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Trial lawyers versus the Supreme Court
By: David Freddoso
Online Opinion Editor
09/10/09 9:56 AM EDT
A ruptured catheter. A fraudster beaten in jail. A shady cable deal. A powerful phone company. An tire-maker who might have discriminated. Between the five, there is only one thing in common: Each was recently the subject of a Supreme Court case that trial lawyers are now working to overturn.
This might be the first time anyone has tried to overturn five Supreme Court cases in a single Congress. It is a testament to just how much money the Roberts court is costing plaintiff's lawyers, and how powerful the industry believes itself to be in Democrat-controlled Washington.
For the trial lawyers, ably represented by the American Association for Justice (AAJ), now is the time to act on legislation that will expand the number of possible lawsuits and the amount of money available to sue for, settle for, and split with their clients. They collected their first scalp in late January with the passage of the Lilly Ledbetter Fair Pay Act. That bill essentially abolished the statute of limitations for one particular kind of employment discrimination claim. It was named after Lilly Ledbetter, who lost her claim against Goodyear Tires in the Supreme Court after she failed to bring her case in a timely manner. President Obama considered the bill such a priority that he signed it without posting it online and waiting for five days, as he had promised to do with non-emergency legislation.
AAJ, far from resting on its laurels, has other scalps to gather. For the next 16 months, at least, they have a friendly Democratic Congress and president who owes them a lot. In just the first half of this year -- an election off-year -- employees of the top 15 plaintiffs' law firms contributed $636,000, 99 percent of it to Democrats. AAJ's PAC gave Democrats 96 percent of its additional $627,000 in contributions. As a result, the trial lawyers' lobbyists -- both their in-house staff and the guns they've hired from Washington's top firms -- command a lot of respect in the White House and on Capitol Hill. AAJ spent $2.3 million lobbying Congress in the first half of this year.
Congressional lobbying disclosure forms tell the story of what AAJ wants for their money. For starters, they'd like to open the way for more state liability torts for medical device manufacturers. That's why they're lobbying for a bill to overturn an 8-1 decision called Riegel v. Medtronic, which involved the ruptured catheter. The Supreme Court ruled that federal law pre-empts state lawsuits over medical devices because Congress quite clearly set it up that way in 1976, out of concern that such devices would not otherwise be manufactured. The trial lawyers now want Congress to change the law and allow more suits, which will increase medical costs. AAJ already succeeded on a broader issue of federal pre-emption in May, when their lobbying efforts made President Obama order his administration to stop pre-emption through federal regulations.
Another priority for plaintiffs' lawyers is to reach into the deep pockets of accounting firms and companies tangentially involved in other companies' corporate frauds through class action lawsuits. That's why they have invested in reversing the 5-3 Stoneridge securities decision. The majority held that a defrauding company's corporate customers and suppliers -- and by extension its banks, lawyers and accountants -- cannot be sued by aggrieved private shareholders for fraud unless they actually defrauded the plaintiffs themselves.
Finally, AAJ is particularly interested in reversing two related Supreme Court cases that set stringent standards for pleadings in lawsuits. The Bell Atlantic v. Twombly (7-2) and Ashcroft v. Iqbal (5-4) cases set the bar high on pleadings, so that plaintiffs cannot get away with filing bare-bones allegations with few facts -- literally, suing first and then asking questions later in discovery in order to build a case. The two cases have had a wide-ranging effect, causing several product liability cases to be thrown out of court and costing trial lawyers millions already.
AAJ's current president, Anthony Tarricone, set the reversal of these two cases near the top of his group's agenda in Trial magazine this month. He complained that both Iqbal, which involved a maltreated federal detainee, and the less controversial Twombly, which was written by liberal former Justice David Souter, "will result in dismissal of meritorious cases." Sen. Arlen Specter, D-Pa., is carrying the bill to reverse them both.
With Congress and the president distracted by current events in the health care and climate change debates, it may seem unlikely that AAJ can succeed in its quest to overturn five Supreme Court decisions. But given their significant political donations and lobbying expenditures, and the friendly makeup of this Democratic Congress, the trial lawyers' early successes come as little surprise. And so will any later ones.
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