“T” for “Texas”…”T” for “Tort Reform”
“It’s about creating jobs versus lining trial lawyers’ pockets.” – The Rick Perry Campaign
Trial lawyers prep for war on Perry
By: Alexander Burns – Politico – 08/22/2011
America’s trial lawyers are getting ready to make the case against one of their biggest targets in years: Texas Gov. Rick Perry.
Among litigators, there is no presidential candidate who inspires the same level of hatred — and fear — as Perry, an avowed opponent of the plaintiffs’ bar who has presided over several rounds of tort reform as governor.
And if Perry ends up as the Republican nominee for president, deep-pocketed trial lawyers intend to play a central role in the campaign to defeat him.
That’s a potential financial boon to a president who has unsettled trial lawyers with his own rhetorical gestures in the direction of tort reform. A general election pitting Barack Obama and Perry could turn otherwise apathetic trial lawyers into a phalanx of pro-Obama bundlers and super PAC donors.
“If this guy emerges, if he’s a serious candidate, if he doesn’t blow up in the next couple weeks, it’s going to motivate many in the plaintiffs’ bar to dig deeper to support President Obama,” said Sean Coffey, a former securities litigator who ran for attorney general of New York last year. “That will end up driving a lot of money to the Democratic side.”
Some attorneys don’t intend to wait and see how Perry fares in the GOP primaries.
Democratic Houston trial lawyer Steve Mostyn — who, along with his wife, Amber, donated nearly $9 million to Texas candidates and party committees in the 2010 cycle — said he’s in the process of forming “some federal PACs” to take on Perry. That will likely include a federal super PAC that could take in the kind of massive donations that are permitted in Texas.
Mostyn said his political spending wouldn’t just center on the trial lawyers’ agenda.
“The legal issues are important and near and dear to my heart,” Mostyn told POLITICO. “But more important is the myth that we’re doing great down here when we’re not. We’re falling behind the rest of the country, and the country is falling behind the rest of the world.”
But the “legal issues,” as Mostyn calls them, are far more than incidental to the hostile relationship between Perry and trial attorneys.
The governor has pushed through a string of tort reform laws, including a 2003 measure putting a monetary cap on non-economic damage awards. He passed another law in the most recent Texas legislative session, making it easier to dismiss some lawsuits and putting plaintiffs on the hook for legal costs in certain cases that are defeated or dismissed.
The campaign for tort reform in Texas began in the 1990s, well before Perry was governor, but the Republican can legitimately claim some credit for the results. It’s a story Perry proudly tells on the stump, casting himself as the man who mastered a legal system run amok and made Texas friendlier for business.
He lists tort reform among the core economic proposals of his presidential campaign and mentioned it in his announcement speech. On a Friday visit to a Florence, S.C., hospital, Perry recalled that “back in the ’80s and ’90s, Texas was a very litigious state,” but now: “We passed the most sweeping tort reform in 2003 and it still is the model in the nation.”
John Coale, a former trial lawyer who has donated tens of thousands of dollars to Democrats over the years, agreed that Texas had once been the “golden goose” for plaintiffs’ attorneys.
“Now, the pendulum has swung in the other direction, where it’s a very bad place now,” Coale said.
“If Perry’s the nominee, the trial lawyers will come out of the woodwork to support Obama, where I don’t know that they would now,” he predicted. “Most of the guys I know don’t like [Obama], think he’s screwed up the economy or taken Bush’s bad economy and made it worse. But when your livelihood, your money’s on the line, it concentrates the mind.”
While trial lawyers are more influential in state politics than federal or presidential politics, they have a potentially enormous well of money at their disposal if they decide to mobilize. The American Association for Justice — formerly known as the American Trial Lawyers Association — has given about $34 million to candidates since 1990, according to the Center for Responsive Politics. Eighty-nine percent of that money has gone to Democrats.
The trial lawyer community last engaged on a grand scale with presidential politics in 2004, when John Edwards — himself a former trial lawyer — ran for president. The top employers to contribute to his campaign included numerous plaintiffs’ law firms. Near the top of the list was the Texas-based outfit Baron & Budd, led by the late Fred Baron, who chaired Edwards’s campaign and ultimately ended up at the center of the former North Carolina senator’s campaign finance scandal.
As strongly as trial lawyers backed Edwards in 2004, their involvement in 2012 could be even more intense as they mobilize against Perry. And the governor’s campaign knows it.
Perry spokesman Mark Miner said the campaign was fully prepared to engage a fight with trial attorneys on a national level, saying plaintiffs’ lawyers “feed off the system” and inhibit job creation.
“Of course they’re going to scream and shout when they feel that someone like Gov. Perry is standing in the way of them lining their pockets,” Miner said. “They’ve been active through all the governor’s races, to no effect. Steve Mostyn has poured millions of dollars into campaigns against the governor for nothing.”
There are also interest groups that favor tort reform that could back up Perry in the presidential race, including pro-business organizations like Americans for Job Security, which counts Perry adviser Dave Carney among its co-founders.
AJS president Stephen DeMaura noted that the group spent money advocating for the most recent round of Texas tort reform, and might be prepared to lay out money in the presidential race.
“If the trial lawyers decide to take this as a national issue,” he said, “anything is possible.”
Trial attorneys outside Texas said it’s still too early to predict exactly what form their involvement with the 2012 race would take. But the lawyers who spoke to POLITICO who were acquainted with Perry’s record in Texas were vehemently critical.
C. Gibson Vance, a former president of the Alabama Association for Justice, a trial lawyers’ group, said the plaintiffs’ bar would “absolutely” sit up and take notice of a Perry nomination.
“It’s clear from Gov. Perry’s record in Texas and the early part of his campaign that he is not a friend of the civil justice system,” Vance said. “It would be very difficult, in my opinion, for a trial lawyer to support such a candidate.”
Dallas attorney Mary Alice McLarty, the incoming president of the American Association for Justice, vowed: “I hope he doesn’t get the nomination, but I will support candidates against him.”
“Lawyers around the country would feel that the Seventh Amendment and other states’ rights would be on the table,” she said, referring to the constitutional right to a trial by jury.
Perry has been vague about exactly what kind of tort reform he’d like to see on the federal level, and said he wouldn’t want to impinge on states’ rights. Trial lawyers aren’t so sure that Perry would hold back if given the opportunity to attack their profession on a grand scale.
Though the immediate interest for trial lawyers would be halting tort reform — and one of its most prominent champions — on the national stage, attorneys familiar with Perry’s Texas record also say that his struggle with the legal system could be an effective lens for portraying the governor as a tool of corporate interests.
Even as trial lawyers have donated generously to Texas Democrats, Perry has received ample support from insurance companies, builders and other business groups that have much to gain from limiting high-dollar litigation.
South Carolina Democratic Party Chair Dick Harpootlian, a Columbia-based trial lawyer, said the Texas tort reform wars “show where [Perry’s] loyalty lies: with the big corporations and the insurance companies.”
“He has done everything in his power to make sure that an individual who is wronged by a big corporation or an insurance company can’t go to court, can’t afford to go to court,” Harpootlian said. “Corporations don’t locate to Texas because of tort reform, because of this idea that they won’t be sued. They locate to Texas because … labor is cheap and Rick Perry’s not doing anything to protect the average working men and women.”
And California trial lawyer Joe Cotchett alleged some hypocrisy in Perry’s record, saying that while the governor has “a habit of publicly attacking the courts,” he has fewer compunctions about using lawsuits to “flood the courts with attacks on gun control laws, environmental protection laws, safety laws and attacks on the SEC [Securities and Exchange Commission] to loosen restrictions on Wall Street.”
It’s easy to imagine any of those lines becoming part of a national campaign against Perry. His own team, however, sees the issue in simpler terms.
Said Miner, the Perry spokesman: “It’s about creating jobs versus lining trial lawyers’ pockets.”