Special Editorial Reports
An Examiner Editorial Special Report:Trial lawyers’ lobbyists seeking special favors from Congress
By: Quin Hillyer
Examiner Columnist
February 19, 2009
Washington special interests don’t always need traditional pork barrel to get rich through congressional action. Brief or obscure provisions in bills that often run to hundreds of pages can do the trick just as well as a law directing a government check or contract to a favored recipient.
That reality is what made so telling an observation from House Speaker Nancy Pelosi, D-CA, regarding tense negotiations between her chamber and the U.S. Senate on the $787 billion economic stimulus package signed Tuesday by President Barack Obama.
Pelosi said: “Around here language means a lot. Words weigh a ton…. We wanted to take all the time that was necessary to make sure it was right."
Pelosi’s remark also points to the reason why the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) last summer started warning against what it called “trial lawyer earmarks” - provisions (sometimes even entire laws) designed to encourage lawsuits on issues in which certain attorneys specialize.
Trial lawyers are among the most prolific contributors to Members of Congress, with the American Association for Justice (formerly known as the Association of Trial Lawyers of America) alone giving Democratic congressional incumbents and challengers more than $2.5 million. A mere four percent of the group’s contributions went to Republicans.
In return for the campaign dough, senators and representatives insert the earmarks or other legislative language that creates new litigation opportunities for the enterprising trail lawyers. And round and round it goes, all at the taxpayers’ expense.
To help taxpayers keep track of this process, ILR created a website – which premiered last July in conjunction with an illustration first published by The Washington Examiner – to dramatize and track the legislative priorities of the increasingly aggressive class-action trial lawyers (http://www.triallawyerearmarks.com/).
As the Examiner reported at the time, “stealth” provisions in various bills in the last Congress encouraged filing of more class-action lawsuits relating to asbestos exposure (even after a huge scandal had erupted involving tens of thousands of false asbestosis claims), against cruise ship companies, and even to collect “disability” benefits for people who merely appear to be disabled but who actually have no real impairment!
ILR now is busily updating its web site for the new Congress that came into office last month. With even larger majorities for lawmakers friendly to the plaintiffs’ lawyers that often are their heaviest campaign contributors, lobbyists for the trial lawyers bar are actively pursuing new earmarks.
And they are succeeding. The economic stimulus package, for example, contained a provision expanding class-action lawsuits on medical records. Another new bill recently introduced in Congress would eliminate arbitration between consumers and creditors and replace it with court suits. And that’s just the start.
Working with IRL, The Washington Examiner is actively tracking the many ways trial-lawyer lobbyists and their congressional buddies are trying to influence legislation to put more money in the pockets of class-action attorneys who in turn make lots of campaign contributions.
Three that are already prominent in the 111th Congress are proposed legislation on whistle blowers in the workplace, paycheck fairness and whether greenhouse gas emissions constitute a workplace danger. Read on for more details.
Part 2
Blown whistles, or a siren song for business?
Everybody likes people who blow the whistle on government waste and fraud. Whistleblowers are heroes. So, why would anyone object to a bill giving whistleblowers more reason to be vigilant?
Such good-intentioned, pro-whistleblower sentiments seem to explain the impetus behind proposed changes to the federal government’s False Claims Act. What they hide is the huge profit motive for enterprising lawyers, and the huge danger to mom-and-pop businesses and to charities as well.
The Examiner reported last summer that the changes would expand the definition of four words – “government money or property” – to cover any money “to be spent on the government’s behalf or to advance a government program.”
In practice, that means that a third-party claiming to be acting on behalf of taxpayers could sue any recipient of money that began as a government grant – no matter how many times the money changed hands in the meantime.
(Under the terms of the Act, the government can collect damages of three times the original amount in dispute, plus up to $11,000, for each individual “false claim,” and the outside party that brought the suit could collect 30 percent of the government’s take.)
So if a hardware shop “overcharges” for the widgets it sells a charity funded by a local agency that received a federal grant, well…suddenly, the hardware shop could be dragged into court and charged with fraud.
As it turns out, though, the proposed changes to the False Claims Act go much farther than just those four words. John T. Boese, author of a two-volume text regarded by law schools and courts since 1993 as the leading authority on the subject of the False Claims Act, wrote an analysis last February that outlines a host of other problems with the new proposals.
First, Boese noted that the statute of limitations on such lawsuits effectively would be extended, in certain circumstances, to decades – far longer than for almost any other violation. The mob-busting RICO (Racketeer Influenced and Corrupt Organizations) statute, for instance, has a four-year statute of limitation.
The extended limitations for the Fair Claims Act would mean that every charity, university, or small business that handles any government money would face an administrative nightmare of record-keeping for years on end, just to guard against any retroactive lawsuit some third party might dream up.
Other proposed changes effectively would eliminate a number of grounds for dismissing such lawsuits on the front end and force defendants to share otherwise privileged business information not just with government investigators but with third parties – even though the vast majority of such third-party lawsuits ultimately are dismissed for lack of merit.
Perhaps worst of all, one proposal would encourage government employees themselves to file third-party False Claims suits and profit from them, rather than just reporting their findings to their agency for review.
Boese writes that the result would be defendants “sued by a government employee using government information for personal gain. That is toxic…. The amendment practically encourages auditors, investigators, and regulators to file such suits…. [But] government employees should not be permitted to receive a financial windfall for merely doing their jobs.” --- Quin Hillyer
That reality is what made so telling an observation from House Speaker Nancy Pelosi, D-CA, regarding tense negotiations between her chamber and the U.S. Senate on the $787 billion economic stimulus package signed Tuesday by President Barack Obama.
Pelosi said: “Around here language means a lot. Words weigh a ton…. We wanted to take all the time that was necessary to make sure it was right."
Pelosi’s remark also points to the reason why the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) last summer started warning against what it called “trial lawyer earmarks” - provisions (sometimes even entire laws) designed to encourage lawsuits on issues in which certain attorneys specialize.
Trial lawyers are among the most prolific contributors to Members of Congress, with the American Association for Justice (formerly known as the Association of Trial Lawyers of America) alone giving Democratic congressional incumbents and challengers more than $2.5 million. A mere four percent of the group’s contributions went to Republicans.
In return for the campaign dough, senators and representatives insert the earmarks or other legislative language that creates new litigation opportunities for the enterprising trail lawyers. And round and round it goes, all at the taxpayers’ expense.
To help taxpayers keep track of this process, ILR created a website – which premiered last July in conjunction with an illustration first published by The Washington Examiner – to dramatize and track the legislative priorities of the increasingly aggressive class-action trial lawyers (http://www.triallawyerearmarks.com/).
As the Examiner reported at the time, “stealth” provisions in various bills in the last Congress encouraged filing of more class-action lawsuits relating to asbestos exposure (even after a huge scandal had erupted involving tens of thousands of false asbestosis claims), against cruise ship companies, and even to collect “disability” benefits for people who merely appear to be disabled but who actually have no real impairment!
ILR now is busily updating its web site for the new Congress that came into office last month. With even larger majorities for lawmakers friendly to the plaintiffs’ lawyers that often are their heaviest campaign contributors, lobbyists for the trial lawyers bar are actively pursuing new earmarks.
And they are succeeding. The economic stimulus package, for example, contained a provision expanding class-action lawsuits on medical records. Another new bill recently introduced in Congress would eliminate arbitration between consumers and creditors and replace it with court suits. And that’s just the start.
Working with IRL, The Washington Examiner is actively tracking the many ways trial-lawyer lobbyists and their congressional buddies are trying to influence legislation to put more money in the pockets of class-action attorneys who in turn make lots of campaign contributions.
Three that are already prominent in the 111th Congress are proposed legislation on whistle blowers in the workplace, paycheck fairness and whether greenhouse gas emissions constitute a workplace danger. Read on for more details.
Part 2
Blown whistles, or a siren song for business?
Everybody likes people who blow the whistle on government waste and fraud. Whistleblowers are heroes. So, why would anyone object to a bill giving whistleblowers more reason to be vigilant?
Such good-intentioned, pro-whistleblower sentiments seem to explain the impetus behind proposed changes to the federal government’s False Claims Act. What they hide is the huge profit motive for enterprising lawyers, and the huge danger to mom-and-pop businesses and to charities as well.
The Examiner reported last summer that the changes would expand the definition of four words – “government money or property” – to cover any money “to be spent on the government’s behalf or to advance a government program.”
In practice, that means that a third-party claiming to be acting on behalf of taxpayers could sue any recipient of money that began as a government grant – no matter how many times the money changed hands in the meantime.
(Under the terms of the Act, the government can collect damages of three times the original amount in dispute, plus up to $11,000, for each individual “false claim,” and the outside party that brought the suit could collect 30 percent of the government’s take.)
So if a hardware shop “overcharges” for the widgets it sells a charity funded by a local agency that received a federal grant, well…suddenly, the hardware shop could be dragged into court and charged with fraud.
As it turns out, though, the proposed changes to the False Claims Act go much farther than just those four words. John T. Boese, author of a two-volume text regarded by law schools and courts since 1993 as the leading authority on the subject of the False Claims Act, wrote an analysis last February that outlines a host of other problems with the new proposals.
First, Boese noted that the statute of limitations on such lawsuits effectively would be extended, in certain circumstances, to decades – far longer than for almost any other violation. The mob-busting RICO (Racketeer Influenced and Corrupt Organizations) statute, for instance, has a four-year statute of limitation.
The extended limitations for the Fair Claims Act would mean that every charity, university, or small business that handles any government money would face an administrative nightmare of record-keeping for years on end, just to guard against any retroactive lawsuit some third party might dream up.
Other proposed changes effectively would eliminate a number of grounds for dismissing such lawsuits on the front end and force defendants to share otherwise privileged business information not just with government investigators but with third parties – even though the vast majority of such third-party lawsuits ultimately are dismissed for lack of merit.
Perhaps worst of all, one proposal would encourage government employees themselves to file third-party False Claims suits and profit from them, rather than just reporting their findings to their agency for review.
Boese writes that the result would be defendants “sued by a government employee using government information for personal gain. That is toxic…. The amendment practically encourages auditors, investigators, and regulators to file such suits…. [But] government employees should not be permitted to receive a financial windfall for merely doing their jobs.” --- Quin Hillyer
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