November 2, 1998
California Trial Lawyers
Try to Buy a Governor
By Mark S. Pulliam, an attorney in private practice, and the immediate
past president of San Diego County Citizens Against Lawsuit Abuse.
If Gray Davis is elected governor of California tomorrow--and polls
indicate he almost certainly will be--the Los Angeles Democrat won't be the
day's only big winner. Equally rewarded will be Bill Lerach, the San
Diego-based class-action suit mogul. Mr. Lerach, one of the biggest
contributors to Mr. Davis's campaign, was also one of the chief sponsors of
1996's Proposition 211, a brazen attempt to enact by initiative the perfect
class-action lawsuit: a suit that could be brought in California's state courts
against any publicly traded company in America, on behalf of almost
anyone, for doing nothing wrong, and that would have been nearly
impossible to defend. The proposition--call it strict liability for doing
business as a corporation--went down to a lopsided 74% to 26% defeat.
Now Mr. Lerach hopes that he can get much of the same under a Davis
administration.
Anyone who doubts the reach of Mr. Lerach's
influence should consider that in 1995 President
Clinton vetoed the bipartisan Securities Litigation
Reform Act, after promising to sign it, following a
private dinner meeting with--guess who?--Mr.
Lerach. That Congress dramatically overrode Mr.
Clinton's veto has not diminished the lawyer's
extraordinary power, as a recent fund-raiser
featuring Mr. Clinton at Mr. Lerach's mansion in the
tony suburb of Rancho Santa Fe attests. Under a
Davis administration, Mr. Lerach would be in a
position to exercise similar influence in Sacramento.
He could then even the score against the Silicon
Valley business leaders who raised and spent $40 million to defeat
Proposition 211.
Mr. Lerach is not the only member of the California plaintiffs' bar backing
Mr. Davis. In fact, trial lawyers, as a group, are among Mr. Davis's major
contributors. A recent analysis conducted by the Los Angeles Daily Journal,
a legal newspaper, revealed that Mr. Davis received at least $1.98 million
from plaintiffs' lawyers in the first nine months of 1998, representing nearly
10% of his total fund-raising. (Other analysts estimate that trial-lawyer
contributions to Mr. Davis for that period exceeded $2.4 million.)
Trial-lawyer money continues to pour in to California candidates--almost all
of them Democrats--at a record rate: more than $9 million in 1998 alone,
including another $500,000 for Mr. Davis since Oct. 1.
Mr. Davis purports to have a neutral stance on civil-justice reform. But
high-powered trial lawyers are shrewd operators: They don't part with their
money without at least an expectation--if not an actual commitment--of a
quid pro quo from politicians they support. What do these savvy investors
seek? Simply put, they expect that Gov. Davis will sign into law all of the
antibusiness legislation vetoed by Republican Gov. Pete Wilson over the
past eight years.
Thus, trial lawyers want to gut California's landmark medical malpractice
reform, known as Mirca. They want to reinstate the "Royal Globe" cause of
action for bad faith against insurance companies that don't immediately pay
all claims, no matter how unfounded or exaggerated. They want to prohibit
mandatory arbitration as an alternative to lawsuits. More than anything else,
they want to pack California's courts with liberal judges sympathetic to
plaintiffs, who will preside over ad hoc wealth transfers from corporate
shareholders and consumers to contingency-fee lawyers. Remember the
heyday of Gov. Jerry Brown and his chief justice, Rose Bird? Mr. Davis
was Gov. Brown's chief of staff.
At a televised debate between Mr. Davis and his Republican opponent,
Dan Lungren, on Oct. 15, one of the panelists asked Mr. Davis directly if
his neutrality on Proposition 211 in 1996--in contrast to Mr. Lungren's
vigorous opposition--was because he was "in the pocket of the trial
lawyers." Mr. Davis's response: "I don't think it's my job to take a position
on every issue on the ballot [audience laughter]. Uh, I just don't believe
[pause]. I had no, I had no personal, uh, expertise [pause] to add to that
issue." Note that he did not deny the accusation.
Trial-lawyer influence is not limited to California. In Alabama, trial-lawyer
political action committees provided $2.1 million to the state Democratic
Party from July to September, accounting for 83% of the total funds raised.
Trial lawyers are major players in Ohio elections this year, accounting for
77% of total contributions to two state Supreme Court justices through July.
A 1994 survey by the American Tort Reform Association found that
trial-lawyer contributions in state legislative and judicial races in Alabama,
California and Texas from 1990 to 1994--almost $20 million--exceeded
the total spent by the Republican and Democratic National Committees
combined in all 50 states during the same period. The plaintiffs' bar has
become the best-funded special interest in the U.S. Can elections be bought
in this fashion? Distressingly, the polls seem to answer yes.
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