Report from Capitol Hill.

ATLA and its allies ensured that consumer rights were protected and expanded in the 106th Congress. New challenges await in the 107th.

How did civil justice issues fare in the 106th Congress? And how effectively did ATLA advance the interests of trial lawyers and their clients? In the past, those questions might have called for no more than an analysis of whether ATLA defeated tort "reform." And though that inquiry remains the principal barometer of the association's success, this time the inquiry is broader.

Make no mistake, the 106th Congress produced the usual abundance of dangerous proposals to curtail legal rights--limiting everything from class actions to punitive damages to recovery for workplace injury--and every one of those bills was defeated. But ATLA was also called on to work on behalf of affirmative legislation, positive proposals to expand rights. From health care to admiralty to the law of consumer arbitration, important first steps were taken and groundwork was laid on a bipartisan basis for the possible enhancement of rights in the future.

Although the political landscape has changed--with a nearly even party split on Capitol Hill and a new Republican administration in place--ATLA will look for opportunities to build on these foundations in the freshly minted 107th Congress.

Managed care

Without question, in the 106th Congress, the Patients' Bill of Rights was the 800-pound gorilla of proposals that would have expanded rights. No bill was subject to more extensive, higher-stakes negotiating. ATLA was deeply involved in the negotiations process over a two-year period, working closely with congressional staff and members of the House and Senate on a bipartisan basis.

In the closing months of the Congress, ATLA representatives sought to help craft an agreement that would have preserved the framework of the historic Norwood-Dingell Bipartisan Consensus Managed Care Improvement Act that passed the House on October 7, 1999. That bill would have lifted preemption of state law under the Employee Retirement Income Security Act and permitted actions under state law to recover damages for personal injury or death against an insurer or plan administrator. The bill also would have expanded patient protections by ensuring access to emergency services, pediatric care, and obstetric and gynecologic care. It would have covered all citizens with private health insurance.

Last summer, after months of resisting meaningful reform, opponents of Norwood-Dingell responded to increased political pressure by looking for some "compromise" managed care proposal that might be enacted before the election.

Working with friends on Capitol Hill and with others committed to a bill ensuring meaningful legal accountability, ATLA responded to numerous requests for help from those working to draft a bill acceptable to all sides. In the end, the negotiations--though exhaustive--did not produce the basis for any final agreement. The most difficult issue to resolve proved to be liability: specifically, whether to provide patients with any right to sue plan administrators and, if so, whether to repose that right in state or in federal court and whether to permit class actions.

But Congress's failure to enact a patients' bill of rights should not diminish the importance of advances that ATLA and other progressive groups made toward the enactment of positive legislation. The Norwood-Dingell bill triumphed in the House, sweeping to passage by a bipartisan 275-151 margin after surviving a failed leadership amendment to weaken it. This was a remarkable achievement. Given the fact that the bill repeatedly failed to gain a Senate majority by only the barest of margins, it can fairly be said that this glass is more than half full. Managed-care reform will be back to engage the 107th Congress.

Maritime law 

Important strides were made involving the expansion of rights under the Death on the High Seas Act (DOHSA). On April 5, 2000, the president signed a bill providing for nonpecuniary damages under the act for wrongful death in commercial aviation accidents on the high seas. Previously, DOHSA allowed only for the recovery of pecuniary loss.

Also, in the case of a commercial aviation accident where death is caused by a wrongful act 12 nautical miles or closer to U.S. shores, DOHSA will no longer apply, but other applicable law will.

While this expansion of rights for the families of commercial aviation victims was historic, and ATLA is proud of its role in helping to enact it, the association's overriding commitment is to remedy the underlying unfairness of DOHSA for all who lose their lives on the high seas, not just for commercial aviation victims.

To that end, in consultation with ATLA's Admiralty Law Section, the association successfully lobbied senators on the Commerce Committee for legislation that would extend the same new DOHSA remedies to families who lose loved ones in marine accidents. On July 27, 2000, the full Senate passed such an amendment as part of its version of the Coast Guard authorization bill. In the closing weeks of the Congress, ATLA spent considerable time and effort on this issue, as negotiators sought to draft a conference report on the Coast Guard bill.

When cruise line owners and operators resisted the Senate*passed DOHSA amendment, ATLA worked to achieve a reasonable compromise. Association staff conferred regularly with the officers of the Admiralty Law Section as each new "compromise" was offered. In the end, it was not possible to reach an agreement that treated the families of marine victims fairly. Rather than agree to a less-than-equitable "compromise," ATLA concluded it would be preferable to continue pressing for genuine reform in the future.

Taxes and arbitration

In two other areas, the tax code and the rules governing consumer arbitration, there were noteworthy developments to build on in the future.

A bipartisan group of sponsors and cosponsors in both houses was put together on behalf of the Civil Rights Tax Fairness Act. The bill would have restored the tax deductibility of certain damage awards for nonphysical injury, primarily in statutory civil rights and employment discrimination cases. These awards were made nondeductible under a 1996 law that preserved the deductibility of awards received in cases involving physical injury.

Unfortunately, the Civil Rights Tax Fairness Act remained only the longest of long shots for passage in 2000. Though ATLA lobbied hard for the bill as part of a coalition that included AARP, the National Employment Lawyers Association, several civil rights organizations, and even the U.S. Chamber of Commerce, the absence of any omnibus budget reconciliation legislation--where various revenue measures would have been included--hurt the bill's chances. Although many, including House and Senate Democrats and Republicans and the White House, supported the bill, none had it as a must-pass priority during final budget negotiations.

In another development, first steps were taken toward addressing issues raised by the increased frequency with which businesses include mandatory arbitration clauses in a wide variety of contracts--for example, employment contracts, sales contracts, franchise agreements, and consumer credit notes. Bills to require arm's-length, mutual consent before contractual arbitration can limit an aggrieved party's right to a jury trial were introduced in each house.

Interestingly, the one arbitration bill that showed real movement in the 106th Congress was one advanced by the Automobile Dealers Association. It would have allowed any party to a motor vehicle franchise sales and service contract to reject arbitration as a means of resolving any dispute. In early October, the bill passed the House by voice vote, but, despite several late-session attempts to report it from the Senate Judiciary Committee, Congress adjourned without enacting the bill.

Still, the interest in the bill suggests that as the broader arbitration debate unfolds in the years ahead, consumers may have an opportunity to join in common interest with business constituencies, especially small business.

Victory over tort `reform'

In any Congress, as in the 106th, ATLas success is measured in the end by how well it protects against federal encroachment of state-based access to civil justice. By that criterion, the association's success in the last Congress was sweeping.

Numerous proposals would have diminished the rights of injured Americans under state law. First, there was the defeat of the asbestos bill. But there were also victories over bills to limit the viability of class actions, to enact a national statute of repose for workplace products, and to diminish the liability of "small" businesses.

The asbestos fight raged for more than a year, beginning with the introduction of the so-called Fairness in Asbestos Compensation Act in March 1999. In the Senate, that bill never advanced beyond a single hearing in the Judiciary Committee, but in the House, there was a 12-month maelstrom of activity that resulted in a substitute version of the bill emerging from the Judiciary Committee in March 2000 by a bare 17-16 margin.

Under the committee substitute, most pending cases arising from asbestos-related injury--and all future claims--would have been funneled out of the courts and into an administrative bureaucracy at the Justice Department. Only claimants meeting narrow medical criteria, far more restrictive than the criteria under any state law, would have been eligible for compensation.

More than 50 percent of asbestos claimants who currently are legally eligible for compensation would have been screened out of the system. For claimants who met the bill's restrictive medical criteria, only a limited opportunity to seek judicial relief would have been preserved at the end of the mandatory administrative process.

In the face of an effective ATLA lobbying and public education effort, the Judiciary Committee struggled for months just to keep the bill afloat. In a failed attempt by Chairman Henry Hyde (R-Ill.) to achieve bipartisan support, at least four versions of the bill were circulated before the committee settled on the eventual substitute, and no fewer than seven tentatively scheduled mark-up sessions were postponed.

In the end, not even one committee Democrat could be persuaded to support any version of the bill, and when the process went forward without even unanimous Republican support, the result was the bare 17-16 margin. The bill was never considered on the floor of the House, nor did the committee ever formally file its report.

Still, the bill's final unraveling occurred not in the House Judiciary Committee, but on the floor of the Senate. In an extraordinary colloquy inserted into the official Senate Record of Proceedings on April 4, 2000, the bill's chief sponsor, Sen. John Ashcroft (R-Mo.), acknowledged that support for the bill had diminished and that it served no purpose to represent that it would pass or be acted on. The majority leader, Trent Lott (R-Miss.), responded by advising senators that "in all candor, the necessary floor time will not be available to act on the Senate asbestos bill this year."

The defeat of the asbestos bill may have been ATLA's highest-profile victory during the 106th Congress, but the class action bill, the statute of repose bill, and the small business liability bill all raised wider issues and would have more broadly affected the civil justice system. Each passed the House but was blocked in the Senate. Still, in large part, the fate of these bills may have been decided back on the House side, where effective lobbying resulted in the passage of each by very narrow margins.

First, the class action bill--which proposed expansive new federal court jurisdiction that would have permitted removal of virtually any case filed in state court as a class action--won House passage with only 223 votes. Next, the statute of repose bill--which would have closed the courthouse door to any lawsuit arising from a workplace product 18 years old or older--passed the House with just 222 votes. Finally, a bill that would have capped punitive damages and eliminated joint liability in any action against any business with fewer than 25 full-time employees--and would have substantially limited the liability of all product sellers regardless of size--received just 221 votes, or only three more than a bare House majority.

These numbers remain short of sufficient for House victory by ATLA and its friends in the labor and consumer movements. However, the numbers mean that over a five-year period, the margin for tort "reform" has been reduced by nearly 20 percent. During the Contract with America Congress in 1995, the tort "reform" bill (eventually vetoed) initially passed the House with a whopping 265 votes.

Prospects for the 107th Congress

Perhaps the record of the 106th Congress can provide clues as to what lies ahead, as can the broader record of the tort "reform" debate over the past decade and a half. In truth, there are few certainties, other than the certainty that attacks on the civil justice system will continue and federal proposals to limit rights in civil cases will be back on Congress's agenda.

Many bills that failed in the 106th Congress are likely to be re-introduced. The class action and small business liability bills will be back, as will legislation relating to automobile no-fault insurance, medical malpractice liability, and vicarious liability.

The 107th Congress, however, began work last month under changed political circumstances. Whereas the Clinton administration effectively opposed tort "reform," President George W. Bush led the tort "reform" effort in Texas and ran for president on a platform that called for the same in Washington.

On the Hill, the narrowly divided House remains largely unchanged from the 106th Congress, but the composition of the Senate has shifted significantly and opposition to tort "reform" appears to have grown stronger. It is not simply that the Senate is now divided evenly, whereas for most of the 106th Congress there was a 56-44 Republican majority. The more significant fact is that in November, many of the Senate's most prominent champions of tort "reform" were defeated and replaced by new senators with superior records of support for civil justice.

Slade Gorton (R-Wash.), for example, who served as the Senate floor manager for nearly every important tort "reform" bill in the 1990s, lost his bid for reelection, as did leading tort "reform" supporters John Ashcroft (R-Mo.)(now attorney general-designate), Spencer Abraham (R-Mich.), and Rod Grams (R-Minn.). Sen. Connie Mack (R-Fla.), another long-time tort "reformer," retired and was replaced by a new senator with a strong record on consumer and legal rights.

None of this is to suggest that the fights that lie ahead will be easy. As always, the tort "reformers" will be heavily financed by powerful interests, and this time their effort will be supported by the president. The challenges posed by the change in administrations will be enormous.

Still, in the wake of the election, and in the face of the nearly even split on Capitol Hill, the new president has pledged to seek consensus. Just how quickly, then, he might aggressively pursue what would be a divisive tort "reform" agenda remains to be seen, though certainly difficult votes on civil justice issues can be anticipated during the first session this year.

Dan Cohen is Director of National Affairs for ATLA.