The Lawyer Issue
The Wall Street Journal
October 17, 2000
John Abraham
Around the world we've seen how government can be perverted into an instrument of kleptocracy. To be decided in our Presidential election this year may be the very important question of whether it will happen here.
"Kleptocracy" is not too strong a word if you believe our tort system should be a means of compensating the truly wronged and not a means of transferring large amounts of wealth to those who are adept at manipulating the levers. What exactly distinguishes the 1998 tobacco settlement, which created a de facto cigarette cartel and spread the proceeds among politicians and lawyers, and Tommy Suharto's clove cigarette monopoly when his father was running Indonesia? Functionally, nothing except our confidence that, when such things happen here, it must somehow be different because we operate under a rule of law.
Maybe this election is a good time to re-examine that confidence. The Founding Fathers gave us a mechanism for imposing excise taxes and it wasn't lawsuits. But there's a larger story. The vast legal fees generated by the tobacco settlement are to be paid over time, $500 million a year, for decades to come. Realistically, some of this money will be kicked back to the politicians to make sure nothing interrupts the flow. The five attorneys who handled Texas's tobacco case have donated $4 million to the Democrats, and they're just the tip of the contributions iceberg. Nationally, the legal buccaneers, a deep-pocketed constituency of a few thousand, will soon surpass organized labor, a constituency of millions, as the party's top bankroller.
To imagine that tobacco was going to be the end of it was always an illusion. A new power has been born, the plaintiffs' lawyer power, and it must constantly seek to relegitimize itself.
The tobacco money has been put to work to target new industries, like lead paint, HMOs and the pharmaceuticals. In the latest issue of American Lawyer, Joe Rice, whose South Carolina firm is in line for untold millions, makes clear the lawyers won't take their fortune and just go away: Resting on a fat cushion of tobacco money, he says, "We can be more aggressive." Last week came news that the notorious strike-suit firm Milberg Weiss would ally itself with a New York law firm famous for job-discrimination suits.
The tobacco windfall happened so quickly that the Democratic Party as led by Bill Clinton and Al Gore is only now trying to catch up by fashioning an ideological rationale for its role as the party of lawyer protection. Since their dependence on lawsuit money has become harder not to talk about, DNC mouthpieces have started claiming they're just protecting "the right to sue."
Nobody is talking about taking away the right to sue. We are talking about restoring elements essential to the rule of law, predictability and proportionality.
Scientific study after scientific study has failed to validate the complaints that bankrupted the silicone breast implant industry. Similar attacks have wrung huge settlements from companies unwilling or unable to risk time in court getting justice while a cloud hangs over their share prices. Even the legal claim used to justify the tobacco shakedown, that Medicaid was harmed by cigarette advertising, has been thoroughly repudiated by the courts when advanced by private health insurers.
The right to sue is only half the rule of law. The other half is the right to present a defense. Something has gone seriously wrong when defendants with solid, legally compelling arguments no longer feel safe taking their chances in a courtroom.
This tilting of the system to favor the plaintiffs is really a tilting to favor their lawyers, who earn their outsized rewards under contingency-fee arrangements. They're the ones who have the money and power to create incentives for others to go along, namely politicians and elected judges.
We've reached the point where the Democratic Party's captivity has become an embarrassment and threat to the nation. Candidate Gore barely dodged one fund-raising boomerang when his name was linked to an apparent attempt to solicit $100,000 from Texas lawyer Walter Umphrey in return for President Clinton's promised veto of a tort reform bill. Mr. Gore walked into it again when his claimed visit with the FEMA head to inspect fire-damaged Parker County turned out never to have taken place. As the world now knows, he was in Houston for a fund-raiser with the head of the Texas trial lawyers association.
This is why we have changes of power, to clean out the stables. In Indonesia it happens once every 30 years, when the reigning strongman gets bumped off or pushed out. Here, preserving the rule of law is one more responsibility of the voters. Unless you believe Mr. Gore would have the unlikely gumption to impose discipline on his primary funding constituency, the best chance the Democrats have of escaping their trial-lawyer captivity is to spend a few years by a quiet stream, asking themselves what kind of party they've become.
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