Follow the money: big business funnels millions through seemingly benevolent organizations to fund tort 'reform' efforts. These groups' motives are anything but benign.

In an age when corporate accounting scandals have taken center stage, and the most talked-about litigation involves such Fortune 500 firms as Firestone, Exxon, and McDonald's, it is easy to see the fight over the civil justice system as pitting trial lawyers against big business. Lawsuits have indeed targeted misdeeds by corporations, and corporations have poured billions into the political system. But the reality goes far beyond this simplistic characterization.

While companies are often happy to take credit for donations to politicians and their parties, the average CEO is reluctant to have the corporate name attached to what some might perceive as attempts to restrict consumer rights. But many groups are willing to pursue this agenda for them.

Corporations and a wide array of think tanks, business organizations, grassroots groups, academic institutions, state and national political parties, and individual politicians share a common interest in attacking trial lawyers and civil juries. Corporations want to reduce their liability, without appearing heartless to consumers. Interest groups and politicians want the corporate donations. Hence their concerted assault on the civil justice system.

Front groups

Behind many of these assaults, fronted by so-called citizen or nonpartisan/ nonprofit groups, lies corporate wealth. Many allegedly independent "citizens against lawsuit abuse" groups were created with seed money from tobacco companies, which sought anonymity by directly and indirectly funneling the funds first through the Washington, D.C., law firm Covington & Burling, then the American Tort Reform Association and its public relations firm, APCO Associates. (1)

Industry tort-reform groups utilize 'independent voices'--PR agencies and phony 'grassroots' front groups that appear to be independent of the direct beneficiaries of 'tort reform,'" writes David Johnson in The Attack on Trial Lawyers and Tort Law--an in-depth report from the nonprofit, nonpartisan Commonweal Institute that examines the people and groups involved in the tort "reform" campaign. "They have been disciplined, strategic, and patient. They have focused substantial resources on changing the underlying political and social environment, rather than focusing only on single issues." (2)

The U.S. Chamber of Commerce has fronted corporate political initiatives. In 2000, the Chamber ran multimillion-dollar ad campaigns on the supreme court elections in Alabama, Michigan, Mississippi, and Ohio, and in the Indiana attorney general contest. (3) The Wall Street Journal reported, "Wal-mart Stores, Inc., DaimlerChrysler AG, Home Depot, Inc., and the American Council of Life Insurers all kicked in $1 million each for one of the Chamber's special projects: a TV and direct-mail advertising campaign aimed at helping elect business-friendly judges." (4)

The Chamber is still litigating to keep the campaigns' corporate funders anonymous. (5)

The Chamber also spearheaded an attempt to derail a bill that Sen. John McCain (R-Ariz.) introduced in the wake of the Firestone tire recall. According to the same Wall Street Journal article, the Chamber

   mounted a fierce lobbying effort against
   the McCain bill and helped convince their
   COP allies in the House to introduce an alternative
   that provided business with far
   more protection from lawsuits.... The successful
   campaign was run out of the Chamber's
   Institute for Legal Reform, which,
   according to internal documents, has received
   $250,000 from GM, $200,000 from
   Toyota Motor North America U.S.A., Inc.,
   $150,000 from Ford, and $50,000 from
   DaimlerChrysler.

Another organization that has thrived by helping corporations distance themselves from the political fray is the American Legislative Exchange Council (ALEC), which calls itself "the largest bipartisan, individual-membership organization of state legislators." (6)

Others see the organization in a different light. A report by environmental groups about ALEC's activities concluded that it was

   little more than a tax-exempt screen for major
   U.S. corporations and trade associations
   that use it to influence legislative activities
   at the state level. ALEC allows these
   corporations to do what they couldn't attempt
   directly or openly without risking
   public criticism. They funnel cash through
   ALEC to curry favor with state lawmakers
   through junkets and other largesse in the
   hopes of enacting special-interest legislation--all
   the while keeping safely outside
   the public eye. (7)

ALEC claims more than 2,400 state legislator members, (8) but its own figures show that legislator dues make up only 1.1 percent of its total revenues. (9) Much of the rest comes from corporations and foundations that pay from $5,000 to over $50,000 a year. (10)

In return, these groups get more than input. According to the director of Public Trust, a nonprofit group,

   Corporations control the purse strings of
   ALEC, and they control the agenda. Obviously,
   it's not surprising that virtually all of
   ALEC's model bills put corporate interests
   before consumer and public interest. Polluters
   are writing environmental laws, corporations
   are writing union regulations,
   and pharmaceutical companies are writing
   prescription drug laws. Of the more than
   120 civil- and criminal-justice issues for
   which ALEC has model legislation, most
   are transparent efforts to shield business
   from liability and punitive damages. (11)

Foundations

Corporate wealth is also funneled through seemingly benevolent charitable foundations. The National Committee for Responsive Philanthropy has identified 79 conservative foundations that have played a substantial role in setting public policy priorities. (12) The foundations were built on the fortunes of donors such as

* Koch Industries, one of the largest privately held companies in the United States, subject to some of the largest fines ever imposed by the EPA (13) and a leading contributor to President Bush's "Republican causes"

* Coors Brewing Co., subject to a decade-long boycott by the AFL-CIO over labor practices that allegedly discriminate against women, minorities, gay employees, and union members

* publishing magnate Richard Scaife, whom Newt Gingrich has credited as having "really created modern conservatism." (14)

These entities give hundreds of millions of dollars to, and sometimes create, think tanks and so-called grassroots groups that aggressively target the civil justice system. (15)

For example, Citizens for a Sound Economy, which calls itself a volunteer grassroots army" dedicated to "spearheading efforts to enact real tort reform," (16) was launched with seed money from the Koch Foundations (created and funded by Koch Industries), as was the libertarian think tank the Cato Institute. (17) The Heritage Foundation, arguably the most influential conservative think tank, was started with financial support from Richard Scaife and Joseph Coors. (18)

Other independently created think tanks have evolved to focus on tort "reform" as a means of tapping into foundation funding. For example, the American Enterprise Institute (AEI) Liability Project claims that a "litigation explosion" extends back to the 1980s. (19)

In 1991, The Litigation Explosion by Manhattan Institute scholar Walter Olson made similar claims. The organization has repeated the message ever since, despite research from the National Center for State Courts and the Department of Justice's Bureau of Justice statistics showing that tort firings and trials have steadily decreased since 1990. (20)

The latest version of the message appeared in the Manhattan Institute's 2003 report, Trial Lawyers, Inc., which "imagine [d] a corporation called Trial Lawyers, Inc., which rakes in almost $40 billion a year in revenues--50 percent more than Microsoft or Intel and twice those of Coca-Cola." (21)

Former Manhattan Institute President William Hammett gave some insight into the motives behind such efforts when he boasted in a letter to supporters that "any funds made available to the [institute's] Judicial Studies Program will yield a tremendous return at this point--perhaps the highest 'return on investment' available in the philanthropic field today." (22)

These organizations have used the funding to influence media (and therefore public) perceptions. According to the group Fairness and Accuracy in Reporting, 47 percent of media references to think tanks mentioned conservative ones, as opposed to 12 percent that mentioned progressive ones. The senior tort "reform" think tanks--Heritage Foundation, AEI, Cato Institute, and Manhattan Institute--were all among the top 15 most-mentioned groups. (23)

Academia

The foundations' grants to think tanks are dwarfed by the amounts they have invested in academia--and the foundations do regard them as investments. Their money has sponsored institutions, professorships, and academic programs that promote conservative approaches to fields such as law and economics.

James Piereson, head of the Olin Foundation, which grew out of a family manufacturing business, expressed his organization's commitment to gaining influence in academic circles, swing, "We invested at the top of society, in Washington think tanks and the best universities, and the idea is this would have a much larger impact because they were influential places." (24)

The Bradley Foundation, funded by the Allen-Bradley electronics company (now owned by Rockwell International Corp.), has sponsored scholarships given to many hundreds of graduate students. Michael Joyce, former Bradley Foundation executive director, likened this effort to "building a wine collection." (25)

On occasion, educational institutions have spurned such sponsorships and donations. The University of California at Los Angeles (UCLA) halted its Olin program, objecting to the program's mandatory symposia with such conservative speakers as Robert Bork and Supreme Court Justice Antonin Scalia. The UCLA Law School's curriculum committee described Olin's program as "taking advantage of students' financial need to indoctrinate them with a particular ideology." (26) However, in most instances, universities find that the money is simply too good to pass up.

The Chamber of Commerce

The U.S. Chamber of Commerce has long said that trial lawyers are its greatest domestic foe. Its CEO, Thomas Donohue, described trial lawyers as an enemy ranking alongside "agents from China or Cuba." (27)

Upon assuming his post in 1997, Donohue proposed a campaign aimed directly at trial lawyers, swing, "I want to give the trial lawyers and ambulance chasers migraine headaches." (28)

He may have intended the campaign to boost membership by uniting companies against a common foe, or to win back ground from other business groups that had surpassed the Chamber in power and influence with Republican members of Congress. However, the campaign met with intense opposition from ATLA and, to a lesser extent, the American Bar Association; most significantly, many Chamber members who happened to be lawyers also objected. (29) Several of the Chamber's local affiliates refused to endorse the campaign. Facing a potential backlash that could reduce rather than bolster membership, the Chamber toned down the effort.

But it has renewed and refined its attack. In 2000, when most big interest groups were trimming lobbying expenditures, the Chamber and its ally, the Business Roundtable, increased their combined spending from $27 million (in 1999) to $47.6 million. (30) At the same time, the two groups collaborated on an electoral project, the "Litigation Fairness Campaign," which raised approximately $25 million from corporations to support strongly pro-business state supreme court justices, attorneys general, and legislators. (31)

The Chamber was clearly pleased with its campaign's success and continued it with the Institute for Legal Reform. Donohue had launched the institute in 1997, envisioning it as a "central 500-pound gorilla to lead the charge." (32) In 2003, the institute announced plans to spend $40 million in 2004 (33)--a public relations effort funded by contributions from a broad list of companies and interest groups, including Aetna, the American Council of Life Insurers, Ford Motor Co., General Electric Co., Johnson & Johnson, the National Association of Manufacturers, and the Business Roundtable. (34)

The money is funding both a general publicity campaign and one that targets specific issues, including class actions, asbestos litigation, medical malpractice, noneconomic damages, and alternative dispute resolution. One of the institute's goals is to "neutralize plaintiff trial lawyers' excessive influence over the legal and political systems." (35)

The American Medical Association 

State and federal legislative battles over medical malpractice liability mark one of the few attempts to restrict consumer rights that is not motivated by corporate wealth. However, for those who support changing the rules of litigation, money remains at the heart of the issue.

The American Medical Association (AMA) sees tort "reform" as its best "marketing tool" to slow a decades-long slide in membership. (36) Thirty years ago, dm association represented 75 percent of all physicians, but by 2002 that number had declined to 29 percent. (37) This slump in membership dues led to a $9 million drop in the group's revenues between 2000 and 2001. (38)

The AMA jump-started its medical liability "reform" efforts by raising $15 million--in addition to its annual revenues of about $250 million--for a national public relations campaign. Emboldened by a private meeting between AMA leaders and President Bush, physicians across the country staged walkouts. Association officials later credited that meeting as the impetus for the aggressive walkout strategy. (39)

The AMA's decision to launch a tort "reform" campaign was a coup for the White House and Republican leadership. It brought doctors--and their donations--back into the political fold after years of conflict with Republican lawmakers over managed care and the "patients' bill of rights."

The White House

The White House may be the biggest beneficiary of all in the campaign against trial lawyers. The Bush administration has come to the same conclusion as myriad think tanks and interest groups: Nothing raises money like attacking trial lawyers.

Tort "reform" has served as a tremendous fund-raising tool for the Bush campaign. Each immunity proposal for a given industry raises more dollars from that sector. The White House has aggressively supported tort "reform" legislation affecting physicians, pharmaceutical companies, the insurance industry, gun manufacturers and dealers, teachers, companies facing asbestos liability, and manufacturers of gasoline additives. It has also backed a host of bills that appeal to the whole business community, such as ones that would federalize class actions.

The Bush administration has focused on tort "reform" relentlessly. One Republican pollster wrote, "Attacking trial lawyers is admittedly a cheap applause line ... but it works. It's almost impossible to go too far when it comes to demonizing lawyers." (40)

The White House has taken that theory to heart. Since taking office, President Bush has repeatedly spoken of "frivolous" or "junk" lawsuits and has blamed trial lawyers for the rise in health care costs, the size of the federal budget deficit, (41) job losses, (42) and the decline in the economy. (43)

Grover Norquist, president of Americans for Tax Reform, has said, "Modest tort reform would defund the trial lawyers, now second only to the unions--and this is debatable--as the funding source of the Left in America." (44)

Norquist's comments are at the heart of the political campaign against the civil justice system. Such attacks, whether they lead to legislative changes or not, aim to eliminate trial lawyers as a political force.

Trial lawyers remain resolute

Perhaps at some point those funding the tort "reform" movement will question whether they are getting their money's worth. Although the movement's money and resources far outweigh the resources available to ATLA, its members, their clients, and the myriad consumer groups that stand against the "reform" movement, the attack on the civil justice system is notable less for what it has achieved than for what it has failed to achieve.

For many of the interest groups that have spent corporate money year after year, there is precious little to show for it--a fact that corporate patrons may one day realize. The AMA, for example, has not experienced the recruiting success that it hoped tort "reform" would spur. Last year the organization lost nearly 4 percent of its membership. (45) Politically, it is questionable that the "defunding" strategy has been successful at all.

For all the innumerable interest groups and the billions of corporate dollars, tort "reform" remains fruitless in its central goal. Trial lawyers have not been eliminated as a force in society. In fact, both individually and collectively, trial lawyers are resolute in the fight to save the civil justice system and protect consumer rights.

The real tragedy of the tort "reform" movement is how it has restricted, or in some cases denied, access to justice for ordinary men, women, and children who are victims of negligence and willful misconduct.

Notes

(1.) CARL DEAL & JOANNE DOROSHOW. THE CALA FILES: THE SECRET CAMPAIGN BY BIG TOBACCO & OTHER MAJOR INDUSTRIES TO TAKE AWAY YOUR RIGHTS 2 (2000), released by CTR. FOR JUSTICE & DEMOCRACY & PUBLIC CITIZEN. Executive summary available at www.centerjd.org/lib/cala. htm (last visited june 1,2004).

(2.) DAVID C. JOHNSON, THE ATTACK ON TRIAL LAWYERS AND TORT LAW 19 (2003), released by COMMONWEAL INSTITUTE, available at www.commonwealinstitute.org/reports (Click on "TortReport.pdf") (last visited June 1, 2004).

(3.) Associated Press, Chamber's Ad Efforts Failed in Ohio, Worked in Other States, COMMERCIAL APPEAL, Nov. 9, 2000, at DS6.

(4.) Jim VandeHei, Political Cover: Major Business Lobby Wins Back Its Clout by Dispensing Favors-Some Members Can Hide Behind Chamber's Name to Pursue Private Ends, WALL ST. J., Sept. 11, 2001, at A1. See also Bert Brandenberg, Keeping the Courts Free and Fair, in this issue of TRIAL, at 32.

(5.) Editorial & Comment, Open Court: Spending in High-Court Races Should Be Transparent, COLUMBUS DISPATCH, Apr. 11, 2004, at 4C; Jon Craig, Court Hopefuls Vow 'Clean Campaign,' COLUMBUS DISPATCH, Apr. 2, 2004, at 5B.

(6.) AMERICAN LEGISLATIVE EXCHANGE COUNCIL, 2002 ANNUAL REPORT 7 (2003) (on file with author).

(7.) DEFENDERS OF WILDLIFE & NATURAL RESOURCES DEFENSE COUNCIL, CORPORATE AMERICA'S TROJAN HORSE IN THE STATES 4 (2002) available at www. alecwatch.org/report.html (chapter I) (last visited June 1, 2004).

(8.) AMERICAN LEGISLATIVE EXCHANGE COUNCIL, supra note 6, at 3.

(9.) AMERICAN LEGISLATIVE EXCHANGE COUNCIL, 2002 IRS FORM 990 4,6 (2003) (on file with author) (Membership dues revenue $55,021, total revenues $4,990,388. Past IRS returns show a similar ratio.).

(10.) AMERICAN LEGISLATIVE EXCHANGE COUNCIL, 2001 BROCHURE, "CORPORATE EDITION" (on file with author).

(11.) E-mail from Erin O'Neill, Director, Public Trust, to author (Mar. 30, 2004) (on file with author).

(12.) NAT'L COMM. FOR RESPONSIVE PHILANTHROPY, AXIS OF IDEOLOGY: CONSERVATIVE FOUNDATIONS & PUBLIC POLICY (Mar. 2004).

(13.) Press Release, Environmental Protection Agency, Koch Industries to Pay Record Fine for Oil Spills in Six States (Jan.13, 2000), available at www.epa.gov (search for title) (last visited June 1, 2004).

(14.) Ira Chinoy & Robert G. Kaiser, Decades of Contributions to Conservatism, WASH. POST, May 2, 1999, at A25.

(15.) PEOPLE FOR THE AMERICAN WAY, BUYING A MOVEMENT: RIGHT-WING FOUNDATIONS & AMERICAN POLITICS 17, 22 (1996), available at www.pfaw.org (search for "buying a movement") (last visited June 1, 2004).

(16.) See www.cse.org/know/index.php; Lawsuit Abuse: Issue Homepage, available at www.cse.org (select "Key Issues," then "Lawsuit Abuse") (last visited June 1,2004).

(17). W. John Moore, Wichita Pipeline, NAT'L J., May 16, 1992, at 1169.

(18.) RUSS BELLANT, POLITICAL RE SEARCH ASSOCS., THE COORS CONNECTION: HOW COORS FAMILY PHILANTHROPY UNDERMINES DEMOCRATIC PLURALISM 29 (1991).

(19.) See Liability Project, available at www.aei.org (select "Liability Project" on lower left) (last visited June 1, 2004).

(20.) BRIAN OSTROM ET AL., COURT STATISTICS PROJECT, NAT'L CTR. FOR STATE COURTS, EXAMINING THE WORK OF STATE COURTS 2002, 24 (2003), available at www.ncsc online.org (select "Research," then "Court Statistics Project") (last visited June 1, 2004); THOMAS H. COHEN & STEVEN K. SMITH, BUREAU OF JUSTICE STATISTICS, U.S. DEP'T OF JUSTICE, CIVIL TRIAL CASES & VERDICTS IN LARGE COUNTIES 2001, 9 (2004), available at www.ojp.usdoj.gov (select "Courts," then the report title) (last visited June 1, 2004).

(21.) MANHATTAN INSTITUTE, TRIAL LAWYERS, INC. 2 (2003), available at www.triallawyersinc.com (select "download PDF") (last visited June 1, 2004).

(22.) Letter from William Hammett, President, Manhattan Institute, to Manhattan Institute supporters (Nov. 12, 1992) (on file with author).

(23.) Michael Dolny, Spectrum Narrows Further in 2002: Progressive, Domestic Think Tanks See Drop, EXTRA!, July/Aug. 2003, available at www. Fair.org/extra/0307/thinktanks2002.html (last visited June 1, 2004).

(24.) James Barnes, Banker with a Cause, NAT'L J., Mar. 6, 1993, at 564.

(25.) Id. at 564-65.

(26.) John Weiner, Olin Money Tree: Dollars for Neocon Scholars, THE NATION, Jan. 1, 1990, at 12.

(27.) VandeHei, supra note 4.

(28.) James Toedtman, Full-Court Press for Business, NEWSDAY, Jan. 4, 1998, at F08.

(29.) Terry Carter, A Lesson Learned, 84 A.B.A.J, 70 (1998).

(30.) Center for Reponsive Politics, U.S. Chamber of Commerce Lobbying Expenditures, at www.opensecrets.org/lobbyists/client.asp?id= 24309, Business Roundtable Lobbying Expenditures, at www.opensecrets.org/lobbyists/client. asp?id=3592 (last visited June 1, 2004).

(31.) Chamber's Legal Reform Head Leaving in Midst of Campaign, CONGRESS DAILY AM, Sept. 6, 2002.

(32.) Peter H. Stone, Trial Lawyers on Trial, NAT'L J., July 12, 2003, at 2250-55.

(33.) Ana Radelat, Mississippi Again Ranked Worst in the Nation for Lawsuits, GANNETT NEWS SERVICE, Mar. 9, 2004.

(34.) Stone, supra note 32.

(35.) Mission & Goals, available at www.legal reformnow.com/about/mission.cfm (last visited June 1, 2004).

(36.) Peggy Peck, AMA Pursues Tort Reform as Part of Strategy to Build Membership: Specialty-Specific Approach Still an Option, INTERNAL MED. NEWS, Jan. 1, 2004, at 4.

(37.) Shawn Zeller, Lobbying: Identity Crisis, NAT'L J., Apr. 27, 2002, at 1218.

(38.) Bruce Japsen, Cost-Cutting Keeps AMA Finances on Mend: Operating Income Up 81%; Dues Fall, CHI. TRIB., May 31, 2002, at 3.

(39.) Jeanne Cummings, Doctors' Activism Revives Malpractice Bill: Inspired by Bush, Physician Are Pressuring Congress to Cap Damage Awards, WALL. ST. J., Jan. 13, 2003, at A4.

(40.) FRANK LUNTZ, LANGUAGE OF THE 21ST CENTURY: BRIEFING BOOK FOR HOUSE REPUBLICANS (1997); Juliet Eilperin & Jim VandeHei, Trial Lawyers Are New COP Villain for 1998 Elections, ROLL CALL, Dec. 11, 1997.

(41.) Press Release, The White House, Remarks by the President to the Greater Manchester Chamber of Commerce (Oct. 9, 2003), available at www.whitehouse.gov (select "News," then "October 2003" on left) (last visited June 1,2004).

(42.) Press Release, The White House, President Discusses Economy, Child Tax Credit in Philadelphia (July 24, 2003), available at www.whitehouse. gov (select "News," then "July 2003" on left) (last visited June 1, 2004).

(43.) Press Release, The White House, President's Radio Address (July 19, 2003), available at www.whitehouse.gov (select "News," then "July 2003" on left) (last visited June 1, 2004).

(44.) Grover Norquist, Winner Take All--The 2000 Elections Will Decide the Democrats' Future, AM. SPECTATOR. Apr. 1999, at 66-67.

(45.) Peck, supra note 36, at 4.

DAVID RATCLIFF is the research manager in ATLA's State Affairs department.