Court Challenge
Corporate America takes on Spitzerism.
BY KIMBERLEY A. STRASSEL
Monday, September 25, 2006 12:01 a.m. EDT
New York Attorney General Eliot Spitzer garnered a stunning 81% of the vote in his primary for the New York governorship two weeks ago, riding high on his reputation as Chief Persecutor of Wall Street. It was the sort of result that should have made grown CEOs cry.
Still, there was some reason for good cheer in the business community: namely, a race on the other side of the country. In Washington, a relatively unknown property-rights lawyer, John Groen, challenged the activist chief justice of the state Supreme Court. It was the most hotly contested judicial contest in state history--highest profile, highest dollar, highest stakes. Mr. Groen lost last week, but barely. Across the country, incumbent judges--who are rarely challenged, much less seriously so--began shaking in their robes.
Call it business's revenge, or better yet, business's new political strategy--one that may prove a rare bright point for conservatives in upcoming elections. Somewhere among the Spitzer campaigns, the endless trial-lawyer suits, and the adverse verdicts in state courts, the corporate world realized it needed to address root causes. Local chambers of commerce and tort-reform groups encouraged businesses to start putting some skin into state elections.
This year, that effort has given rise to a frontal assault aiming to reshape courts and law enforcement offices across the nation. If business coalitions have their way, Michigan, Ohio, Wisconsin and New Mexico will not be the playgrounds of proto-Eliot Spitzers. Nor will the courts of Georgia, Kentucky, Alabama, Michigan, Oregon, Ohio and Illinois make Stephen Breyer proud. The money underlines the commitment: In 2002, spending on state Supreme Court races was $29 million; by 2004 it had jumped to $42 million; this year it's expected to set records.
If there's a godfather of this movement it might be John Engler, who realized early in his 1990s career as Michigan governor that tort reform didn't count for much if state courts routinely struck down new laws. (Mr. Engler is currently a director of Dow Jones, which publishes this newspaper.) As governor, he made judges a top priority, one reason why Michigan's high court is today a national model of judicial restraint. Mr. Engler carried that philosophy to his presidency of the National Association of Manufacturers.
Last year, NAM launched the American Justice Partnership, an umbrella organization that brings together a mindboggling array of national and state organizations--industry groups, chambers, think tanks, citizens' groups--fighting for legal reform. "Legal reform has become a full contact sport," says Steve Hantler, assistant general counsel of Daimler-Chrysler and chairman of AJP. "More business leaders and consumer groups have realized this fight is in the political arena, and you can't leave that arena to the trial bar."
Plaintiffs' attorneys have been in this game a long time, knowing the value of sympathetic judges and meddlesome AGs (who often throw them business). They've perfected a fund-raising machine, drumming up individual donations via firms, and often tap this network to stand for office themselves. Reform groups are borrowing these tactics, rallying more companies to donate to campaigns, making the public aware of races, and also setting up political action committees designed to solicit and bundle money for elections.
In Washington, Mr. Groen's bid was launched with the financial backing of a state builder's association weary of the high court's anti-property-rights bent. But he also got a boost from some $350,000 of ads against his opponent, financed by a new outfit called Americans Tired of Lawsuit Abuse, a national PAC that counts the American Tort Reform Association as a donor. In total, outside groups spent more than $1.5 million on the Groen campaign, or about three times that spent by defenders of Chief Justice Gerry Alexander.
Mr. Groen still lost, which is partially a reflection of the difficulty of ousting a sitting judge or a popular incumbent AG. It also underscores the challenges facing the business community in making any of this work. But several key victories serve as inspiration. One notable example was Michigan's 2002 AG race, in which Republican Mike Cox, a state prosecutor, ran against state Sen. Gary Peters, a friend of the trial bar. In the final days, the Michigan Chamber dropped a wad of money on a TV ad supporting Mr. Cox. He won by a mere 5,000 votes, and no one doubts the ad put him over the top. This year, his opponent is a trial lawyer, and the business community isn't taking any chances.
Democrats currently hold 29 AG seats, and business leaders hope to pick up three or four seats for the Republicans this year. While that would hardly be a landslide, it would be significant given the GOP's larger troubles. Plus, flipping AG seats is a double victory: It stops a Spitzer-like prosecutor and takes away a popular platform to run for higher office.
The courts project is harder, and longer term: Incumbents are tough to unseat, individual victories don't often lead to majorities, and the public has historically showed little interest in judicial races. Though, as John Groen's razor margin shows, the times are a-changin'.
The corporate world is still taking its usual interest in congressional elections, though here too it's upping the stakes in select races. Iowa's open congressional seat offers a case study, where Republican businessman Mike Whalen is running against Democratic trial lawyer Bruce Braley. Reform groups view this as a chance to beat a prominent plaintiffs' attorney, and to do so by making his career a liability.
Ads against Mr. Braley have focused largely on his stint as head of the Iowa Trial Lawyers' Association and his lifetime of suing doctors and companies. The tort bar has sensed the threat, and the Association of Trial Lawyers of America has stepped up as one of Mr. Braley's chief donors. The race is fast becoming a referendum on tort lawyers.
In a sense, Eliot Spitzer's success might turn out to be a net positive for the business community. Back in April, the notorious AG went to Michigan to campaign against Mike Cox. The visit struck a nerve. Mr. Cox has raised more money than any AG candidate in state history.
Ms. Strassel is a member of The Wall Street Journal's editorial board.
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