The very "study" the CJD issued through its subsidiary group, "Americans for Insurance Reform," showed that since 1975, actual liability losses paid by doctors have escalated 1300%, versus a general 500% medical cost inflation, and only a 300% rise in actual premiums written per doctor. The result, of course, is that the paid-loss ratio -- the percentage of insurance premiums going to cover tort losses -- escalated from about 25% in 1975 to about 80% today. (CJD either doesn't understand its own data, or it deliberately misrepresents them. For more thoughts on the weakness of the CJD's claim that medical malpractice insurance rate increases are not linked to rising tort costs, see Ted Frank's earlier commentaries here and here.)

The medical malpractice insurance industry, therefore, has been a decidedly unprofitable business. In 2001, the country's biggest malpractice insurer, the St. Paul Companies, exited the business entirely after incurring nearly $1 billion in losses. In Pennsylvania, one of 20 states with out-of-control rates, only two malpractice insurers remain, down from ten only five years ago. In Mississippi, at least 15 insurers have exited the market since 1997.

In this environment, the majority of doctors today are insured through mutual insurance companies -- i.e., those owned by the doctors themselves. In other words, if the doctors' malpractice insurance rate hikes were "all about greed," it would be a peculiar greed indeed, since the doctors themselves control most the companies through which they are insured.

Herbert's column would be amusing were its implications not so deadly serious. Faced with potential bogus "botched delivery" suits, many obstetricians are limiting their practices to gynecology, forcing women in some areas to travel hours for prenatal care and delivery. High-risk specialists such as neurosurgeons are exiting some parts of the country entirely, meaning that stroke patients and head- and spinal-trauma victims have to be helicoptered to neighboring states.

Americans potentially have access to the best health care in the history of the world, but that health care is being threatened by a system that is reducing their access to care through a random and haphazard system of law. Of course, in medicine, mistakes happen, and some of those are due to doctor negligence. A system of deterring those mistakes, and compensating the victims of negligent mistakes, is extremely important. But that's not what our system is doing; our system is broken and it needs to be fixed. Instead of pointing a finger at the insurance industry, we should be thinking about solutions to the problem.

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