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Press Release

    The Trouble with Trial Lawyers

    07/27/2004

    Good morning.

    It’s good to see so many familiar faces here today—like Jim and Betty Jean Saylor, the Reids, the Randolphs, Linda Cone. You know, you’re the best activists in the country, and it’s your dedication that separates us from the other groups in Washington, DC— Congress listens when a large group of people from important states like Wisconsin, and Oregin, and Washington, and Florida, and Texas, and Michigan, and Illinois, and Iowa, and of course, North Carolina, come to town!

    One thing we need them to listen to us about is lawsuit abuse.

    As all of you here today know, lawsuit abuse is harming American businesses, harming American consumers, and harming American families.

    It’s harming you and it’s harming me.

    It’s harming us because it’s harming our legal system, and a well functioning legal system is essential for a free society and a free market. But our system is not functioning well. There is something wrong with it.

    There’s something wrong with our legal system when it is easier to sue a doctor than it is to see a doctor.

    There’s something wrong with our legal system when someone wins millions of dollars because they were served hot coffee, rather than lukewarm coffee, at McDonald's.

    There’s something wrong with our legal system when someone can sue Kentucky Fried Chicken for their weight gain because they ate too much fried chicken and too many of those tasty biscuits.

    And, there is definitely something wrong with our legal system when, as studies show, over half of all tort liability costs go to trial lawyers and administrative expenses, and not the victims.

    In one offensive example, a settlement against Bank of Boston awarded $8.64 to each class member, but then charged each of those members $90 in trial lawyer fees.

    In a case against Blockbuster, the attorneys took home over $9 million in fees. The harmed plaintiffs each got a $1-off coupon for future video rentals

    In a suit against Cheerios, the trial lawyers were paid nearly $2 million in fees, while their clients received coupons for a free box of cereal.

    And, the examples go on and on and on--millions for trial lawyers, pennies for purported and real victims.

    One of the most glaring examples of abuse is in the asbestos lawsuit mess. Most asbestos exposure took place more than 30 years ago, so the rate of related illnesses has fallen sharply over the last decade—asbestosis has been called a “disappearing disease.” But asbestos lawsuits continue to increase.

    Between 1999 and 2001 alone, the number of claims being filed tripled to 90,000, and hit 110,000 a year ago. Asbestos litigation has driven 78 companies to bankruptcy, with a disproportionate number of those coming in recent years.

    And it has been estimated that 80-90 percent of these claims are specious, with plaintiffs being coached to provide false testimony, and by faking medical records.

    This has been documented and detailed for the Senate Judiciary Committee.

    And just two law firms account for half of all the case being filed, having found themselves a gold mine. One of these two firms is Baron & Budd, headed by Fred Baron, who I’ll talk more about in a minute.

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    In recent years, State courts have been flooded with class action lawsuits, many without merit. Over the last 10 years alone, class action filings in State courts have increased 1,000 percent.

    Now, class action lawsuits were originally meant to help similarly injured parties by allowing them to go to court as a group, but trial lawyers, like John Edwards, who many of you are familiar with, are exploiting this legal device to enrich themselves at our expense.

    Trial lawyers like John Edwards will pick a company to sue, then go to a state court with judges elected with trial lawyer dollars to “certify” a class of plaintiffs, most of whom don’t even know they’re suing the company. The lawyers will take home millions and send us a check not worth the paper it’s printed on.

    In the end, judge accountable to a single county can make decisions effecting products sold across the country.

    One such place where this happens is Mississippi which has only 1 percent of the U.S. population, but 20 percent of asbestos claims are filed there.

    This sort of abuse is costing us dearly.

    The cost of litigation accounts for one-third of the price of an 8-foot aluminum ladder,
    it doubles the price of a football helmet,
    it adds $500 to the sticker price of a new car,
    and it increases the cost of a pacemaker by $3,000.

    This lawsuit abuse, which amounts to a “tort tax”, costs the country $233 BILLION per year—that’s over 2 percent of our Gross National Product. To break the “tort tax” down to the individual level—that’s $809 per person. For a father and son like Bill and Brandon Randolf, two loyal CSE members who have come up from North Carolina for this liberty summit, that’s over $1600 a year that would be better spent on Brandon’s college education.

    Trial lawyers are also driving up the cost of health care—malpractice insurance rates for some providers went up 30 percent a year recently. This not only increases medical expensing but, even worse, drives some doctors in high-risk specialties and underserved areas to quit practicing medicine entirely, leaving patients without doctors.

    With the harm being done to our economy and our nation by lawsuit abuse, you’d think it would be easy for politicians to do the right thing and pass the reforms we call for, to end the tort tax.

    But they don’t, and the reason they don’t is at least as worrisome as the problem itself.

    Trial Lawyers have become the biggest political powerhouse in the country. The have more control over Congress than the Unions, the Teamsters, or the Teachers. They have taken their new-found loot and used it to fund effort to block reform of class action law in Congress and state legislatures.

    Lawyers and law firms are the top contributors to federal campaigns. They have been since 1990. In those 14 years, they have given over $470 million to campaigns, with 71 percent of it going to the Democrats.

    In fact, the former president of the Association of Trail Lawyers of America, Fred Baron, head of Asbestos law firm Baron & Budd, was the chair of the finance committee for the John Edwards presidential campaign. And he’s still involved—now he is the co-chair of Kerry Victory ’04.

    This former president of the Trial Lawyers of America, this friend of Kerry-Edwards, and his Baron & Budd, have been examined by the Senate Judiciary Committee for the controversial role it has played in asbestos litigation.

    As I mentioned earlier, Baron’s firm is one of two firms in the country responsible for half of the countries asbestos lawsuits—the eye of the lawsuit abuse hurricane.

    So, if John Edwards insists on talking about two Americas, now that he’s the Democrats Vice Presidential nominee, let’s do it, or, as John Kerry likes to say, Bring It On.

    There are two Americas. There’s one America, John Edwards’ America, that likes trial lawyers, and another America who agrees with what President Bush said in the 2004 State of the Union address, “Our agenda for jobs and growth must help small business owners and employees with relief from…junk and frivolous lawsuits.”

    There is one America that John Edwards represents—well-connected trial layers who make their money perverting our legal system, another America full of decent and honest people working for a living. A nation of producers and of parasites. Or, as Parasite Number One John Edwards put it--One America that does the work, another America that reaps the rewards. Is it just me, or is that a funny thing for a trial lawyer-turned-Senator—neither productive jobs—to say?

    John Kerry couldn’t have done our movement a bigger favor than naming a notorious trial lawyer as his Vice Presidential candidate. It may suggest just how much influence the trial lawyers have over his party—but it also brings the national spotlight to this critical issue.

    We almost had reform three times in the past few years. The House has three times passed the very good Class Action Fairness Act, with our encouragement, of course. But it has died in the Senate—thanks to trial lawyer-funded Senators squashing it.

    With one house willing to do the right thing, and a president actively promoting it, we now have a very good chance to take back our legal system—and with your continued hard work, your letters, and your phone calls to Congress, we will.

    Thank you.