Wednesday, November 21, 2007

I go back to drawing board

The extensive negative feedback I got from the law professors caused me to revise my proposed "position" letter to a more neutral letter that only framed issues and questions for the lay public to think about in formulating their views about tort reform. Surely that would be more palatable for those with opposing views. If that did not go far enough, I thought "dueling" letters could be a nice idea, in which law professors opposing tort reform could draft a position letter for their side for submission to The Wall Street Journal.

Further, although tort reform had pronounced exposure in the 2004 Presidential election campaign, at least one law professor indicated an unwillingness to express support for tort reform because he favored Kerry and did not want to do anything that could help Bush. I did not think this should have been a significant impediment to my "position" letter idea, but I did not have a problem with revisiting with law professors once the election was over.

In January 2005 I did a second round of emailing to the law professors as follows:
Dear Professor ____________,

With the 2004 presidential election over, and with President Bush's high agenda item for tort reform, I am reviving my efforts that I initiated last fall of trying to have The Wall Street Journal publish a letter that is signed by law school tort law professors and that tries to raise the public's consciousness about the subject. I have done further work in drafting a suggestion for a letter to The Wall Street Journal, and it is appended below.

As before, I ask that, If you would have an interest in participating in this project and signing a letter, along with other tort law professors, for publication in The Wall Street Journal, please read the suggested letter to the Journal that is appended below and advise me of any suggestions or comments you have for the letter. I wish to emphasize that I am open minded in this project and would submit two different letters to The Wall Street Journal if one group of professors wanted to sign one letter and another group wanted to sign a differing letter.

If you were reticent last fall about a letter being published before election day because you felt other political issues in the presidential election were more important than tort reform and did not want your views on tort reform to affect how a voter would vote in the election, hopefully that reticence is now alleviated.

Please let me hear from you if you are interested in participating and signing, along with other tort law professors, a letter to The Wall Street Journal for publication.

Thank you.

Sincerely yours,

[my name, address and telephone number]

[suggestion for letter to The Wall Street Journal]

Dear Sir:

The undersigned are law professors who teach tort law at United States law schools.

For a quarter century, there has been growing controversy about plaintiffs' lawyers. They were an issue in the 2004 presidential election, and now President Bush is submitting to Congress again significant tort reform legislation. This presents a good opportunity to raise the public's consciousness.

We believe there are many significant questions that citizens and their lawmakers should consider and debate in a thoroughgoing fashion. We raise in particular the following:

1. In the separation of powers under the American form of constitutional government, a democratically elected legislative branch enacts laws that regulate business and other activities and that impose taxes. The executive branch, headed by a democratically elected President or other chief executive officer, implements (executes) the mandated regulation and taxation, with some delegation of authority by the legislative branch to the executive branch to write "legislative" regulations (i.e., regulations where the law is lacking in specific detail and the legislative branch has instructed the executive branch to develop details, subject to the power of the legislature to change subsequently by further legislative enactment any detail that the executive branch has specified and that the democratically elected legislature disagrees with). The judicial branch applies and interprets those laws and "legislative" regulations in particular cases where parties have a dispute. Our society needs more debate about the extent to which judges and plaintiffs' lawyers, working within the judicial domain, have usurped the legislative and regulatory functions of the other two branches of government. We cite the national tobacco settlements entered into in the late 1990's as one very large case in point, and we believe there are untold numbers of other examples that warrant evaluation of whether there has been an inappropriate usurpation of the legislative and regulatory powers by actions within the judicial domain.

2. In the debate about plaintiffs' lawyers, characterization has been made of them as "public lawyers." We think this characterization has validity and that plaintiffs' lawyers act in a public role similar to that of governmental regulators, criminal prosecutors, state attorney generals and legislators. We further think, however, it properly leads to questions of oversight and accountability. Governmental regulators, prosecutors, state attorney generals and legislators are subject to public oversight and accountability, either to voters/taxpayers directly or to their democratically elected legislatures and executive branches of government. Debate should be had about whether democratically elected legislatures ought to exercise more oversight over the activities and compensation of plaintiffs' lawyers in their role as "public lawyers".

3. We believe the area of compensation calls for special scrutiny. . We the compensation received by governmental regulators, prosecutors, state attorney generals and legislators in their public roles, by reason of the public oversight and accountability, is reasonable for the work done, and in particular it is not geared to the dollar amount of economic activity that their public work affects (i.e., legislators and regulators don't get paid millions of dollars because they put into effect large governmental budgets, levy commensurate amounts of taxes, and write and enforce laws and regulations that affect billions of dollars of economic activity and that impose and allocate large economic costs on and among businesses, consumers and other parties.) Plaintiffs' lawyers receive huge amounts of compensation that is geared to large and sometimes gigantic dollar amounts of economic activity that their work affects and that is geared to associated costs being shifted around among various parties. An example is in the national tobacco settlements, in which the plaintiffs' lawyers got over ten billion dollars for their work that arguably usurped the legislative power of government and implemented industry wide economic and social policy for the tobacco industry, coupled with the imposition of over $200 billion dollars of payments and cost transfers from cigarette companies to state governments that are being be funded by price increases on cigarettes that are in essence taxes on the customers.

4. In evaluating the appropriateness of plaintiffs' lawyers' compensation, we think due attention needs to be paid to human nature and baneful effects that can result from overpowering inducements that can be provided by large amounts of compensation. Our country has seen enough of that phenomenon in recent years. Corporate executives standing to gain fortunes from stock options committed massive accounting frauds that contributed to maintaining and increasing lofty stock price levels that would enormously benefit them under their stock options and other compensation arrangements. Accountants have been charged with faulty accounting work arising from the conflict of having lucrative consulting work with the audit client. Stock analysts have been inappropriately influenced in their stock reports by reason of getting compensation based on investment banking business their employer gets from companies the analyst covers. Brokerage firms corrupted the IPO market by allocating stock in hidden exchanges for inflated commissions on unrelated transactions. Mutual funds and insurance brokers have acted in wrongful disregard of conflicts of interest in order to increase their revenues and profits.

5. In considering whether tort reform is or is not needed, consideration should be given to possible wrongs that plaintiffs' lawyers are perpetrating on the nation's legal system and its economy and that can be attributed to baneful effects of their very large compensation being geared to the magnitude of the dollar amount of economic activity that is brought within the purview of their cases and geared to case outcomes in which payments and other economic transfers are made among various parties, and that the more the economic activity that is affected and the more the amount of payments and transfers, the more the plaintiffs' lawyer will be compensated. Among other things, plaintiffs' lawyers have extraordinarily powerful incentives to seek: (i) expansion of harms or detriments for which a payment should be made, (ii) higher rather than lower amounts that should be paid, (iii) expansion of liability where there is no fault, (iv) disregard of distinctions between intentionally culpable, negligently culpable and faultless defendants (and other parties who bear the cost), (v) disregard of culpability of plaintiffs in their own injuries and harms, (vi) disregard of rational cost/benefit principles, (vii) the invocation of junk science if the junk science helps their case, and (viii) expansion of the usurpation by them and the courts of the powers of the legislative branch and of the executive branch regulatory apparatus.

6. It needs to be debated more the extent to which part of the problem is that the legislative branch of government, and its regulatory apparatus, are corrupt and defective and not functioning properly, because of undue control by "special interest" money or because of the regulatory agency/industry "revolving door" syndrome. If a corrupt and defective legislative branch and regulatory apparatus is concluded to be a contributing cause to the courts and plaintiffs' lawyers acting in the judicial domain to usurp the legislative and regulatory function, we can only say "shame, great shame on you legislators" and "physician heal thyself."

The above are some of the significant questions implicated in the controversy over plaintiffs' lawyers. We do not think the public and lawmakers have had these questions properly and sufficiently raised before them and the public, political and legislative debate about them has been deficient. We think the public and the lawmakers are ill served by categorizations of the debate as "business against the little guy" or "patients against rich doctors." We consider it unfortunate that the most vocal protagonists, to wit, the plaintiffs' lawyers on one side, and business and doctors on the other side, have a predominant financial interest only on one side, whereas the reality for the citizenry is that they have more equal financial interests on both sides. Citizens may themselves be plaintiffs seeking fair and appropriate legal recovery on the one side; on the other side they ultimately, in small amounts, and hundreds and thousands of times over, and in a fashion similar to being taxed, are the source of payment of court judgments, legal settlements and plaintiffs' attorneys fees. We believe that the controversy over plaintiffs' lawyers needs to be approached from the perspective of the public that has financial interests on both sides of the debate, and the proper resolution of the debate should seek to balance those interests.


__________________, Professor of Law, _________ University
__________________, Professor of Law, _________ University
__________________, Professor of Law, _________ University
__________________, Professor of Law, _________ University

[end of suggestion for letter to The Wall Street Journal]

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