TomPaine
May 8, 2001
By Michael King

"How would any of you put a dollar figure on your child? When anyone brings up money, it hurts so much -- because I would give everything I own to have my daughter back. ... You can't begin to put a dollar figure on a human life. But it's the only way it seems like, in our system in America, you get any accountability."

— Evelyn El-Misnad, mother of a victim of a
fatal Ford Explorer/Firestone rollover

Citizens charmed by George W. Bush's approach to economics (them that has gets, the rest can form a line) or the environment (smoke gets in your eyes, arsenic in your water) should be equally engaged by the former Texas governor's approach to "reforming" the legal system: never trust a jury.

Thus far the president has been preoccupied with tax cuts for the rich, budget-slashing for the rest, playing chicken with China and clear-cutting annoying environmental laws obstructing the backroads of profit. But he has hardly shown his hand on "tort reform" -- the misleading, legalistic term used to describe a decade-long, state- and federal-level legislative assault on the civil justice system. The assault's goal: making it more difficult for the courts and the public to hold corporate malefactors accountable for their misdeeds.

Bush hasn't said much about tort reform since entering the Oval Office, but throughout his presidential campaign he proudly took credit for curbing "junk lawsuits" in Texas. And he's used other phrases from the tort reformers' code book, talking about protecting employers from "unnecessary and frivolous lawsuits" and capping lawsuit damage awards to discourage "excessive" litigation.

These are clues to the coming battle in Congress over tort reform. Expect the Bush administration to promote the cause of its corporate sponsors, who are frank about their intentions: insulating manufacturers and sellers from liability for defective products; restricting or "federalizing" class action suits, thereby reducing or delaying judgments; minimizing or eliminating joint and several liability, making it easier to shield corporate defendants from financial sanction; restricting injured parties' medical claims to standards written by industry; and capping lawsuit damages at levels that make it cost-effective for corporations to persist in wrongful conduct while avoiding financial liability.

These are the long-term goals of the tort reform movement, which is composed of corporate trade associations and ideological think tanks, including the Chemical Manufacturers Association, the National Association of Manufacturers, the U.S. Chamber of Commerce, and Citizens for a Sound Economy. Bush advanced their goals in Texas, and according to Joan Mulhern, legislative counsel with Earthjustice Legal Defense Fund, bills addressing all these issues are now taking shape in Congress. She says the primary question appears to be whether the administration will move "piecemeal, with a death by 1,000 cuts," or try to get "the whole enchilada" by putting together an omnibus bill on tort reform. Either way -- and the business lobby is apparently divided on which is the best strategy -- Bush is hoping to replicate in D.C. what he accomplished in Austin.

Target: Juries

Bush touts himself as "tough enough to take on the trial bar," and the rhetoric of tort reform reflexively attacks "trial lawyers" as the source of all the problems of "lawsuit abuse." That's an easy PR strategy: "trial lawyers" as the contemporary, tassel-loafered equivalent of horse-thieves. But the true target of tort reform is not the bar, but juries -- and their constitutionally-based discretion in weighing alleged wrongdoing and assessing compensatory and punitive damages.

"The jury is the last line of defense against corporate misconduct," says Craig McDonald, director of the Austin-based public interest group Texans for Public Justice, which monitors the influence of money on politics and the courts. "The corporations are most afraid of 12 people they can't control."

Indeed, it is the fear of punitive damage awards by juries that has traditionally inhibited corporate misconduct. Corporate PACs and lobbyists have already severely weakened the public counterbalance provided by legislators, regulators, and judges, says McDonald, leaving only the independent juries. But unlike regulators, legislators or judges, juries can't readily be intimidated, lobbied, elected or bought, McDonald says, so they have to be gotten out of the way by other means -- "tort reform."

McDonald rejects the notion that only plaintiffs' lawyers, because of their direct financial interests, object to tort reform.

"All of us, consumers, workers, citizens, also have a strong interest in a strong civil justice system," McDonald says. "We're very glad the trial lawyers have a financial incentive as well. There are very few financial incentives to pursue justice in this society."

Joanne Doroshow, executive director of the nonprofit Center for Justice and Democracy, agrees. "Lawsuits are a way to discipline corporate misconduct, and if you weaken the system, you're going to have corporate abuses."

Taking on Torts in Texas

George W. Bush didn't invent tort reform, but its promoters have been and remain among his most important political sponsors. When he became Governor of Texas in 1995, he emerged from a meeting with tort reformers and declared "reforming the civil justice system" a legislative emergency.

The corporate lobby, alarmed by what it considered "plaintiff-friendly" Texas courts awarding large personal injury judgments against major corporations, had organized several tort reform PACs and advocacy groups. These groups underwrote corporate-friendly candidates and pressured the Legislature to limit both corporate liability and citizen access to the courts. Governor Bush weighed in behind the scenes at the Legislature, while publicly denouncing the "junk lawsuits" supposedly clogging Texas courts -- although independent observers say the number of tort-related lawsuits in the state were unremarkable by national standards. Bush eventually signed into law seven major bills codifying much of the tort reformers' agenda: capping punitive damages while simultaneously raising standards of proof; limiting the liability of multiple defendants; limiting medical malpractice lawsuits; and restricting the definitions of corporate "negligence" so that an injured worker or consumer, in order to receive punitive damages, virtually must prove he or she was willfully and intentionally injured by a particular corporate executive.

The Texas tort reformers succeeded. All told, these "reforms" add up to less legal protection for ordinary citizens versus corporations. Texans for Lawsuit Reform (TLR), a lobby group sustained by a small group of major corporate underwriters who also contribute heavily to state political campaigns, proclaims that "balance" has been restored to the Texas civil justice system. Ralph Wayne, of the Texas Civil Justice League (TCJL), whose advisory board is both a short list of the major economic players in Texas and a handy reference guide to major donors who fund Bush campaigns), is equally delighted with the changes, and gives George Bush much credit for the transformation. "On a scale of 1 to 10," Wayne told the New York Times, "he's a 10." (According to Texans for Public Justice, these two leading tort reform organizations and their members gave Bush more than $4 million -- 10.6 percent of his total -- for his two gubernatorial campaigns.)

Ordinary citizens are less enthusiastic, especially those injured by corporations who have sought redress in the Texas courts. The most notorious results have been in the reduction of large damage awards in lawsuits over death or major injuries, but Dan Lambe of the consumer group Texas Watch says that even ordinary automobile claim settlements have been reduced or made more difficult.

"For the average Texan, it means when you get in a fender-bender, and simply have to get a claim filled, it's more difficult to get a fair offer," Lambe said. "Where you've got $3,000 in medical expenses, they offer $2,500, just because they can. The insurers know that the law is on their side now."

Among numerous other corporate-friendly changes, recent Texas laws capped punitive damages at no more than twice actual damages plus $750,000, and radically limited the liability of those only "partly" responsible for an injury -- even if a jury finds that the injury would not have occurred without that party's action (or inaction). With Bush's enthusiastic encouragement, the Texas Legislature went a long way toward removing the courts and juries from the accountability process -- with predictable and often devastating results.

The Fallout

Tort reform in Texas has made it much more difficult for injured workers or their families to receive adequate compensation from employers; it has diminished the potential liability of manufacturers who knowingly sell defective products; and it has undermined the jury system by discouraging reasonable lawsuits and setting arbitrary and unrealistic limits on damage awards, even in egregious cases.

Last December, for example, a Houston jury awarded over $117 million to the family of Juan Martinez Jr., a worker killed in a 1999 explosion at a Chevron Phillips Chemical Company plant in nearby Pasadena -- $7.85 million in actual damages and $110 million in punitive damages. The plant had a poor safety record, including numerous fines for violations of federal regulations, and there were other explosions both before and after the one that killed Martinez and his uncle. Reviewing the evidence, the jury found the company had acted with both negligence and malice.

Yet because the jury could not also conclude that the company "knowingly and intentionally" caused Martinez's death (an effectively impossible standard to meet), Texas tort law required that the punitive damages be reduced to as little as $3.2 million -- hardly an incentive for the company to spend additional sums on safety precautions. Indeed, one of the jurors, Michael McCarthy, told the New York Times that considering the plant's repeated similar accidents and numerous fatalities, the jurors had concluded only a large damage award would force the company to mend its ways. Then the judge informed the jury that the damages would almost certainly be radically reduced. "I felt betrayed," McCarthy told the Times. "You think you've done a good service to the community and then you find out all your work has come to nothing."

In a similar case two years earlier, a San Antonio jury awarded $42.5 million to the widow of a worker killed in an explosion at a Diamond Shamrock refinery in Amarillo. The jury was convinced that the company knew its equipment was unsafe but had ignored the problem, juror Wilda Hosch told the Dallas Morning News.

"We felt the verdict appropriately punished this company," Hosch said. "We wanted to get their attention." Diamond Shamrock, which appealed the verdict, is unlikely to heed the warning: Texas law caps the company's damages at $200,000.

As in the Chevron Phillips case, jurors in the Diamond Shamrock case -- who were not allowed to know about the statutory damage caps in advance of their deliberations -- complained that their time and work had been wasted and that the caps make a mockery of justice. Said Hosch, "$200,000 is nothing to these guys."

Second Thoughts

The tort reformers insist that such cases are exceptional, and that Texas law adequately protects consumers and workers from irresponsible or criminal companies. But Texas lawmakers are no longer quite so certain.

During the 2001 session they have considered at least one bill that would allow exceptions to the punitive damage caps in product liability cases -- if the company knows of serious risks to public health and safety connected to its product prior to the injury and yet "knowingly and intentionally" keeps that information secret. The bill's sponsor, Houston Democrat Fred Bosse (who still supports tort reform) said he has developed the legislation over several years. But in a March hearing before a House committee, members and witnesses alike made it clear that the recent headline history of Ford Explorers using Bridgestone/Firestone tires was very much present in their considerations. His bill, said Bosse, is designed to capture only "the worst of the worst" corporate actors.

Many of the more than 150 victims of the Ford/Firestone debacle were Texans, and several of them (or their survivors) came to Austin to tell their stories. They pointed out that because of numerous consumer complaints, Firestone knew of the defects in its tires as early as 1989, and yet continued to market the tires. When the inevitable accidents generated lawsuits, Firestone made settlements conditional on confidentiality agreements that successfully prevented consumers (or potential plaintiffs) from being aware they might be purchasing defective tires. Corpus Christi attorney Mikal Watts told the committee that plaintiffs' lawyers had essentially been forced to choose their obligation to their clients over their responsibility to the public. Witness after witness testified, "If I had only known then what I know now, I would not be standing here today." According to a recent report by Public Citizen, "Not only do such arrangements force every consumer injured by the same product to build their case against the corporation from scratch, they also prevent regulatory agencies, the media and the public from learning about dangerous or hazardous products." (Advocates are now fighting to ban such confidentiality agreements, notably in California.)

Donna Bailey, the plaintiff who forced an historic public apology from Ford and Bridgestone executives, testified by videotape -- she was made a quadriplegic by her accident and breaths only with the help of a respirator. She told the committee it is "immoral and criminal to sell a product that you know is dangerous." She said that if Bosse's bill does not pass, "We will be telling corporations they can get away with endangering Texas families." Dawn Fuhrman of San Antonio, whose daughter Ashley died in a rollover accident in March of last year, said, "We teach our children to take responsibility, and that's what we want these companies to do." George Blossey, whose wife was severely injured and 11-year-old daughter killed in an Explorer rollover, said that corporations must be "held responsible, so that they will have to disclose when there are major problems with their products -- because human life will be held above monetary gain."

One of the particular cruelties of current Texas tort law is its effect upon the families of children killed outright in accidents, who therefore have no medical expenses and no established earnings. Since they represent no "actual damages," the law states that the companies are not liable for punitive damages to their survivors, beyond the statutory $750,000.

"They told me that my son wasn't worth anything," said Vickie Hendricks, "because he had not established a career, and there was no way to show that he had any compensation coming. Well, I disagree with that very strongly, because my son was worth more than any money that Firestone or Ford could ever make."

Mikal Watts says that Texas tort reform under Bush has effectively removed any economic incentive for corporations to "do the right thing." "If the choice is recalling a defective product, which might cost them billions," Watts said, "or allowing those products to continue to be sold at a risk of only $750,000 in punitive damages, the choice is obvious." (Significantly, the figure President Bush cites as an ideal punitive damage limit under federal tort reform is $750,000.) Watts says he has sat across the table from Firestone attorneys speaking to mothers who have lost children, and heard them say, "'Yeah, we know that we're at fault, but we're capped at $750,000 in punitive damages.'" As Watts sees it, "Tort reform in Texas has effectively immunized companies like Firestone from any meaningful responsibility for their tortious conduct."

Indeed, Evelyn El-Misnad, whose daughter died in a rollover accident, made it clear that even monetary damages are hardly proportionate to her loss. "In my mind, it was premeditated mass murder, because of the knowledge they had that they kept hidden -- and in my mind it was criminal conduct, and people should be held accountable. I don't see anybody going to jail."

Bosse's bill would do nothing to help these victims, but all said they testified to help protect others in the future. Alan Waldrop, of the corporate lobby group Texans for Lawsuit Reform, was unimpressed. He testified that the new bill was simply a disingenuous attempt to "roll back tort reform," and that if enacted it would require even the sellers of apples or sharpened pencils to be liable for not informing consumers of every possible risk associated with their products.

"This bill is so broad," said Waldrop, "that as it casts its net for the guilty, it will capture the innocent as well. ... We have laws," he argued, "that are designed to apply to the people who are at fault."

Waldrop could not explain how current Texas law had allowed Firestone and Ford to persist in their negligent behavior for so long. Not even he disputed that the Ford/Firestone case exemplified "the worst of the worst" -- yet nobody seemed to find it remarkable that two huge and well-known corporations would engage in such conduct in the ordinary course of business.

In his closing statement to the committee, Bosse said "It is ironic that in this state, for an individual who murders somebody for profit, or who would go out and hold up a store and then murder all the witnesses, we prescribe the most severe punishment known to man. All this bill does is place a monetary penalty against corporations that engage in this same type of conduct."

In late April, with a month left in the session, legislative sources reported that Bosse's bill will die in committee. According to a legislative aide close to the committee, Texans for Lawsuit Reform followed its public testimony by promoting an aggressive fax and e-mail campaign from state businesses, denouncing the legislation as an attempt to "roll back tort reform."

Mr. Bush Goes to Washington

The considerable success of the tort reformers in Texas and in other states hasn't yet been matched in the U.S. capital. According to Rachel Weintraub, staff attorney for the U.S. Public Interest Research Group, previous attempts at tort reform along Texas lines have passed the House but not reached the Senate floor -- and the electoral losses of such high-profile advocates as John Ashcroft and Spencer Abraham, among others, may make the road there more difficult. But Ashcroft and Abraham are both now in the Bush Cabinet, the corporate lobby is eager to test the extent of the Bush victory, and the president has made it clear he will take up the issue. Further encouragement comes from, among others, the tobacco and chemical industries, both big Bush campaign contributors that fear class-action lawsuits against them and their hazardous products.

Congress Daily reported April 11 that Representatives Asa Hutchinson, R-Ark., and Tim Holden, D-Pa., will soon introduce a bill similar to one which died last year -- limiting defective product liability and setting caps on punitive damages. Senators Mitch McConnell, R-Ky., and Joe Lieberman, D-Conn., are expected to carry the bill in the Senate. USPIRG's Weintraub says such a law would effectively shift risks and harm from producers and sellers to consumers, yet it is not surprising to find both Democrat and Republicans supporting it. "It's a matter of ideology, and whether they're prioritizing the rights of corporations over the rights of consumers and ordinary citizens."

Before Congress rushes to the aid of distressed corporations, they might well consider the experience of Texans subject to such dubious "reforms." As Evelyn El-Misnad, whose daughter died in a Ford/Firestone rollover, told legislators, "Even though I don't live in Texas now, my son still does, and I care about the people of Texas. I would like to be proud to be an American, but it's very difficult, knowing that it's the greed and corruption of an American corporation that brings me here today. ...

"I'm sure you feel my pain and grief," concluded El-Misnad. "I don't want anyone else to be part of my club, the Death Club -- it's not a very nice place to be. I hope to God this doesn't happen to anyone in the future."