Many Eyes on Tort Reform Debate

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The New York Sun

WASHINGTON – When President Bush spoke privately to five doctors who appeared with him at a speech in Collinsville, Ill., earlier this month, he assured them he would devote part of his State of the Union address to pushing for restraints on the medical malpractice lawsuits blamed for the high insurance premiums that led them to reduce or abandon their high-risk practices.


A hospital administrator in Randolph County, Bob Moore (dubbed “Big Bob” by the president), said Mr. Bush assured the group – which included a neurosurgeon, an obstetrician, a cardiologist, and a labor and delivery nurse – that the issue is a top priority.


The Illinois visit was part of a tour in which the president pushed his three-part legal reform agenda: restrictions on class-action lawsuits, caps on damages in medical malpractice cases, and the creation of a trust fund to settle asbestos claims.


That agenda will live or die in the Senate, where it has so far floundered.


“It’s a priority for him,” Mr. Moore said of the proposed limits on medical malpractice awards. “It has passed the House many times, but there will be a battle in the Senate.”


The best chances of passage are for a bill that would push many class-action lawsuits into federal courts, which are reputed to be more resistant to allowing such litigation.


“Class action has the smoothest path, because it progressed so far last time. It has significant bipartisan support,” said Rep. Lamar Smith, a Texas Republican and vocal proponent of tort reform.


Mr. Smith this week introduced a bill, called the Lawsuit Abuse Reduction Act, which would require plaintiffs to sue only in jurisdictions where they live or suffer injury, or where defendants maintain their principal place of business. The aim of the bill is to prevent trial lawyers from picking and choosing plaintiff-friendly counties where juries are known to give high awards.


Mr. Smith would like to see the bill added to the class-action legislation, but there will be pressure to get the class-action bill passed as quickly and easily as possible to create momentum for the entire tort reform movement.


“The strategic thing that [the president] wants to do is get a victory under his belt and claim credit,” said the director of the Liability Project at the American Enterprise Foundation, Michael Greve. “The administration has been fairly indifferent to the details [of proposals].”


Senate Majority Leader Frist has said he would bring the class-action bill for debate the week of January 7. Last year, 60 senators supported the bill, but it was stalled for procedural reasons.


Beyond the class-action proposal, the political terrain becomes more rocky.


There are deep divisions among many of the parties involved in shaping a trust fund that would pay asbestos claims and potentially replace litigation. The trial lawyers, insurance companies, manufacturers, and labor unions are deeply divided over how the fund should work, whom it should cover, and whether it should eliminate all lawsuits.


“There is very little room for compromise,” Mr. Greve said.


The industry groups are more hopeful.


“I think there is a lot of momentum on asbestos reform. … I think Congress understands that there are very severe consequences of not acting,” said the general counsel of the U.S. Chamber of Commerce Legal Institute, Lisa Rickard.


Likewise, the general counsel to the National Association of Manufacturers, Jan Amundson, said she saw a good “traction” on the fund.


However, a spokesman for the American Trial Lawyers Association, Carlton Carl, said a compromise is nowhere in sight. “It’s not even soup bones, much less soup, yet,” he said.


Medical malpractice reform may also prove to be too controversial, too complicated, and beyond the role of Congress.


“The argument that the states are already doing this has enormous force. That alone will impress some of the Republican senators,” Mr. Carl predicted.


Even some proponents of tort reform believe it should be carried out at the state level.


“What [Mr. Bush] should be saying is the federal government has no business messing around in an area that has been left to the states since the founding of the Republic,” said a senior fellow in constitutional studies at the Cato Institute, Robert Levy.


“This is a doctor in state, being sued by his doctor in state, for an injury that took place in state. How in the world is this interstate commerce?” Mr. Levy asked.


Mr. Bush has said he shared that view while he was governor of Texas, but he has come to believe it is a national matter. In a speech earlier this month, he gave two reasons: He said that when one jurisdiction reins in lawsuits, it merely “shifts” a problem to a different jurisdiction; and the threat of litigation leads doctors to perform unnecessary procedures and drives up the costs of Medicare.


Given the complexities involved, it is unclear how much emphasis the president will put on the theme of tort reform in his State of the Union address, especially in light of his other priorities, including the creation of private Social Security accounts, tax reform, and the war on terror.


At a retreat for Republican lawmakers yesterday, the president’s political adviser, Karl Rove, devoted his entire talk to the subject of Social Security, Mr. Smith said. That led lawmakers to conclude the policy would dominate as the speech’s “big-ticket item.”


Most observers who follow the tort issue expect the president to recap the general themes of the speeches he gave earlier this month, emphasizing the costs of lawsuits to ordinary Americans.


“He has to urge Congress to ‘Let’s just get it done,'” said a spokeswoman for the American Tort Reform Association, Gretchen Schaefer.


Recent events may also jostle the debate. A recent judicial decision allowing a suit to proceed against the Mc-Donalds restaurant chain by a group of teenagers who claim the food made them obese may breathe new life into proposed legislation that would protect eateries from such litigation – and inject fresh indignation into the tort-reform debate.


At the same time, outrage on the other side of the debate is being fueled by disclosures that pharmaceutical companies were aware of potential harmful side effects of the popular drugs such as the pain reliever Vioxx.


“I think the public does not want the Congress to immunize companies that knowingly jeopardize [people’s] lives and those of their family members, and I think they would react harshly at the polls to someone who does support legislation like that,” said Mr. Carl of the trial lawyers’ group.


Mr. Carl was skeptical about the passage of any of the bills, including the class-action legislation, regardless of what the president says.


“I think there is a significant possibility that it will be amended to make it less anti-consumer than it is,” he said. “And if that happens, the corporate wrongdoers who have spent millions of dollars to pass the legislation might not like it anymore.”


The New York Sun

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