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2005-02-04

Tort Reform: The Big Payoff for Corporations, Curbing the Lawsuits that Hold them Accountable

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In his State of the Union address, President Bush urged lawmakers to rewrite tort law rules to do away with class action lawsuits. We take a look at medical malpractice with Joanne Doroshow, executive director of the Center for Justice and Democracy. [includes rush transcript]

In his State of the Union address Wednesday, President Bush urged lawmakers to rewrite tort law rules to do away with class action lawsuits he says have become a significant drag on the economy.

  • President Bush, State of the Union address, February 3, 2005:
    "To make our economy stronger and more dynamic, we must prepare a rising generation to fill the jobs of the 21st century. Under the No Child Left Behind Act, standards are higher, test scores are on the rise, and we’re closing the achievement gap for minority students. Now we must demand better results from our high schools, so every high school diploma is a ticket to success. We will help an additional 200,000 workers to get training for a better career, by reforming our job training system and strengthening America’s community colleges. And we’ll make it easier for Americans to afford a college education, by increasing the size of Pell Grants. To make our economy stronger and more competitive, America must reward, not punish, the efforts and dreams of entrepreneurs. Small business is the path of advancement, especially for women and minorities, so we must free small businesses from needless regulation and protect honest job-creators from junk lawsuits. Justice is distorted, and our economy is held back by irresponsible class-actions and frivolous asbestos claims — and I urge Congress to pass legal reforms this year."

The president won an an initial victory in tort reform yesterday when a bill sought by corporations to curb class action lawsuits advanced in the Senate.

The Judiciary committee voted 13 to 5 to approve the measure and send it to the full Senate, where it will be considered as early as next week. The bill transfers most class-action lawsuits from state courts to more stringent federal courts and is the first in a package of changes to the tort system sought by the Bush administration.

But Republican Senator Arlen Specter of Pennsylvania is trying to take the bill one step further. Specter is pushing forward an amendment to would impose new limits on medical malpractice lawsuits and would preclude people who claim they have asbestos poisoning from filing lawsuits.

Asbestos was widely used for fireproofing and insulation until the 1970s. Studies have shown that inhaled fibers are linked to cancer and other diseases, and hundreds of thousands of injury claims have been brought to court.

Transcript

This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: In his State of the Union Address Wednesday, President Bush urged lawmakers to rewrite tort laws to do away with class action lawsuits he says have become a significant drag on the economy.

GEORGE W. BUSH: To make our economy stronger and more competitive, America must reward, not punish, the efforts and dreams of entrepreneurs. Small business is the path of advancement, especially for women and minorities. So, we must free small businesses from needless regulation and protect honest job creators from junk lawsuits. Justice is distorted, and our economy is held back by irresponsible class actions and frivolous asbestos claims, and I urge Congress to pass legal reforms this year.

AMY GOODMAN: President Bush speaking before Congress in his 2005 State of the Union Address. The President won an initial victory in tort reform on Thursday when a bill sought by corporations to curb class action lawsuits advanced in the Senate. The Judiciary Committee voted 13-5 to approve the measure and send it to the full Senate where it will be considered early next week. The bill transfers most class action lawsuits from State Courts to more stringent Federal Courts, and is the first in a package of changes to the tort system sought by the Bush Administration.

JUAN GONZALEZ: But Republican Senator Arlen Specter of Pennsylvania is trying to take the bill one step further. Specter is pushing forward an amendment to impose new limits on medical malpractice lawsuits, and that would also preclude people who claim they have been, have suffered from asbestos poisoning from filing lawsuits. Asbestos was widely used for fireproofing and insulation until 1970’s. Studies have shown that inhaled fibers are linked to cancer and other diseases and hundreds of thousands of injury claims have been brought to the courts.

AMY GOODMAN: Today, we’re joined by Joanne Doroshow, Executive Director of the Center for Justice and Democracy. Welcome to Democracy Now!

JOANNE DOROSHOW: Thank you.

AMY GOODMAN: Can you talk about the scope of what’s happening right now. What does tort reform mean?

JOANNE DOROSHOW: Right, well, it’s a bit of a misnomer. It’s not really reform at all. All these laws that are under the guise of tort reform are really about taking away people’s rights to go to court, taking away their access to the courts, undermining the constitutional right to trial by jury, and it’s also, the second part of this is, they’re all payoffs to the major corporate contributors of the politicians that are advocating these laws. There’s nothing good about them. They’re all anti-consumer, they will hurt people, they will make, they will devastate families in this country, and this is a top priority of the Bush Administration. Very unfortunately.

JUAN GONZALEZ: And why so much the push to move these lawsuits out of State Courts and into Federal Courts?

JOANNE DOROSHOW: Right. That’s the Class Action Bill. It’s a little complicated. It doesn’t seem like on its surface that would be such a big deal, but most of these class actions are now brought in State Court. The State Courts are much much bigger than the Federal Court System. All kinds of judges in the State Court System are very familiar with these class actions. And just to step back for a second as to what class actions are, they’re a very important tool for consumers that have been hurt by HMO abuses, civil rights violations, all kinds of abuses where some company has gotten a large benefit by hurting large numbers of people with relatively small injuries so that the individual could not go to court on their own, but by joining together, they can effect some kind of change in this horrible corporate conduct. So, they’re a critical tool for people. By dumping these cases in the federal court, which is what this law would do, which are already overburdened, and are much smaller than the States, and are not expert in these cases, the intention is, I believe, to throw them out of court, to make sure that they never get to see the light of day. And that’s why every civil rights group, environmental group, consumer group, women’s group, labor, everybody who has a stake in protecting the public interest is against the Class Action Bill.

AMY GOODMAN: Joanne Doroshow, we’ve heard about Vioxx and Celebrex, tens of thousands of deaths due to heart attack, to stroke. How does that fit into this?

JOANNE DOROSHOW: Well, attached onto this bill could, if it were to pass Congress, could very well be a mass tort section, which basically includes these large cases against the pharmaceutical companies. So, you’ll find that class actions are, these kinds of larger suits against large pharmaceutical companies may be severely restricted, and at the same time, the medical malpractice legislation that the Administration is also pushing, They’ve just introduced a bill in the house on this, and they’re going to possibly even be hearings on this next week, would not only cover medical malpractice cases, but all cases against the drug companies for unsafe drugs and medical devices. As well as nursing home abuse and neglect cases. So, you can see the breadth of these laws, and really what they’re trying to do is immunize these really horrible corporations that have been engaged in all kinds of misconduct from any kind of liability.

JUAN GONZALEZ: Well, the President specifically singled out what he called frivolous asbestos suits. I mean I’m familiar with the whole asbestos scandal over the decades, and clearly this has been a particular concern to a bunch of American companies, and as I recall, there was some legislation that has not succeeded to try to create a compensation fund for asbestos victims, because the reality is that when it comes to asbestos, it’s been fairly well documented that the companies knew for decades that it was producing health effects and cancer and mesothelioma and hid the information so that no company can defend itself in these suits. They have continued, because hundreds of thousands of people were affected. And there’s WR Grace Co., Johns Manville, and Dick Cheney’s own Halliburton is facing huge asbestos liabilities. What’s up — how would this particularly affect the asbestos battle?

JOANNE DOROSHOW: Right. Well that’s the third part of the Bush agenda on liability laws right now, at least. Basically, the idea is to set up a compensation fund as you mentioned, to cover the current and future claims of people that are going to die as a result of asbestos poisoning. Many of the claims are not able to be filed yet. People, this is a latent kind of injury. It takes years sometimes to develop. But these people need to be compensated. So, there is a fund that is being considered to be set up. The issue really is how much money is going to be put into this fund by the insurers, and there’s a huge dispute right now as to the amount of money that’s being considered as a set-aside to take care of all of these sick and dying people for now and in the future. That’s really what the sticking point is. For the most part, I think all of the parties have kind of come together to try to work this out but there are huge divisions. Labor is also very much against this proposal to under-fund the compensation fund.

JUAN GONZALEZ: I have to wonder what a former shipyard worker or former miner, who was listening to, who is maybe suffering from asbestosis or mesothelioma, and is listening to the President say that these are frivolous asbestos suits in terms of the suffering they have been going through?

JOANNE DOROSHOW: Exactly. I mean, he has been using this term frivolous suits for the last two-three years. He has campaigned on this issue hundreds of times. We hear from victims from all over the country all the time, often staunch Republicans that have voted for Republicans in the past that are so offended at their President getting up and saying that their suits are frivolous, whether it’s the asbestos victims or the medical malpractice victims, or any victim out there. I mean, and the people that do file these cases, we consider them heroes. They’re the ones that are willing to stand up and take on the insurance companies, the health care industry, the companies responsible for asbestos. It really is an extraordinarily difficult thing for people to go to court and sue these companies. You don’t realize often how difficult it is. And so for them to get up to have to hear the President over and over again refer to their, to them and their families and their cases, as frivolous is so offensive. It’s really actually galvanized a lot of people. We’re actually bringing over 50 families down to Washington next week to lobby against these bills. These are people often that have had their cases already finished. They’re not going to personally benefit from any of this.

AMY GOODMAN: Can you tell us one story?

JOANNE DOROSHOW: Well, we have some drug injuries. A woman who is a Vioxx victim, a young woman had a stroke, continued to take Vioxx, wasn’t told of the horrible, you know, the potential for this, and had another stroke. Young children. Then we have all kinds of medical malpractice victims. A woman, many women who have had children with severe birth related injuries. Whose children are in wheelchairs, brain damaged, blind, for the rest of their life. The President is proposing to cap their non-economic damages at $250,000 to take care of these children for the rest of their life.

AMY GOODMAN: What does that mean, "non-economic damages?"

JOANNE DOROSHOW: Non-economic means compensation for things like blindness, permanent disfigurement, brain damage. It’s not the kind of injury that you go and get a receipt for. These are, when a hospital commits an egregious error and your child is blind for the rest of their life, that’s what non-economic damages are.

AMY GOODMAN: But their response is, if they’re not capped, then people will not be able to afford to get medical care because of the very high malpractice rates?

JOANNE DOROSHOW: Yeah. It’s just a false argument. I mean, there are problems with insurance premiums. That’s for sure. There are a lot of doctors that are being hit and price-gouged with high, excessive rates. It has absolutely nothing to do with the legal system. The cause of that are the insurance industry’s own practices, the investment cycle, they’re making up money from lost investments on the backs of their policyholders. They’re raising rates and they’re sending doctors out there to complain about malpractice rates and screaming, you know, we need to cap lawsuits. Meanwhile, States that have tried to do that have only seen insurance rates rise.

JUAN GONZALEZ: Now in this vote in the Senate Judiciary Committee, there apparently are still some divisions among the Republicans themselves, right? That Senator Specter seems to be staking out a position different from the Senate majority leader, Bill Frist. Could you explain what some of the differences between the Republicans are in this?

AMY GOODMAN: Dr. Bill Frist?

JOANNE DOROSHOW: Yeah. Well, Dr. Frist has been one of the staunchest proponents of these restrictions on people’s rights that we’ve ever seen in the history of Congress. As a doctor, whose family is, has a major interest in a major hospital chain, H.C.A, we know that he has tremendous personal interest in making sure that lawsuits, particularly malpractice suits, are restricted but Senator Specter has always been somewhat more moderate in this area, in fact voted, didn’t vote, but was opposed to the restrictive medical malpractice bill last year that Frist was proposing, and you know, he’s a lawyer. He understands this, I think, a little bit better than some of the Republicans in the Senate.

AMY GOODMAN: We’re going to have to leave it there, but we are going to go on in the next segment to talk about personal bankruptcies, and how half of all of them are caused by soaring medical bills. We’ve been talking with Joanne Doroshow. Joanne Doroshow is Executive Director of the Center for Justice and Democracy here in New York. Thanks for joining us.

JOANNE DOROSHOW: Thank you.

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