ThePopTort

Social Inflation Nonsense, or, What Happened to Victor Schwartz?

Clive Davis, the Victor Schwartz of the music biz. Photo by Christopherpeterson at English Wikipedia, CC BY 3.0

“Social inflation is the insurance industry’s relatively new term to justify price-gouging of policyholders. Using this catchy phrase allows insurers to deflect attention from their own greedy need for more money. They tell policyholders, “Oh, don’t look at us. It’s not our fault that we’re price-gouging you. It's social inflation. You know, lawyers and juries!” This time, they settled on a vague, undefined term that allows them to complain about (and blame) everything they don’t currently like about the civil justice system. #MeToo and child sexual abuse cases. Lawyer advertising. Verdicts in worsening truck crashes. Keeping track of and debunking these wildly-disconnected things is like playing “tort reform whack-a-mole.”

Usually blaming lawyers and juries works for them, even though this tricky industry hikes premiums for completely different reasons. But during past periods of similar price-gouging, lawmakers have responded by enacting legal obstacles for injured people to bring cases, or laws taking power away from juries. (For a 50-year history of how insurers have bamboozled public officials, see the Appendix in this study.)

However, one thing they didn’t anticipate in 2019: COVID. No sooner did they whip out their “social inflation” messaging, than COVID shut down the courts. Complaining about too many lawsuits and “out of control” juries while making a windfall from the pandemic made the insurance industry look ridiculous at best, venal at worst. They’ve struggled to be taken seriously. So, apparently needing help, they just dusted-off an old-timey “big gun” to speak for them, OG Victor Schwartz. The Clive Davis of the “tort reform” movement. And they got Victor to sign onto a data-starved naïve fantasy piece in the conservative Washington Examiner called “How to curb 'social inflation' in lawsuit damages.”

It’s safe to say that Victor Schwartz is someone we never agree with on civil justice issues (except those times when he slips up and truth slithers out). His association with the American Tort Reform Association, a much-diminished organization whose role, from what we can tell, “has been reduced to releasing tired, discredited messaging about judges and juries who rule against [its] corporate members when they kill and injure people,” or the American Legislative Exchange Council, famous for its link to the gun lobby, is pretty gross.

But we’ve never brushed him off as a careless amateur. He co-writes the law school casebook on torts. When he used to testify in Congress, he would generally recite his arguments without notes. (Evil genius comes to mind!) I say “used to” because it has been many years since this golden-ager has occupied a prominent public role in the “tort reform” movement. A decade ago, he admitted on camera to trying to push his inexperienced younger associates into the spotlight, as he was still the guy with the “name recognition.”

Despite the toll age may have taken, we genuinely wonder how he could have put his name on something so slipshod as this article? Who actually wrote this? It’s an online advocacy piece with no links to anything. I take that back - there are four links, all of which appear in the first three paragraphs and link to other Washington Examiner articles nearly unrelated to points being made. (Guessing some Washington Examiner intern said, “I know nothing about this topic but let me throw in some links.")

For example, one paragraph begins, “According to a recent study,” but no study is cited, and there is no link to anything. They say this “study” proves that large verdicts went way up between 2010 and 2019.

Um, actually, they didn’t. As we reported in our fully-cited study, as of the time of publication in 2019:

ALM’s Verdict Search data … show nearly three times the number of $1 million plus verdicts in 2010 (1542) as compared to 2019 (550), with a continuous drop each year. As for verdicts over $10 million, there were about half the number in 2019 (131) as there were in 2010 (256), also with a steady decline each year.  Whether looking at $5 million verdicts or $20 million verdicts, the same trends appear.

And that was before the pandemic!

Then Victor throws in a socio-political opinion about “a younger generation of jurors,” who, he says, is arbitrarily throwing money at people to “redistribute wealth.” Not a single fact, study, link, or even one single example is used to support this. In 2020, the insurance industry called the problem “millennials” recently coming on juries. Then we pointed out that millennials have been on juries since 1999. So they just changed their words, i.e., the vocabulary changed but the inane rhetoric did not.

Then comes the customary attack on the lawyers who represent sick and injured victims. These attacks change over time, but today it’s about a few firms that “advertise” about harm caused by dangerous drugs and products, and a few other firms that reach out to financing companies to help fund often extremely-expensive cases. Litigation finance firms typically allow someone suffering an injury the means to bring a case and not be forced into accepting low-ball offers from insurance companies simply because they can’t pay rent. Welp, here’s the good news. Empirical research shows that litigation finance firms actually screen out meritless cases. Even business attorneys have written that “linking litigation funding to social inflation exposes the specious nature of the social inflation theory itself.” So there’s that.

Then Victor starts complaining about “caps on damages.” Don’t get me wrong, he (or whoever wrote this) loves his caps, especially the ones the insurance industry manipulated many states around the nation into passing, claiming caps would bring down insurance rates. (They didn’t.) But they hate when state constitutions disallow caps. Caps have been struck down nine times (and not repassed) over the course of 50 years. But most recently, New Mexico’s high court upheld an extremely brutal state cap. These laws are not exactly falling by the wayside. The next case up? An Ohio case challenging a state cap, which has been used against a child repeatedly raped by her pastor. There’s a right and wrong side of that issue. I think most people know what that is.

The rest of the article consists of further attacks on judges and juries, making  jurors sound like blubbering idiots who don’t listen to evidence from both sides but are rather enchanted by bewitching plaintiffs lawyers, while calling judges “irresponsible” for allowing victims’ lawyers (never corporate or insurance lawyers) to “flood” jurors’ minds with “misleading information.” Not one example is given. What a dumb thing to argue.

When the pandemic hit, courthouses shut down. Jury trials stopped. People stopped driving for months. People drastically cut down on non-essential medical care, while at the same time most states passed laws immunizing hospitals and nursing homes from liability. (See more here.) No one believed that backlogged juries, non-existent victims and lawyers who couldn’t get their cases heard, were driving insurance rate hikes. Yet the industry never stopped talking about lawyers, juries and "social inflation." Pile onto that the fact that insurers, who had already put virus exclusions in many commercial policies, refused to pay virus-related business interruption claims and fought businesses in court. Insurers are winning those cases. As a result of all this, the property casualty insurance industry’s surplus is now more than an astonishing, record-breaking $1 trillion.

I don’t think even a legacy artist like Victor Schwartz can overcome a reality like that.

Repost from 2012: The Unbearable Lightness of Being ... Unaccountable

You know how much I love quoting Ronald Reagan.  (Kidding.) (No offense, Tea Party friends.)  Here’s a good one: “We must reject the idea that every time a law's broken, society is guilty rather than the lawbreaker. It is time to restore the American precept that each individual is accountable for his actions.”

I’m guessing he believed that cigarette smokers, as one example, fell into that “individual accountability” category.  But what if the law breakers are the people who are supposed to be enforcing the law?  Should they be accountable?  Which brings us to last night’s 60 Minutes, and a couple other hot topics. 

The show last night was about the exoneration of Michael Morton, wrongly convicted of murdering his wife in 1987.  He was freed after 25 years in prison based on DNA evidence, thanks to the hard work of the Innocence Project. 

But, reports 60 Minutes, Morton’s attorneys, “recently discovered something astonishing: sitting in his prosecutor's file all those years was evidence that could have established Morton's innocence during his trial.”  That evidence was a police report, relating how Morton’s then 3-year-old son, who witnessed the murder, described in detail the guy who really killed his mother, and it wasn’t Michael Morton.  The DA who apparently failed to turn the report over to Morton at the time, Ken Anderson, later “was named prosecutor of the year in Texas and since 2002 he's been a district judge in the same court where Michael Morton was convicted. All those years, Morton languished in prison.” 

Here’s some of the conversation between 60 Minutes correspondent Lara Logan and Barry Scheck of the Innocence Project, and Logan and Anderson’s lawyer, Eric Nichols:

Lara Logan: So just to be clear, from both of you, you believe that Ken Anderson, the prosecutor in Michael's case, willfully, deliberately withheld evidence.

Barry Scheck: We believe that there's probable cause to believe that he violated a court order, withheld exculpatory evidence, and violated other laws of the State of Texas.

In February, a Texas judge agreed with Michael Morton's legal team that there was probable cause to believe Ken Anderson violated the law, and Anderson is now the subject of a special criminal inquiry. That's extremely rare. Studies have shown prosecutors are hardly ever criminally charged or disciplined for serious error or misconduct. And one thing Ken Anderson doesn't have to worry about is being sued for damages by Michael Morton because the Supreme Court has ruled that prosecutors have "absolute immunity" from civil lawsuits for their legal work.

Lara Logan: Doctors, lawyers, policemen, there are all kinds of people who do their job with limited immunity or no immunity. It just seems hard to understand why prosecutors have to have a different standard to everybody else.

Eric Nichols: Seeing that justice is done, in many instances, requires very difficult judgments. And to come back behind those prosecutors and second guess them, or sue them would throw a wrench into that system of prosecutors seeking justice.

Lara Logan: I have to say, there's a certain irony in hearing you say it's the job of a prosecutor to seek justice, right? Because in this particular case, that's exactly what Michael Morton did not get. …

Michael Morton: I don't have a lotta things really driving me. But one of the things is, I don't want this to happen to anybody else. Revenge isn't the issue here. Revenge, I know, doesn't work. But accountability works. It's what balances out. It's the equilibrium. It's the social glue in a way. Because if you're not count-- accountable, then you can do anything.

Pay attention, corporate and medical lobbies pushing for laws to limit their liability for wrongdoing, so-called "tort reform."  He's talking about you.  As Logan notes, accountability doesn’t just mean criminal accountability but also, civil liability - something we touched on last week in our post about how the civil justice system can sometimes step in where the criminal justice fails.  That is, except if the destructive, corporate-backed, right-wing American Legislative Exchange Council (ALEC) (which we’ve covered many times, like here, here, here) has anything to do with it. 

Paul Krugman's column in today’s New York Times, called "Lobbyists Guns and Money," hits it out of the park with a great piece about how ALEC is responsible for the spread of Stand Your Ground laws (among many other horrendous laws), which many believe not only contributed to the killing of Trayvon Martin but also, the failure by police to arrest his killer.  Writes Krugman:

Florida’s now-infamous Stand Your Ground law, which lets you shoot someone you consider threatening without facing arrest, let alone prosecution, sounds crazy — and it is. And it’s tempting to dismiss this law as the work of ignorant yahoos. But similar laws have been pushed across the nation, not by ignorant yahoos but by big corporations.

Specifically, language virtually identical to Florida’s law is featured in a template supplied to legislators in other states by the American Legislative Exchange Council, a corporate-backed organization that has managed to keep a low profile even as it exerts vast influence (only recently, thanks to yeoman work by the Center for Media and Democracy, has a clear picture of ALEC’s activities emerged). And if there is any silver lining to Trayvon Martin’s killing, it is that it might finally place a spotlight on what ALEC is doing to our society — and our democracy. …

But where does the encouragement of vigilante (in)justice fit into this picture? In part it’s the same old story — the long-standing exploitation of public fears, especially those associated with racial tension, to promote a pro-corporate, pro-wealthy agenda. It’s neither an accident nor a surprise that the National Rifle Association and ALEC have been close allies all along.

There’s a lot more in Krugman’s piece about the corrupting influence of corporate money behind ALEC’s work.  So where does civil liability fit into this picture?  Well, forget prosecutor immunity laws.  These Stand Your Ground laws turn everyday people into prosecutor, judge, jury, and executioner, and then immunize them not just from criminal prosecution but also civil liability.  Just like dirty prosecutors in Texas are protected.  Just like the corporate members of ALEC are protected from civil liability when they commit wrongdoing, thanks to laws written and pushed by ALEC's civil justice task force, chaired by our friend Victor Schwartz, the General Counsel of the American Tort Reform Association.  Here’s Victor, below.  As they say, everything’s connected.

California Rights a Terrible Wrong

Patient advocates at the White House fighting MICRA's spread nationally, 2010

As the saying goes, “a lie can travel halfway around the world while the truth is still putting on its shoes.” Well, when it comes to California’s 1975 brutal law that severely caps (at $250,000) non-economic damages for injured patients – even catastrophically-injured children – the shoes are finally on. At least in part.

Reports indicate that California’s medical industry has finally realized that the falsehoods and nonsense used to justify opposing even an small inflationary increase to this cap after nearly 50 years, weren’t working anymore. Between a threatened ballot initiative to raise the cap and more, a very smart organizing and media campaign, and some skillful lobbying by advocates, they finally gave in, agreeing to an inflationary adjustment.

Yet this law should never have come to be in the first place.

In 1974, a bunch of insurance companies in California suddenly and drastically raised medical malpractice premiums on doctors with no data to support what they were doing. During this period, J. Robert Hunter, at the time the nation’s Federal Insurance Administrator, started examining whether this premium increase was caused by some huge jump in medical malpractice claims. Working with the National Association of Insurance Commissioners (NAIC), they found that there was no jump in claims and no justification for insurers to drastically raise rates. The fault lied entirely with an out-of-control and largely unregulated insurance industry. (Learn more here.)

President Ford (and later President Carter) resisted efforts to consider a national "tort reform" bill based on this research. However, the truth didn’t stop insurance and medical lobbyists. They zeroed-in on state lawmakers, spouting their false narrative, saying, “Don’t look at us for these astronomical rate hikes– blame the lawyers, lawsuits and juries!” With this rhetoric in hand, they used their economic clout to force many states to weaken civil liability laws. And it was all done with very little scrutiny by policyholders, lawmakers, the media or the public at large.

Perhaps most famously was California’s $250,000 cap law, the Medical Injury Compensation Reform Act, or MICRA. This cap has not increased one cent from the original $250,000 limit, despite inflation that has far more than quadrupled costs (“Had the cap had been annually adjusted for inflation, it would now be $1.3 million.”) Those hurt most by this law are children, stay-at-home parents, the elderly and poor, i.e., those whose economic damages tend to be less despite the fact that they have suffered grievous injury.

Governor Jerry Brown signed the MICRA bill in 1975, and then, realizing it was a mistake, repudiated it in a public written statement in 1993. But he cowardly failed to act to change the law when he became Governor again in 2011. Tragically MICRA kept harming the most seriously injured and needy children and adults who suffer from negligent (or worse) physicians and hospitals. And it has allowed the medical establishment to try to spread this cruel law to other states and even – unsuccessfully, thank goodness - to the entire nation in federal legislation.

MICRA has had terrible consequences for many innocent people, while doing nothing to improve the affordability of liability insurance for doctors. This new deal will raise the cap to $350,000, which would gradually increase over a 10-year period to $750,000 (more for death cases). Moreover, if both a doctor and hospital are found responsible, both can be liable for these damages, which is something not allowed under MICRA. It is a very big step to righting a horrible injustice. Kudos to all involved.

Tip-Toeing Into the Light

If you’re a fan of “The Office,” you may remember the story line of Michael dating Pam’s mom. And in particular, the scene where Michael first tells Pam about it. Michael softly whispers “It’s OK, it’s OK” while Pam gradually starts screaming her head off.

“It’s ok, it’s ok,” is something we’ve probably all whispered to someone, somewhere, at some point in our life. Today, I’m going to gently whisper this to two unlikely groups: the American Medical Association (AMA) and the “tort reform” crowd in Congress. They’ve both recently tip-toed over to the light from the civil justice dark side, and I’m here to tell them “It’s ok, it’s ok. Everything’s gonna be alright!”

First, the AMA. The other day, the AMA publicly admitted that the insurance industry’s predictable economic cycle is to blame for the recent round of medical malpractice insurance premium hikes for doctors. They said, “The medical liability insurance cycle is in a period of increasing premiums.” (See why that’s true here.)

The fact that they didn’t go on an unsubstantiated screaming rant about juries, lawyers, lawsuits, or claims stands in stark contrast to the AMA’s response to prior periods of rate hikes (and there have been three since the 1970s). Every other time, the AMA responded with a huge PR and lobbying campaign blaming the legal system for doctors’ insurance problems and pressuring for new “tort reform” laws as the “solution.” (See more here.) But they can’t do that now. I mean, I guess they could try, but they’d be laughed out of the room. Some states suffering through rate hikes still have pandemic liability shields in place, which immunize health care workers from liability. Jury trials ground to a halt during the pandemic and are still severely backlogged. And half the states with the highest med mal insurance rates limit compensation for injured patients (illustrating the true ineffectiveness of “caps” as solutions to this insurance-created problem.) So for a change, they’re trying honesty.

To the AMA, we say, it’s ok, it’s ok, it feels good to be honest about this, right? No more screaming rants. Help your doctors with real insurance-based solutions to their cyclical insurance problems. It's the only thing that works. Drop us a line. We have thoughts.

Second, hello Congress’ “tort reform” crowd! As we recently wrote a few weeks ago, a strongly bi-partisan anti-forced arbitration bill just passed the U.S. House by a vote of 335 to 97, and then passed the Senate unanimously. Now signed into law, this bill bans the use of forced arbitration clauses in cases involving sexual harassment and sexual assault. Congress’ landslide vote on this wasn’t just a “tip-toe” into the light, but rather a major jump. They were actually forced to admit that forced arbitration is not good for people.

It seems ridiculous for anyone to argue now, with a straight face, that forced arbitration clauses are good for people, in fact so great that for their own good, the public must be forced to agree to them. Nearly the entire Congress rejected that here. Obviously these clauses are as bad for sexual harassment and assault victims as they are for defrauded servicemembers, neglected nursing home residents, small businesses being squeezed by a conglomerate, low-wage essential workers being ripped off during a pandemic. Forced arbitration clauses have proliferated in all of these areas and should be outlawed.

So to all you “tort reformers” in Congress, it’s ok, it’s ok, stay honest about this. No more screaming rants about juries, lawyers, lawsuits, or claims. Remain over here with us, in the light, and with those who care about workers and consumers. Because it’s all coming up again, real fast. The House votes today on H.R. 963, the Forced Arbitration Injustice Repeal (FAIR) Act, which would ensure that all workers, consumers, servicemembers, nursing home residents, ordinary investors, and small businesses harmed by bad actors can bring valid claims in court.

Stay in the light and do the right thing. And if you’re still struggling with this, drop us a line. We have thoughts.

Forced Arbitration Is About to Shift Shape

I’m no historian but the amount of lying going on these days by those desperate to hang onto power seems unprecedented. Take the issue of forced arbitration clauses.

“What are forced arbitration clauses?” you may ask. Those are the ever-present clauses that corporations bury in fine print legalese “agreements” (that no one reads) when you get a phone or something online or even a job. Here's what they mean: if the company cheats, defrauds, discriminates against, harasses, physically injuries or otherwise harms you, you cannot sue the company in court or have a trial. Instead, you are forced to deal with the company in a private, secretive, rigged arbitration system controlled by the company. You may have to pay for the arbitrator. You can’t talk about what happened. And there is no right to appeal.

While the U.S. Supreme Court decision narrowly OK'ing these atrocious clauses in 2011 had a number of disturbing results, one of the weirdest was the shape-shifting of corporations into consumer and worker rights advocates! (Whatever demonic potion they've been drinking, keep it away from us.) More specifically, since that 2011 SCOTUS decision, corporate lawyers have stuck these clauses in everything because, they say they want to help you! You, the consumer! You, the worker! Not only are forced arbitration clauses good for you, they say, they’re so great that for your own good, you must be forced to agree to them! And if you don’t, no product, service, job or soup for you! (FYI we used to get our soup there and it’s all true.)

Well of course, nothing about any of this is good for you (except the soup – try the Mulligatawny). When we push back (see e.g., here, here, here), they say not only are we wrong, but we’re too stupid to know we’re wrong. But of course, we are not stupid and they are lying. And now Congress seems poised to help expose this lie for the first time in a very long while.

On Monday, an extraordinary thing happened in the U.S. House  of Representatives. A strongly bi-partisan bill, titled The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, passed the U.S. House by a vote of 335 to 97. When finally passed by the Senate and signed into law, this bill will ban the use of forced arbitration clauses in cases involving sexual harassment and sexual assault. This will be the first major, permanent crack in the “forced arbitration” wall erected by SCOTUS more than a decade ago.

Because passage of this bill will help expose the lie from those corporate shape-shifters, its importance cannot be overstated – for survivors, for workplaces everywhere, for all of us. And it’s worth remembering that these clauses are as bad for sexual harassment and assault victims as they are for you the defrauded bank customer, you the neglected nursing home resident, you the small business being squeezed by some conglomerate, you the low-wage essential worker being ripped off during a pandemic. Forced arbitration clauses have proliferated in all of these areas and should be outlawed. But one very important step at a time.

Please tell your Senator to support this bill.  And if you need a little more convincing, please watch this video. #EndForcedArbitration!

#EndForcedArbitration from American Association for Justice on Vimeo.

It’s Med Mal Quiz Time Again!

Hey kids, it’s our favorite time of year – PopTort Pop Quiz time! Our first of 2022 on the important topic of medical malpractice and health care. I just know you've all been studying very hard. So let’s go!

1. What percentage of injured patients who win their cases actually receive what a jury awards them:

1. 100%
2. 70%
3. 50%
4. Less than 30 percent

The answer is "d." According to new research from 6 top medical malpractice researchers, 74 percent of patients receive less than what a jury awards “whether the wrongdoer is a physician, hospital or nursing home.” They say that there is a “large gap” between what juries award and what insurers actually pay, which is far less. Industry campaigns focused on jury verdicts are “disingenuous, based on an incomplete and potentially misleading factual foundation.”

2. The chance of a physician having to personally cover the difference between a large jury award and their smaller medical malpractice insurance policy limit is:

1. 100%
2. 50%
3. 25%
4. Less than 1%

The answer is once again “d.” According to the same new research from 6 top medical malpractice researchers, “in only 0.6 percent of cases did physicians make any out-of-pocket payments, and most of these were relatively small. Essentially, physicians’ policy limits are a hard cap on recovery.

3. A new physician survey finds that roughly 1 in 5 are considering leaving their current jobs to pursue a nonclinical career. The top reason given by physicians was:

1. Risk of being sued
2. General burnout
3. Need to reduce hours
4. The pandemic

The answer is “b" for burnout! According to the survey, risk of being sued is not a factor. And “only 7% put the blame for leaving clinical practice squarely on the pandemic.” However,“Burnout was most often cited as the primary reason for considering a change; 34% gave this reason. Twenty percent said they wanted to work fewer hours.” The risk of being sued is not a factor.

4. True or False: Most doctors who have been sued believe the outcome of the lawsuit was fair.

That would be “True.” According to a new Medscape survey, “A majority — 61 percent — of doctors who were sued “believed the outcome of their lawsuit was fair.” Moreover, “More than half of physicians who were sued reported that there were no attitude or career changes after the experience, which is consistent with results of prior surveys.”

5. When asked if they’d been sued for COVID-related negligence, what percentage of doctors surveyed in 2021 answered "yes, they had been sued":

1. 100 percent
2. 50 percent
3. 10 percent
4. 0 percent

The answer is “d.” When asked whether they’d been sued for a COVID-related allegation, 100 percent of respondents said no.  That's the "wave" of lawsuits some insisted was coming.

6. Surplus - the extra money medical malpractice insurers set aside over and above what they keep for expected losses - did what during pandemic:

1. Dropped
2. Stayed the same
3. Increased

The answer is “c.” According to the October 2021 issue of Medical Liability Monitor, thanks to a stock market windfall, the industry saw “a surplus increase of almost 3% in 2020, bringing total surplus to the MPL sector to more than $33 billion.” Astounding.

Bonus Question:

True or False: More than 140,000 nursing home residents have died from COVID-19.

Sadly, this is "True." According to the most recent government data, as of the week ending December 26, 2021, more than 754,500 nursing home residents had contracted COVID-19 and over 142,300 residents had died from COVID-19

Of course, all of this information and much more can be found in the Center for Justice & Democracy at New York Law School’s new briefing book, Medical Malpractice – By the Numbers!  Study up.  You never know when quiz time will pop up again!

Confidential Memo on "Judicial Hellholes" from Insurance Industry!

Looked what was just leaked to us!

-----------------------------------------

CONFIDENTIAL MEMO

To: American Tort Reform Association

From: Property/Casualty Insurance Industry PR Hacks

Date: December 6, 2021

Re: Good luck tomorrow!

I hope you know that we value nothing more than our friends in the “tort reform” movement, like you, who share our goals: getting politicians and media outlets on our side, demeaning judges who rule against us, and passing laws that take power and authority away from juries. Our methods may be different than yours: we engineer the unjustifiable price-gouging of policyholders until they scream, you issue an inane repetitive yearly “judicial hellhole report” designed to cause screaming! (More about that below.) But as our goals are the same, we thought you might benefit from our recent experience trying to attack judges and juries during a pandemic - since it looks like you are officially releasing another one of these reports tomorrow.

We should start by being honest and telling you that those screaming about your report aren’t quite what we’d hoped, and have instead presented some real PR challenges for our movement. The severity of attacks by legal scholars and media outlets even took us by surprise! Targeting jurisdictions with poor and minority populations probably doesn’t help either (although we do that all the time so who are we to judge?). Also, attacking local judges and juries seems un-American and unpopular to a lot of people. So, while you were already on thin ice with this “study,” there is now a whole new context to consider: the pandemic. The civil justice system was dormant for many months and is only now slowly coming back to life. Jury trials stopped, are still not happening in many places, and injured people can’t get cases heard. In other words, this darn pandemic has just wreaked havoc on our PR messaging!

We know this from experience. Let us explain. A few months before the pandemic, we began suddenly raising insurance rates on businesses (as usual) despite sitting on mountains of cash (close to a trillion dollar surplus now). For forty years, we followed a standard playbook: 1. Suddenly raise rates on doctors and businesses so they go nuts; 2. Falsely tell them that lawsuits, juries, lawyers and victims are to blame even though there is never a spike in insurance claims or lawsuits; 3. Lie to politicians, saying enacting “tort reform” is the only way to bring down rates; 4. Get "tort reform" laws passed that take power away from juries. This worked every time.

But our old tricks aren’t working now. In 2019 and 2020, we dutifully created a new insurance crisis, trying to follow the same playbook. We even thought up a convenient new term to blame for our price-gouging. We called it “social inflation” - a term we haven’t given up on yet, by the way. We thought this was a perfect PR device, a term so vague it can be used for everything we hate: policyholders who go court, “aggressive” attorneys who represent them, and local juries. But one thing we didn’t anticipate: COVID. COVID shut down the courts. Complaining about too many lawsuits and “out of control” juries suddenly made us look silly. And without that kind of PR hook, no one was screaming for “tort reform.”

Things aren't getting much better. In fact, thanks to the pandemic, civil cases are now completely backlogged. Civil cases are being put at “the end of the line,” and they are piling up. Judges – and there are simply not enough of them - are trying to prevent jury trials altogether, often for the safety and economic concerns of potential jurors. They are pressuring settlements like never before. So believe it or not, sometimes we’re the ones pushing for jury trials now! (As one lawyer put it, “We are finding that liability insurers and defendants, most of the time, will not waive their right to a jury trial…”)

Now I’m not saying you won’t be able to bamboozle some, shall we say, “gullible” reporters and editors to pick up your spin. For example, just look at the awesome, highly misrepresentative headline by media outlets (like here here) reporting on a so-called “record breaking” Nebraska jury verdict for a negligently injured, permanently-disabled child. We all know the family will receive only a tiny fraction of this verdict because Nebraska has a severe cap on damages for injured patients including children – a cap the jury was not told about. But this fact was barely mentioned in the articles. Kudos to whatever PR operation hoodwinked some lazy reports and editors on this one! But the media isn’t as reliable for us as it used to be. Take, for example, the very popular podcast “You’re Wrong About That.” Here’s what they tweeted when they re-ran this year their episode on the McDonald’s Hot Coffee case. They’ve turned our entire PR fabrication about this case on its head, just like the 2011 HBO documentary film Hot Coffee. 

Whatever happens tomorrow, we’ll have your back don’t worry. We just feel bad that your role in our movement has been reduced to releasing tired, discredited messaging about judges and juries who rule against your corporate members when they kill and injure people. Perhaps it's time to reevaluate?

A Civil Justice Top 10 Thank You List

Here’s our Thanksgiving gift to you because sometimes things do go our way and we need to talk about that! Everyone feel better, and Happy Thanksgiving.

1. Congress quit “tort reform.” For 15 years, there has not been a serious “tort reform” effort in Congress. That’s when, in 2006, the last of seven bills to cap damages for medical malpractice victims was brought to the floor and decisively killed in the U.S. Senate even though the “tort reform” party controlled Congress, “tort reformer” in chief George W. Bush was President, and members of Congress were under enormous pressure to succumb to medical and insurance industry pressure. (Doctors had been suffering through four years of unnecessary price-gouging by medical malpractice insurers.) That happened because civil justice advocates effectively pushed back. While the U.S. House may pass bills now and then, they now arrive DOA in the Senate irrespective of who's in charge.

2. Judicial progress. Yes, the federal courts were decimated during the Trump/McConnell years. But the Biden/Schumer years have made much headway turning things around. Quoting our good friends at the Alliance for Justice, “President Biden has already seen more judges confirmed in his first year than the past five presidents, and he shows no signs of slowing down. With each slate, we see his continued commitment to bringing more professional and demographic diversity to our courts.”

3. Support for civil justice is bi-partisan. The “tort reform” movement finds itself no longer fighting just its traditional opponents - Democrats and progressives - as they had been for the first 30 years of the “tort reform” movement. They are now fighting people of their own political party and conservatives – and they are losing. Conservatives helped stop a bad class action bill and federal tort reform, and are now supporting a bi-partisan bill to ban forced arbitration clauses for sexual harassment cases. Who thought we’d ever see that?

4. Forced arbitration is backfiring. Speaking of forced arbitration, who saw this coming? As we wrote last July, “Amazon decided to give up its ‘forced arbitration’ requirement and allow itself to be sued in court. Why?  Because they were outsmarted. Specifically, rather than dropping claims, more than 75,000 Echo users, who were very angry that these Alexa devices were recording them without permission, filed for arbitration, hitting Amazon with a bill for ‘tens of millions of dollars in filing fees.’” Yet smart lawyering isn’t the only trigger for this development. Other big companies, like Google, have also dropped their forced arbitration clauses following major grassroots organizing. The company-by-company approach can’t replace Congress’ much need action on the FAIR Act, but the public education that has surrounded these developments can’t be overstated.

5. Unlikely courts have struck down caps. While not every state supreme court has struck down caps on damages, several surprising decisions have done so in conservative states and/or in states where courts had earlier ruled differently (e.g., Kansas, Oklahoma, Oregon). As a result, less than half the states (24) have laws that specifically cap non-economic damages in medical malpractice cases, which is the most popular kind of “tort reform” proposal. And only nine cap non-economic damages generally.

6. Research comes through. Often the insurance industry can bamboozle politicians despite the best efforts of civil justice advocates. (See what just happened in Louisiana.) But enough time has passed since many “tort reform” laws have been on the books, that credible, in-depth academic research about the impact of these laws is possible. And it’s showing “tort reform’s” failure at every level. That’s true even when it comes to the most common “talking point” in support of such laws: bringing down costs. Caps on damages, for example, cause system costs to actually increase, not decrease! See the book Medical Malpractice Litigation: How It Works, Why Tort Reform Hasn’t Helped, written by six top medical malpractice researchers, published by the conservative Cato Institute, no less. And let’s not forget survey-type research, like this one from one “tort reform” lobbying group. They say that for small businesses, the issue of “lawsuits” is of less importance than almost any issue small businesses could possibly face, or on which they want lawmakers to focus. 

7. New media is smarter. Gone are the days when press releases from manipulative industry PR operations with a lot of money, sent to traditional media outlets, become the only way people hear about civil justice issues. If you want to see how that used to happen, catch the documentary film Hot Coffee, which showed the destructive impact of that PR machine. But there is much more skepticism these days, and many more popular outlets want the truth. Take, for example, the very popular podcast “You’re Wrong About That,” which consistently ranks at the top of podcast episode and show lists. Here’s what they tweeted when they re-ran this year their episode on the McDonald’s Hot Coffee case which (like the film), debunks many anti-civil justice myths about this case: “This is by far our most requested episode! We're a little reluctant to do it simply because the ‘you're wrong about’ narrative is so well-known at this point. But maybe it's worth looking into anyway!” It's not the mid-1990s anymore.

8. Insurer price-gouging not working for them. Volcanic eruptions in insurance premiums for commercial customers (businesses, doctors) occurred the mid 1970s, again in the mid-1980s, and the early 2000s. While lawsuits had nothing to do with why premiums suddenly jumped, each time the industry responded by successfully pushing states to enact “tort reform” laws stripping victims of their legal rights. Now we are in the fourth such cycle. Insurance prices have been rising since 2019. But unlike in the past, today insurers have been unable to exploit their own mismanaged underwriting to push for similar “tort reform” laws. Why? Perhaps it’s because no one believes lawsuits caused insurance premiums to rise in a year when the civil courts and juries were essentially shut down. Or maybe it’s that the industry is sitting on a record-breaking trillion dollar surplus. Or maybe, people are just wising up to how this dishonest industry operates..

9. Law students emerge as a force. Law students have never been more politicized and active on civil justice, corporate accountability and court issues as they are now. People's Parity Project has emerged as a critical new voice on these issues, growing out of a movement at some of the top law schools in the nation. The [F]law is a new publication from Harvard Law School students, with a mission “to share stories that reveal how corporate law and power create social problems and systemic injustices.” And there’s been a huge jump in law school enrollment due to a number of factors including “continuation of what is called ‘the Trump bump’” and “what happened in 2020 — including the police killing of George Floyd and the racial justice movement that arose from it — spurred more applicants, she said, as did the death of Supreme Court Justice Ruth Bader Ginsburg and the confirmation of a controversial successor.” Can’t wait to see what these students do when they make it into the workforce.

10. Finally, we are thankful for everyone who pays attention to ThePopTort, the work of the Center for Justice & Democracy, and all the amazing advocates we work with. Have a very Happy Thanksgiving!

Harry Houdini Has Nothing on the Pharmaceutical Industry

Poll question: Who’s the greatest escape artist of all time? Harry Houdini? Criss Angel? After this week, I’m going with the drug industry (which the Center for Justice & Democracy writes about in its new report, PILLS; Big Pharma, the FDA, and Problem Medicine). Let’s review.

Escape Trick #1: It has been remarkably difficult to hold gigantic drug companies legally accountable for creating the public health disaster known as the opioid crisis. Criminal laws and sanctions fall vastly short. Even if criminally liable, you can’t throw an industry in jail. Yet in terms of the number of deaths and the costly toll on local communities – law enforcement, health care systems, etc. – the harm has been staggering. So states and communities have had to get creative.

They thought they had it, at least in one state – Oklahoma, where state officials said the industry (and in this case, Johnson & Johnson) was liable for creating a “public nuisance” - that being oversupplying opioids to the state. Lower courts agreed. But this week, the Oklahoma Supreme Court threw out the public nuisance case, ruling in the drug company’s favor. A California lower court had done the same thing earlier this month. This isn’t the end of opioid litigation or settlement talks, of course. But now a major legal theory, one with real promise for holding accountable the pharmaceutical industry for this crisis, may be dead.

Escape Trick #2: In October, Johnson & Johnson, with a net worth of about $420 billion, filed for Chapter 11 bankruptcy in order to cheat customers it poisoned with asbestos in J&J talc powders, including baby powder. This was after engaging in a decades-long cover-up of this corporate crime. Rather than face its victims in court, J&J has decided to take advantage of a loophole in Texas law that allows companies to split in two - one with all the company’s assets, the other with all the liabilities for the harm they caused. The company with all the liabilities then filed for bankruptcy and some tens of thousands of claims got dumped into bankruptcy court. Sick and dying victims became nothing more than creditors in a bankruptcy.

Interestingly, J&J filed for bankruptcy in North Carolina for no reason other than they assumed they’d get a favorable judge there. Fortunately, the NC judge kicked the bankruptcy case back to J&J’s home state of New Jersey where it belongs - along with a 60 day stay so a new judge can get “up to speed.” We will see what happens. Meanwhile, Congress is also trying to deal with this kind of bankruptcy abuse, with legislation supported by more than 50 groups to prevent companies from using bankruptcy laws to escape responsibility to customers they harm or kill.

Interestingly, this isn’t J&J’s only “split” of late. It’s also now splitting its health care products from its pharmaceuticals. Not sure what the escape plan is with this move, but I’m sure they’re up to something.

What is Reuters Doing Here?

No, this isn’t a blog about a frivolous lawsuit being filed against a small nonprofit group (us). There was no lawsuit and based on what we know about this situation (that would be a lot) there never would be - but there was certainly a threat.

This is a blog about a news organization - Reuters - that seemed to license one of their photos to a large and wealthy foundation – the World Economic Forum - which represented on its Wiki Commons page that they obtained access to this photo with Creative Common rights so others could use it in their little blogs. (See excerpt from this page).

Licensing photos with Creative Common (CC) rights is something WEC seems to take pride in doing and something that we would otherwise appreciate. Did they fail to do it here despite what they represented? I guess we will never know. 

Because when told Reuters came after us for using one such photo, WEC failed to help (or even respond) and allowed a company working for Reuters to demand that we not only take it down, but also pay an exorbitant fee for “past use,” threatening to refer the case to a law firm and “wait until you see the fees they’ll charge you!” (Although it could have been worse. In the tradition of the finest used car salesman, the company placed a sticker on the payment website offering an enticing 40 percent discount if we pay now.)

We were given 10 days to pay or else. It did not matter that the Reuter’s rep failed to even try to find out if WEC obtained access to this photo on the condition that they obtained CC rights, as they represented. Of course Reuters would also have this information. On this point, both organizations blew us off.  

It did not matter that the Reuter’s rep refused several requests from us for proof of the photo’s copyright registration, an expensive and often not-taken step which is a pre-requisite to suing as explained in this recent LA Times piece about celebrity photos (we hear you Lisa Rinna).  

Nor did it matter that the law considers it to be copyright abuse to not first consider our “fair use” claim before sending a “take-down” demand.

So what is Reuters doing here? And for that matter, what is the World Economic Forum doing?

My advice for anyone interested in engaging in the marketplace of ideas: stay clear of (and shame on) both.