New Report Unearths ‘Trial Lawyer Underground’

Lawsuit Industry’s ‘Largely Unreported’ Lobbying Success with

Obama Administration Detailed 

WASHINGTON, D.C., September 30, 2015 – Hoping to inspire Congress, 2016 presidential candidates and the media to pay closer attention to the lawsuit industry’s extraordinary access to and influence with Obama administration regulators, the American Tort Reform Association and the U.S. Chamber’s Institute for Legal Reform today released “The Trial Lawyer Underground: Covertly Lobbying the Executive Branch,” a report documenting a nearly seven-year expansion of civil liability at the expense of investment, innovation and economic competitiveness.

“In defense of lawmakers and candidates,” began ATRA president Tiger Joyce, “the media have left largely unreported many stories about how the trial lawyers, represented primarily by the American Association for Justice (AAJ), quickly became and remain the most special of special interests in the eyes of the current administration.

“Even when an FDA official grudgingly admitted to a House subcommittee last year that AAJ lobbyists were the only ones to meet directly with the agency before it proposed a dramatic rule-change, most media ignored the story,” Joyce continued.  “The rule change was designed to sidestep Congress and overturn a Supreme Court decision by altering longstanding authority for warning labels on generic drugs in order to generate a new tsunami of class action lawsuits that could enrich trial lawyers and cost consumers an estimated $4 billion annually.

“So, believing that trial lawyer influence warrants greater scrutiny and that those seeking to serve as our next president should better understand the problems posed by such influence, ATRA teamed up with our allies at the ILR to do some research and reporting of our own.  Our new report details many instances when lawsuit industry lobbyists have quietly sought and often secured administration support for their liability-expanding agenda.”

Joyce noted that, even before President Obama was sworn in, the “trial lawyer underground” had sent his transition team a detailed request to limit the so-called preemption of often lucrative state tort lawsuits by various federal health and safety regulations.  And just four months later, the president issued an Executive Memorandum to agency heads cautioning them against asserting or even discussing the preemptive effect of regulations, unless an existing regulation expressly included preemption language.  The memo also ordered agencies to review such regulations and reconsider any preemption language.

“Among the most disconcerting of such reconsiderations and deletions of preemption language,” Joyce said, “were two in 2009 by the National Highway Transportation Safety Administration.  Both dangerously invited lay judges and juries in state courts to second-guess federal experts’ standards for automobile roof strength and seatbelt counts.  Thus public safety was forced to take a backseat to trial lawyers’ desire to file more lawsuits.”

More recently, AAJ lobbyists have failed with Congress and so have turned to executive branch allies in seeking bans on litigation-reducing arbitration clauses in various consumer and employment contracts.  Last year the White House issued the Fair Pay and Safe Workplaces Executive Order prohibiting federal contractors from using arbitration to resolve employment disputes. And earlier this year, with much input from AAJ and allied groups, the aforementioned CFPB issued an anti-arbitration study, laying the ground work for a just announced rulemaking that is expected to restrict or ban altogether arbitration clauses in consumer financial contracts.

“Our ‘Underground’ report also unearths a still-simmering plan for a billion-dollar trial-lawyer tax break, a wealthy asbestos lawyer’s successful request for the withdrawal of a rule requiring reimbursements for federal healthcare expenditures from his colleagues and their clients, agencies willfully turning a deaf ear to judges’ pleas for regulatory clarifications that could help ease clogged court dockets, and other litigation-promoting machinations,” added Joyce.

“Visitor logs indicate that AAJ lobbyists and retained counsel have visited the White House at least 80 times during the Obama administration.  And certainly trial lawyers have as much right as anyone else to petition their government.  But Congress, candidates for office and the media should more vigilantly keep tabs on such extraordinary influence; and the next president, regardless of party, should plainly understand that wins for the lawsuit industry typically result in losses for jobseekers, consumers, patients and taxpayers,” Joyce concluded.

-ATRA-

The American Tort Reform Association, based in Washington, D.C., is the only national organization dedicated exclusively to tort and liability reform through public education and the enactment of legislation.  Its members include nonprofit organizations and small and large companies, as well as trade, business and professional associations at the state and national levels.