Criminal Justice

Screeds, myths, mayhem—and lawsuit reform

July 6, 2008

Patrick B. McGuigan

In PR terms, recent months have been tough for America's trial lawyers. But not as tough as the mayhem inflicted on Oklahoma's economy as we lag behind the rest of the country in lawsuit reform.

The 2008 state legislative session was notable for many things, including Gov. Brad Henry's dramatic exercise of his veto pen. Notable disappointments for conservatives were the spike delivered to school choice (with some Republican help), and our governor's passionate opposition to meaningful lawsuit reform. Henry vetoed two versions of reform last year, and did the same this year, including a moderate proposal designed to provide new legal protections to classroom teachers.

For political junkies, pundits, and the news media, Oklahoma's great political fights make for wonderful theater. No one enjoys political argumentation more than yours truly. Yet there's something frustrating and despair-inducing about willful neglect of policy innovation and reform based on apparently partisan and parochial concerns.

In the end, the opposition and neglect give lawsuit reform a partisan edge-benefiting Republicans in this year's election-that delays economic benefit that will flow to everyone when reform finally comes. Oklahoma can't afford the lost time.

Is Our Litigation Problem a Myth?

Arguments trial lawyers make against reform include the assertion that things are not really all that bad, that advocates of change overstate the nature of the problem (if indeed there even is a problem).

I read law journals and reviews for insight into trends in legal education and creative liberal legal thinking. One recent article in the University of Dayton Law Review, by Joshua D. Kelner, was an instructive read on what he called "the anatomy of an image."

His thesis was that groups like the American Tort Reform Association (and, presumably, the Oklahoma Council of Public Affairs) have created a tissue of emotion for tort reform, a cause célèbre unsupported by facts. After largely dispassionate rhetoric for much of the essay, by the end of his 63 pages Kelner was referring to the "screeds" of tort reformers. The article was instructive, but not persuasive.

There's nothing mythological about the recent State Chamber survey that found 87 percent of business leaders believe the state's legal climate hurts job growth. And just over half say they will consider moving out of Oklahoma because of our lawsuit culture.

Are those business leaders, or analysts like myself, delusional? Are we imagining things?

Does my writing here reach the level of "screed"?

Consider: Three of America's best-known advocates of open-ended tort litigation are headed to prison, and not a moment too soon.

As The Wall Street Journal commented last month, Dickie Scruggs is off to the "Big House, but his methods are continuing to tarnish his partner in lawsuits, Mississippi Attorney General Jim Hood."

A federal judge whacked Hood for direct collusion with Scruggs in evading court orders in a massive lawsuit brought against State Farm Insurance after Hurricane Katrina. That judge described Hood as "a co-conspirator ... and an aider and abetter" in Scruggs' determination to avoid compliance with discovery orders.

Then there's securities class-action lawyer Melvyn Weiss, who's going to the federal pen for 30 months, and his partner William Lerach. They were found guilty on federal conspiracy counts for illegal payments to create class-action plaintiffs, bringing more than a quarter of a billion dollars into their firm.

Tiger Joyce of the American Tort Reform Association fears the bold distortion of the law engineered by these pillars of the trial lawyer establishment is the proverbial "tip of the iceberg." George Will comments: "Weiss' genius was getting in the door first as lead counsel, using a ready-made stable of clients who it turned out were receiving kickbacks" in what the presiding judge described as a "nationwide conspiracy that continued for decades." Is that a screed?

What do things like this mean for Oklahoma? Last year Directorship magazine ranked Oklahoma's legal climate number 44 for business and job growth. The magazine is a favorite read of CEOs and business directors. For the fourth consecutive year, ATRA gave our state a "dishonorable mention" in its annual listing of "judicial hellholes."

Henry Blocks Reform

It's no wonder that outgoing state Sen. James Williamson of Tulsa is frustrated. "A majority of state legislators support real, comprehensive reforms to halt lawsuit abuse," he said. "All we are asking is that the governor fulfill his pledge to Oklahomans for Texas-Plus lawsuit reform."

Owen Laughlin, another Republican senator, led the charge this year for the School Protection Act, a bipartisan measure protecting teachers and schools from lawsuits in response to steps educators take to maintain order, discipline, and a proper educational environment. The bill passed the state House 94-0, but barely squeezed through the Senate, 26-22. The governor vetoed it.

"It's ironic that the self-described ‘education governor' has put the interests of the Big Trial Lawyers industry ahead of the interests of teachers and schoolchildren," Sen. Laughlin said. "It is very discouraging to see the lengths this governor will go to stop even the most modest of lawsuit reform proposals from becoming law in Oklahoma."

Gov. Henry's vetoes have not curbed the appetite for change in the litigation culture. Oklahoma's tide for lawsuit reform grows stronger every year, and a bipartisan push is likely for medical litigation reform once Republicans take control of the legislature.

One-fifth of doctors, according to the Oklahoma Alliance of Physicians for Tort Reform, are thinking of leaving the state, and 60 percent have stopped performing "risky" procedures (including delivering babies).

Meanwhile, the Houston Chronicle reports that Texas is attracting so many physicians from Oklahoma and Pennsylvania that the state can't keep up with the volume of requests for new medical licenses. This at a time the data show projected shortages in specialty physicians emerging in the next decade. A recently published book, Will the Last Physician in American Please Turn Off the Lights, projects a national shortage of 90,000 to 200,000 doctors.

Authors of the book contend non-emergency waiting lists for medical appointments will soon be three to four months or more. And routine visits are going to cost two to three times what they cost today, regardless of insurance status, the authors say. A 2007 national survey found that 57 percent of physicians would not recommend the medical field to their children.

These are facts. The myth is that it's in Oklahoma's best interest to preserve the awful status quo and further delay lawsuit reform.

The governor's critics speculate that his endorsement of Barack Obama for the presidency and his dramatic increase in the exercise of the veto pen are signs our chief executive is angling for a future federal appointment in a Democratic administration.

I believe Henry is a better man than that, and I can make the case that Obama is a better choice as nominee than Sen. Clinton. I just think the governor is wrong on lawsuit reform.

Glenn Coffee, who proved in his work with Mike Morgan that he can be both tolerant and effective in difficult working relationships, has had it with our governor. In response to a request for a comment about the failure of lawsuit reform this past year, the Republican Senate co-president-likely the next Senate President Pro Tempore told me: "In 2004 Gov. Henry claimed he wanted ‘Texas Plus' lawsuit reform for Oklahoma, but he has never lifted a finger to make it a reality. During the past two years the Legislature has passed several lawsuit reform bills, but this governor has issued veto after veto after veto. Brad Henry was the trial lawyers' best friend when he chaired the state Senate Judiciary Committee, so it should not come as a surprise that the same is true with Brad Henry in the governor's office.

"If Oklahoma is going to see the lawsuit reform we so desperately need, the reformers may have to wait until Brad Henry leaves office, or go over his head by sending lawsuit reform directly to a vote of the people."