With Democrats in control, trial lobby makes headway

The trial bar, on the defensive when Republicans ran Congress, is moving to make up lost ground on a variety of fronts now that Democrats are in charge, including through a bill-by-bill campaign to keep federal agencies from overriding tougher state consumer protection laws.

The bar’s main lobbying group, the American Association of Justice, formerly known as the Association of Trial Lawyers of America, has already had some successes this year in its effort to block what’s referred to as federal regulatory preemption.

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The ascension of Democrats in Congress, who receive more than 90 percent of AAJ’s political donations, could reverse fortunes for the trial bar, which has spent recent years fighting off efforts backed by business groups to cap damage payments, change medical malpractice rules and pass an asbestos reform bill that would limit plaintiff awards.

Since the midterm elections, AAJ has been able to be “much more proactive,” said Linda Lipsen, who directs lobbying for the group.

AAJ lobbied, for example, for the inclusion of language on a recently passed FDA drug bill that requires drug makers to update product labels if the company becomes aware of new safety information.

The trade group supported that effort after the FDA moved to protect drug makers from lawsuits even if the company failed to warn doctors and patients of a drug’s dangers so long as the label met minimum federal standards, according to the AAJ. It is still fighting that rule at the agency.

Trial lawyers also were part of an effort to convince Congress to reassert that railroad safety standards set by the Federal Rail Safety Act do nothing to preempt state negligence laws. The AAJ is also hopeful Congress will prohibit the Homeland Security Department from issuing rules that preempt tougher state chemical plant security laws.

The Bush administration has sought to subvert state laws, which often go beyond federal standards, in more than 80 rulemaking efforts, Lipsen said.

 “The Bush White House can’t get garden-variety tort reform through Congress so it’s trying to do it in a very stealthy way through rulemaking,” Lipsen said.

On the other side of the debate are business lobbies like the Institute for Legal Reform, a branch of the U.S. Chamber of Commerce, that have appealed to the administration for clarity in consumer protection laws.

Larry Akey, executive director for communications for the Institute, said that federal preemptions ensure that there is one set of rules for businesses to follow.

Akey called AAJ’s efforts a “broad-based assault on preemption” that would mean higher prices for consumer products if successful.

In some instances, legal precedent could be on businesses side. The FDA, for example, has almost total authority to regulate drugs and medical devices, courts have found.

State legislators, though, have complained about federal preemption efforts too in certain areas. The National Conference for State Legislatures, for example, issued a statement last year calling preemption efforts, a “disturbing and growing trend.”

The group pointed specifically to a proposed rule on “automobile roof crush safety” issued by the National Highway Traffic Safety Administration. The legislators and the AAJ say the rule sets too low a standard and would block consumers from suing manufacturers based on tougher state rules.

While the issue is still under review at NHTSA, AAJ is pressing Congress to issue language clarifying that the final rule should not preempt state laws.

Outgoing administrations usually adopt a host of new regulations in their final months. Federal rulemaking offers an easier way to leave a legacy than pushing bills through Congress, particularly one controlled by the opposing political party.

The administration, however, has had at least one big tort reform success on Capitol Hill. Two years ago, Congress passed a bill that restricts class-action lawsuits. The Class Action Fairness Act of 2005 shifted most class-action suits from state to federal courts, an effort designed to prevent “jurisdiction shopping” whereby trial lawyers sought judges more likely to look favorably on their arguments.

Akey said AAJ had lobbied aggressively against the measure, although Lipsen disputes the contention that passage of the bill represented a significant loss to the trial lobby.

In addition to fighting federal preemption, AAJ also backs a bill introduced on Wednesday that would allow judges to release to the public vital health and safety information uncovered in court proceedings. AAJ contends that the information is sometimes blocked from public view by sealed settlement agreements.

AAJ is also supporting a bill that would allow consumers to take certain disputes that now are automatically directed to an arbitration panel to the court system.

The Arbitration Fairness Act of 2007 was the subject of a Senate Judiciary Committee hearing on Wednesday. Sen. Patrick Leahy (D-Vt.), committee chairman and a cosponsor of the bill, said the legislation protects consumers “by requiring that agreements to arbitrate employment, consumer, franchise, or civil rights disputes be made after the dispute has arisen.”

“Such timing would ensure the voluntariness of the decision to waive the constitutional right to a jury trial and go to arbitration,” Leahy said.

But Akey said if the bill passes the biggest winners would be lawyers who have built their business plans around bringing cases to court rather than achieving results that are “fair and just” for their clients.

Supporters of arbitration say the system provides a lower-cost, speedier resolution of disputes.
 Lipsen said the AAJ’s renewed focus boils down to providing additional protections to individuals wronged by powerful businesses.

“You can’t tell a major corporation to go to its room when it has been bad. You have to hit them where it hurts, and that’s in their bottom line,” Lipsen said.