Honorable Robert Menendez
One Gateway Center, 11^th Floor
Newark, New Jersey 07102

I am writing on behalf of New Jersey Consumers for Civil Justice (CCJ) to express CCJ’s opposition to S. 852, the misnamed “Fairness in Asbestos Injury Resolution (FAIR) Act,” and to urge your outspoken opposition to the bill. CCJ, a coalition of citizen, labor, civil rights, victims’ rights environmental and public health organizations (see roster of trustees below) promoting the interests of New Jersey’s consumers and victims through fair and equal access to the civil justice system and government believes that this bill is unfair, under-funded, unworkable and destined to fail victims and taxpayers alike. To make matters worse, a central premise of S. 852 is false.

According to a recent report issued by Public Citizen, State and federal courts are adequately handling asbestos injury lawsuits and are not buckling under any crushing caseload. This undercuts one of the key arguments advanced by supporters of a proposed $140 billion federal asbestos compensation trust fund. This bill is not fair or just or supported by factual evidence. Rather, S. 852 is, in reality, an industry plan to wipe out tens of billions of dollars in corporate liabilities under the guise of helping victims and, in reality, is anti-victim. Furthermore, the federal trust fund established in S. 852, if enacted into law, is unlikely to have enough money because the number of claims will exceed official projections.

Finally, courts already have at their disposal a variety of ways to handle asbestos claims, according to Public Citizen’s canvassing of judges and attorneys involved in the cases. These include:

· “Inactive dockets,” in which victims file claims but have action delayed until they learn of more serious asbestos-related disease.

· “Medical criteria,” which prevent an action from being brought unless threshold systems of illness are met.

· Litigation protocols known a “case management orders,” which are designed to find fair, quick resolution of claims, while minimizing transaction costs for the parties.

· Court efficiency measures, such as the electronic filing of documents, that speed resolution cases.

Since courts already make wide use of these techniques to handle asbestos cases and State and federal courts are not buckling under any crushing asbestos caseload, the U.S. Senate should reject S. 852 as being unnecessary and counter to both current law and court practice. Most importantly, this bill should be rejected because it is in not in the best injury of victims who were, through no fault of their own, exposed to asbestos.

In conclusion, CCJ believes that this bill will fail to treat victims fairly, while benefiting

the very companies that caused the problem. Again, on behalf of CCJ I urge you to oppose S. 852.

cc: CCJ Trustees—AARP, CCJ Elder Care, CLPER, CWA-District 1 (AFL-CIO), HPAE (AFL-CIO), Hemophilia Assn. of NJ, Housing & Community Development Network of NJ, MADD-NJ, NJ Advisory Council on Safety & Health, NJ Brain Injury Ass. of NJ, NJ Citizen Action, NJ Environmental Federation, NJ PIRG, NJ WEC, Physicians & Patients for Quality Care, SEIU, Voices for Patient Protection

Honorable Joseph J. Roberts, Jr., Speaker
New Jersey General Assembly
State House, Trenton, NJ 08625

Honorable Richard Codey, President
New Jersey State Senate
State House, Trenton, NJ 08625

Of concern to all individuals who believe in the right of persons to access the civil justice system when injured as a result of the carelessness and unreasonable acts or omissions of others is the marked increase in the number of immunity bills introduced in the New Jersey State Legislature in recent years. These bills seek to grant civil immunity for a variety of different individuals and entities. Consumers for Civil Justice (CCJ), a coalition of citizen, labor, civil rights, victims’ rights, environmental and public health organizations promoting the interests of New Jersey’s consumers through fair and equal access to the civil justice system and government (see cc roster of trustees) is among those who oppose the piecemeal eradication of our civil justice system through enactment of individual legislation designed to address a particular industry concern, which is often unsubstantiated, about civil liability.

As many prominent defenders of our civil justice system have said, New Jersey’s civil justice system should be preserved and maintained without regard to special interest groups. Rather than allowing judge and jury to evaluate the merits of each case based on its unique facts and circumstances, immunity legislation results in denying access to the courts regardless of the merits of any particular case. People and corporations who cause harm should be accountable and responsible for the harm they cause to others. As retired New Jersey Supreme Court Justice Daniel O’Hern stated in a keynote speech to CCJ at its May 16, 2001 Awards Banquet, this is the cornerstone of our civil justice system:

Legislating immunity is not the answer. It simply encourages those who cause harm to continue to cause harm. It relieves those who are responsible for the harm from being held accountable, often shifting the harm not only to the person injured, but to the government and taxpayers who must shoulder the costs themselves. CCJ was founded on the premise that when someone is injured, someone must bear the consequences and pay for the costs. Those who cause harm should be held accountable and responsible for the harm they caused.

In the past Legislative Session, we have seen mixed success. On the one hand, the Legislature passed and the Governor approved a bill that allows victims of childhood sex abuse to sue churches, schools and other nonprofits for the actions of employees, thus changing the law that had shielded charities from liability for employee misconduct. However, the Legislature also passed and the Governor signed into law a bill that protects New Jersey professional (minor league) baseball teams from lawsuits by fans who are conked by flying balls or bats at a stadium. This law effectively overturns a recent decision by the New Jersey Supreme Court allowing fans to sue if they are injured by a stray ball outside the seating area of a stadium.

Because of the serious impact immunity legislation has on consumers and victims of New Jersey, CCJ is requesting that all such immunity bills be given a second reference to the respective Judiciary Committees of the New Jersey State Senate and the New Jersey General Assembly if they are given a first reference to another committee. This would allow for the respective Judiciary Committees of both houses to be aware of all the immunity bills introduced in the legislature during the session and to weigh the consequences of such bills in their totality rather than having a particular committee address an immunity bill as a “unique situation,” unaware of the existence of other such bills. This would also help to establish what CCJ believes should be the guiding principle of immunity bills:

On behalf of CCJ, I thank you for taking the time to read this letter and would be pleased to arrange for a meeting between you or your staff representatives and members of CCJ.

AARP
CCJ Elder Care
CLPER
CWA-District (AFL-CIO)
HPAE (AFL-CIO)
Hemophilia Assn. of NJ
Housing & Community Development Network of NJ
MADD-NJ
NJ Advisory Council on Safety & Health
NJ Brain Injury Assn. of NJ
NJ Citizen Action
NJ Environmental Federation
NJ PIRG
NJ WEC
Physicians & Patients for Quality Care
SEIU
Voices for Patient Protection

SECTION: Section A; Column 1; Editorial Desk; Pg. 20

Justice for Asbestos Victims

Just last week, the Democrats' Senate leader, Harry Reid of Nevada, failed to muster the gumption to try to stop the nomination of a right-wing ideologue to a lifetime seat on the Supreme Court. So it's shocking to hear Mr. Reid threatening now to block a bipartisan bill that would finally bring justice and compensation to victims of asbestos-related diseases. We can't imagine what Mr. Reid is trying to achieve, other than showing fealty to the trial lawyers who have been so generous to his party.

The Senate should approve the bill, which would replace the current morass of asbestos litigation with a $140 billion fund to pay the claims of victims of asbestos exposure. The fund would be financed by makers of asbestos, a carcinogenic material, and manufacturers that used it, and their insurers.

It is the product of an assiduous effort by Senator Arlen Specter, the Republican who is chairman of the Judiciary Committee, and Senator Patrick Leahy, the committee's senior Democrat. That makes it a 21st-century rarity: a thoughtful bipartisan compromise on a vexing national problem. It would create a fund to pay awards to those who are already sick, using detailed medical criteria to determine eligibility and the awards. Under this no-fault system, akin to workers' compensation, those exposed to asbestos at work but not ill would be entitled to free medical screening every three years.

Lobbyists for trial lawyers, and various companies, insurers and union interests that feel aggrieved by some aspect of the complex package, are trying to round up lawmakers to block the bill. A key test is to come today, when the majority leader, Bill Frist, has scheduled a vote to allow the Senate to begin formal consideration of the bill. Mr. Reid is trying to derail the measure even before the debate begins in earnest, and Democrats who want to see asbestos victims treated fairly should not support him.

There are other dangers ahead, including the possibility of a ''poison pill'' amendment that would expand to other communities a special provision that would make residents of Libby, Mont., a town uniquely affected by asbestos contamination, eligible for a guaranteed level of compensation without a need to show occupational exposure. Another worry is that some Republicans will try to amend the payment provisions or medical criteria in ways that would be unfair to victims.

No one can be sure that $140 billion would cover all current and future claims. But the bill would give victims the option of going to court should the trust fund run out. It would be a vast improvement over the present method of dealing with the claims of asbestos victims, which is to clog the courts and bankrupt companies while still depriving many victims a measure of justice

SECTION: Section C; Column 5; Business/Financial Desk; Pg. 1

Senate Votes to Debate Bill For Asbestos Victims' Fund

By STEPHEN LABATON

DATELINE: WASHINGTON, Feb. 7

Backers of legislation to create a $140 billion trust fund for victims of asbestos exposure won an important victory on Tuesday evening, when the Senate voted to begin debate on the measure. The vote was 98 to 1, and came after critics dropped their opposition when they realized that they did not have enough votes to block the debate.

The bill, which would replace the current civil court approach to compensating victims with a no-fault program run by a new compensation office at the Labor Department, has provoked a lucrative lobbying brawl featuring four of the most influential interests on Capitol Hill -- manufacturers, insurers, labor groups and trial lawyers. They have showered lobbyists with fees and the lawmakers with contributions in the last year in anticipation of the showdown.

The asbestos measure still faces formidable political obstacles even though it is a priority of Republican leaders in Congress and the White House.

In the first six months of 2005 alone, more than 25 lobbying firms reported fees of more than $8 million for working on the asbestos legislation, according to Political Money Line, a nonpartisan research group that studies reports filed with Congress by lobbyists and their clients.

The largest chunk, $4.7 million, went to the Washington law firm of Swidler Berlin from the Asbestos Study Group, an organization of companies advancing the legislation. All told, Swidler has received more than $23 million representing the Asbestos Study Group. Its team is led by Thurgood Marshall Jr., a former White House official in the Clinton administration and Brian Fitzgerald, a former counsel to the Senate Judiciary Committee.

The other lobbyists listed in the most recent disclosure filings represent an array of makers and users of asbestos, insurers, trial lawyers and venture funds, which are placing bets on the winners and losers of the legislative battle.

The legislation has been opposed by a significant group of small and large companies, including Exxon Mobil, the American International Group, Allstate and BorgWarner, as well as labor unions and trial lawyers. A group of companies opposed to the legislation, known as the Coalition for Asbestos Reform, has a budget of another $3 million not mentioned in the earlier disclosure reports, according to an internal memo of the group that was made public on Tuesday by The Hill, a newspaper that covers Congress.

Supporters and critics of the legislation have exchanged accusations of being tools of lobbyists and special interests. On Monday, the Democratic leader, Senator Harry Reid of Nevada, tried to tar the companies supporting the legislation and their lobbyists by invoking the specter of Jack Abramoff, the disgraced lobbyist who pleaded guilty last month to criminal corruption charges.

''Look what we have on the Senate floor today -- asbestos legislation, legislation that, of course, is not ready to be here, but it is being brought here because of tremendous pressure by the folks downtown,'' Mr. Reid said. ''What do I mean by folks downtown? Washington has been run by lobbyists. The Jack Abramoff scandal is no surprise to people who have been watching this.

''Why do I say that this is an example of why we need lobbying reform in Washington today? This legislation is on the floor for one reason: 15 companies that are pushing this legislation. Thousands of companies oppose it.''

On Tuesday, Senator Orrin G. Hatch, Republican of Utah, replied that the critics should ''look in the mirror'' because they were the ones acting as servants of special interests.

''I'll tell you who the special interests are in this debate -- they are the law firms who are driving this with bogus lawsuits,'' said Mr. Hatch, who has sought an asbestos trust for years. ''If this bill becomes law, these lawyers will have to find another industry to bilk.''

The cloture vote on Tuesday to proceed to debate was requested by Senator Reid. He ultimately voted against his own motion to open the debate after concluding he did not have the votes to stop the legislation. Jim Manley, a spokesman for Mr. Reid, said the senator would continue to use every possible procedural maneuver to kill the legislation, including a filibuster. The sole vote to block debate on Tuesday came from Senator James M. Inhofe, a Republican of Oklahoma.

The bill, which would provide no federal money for settlement, would restrict asbestos victims from bringing their claims into court and would limit the liability of makers and insurers but force them to make contributions to the fund. It would set up a schedule of payments, based on the severity of the illness, ranging from $25,000 for breathing impairments to as much as $1.1 million for victims of mesothelioma, a lethal cancer of the lungs. Fees for lawyers would be capped at 5 percent of the final award.

The vote Tuesday evening was significant because a defeat would have all but doomed the legislation this year. Final action on the measure is weeks away, and the measure faces significant hurdles even though it has gained considerable momentum.

Senator Arlen Specter, the Pennsylvania Republican who heads the Judiciary Committee, has spent more than two years trying to negotiate a compromise involving the manufacturers, insurers, labor groups and trial lawyers. He said on Tuesday that he had been talking to senators to get them to vote for the legislation.

Mr. Specter, who enlisted Judge Edward R. Becker of the United States Court of Appeals to mediate the negotiations involving the four groups, has said the legislation is the only way to reduce the legal costs that critics say have sharply decreased the amount of money available to asbestos victims. Mr. Specter has argued that the legislation would effectively address hundreds of thousands of cases that the courts are incapable of handling.

While the bill has gained the support of major business interests, it has come under attack from Democrats and Republicans.

Liberal Democrats and consumer groups, as well as trial lawyers, say the legislation would unfairly bail out corporations and restrict compensation to victims. Conservative Republicans say the trust would take too much money from industry and could require a federal bailout. As a result, lawmakers such as Senator Judd Gregg, the New Hampshire Republican who heads the Budget Committee, are threatening to raise points of order against the bill on the ground that it violates the Senate budget rules. The budget committee's ranking Democrat, Senator Kent Conrad of North Dakota, has said that asbestos claims could exceed contributions to the fund by $150 billion over 50 years.

Asbestos Bill Is Sidelined by the Senate

WASHINGTON, Feb. 14 — The Senate decided on Tuesday night to all but kill legislation to create a $140 billion fund to compensate victims of asbestos poisoning.

Supporters of the measure, led by Senator Arlen Specter, Republican of Pennsylvania, fell just short of the 60 votes needed to waive a budget objection raised about the legislation. The final vote was 58 to 41, and with powerful interests on both sides it did not break down along party lines.

Senator Bill Frist, the Republican majority leader and a strong supporter of the legislation, changed his vote from yes to no at the last moment so he would have the option of calling for a recount "at some later date," he said.

Still, advocates for the measure held out hope that they could reverse the outcome. On Tuesday night, Senator Specter, its chief sponsor, issued a statement that the one senator who was absent from the chamber, Daniel K. Inouye, Democrat of Hawaii, had told him he would vote to waive the budget objection but he had gone home because his wife was ill.

"We will have him on the motion to reconsider," Mr. Specter said, "and we may change another vote or two, so we may win this one yet."

Nonetheless, the vote meant that the courts were likely to remain the primary forum for processing thousands of asbestos cases in the foreseeable future.

President Bush has made changes in the treatment of asbestos claims a legislative priority, and the Senate action was a major setback for the White House.

The bill, more than two years in the making, became a casualty of powerful business interests opposed to it, as well as of a forceful coalition of conservative and liberal senators. The conservatives argued that the measure could lead to a new and expensive federal entitlement program. The liberals maintained that the asbestos fund was not large enough to compensate victims and was a bailout for asbestos companies and their insurers.

Supporters said the bill was needed to compensate victims and their families, alleviate a crisis among manufacturers and deal with a growing number of cases in the courts.

An estimated 10,000 people die each year from exposure to asbestos, primarily in the workplace. Dozens of companies have sought bankruptcy protection to control their asbestos-related legal costs.

And by many estimates, about 60 percent of the money available to compensate victims is going to lawyers for the plaintiffs or the companies. The courts, facing growing numbers of asbestos cases, have repeatedly called on Congress for a legislative solution.

The measure failed in large part because of opposition from some asbestos makers and insurers, as well as from trial lawyers and labor unions. Some companies opposed to the legislation declared that they were being forced to pay too much into a new compensation fund, while the unions and trial lawyers saw the bill as a bailout without enough money for the victims.

Senator John Ensign, Republican of Nevada, lodged the procedural objection to the bill. He maintained that it violated a Congressional limit on spending. Conservatives have raised concerns that the fund could be insufficient and therefore require a federal bailout. Liberals also hold that the fund is insufficient, but say that is because manufacturers and insurers are not being required to contribute enough.

Earlier in the day, Senator Frist said he would not try to resurrect the legislation if it ran into obstacles this week. "If we are unsuccessful this week in addressing asbestos," he said, "that is it for this year."

Asbestos has been widely used as an insulation and construction material, and exposure to it in the workplace may not manifest itself in harmful ways until decades later. It can cause illnesses ranging in severity from relatively mild to lethal.

A study issued in May by the Rand Institute for Civil Justice found that more than 730,000 people in the United States had filed compensation claims for asbestos-related injuries from the early 1970's through the end of 2002, costing businesses and insurance companies more than $70 billion.

The legislation shunted aside on Tuesday night had been intended to replace the current civil court approach to compensating victims with a no-fault program financed by manufacturers and their insurers and run by a new compensation office at the Labor Department.

The bill would restrict asbestos victims in bringing their claims to court and limit the liability of manufacturers and insurers, but require them to make contributions to the fund.

It would set up a schedule of payments, based on the severity of the illness, ranging from $25,000 for breathing impairments to as much as $1.1 million for victims of mesothelioma, an often fatal cancer of the lungs.

Both supporters and opponents of the legislation relied on a new analysis by the Congressional Budget Office to support their positions. Senator Specter emphasized the budget office's conclusion that the legislation "would be deficit-neutral over the life of the fund."

But the opponents, including trial lawyers' groups and some manufacturers and insurers, pointed to other parts of the budget office analysis showing that its effect would not be deficit-neutral if the administrator of the $140 billion fund had to borrow heavily or if courts ruled that there was a government obligation to pay victims despite the terms of the bill.

The fund in its initial years would be financed through significant borrowing, and critics of the legislation have raised concerns about its impact if some asbestos companies were unable to meet their payments.

Illustrative of the complex political calculations on Tuesday were opposing statements by the two Democratic senators from California.

Dianne Feinstein, one of 20 sponsors, said that while the bill was not perfect, it was necessary to compensate victims and reduce high court costs. She disputed the argument that taxpayers would ultimately have to bail out the trust fund, saying asbestos victims would be able to return to the courts if it did not have enough money.

But Senator Barbara Boxer said that the bill was giving asbestos victims false hope. "Companies will go into bankruptcy," she warned. "It's a giant nightmare.

"I am very fearful that a lot of people who are going to depend on this trust fund will find out that it is not all it is cracked up to be. "The bill promises the moon. But it will not even deliver a sliver of the moon."

SECTION: Section C; Column 5; Business/Financial Desk; Pg. 3

Large and Small Businesses Part Ways on Asbestos Bill

BYLINE: By JULIE CRESWELL;

As the Senate opened debate on legislation that would create a $140 billion fund for victims of asbestos, companies were gearing up for a titanic battle.

But some of the fiercest fighting will be between large and small companies. Several large companies back the bill, arguing they want to put their asbestos litigation and liabilities behind them. Smaller businesses say the bill's complicated formula for determining how much each company will have to put into the fund will drive them into Chapter 11 bankruptcy.

The bill has already pitted unions against one another and led to splits in the insurance industry, and in at least one instance it has a well-known plaintiffs' lawyer standing apart from his colleagues.

In broad strokes, the Fairness in Asbestos Injury Resolution Act of 2005 would restrict asbestos victims from bringing claims to court. Companies with claims against them and insurers would contribute to the fund. Based on their illnesses, victims would receive from $25,000 to $1.1 million, for those with mesothelioma, a lethal cancer of the lungs. Lawyers' fees would be capped at 5 percent of the final award.

''To American business, I think this bill is extremely important,'' said John E. Roueche III, director for investor relations at McDermott International. ''We have seen 70-plus companies that have gone into bankruptcy because of asbestos litigation and there are household-name companies that still have serious asbestos issues.''

So many companies landed in the cross hairs of asbestos litigation because the material, which was inexpensive, versatile and fireproof, was widely used in manufacturing for much of the 20th century.

It is no surprise that McDermott is in favor of the legislation. It has more than $600 million riding on the outcome of the debate. In 1978, McDermott acquired Babcock & Wilcox -- which used asbestos in the boilers it made -- along with its asbestos liability. Overwhelmed by asbestos claims, Babcock & Wilcox sought bankruptcy protection in 2000.

Under a plan that would allow it to emerge from bankruptcy as soon as this month, Babcock & Wilcox created a trust to compensate victims. That trust will initially be funded with $350 million from the company. (Its insurer will add $1.1 billion.) But if the asbestos bill is not passed by Nov. 30, the company is on the hook for an additional $605 million.

USG, parent of United States Gypsum, structured a similar deal in bankruptcy courts in late January. The company has said it used asbestos in building materials.

''In our case, the effect of this legislation is crystal clear: It will cost us $900 million if the Fair Act passes and $3.95 billion if it does not,'' said Robert E. Williams, a USG spokesman. Critics use that discrepancy as an indication that the bill is a bailout for large companies, but Mr. Williams says the big difference actually shows ''the problems and inefficiencies in the tort system.''

But for A. W. Chesterton, a 122-year-old company based in Stoneham, Mass., that used asbestos fibers in its industrial fluid sealing products, the amount of money it would be responsible for under the bill could destroy it, according to its outside legal counsel, John B. Manning.

''Its assessment under the Fair Act is going to be a minimum of $16.5 million annually for 30 years,'' Mr. Manning said. ''That $16.5 million is more than double a year's profit for this company.''

By contrast, large corporations will, at most, be responsible for $27.5 million a year for 30 years. ''You've got large companies making billions and billions a year in profits,'' Mr. Manning said. ''Having to come up with $27.5 million is nothing to them.''

Some small companies say they are probably better off fighting in the courts than paying their share under this bill. They argue that the cases against them have fallen sharply. They attribute that in part to measures in several states that have raised the bar for product liability litigation, and to growing skepticism about a number of asbestos cases amid evidence that some doctors simply rubber-stamped the filing of many questionable claims.

''We have seen a huge drop-off in the number of suits in which we have been named,'' said David M. Lascell, vice president of Hopeman Brothers, which years ago installed wall and ceiling panels containing asbestos in the interiors of ships. ''And one of the reasons is that there has been terrific success with tort reform in states like Texas and Mississippi.'' Under the bill, Hopeman would have to pay $16.5 million a year for 30 years. ''Five years of our earnings wouldn't pay for that,'' Mr. Lascell said.

(Mr. Lascell and Mr. Manning were made available by the Coalition for Asbestos Reform, a lobbying group representing small and midsize businesses against the bill.)

The bill's supporters include some unlikely allies, including Richard F. Scruggs, a trial lawyer famous for his role in tobacco litigation, who has made a great deal of money in legal fees suing on behalf of asbestos victims. ''This bill stops companies from going bankrupt and prevents trial lawyers from going after these companies and bringing them down,'' said Mr. Scruggs, who came out in support of the bill last week.

Chris Mather, a spokeswoman for the American Trial Lawyers Association, which opposes the bill, noted that Mr. Scruggs appeared to be the only trial lawyer in the country who supported the legislation.

Yesterday, the White House renewed its call for Congress to adopt legislation creating an asbestos trust, although it was not entirely satisfied with the Senate measure.

''Although the administration has serious concerns about certain provisions of the bill, the administration looks forward to working with Congress in order to strengthen and improve this important legislation,'' said a statement from the Office of Management and Budget. It did not specify which provisions the administration disliked.

Meanwhile, an analysis by Democrats on the Senate Budget Committee said the measure was ''seriously flawed'' and could force taxpayers to pay as much as $150 billion to make up for a shortfall in financing.

The bill ''sets up a fund that is destined for a taxpayer bailout, or it will provide only a fraction of what is promised to victims of asbestos,'' said Senator Kent Conrad of North Dakota, the ranking Democrat on the committee. ''It offers a false promise to victims of asbestos.''

Senator Arlen Specter, the Pennsylvania Republican who is the bill's chief sponsor, has said it is adequately financed and, in any event, taxpayers would not have to bail out the fund because if there were shortfalls, victims could return to court.

New Jersey has borne the brunt of America's ongoing asbestos liability crisis. Thousands of state families have lost loved ones, and many more suffer the consequences of asbestos-related illness. Local court dockets, meanwhile, groan under the weight of asbestos-related claims. This week, the Senate will consider a bipartisan bill that will bring relief and closure to those with asbestos-related illness: Only predatory trial lawyers stand in the way.

The legislative solution before the Senate will fix a problem that took decades to develop. For much of the 20th century, an inexpensive, versatile, fireproof family of mineral fibers called asbestos seemed like the perfect building material.

All over New Jersey, shipyards and industrial plants employed workers who handled and installed it without proper protection. Many of those workers came down with the lung disease asbestosis, and others — including some patients I treated in my medical practice — developed the incurable chest-lining cancer mesothelioma.

According to the Centers for Disease Control, New Jersey nearly tops the nation in asbestos-related deaths. Even vastly larger California had only a few more. In all, 12 of New Jersey's 21 counties rank among the 100 counties with the most asbestos deaths in the nation.

As a result, asbestos-related cases clog the courts. More than 70 companies have gone bankrupt under the weight of adverse judgments, and at least 150,000 jobs have vanished as a result. While some asbestos victims have collected millions of dollars, most have gotten nothing. When the U.S. Judicial Conference studied the issue, it found that legal proceedings over asbestos take 23 years to resolve — about twice as long as the typical liability case. As a result, many seriously ill people die before seeing a penny.

To make matters worse, groups of trial lawyers have begun to run television and Internet advertisements to encourage people with no symptoms to step forward and serve as plaintiffs in lawsuits against companies that knew nothing about asbestos' risks. Today, nearly 8,500 companies face claims and, according to the RAND Corp., 60 percent of those looking for money don't show any symptoms.

Without further action, experts believe, litigation could last so long that almost all of the injured parties will die before the last asbestos case gets decided. When the Supreme Court looked at the issue a few years ago, William Rehnquist, then the chief justice, came to a simple conclusion: The asbestos crisis, he said, "cries out for a legislative solution."

After years of wrangling, Sen. Arlen Specter, a Republican from Pennsylvania, and Sen. Patrick Leahy, a Democrat from Vermont, have landed on just such a solution: a fair and balanced $140 billion trust fund to make sure that victims get fair compensation. Companies that used and produced asbestos will make payments to the fund, and neutral administrators will compensate victims based on medical evidence. Asbestosis patients will get as much as $850,000, and mesothelioma victims will end up with help of as much as $1.1 million.

Those who have worked with asbestos know that the proposed settlement makes sense. Both the United Auto Workers union and the Association of Heat and Frost Insulators and Asbestos Workers have come out in support of the Specter-Leahy bill. Further delay will deliver enormous fees to trial lawyers but do little to make sure that victims get the compensation they deserve. We can't afford it. It's time for the Senate to act.

WASHINGTON — The Senate last night rejected a delicately crafted bill to relieve companies from mounting asbestos lawsuits, effectively killing the legislation in a significant setback for the White House and the Senate's Republican leadership.

In a 58-41 vote, an alliance of liberals and fiscal conservatives defeated the legislation on a parliamentary maneuver. New Jersey Democrats Robert Menendez and Frank Lautenberg voted against the measure.

Senate Majority Leader Bill Frist (R-Tenn.) reserved the right to bring the legislation back four another vote later this year, but that appeared highly unlikely, and lobbyists involved said the measure appeared dead. The House of Representatives never took it up.

The defeat leaves unresolved one of the country's most vexing legal problems — the explosion of lawsuits by asbestos victims and their families against companies that produced or used the carcinogenic fire retardant material. About 600,000 lawsuits are pending and as many as 75,000 new cases are filed annually.

The legislation would have created a ;140 billion trust fund for victims, paid by companies and their insurers. Among those the fund would have helped compensate are asbestos victims who cannot collect any money now because the company at fault has declared bankruptcy or is out of business.

The wrangling over the measure revealed splits among corporations, unions and insurers, and opposition from consumer groups and trial lawyers.

Conservatives objected to the size of the fund and to the possibility that it could require an infusion of taxpayers' money sometime in the future. Liberals complained that the fund would inadequately compensate victims.

“We are not only plunging into the darkness with this trust fun) . . . we're putting at risk the live, and fortunes of- families across America," said Sen. Richard Durbin of Illinois, the second-ranking Democratic leader.

Sen. John Ensign (R-Nev.), who was behind the procedural move that killed the measure, said he felt uncomfortable siding with trial lawyers, but said the fund may prove inadequate and require a federal bailout.

"If the problem ends up coming back to the taxpayers, it will happen at a time when the baby boomers are starting to retire," Ensign said. "The last thing we can afford to do is to enact a bill that potentially could have a major impact . . .could have a drain on our government"

Sen. Men Specter (R-Pa.), the chairman of the Judiciary Committee, implored members to keep the legislation alive. Specter was intensely involved in crafting the bill, single-handedly tweaking it until it won bipartisan support from his committee last year.

"We have a chance to establish public policy in the interest of Americans," he said.

The legislation has been a lobbying bonanza. According to the Political Money Line, a group that tracks lobbying and campaign spending, 25 lobbying firms reported receiving $8.25 million to lobby on the asbestos legislation for the first six months of 2005, the latest documents available.

In addition to lobbying, interested parties have spent money to target lawmakers with ads and media campaigns.

Interest groups divided in unusual lines for business-related legislation. Exxon Mobil Corp., for example, opposed it because it said its contribution to the fund would be too high. USG Corp., the largest maker of wallboard, lobbied for the bill, arguing that lawsuits have been a windfall for lawyers, not victims.

Asbestos fund bill withdrawn in Senate

WASHINGTON -- Opponents of a $140 billion trust fund for asbestos victims forced Senate leaders to withdraw it yesterday, but its sponsors said they would bring it back up. Next time, they predicted, the bill would pass.

"As John Paul Jones said, we have just begun to fight," declared Judiciary Committee Chairman Arlen Specter (R-Pa.).

The 58-41 vote to send the bill back to the Judiciary Committee was a severe setback. Opponents said the fund would be drained by claims against it, leave taxpayers liable and violate federal budget rules.

The bill's supporters needed 60 votes to keep the measure alive on the Senate floor. They had 59 before Sen. Bill Frist (R-Tenn.) switched his vote at the last minute in a procedural move that allows him to bring it up again.

Sen. Daniel Inouye (D-Hawaii) did not vote. Specter said Inouye would have been the 60th vote that would have kept the vote alive.

"He went home because his wife was sick," Specter said. "We will have him on the motion to reconsider, and we may change another vote or two so we may win this one yet." New Jersey Democrats Frank Lautenberg and Robert Menendez voted against the measure.

The cliffhanger vote followed a furious lobbying effort on the Senate floor. The bill, sought by many manufacturers and their insurers, would end decades of lawsuits that have bankrupted more than 70 businesses. According to supporters, tens of thousands of people sickened by asbestos and related diseases have gone uncompensated.

Drawing on his seniority, Judiciary Committee Arlen Specter (R-Pa.) issued a personal appeal on behalf of the bill.

Opponents and supporters crossed party lines, and businesses and labor unions were equally split. Minority Leader Harry Reid (D-Nev.) said the bill is so flawed that even two weeks of debate weren't enough to get it into acceptable shape.

The measure would have forced defendant companies that dealt with asbestos-containing products to contribute to a $140 billion trust fund from which claims would be paid to those sickened by asbestos. In exchange for payouts of up to $1.1 million, based on age and exposure level, victims would drop all asbestos-related court proceedings.

Such legislation would have spare companies that would be driven out of business by legal fees and lawsuits, supporters say. More than 70 companies have been forced into bankruptcy over asbestos litigation.

Asbestos is a fire-retardant material made up of fibers that cause illness when inhaled. The illness can lie dormant for decades, meaning future asbestos victims might be seeking damages for years to come.

For different reasons, liberals and conservatives and interest groups across the political spectrum have united to defeat the bill by setting up procedural hurdles.

The showdown vote yesterday focused on the bill's impact on the federal budget. Sen. John Ensign (R-Nev.) challenged the legislation on the grounds that claims would drain the fund and leave taxpayers holding a bill for billions of dollars.

Senate procedure required 60 votes to overcome Ensign's point of order. The bill's supporters said the challenge was a thinly veiled effort to kill the measure without drawing blame in a midterm election year.

"This point of order has become ... a backdoor way of killing this bill," said Sen. Pat Leahy (D-Vt.).

Well past lunchtime, Specter and others counting votes said both sides were within a few votes of succeeding.

Supporters insist that even though the Department of Labor would administer the fund, federal money would not be used for any costs. As evidence, they offered a new study by the nonpartisan Congressional Budget Office that found such a fund would not affect the federal deficit.

But opponents said the report leaves open the possibility of borrowing federal money if the trust fund runs dry.

"There is an enormous amount of uncertainty about the potential costs under the proposed amendment," CBO acting director Donald B. Marron wrote to senators yesterday.

Beyond Ensign's challenge, other hurdles awaited the bill. Sixty senators must agree to end debate and bring it to a vote, a procedure likely later in the week, Frist said.

Discusses "Tort Reform"

Restrictions on tort lawsuits and other kinds of lawsuits are issues near and dear to conservative hearts. The following interview with Rockridge Senior Fellow, George Lakoff, explores various aspects of “tort reform,” including the manner in which conservatives have framed the discussion, the problem with the progressive response so far, and ideas for more effective progressive framing of the debate.

Q: Professor Lakoff, why have conservatives made such a major issue of “tort reform” and “lawsuit abuse”?

Lakoff: For two main reasons. The conservative worldview includes the fundamental belief that business is only about profits. They believe that anything that interferes with the opportunity to maximize profits, including the range of protections that are so important for society, should be eliminated or at least severely restricted. And of course, lawsuits to compensate for injuries and to punish those who knowingly caused them are some of those socially important protection mechanisms that can diminish profits.

So, the right wing is attempting to destroy this system by promoting legislation to eliminate punitive damages and cap compensatory damages to relatively small sums. This legislation benefits business both by minimizing the risk of any single suit and by creating a disincentive for lawyers to take cases. Lawyers have to spend their own money to search for evidence of harm, to put together a case, and to prosecute the trial. Their compensation, if any, is a percentage of the “recovery” — the compensatory and punitive damages. Though the lawyers' fees sound high, most of those fees go to support the system. If damages are capped or eliminated, the system will break down for lack of funding.

The attack on tort suits also amounts to an attack on those lawyers who represent injured parties. Those lawyers have historically supported progressive causes and candidates. Not to put too fine a point on it, conservatives want to dry up the flow of contributions from trial lawyers by squeezing their source of income.

Lakoff: They have very cleverly framed the public discussion and have repeated these frames so often and for so long that they have become ingrained in the public’s mind, which means that those frames have become realized physically in the brains of many members of the public.

Lakoff: To begin, the very phrase “tort reform” evokes a frame. In two words, it communicates that something is the matter with the tort system, which requires reform or correction. In this respect, the phrase is similar to another effective conservative phrase, “tax relief.” Once the public accepts these phrases, they have bought into the idea that they need to be relieved from the affliction of taxes and that they need to fix the tort system. The debate then turns to the question of how and how much. At that point, progressives can’t win the debate; the best we can do is limit the losses.

Lakoff: They repeat the phrases “lawsuit abuse” and “frivolous lawsuits.” They refer to “greedy” and “out of control” lawyers. These words suggest that the speaker is a good, honorable, hard-working, God-fearing person. Opposition to abuse communicates reverence. Being against something frivolous is to be prudent and serious. Opposition to things out-of-control implies being orderly and law abiding.

Let’s take another expression that they often use: “litigation lottery.” In order to meaningfully use a word like “lottery” you need a frame. That frame has in it everything about a lottery. It’s gambling. It says you’re not making money by being an honest, hard working person going to work every day. You’re trying to make money just by gambling. That sets up a contrast between the kinds of people who are diligent, careful and frugal and those who want something for nothing and perhaps are willing to cheat to get it.

Once they’ve twisted the discussion to the point where people accept that lawsuits are bad things, the “tort reformers” take it another step. They say that the “frivolous lawsuits” are the cause of the high costs of health care and health insurance. Because people have accepted the frames, they are willing – even in the face of contrary evidence – to believe these statements.

Q: How have the conservatives been able to come up with such effective frames and messaging?

Lakoff: That’s easy. Time and money. Extremely well-funded conservative think tanks have been tackling these issues for the last 40 years. They have become quite expert at figuring out how to frame messages that appeal to persuadable voters.

Q: Have consumer advocates, trial lawyers, and other progressives had much success responding to these conservative frames?

Lakoff: No. Despite spending great sums of money, they have had very little success, as we’ve seen with all the new tort reform legislation at both the state and federal levels. And more legislation is in the pipeline.

Lakoff: The primary reason is that the progressive groups you mention have fought the fight on the “tort reformers’” turf, that is they have merely offered facts to rebut the conservatives’ frames, leaving the frames intact. They’ve tried to show that lawsuits aren’t frivolous, that lawyers aren’t greedy, that plaintiffs are genuinely aggrieved. It’s like Nixon saying, “I am not a crook,” which made everyone think of Nixon as a crook. As I said before, once you go down that road you’ve already lost the fight. It’s only a question of how badly.

Lakoff: First, we have to recognize that when the right wing says “tort reform,” what they really mean is destruction of the civil justice system. Just what is the civil justice system? Most people have a frame for the criminal justice system, but not the for the civil justice system. Since a corporation isn't literally a person, it can't be put in jail for performing harmful or murderous acts. When corporations engage in practices that harm or kill people, the only way through the legal system to punish them and give them an incentive to stop their harmful practices is to sue them and make them pay.

In the civil justice system, the trial is in the form of a lawsuit. The victims of harm are the plaintiffs and the defendants are typically corporations. The roles of police and prosecutors are played by the plaintiffs' lawyers. The victims come to lawyers (the only police). The lawyers search for evidence of harmful corporate behavior. The plaintiffs' lawyers act as prosecutors. The punishments are of two kinds: compensatory damages (compensating victims for harm); and punitive damages (punishing corporations that do harm).

Since a billion-dollar corporation cannot be imprisoned, only very large compensatory and punitive damages can provide sufficient disincentives from doing harm. Given the current climate of less and less regulation of business and increasingly lax or underfunded enforcement of what regulations remain, the civil justice system is rapidly becoming society’s only line of defense. Without it, the unscrupulous can and will run roughshod over the American people, maiming people, making them seriously ill, and sometimes killing them — all in the name of profit. Limiting profits is the only deterrence in many cases. Bear in mind that conservative voters believe in deterrence. It’s a basis for their support of the death penalty, for example. Conservatives also believe in the concept of being responsible and accountable. It relates to their strict father family model for society and government that I’ve written about.

Lakoff: What we have to do is create and communicate our own major frames, frames that communicate this fundamental role of lawsuits and trial lawyers in protecting the public. These frames must be communicated through narratives that people understand and resonate to. There are two key components here. The first is the notion of protection. The second is the idea that it is the public that is protected rather than certain individuals being compensated for injuries.

Lakoff: Because as a general rule, people don’t readily identify with victims. They tend to think that those victims somehow haven’t taken care of themselves properly. So the more effective frame is the bigger picture of societal protection.

Lakoff: Let me back up slightly. Progressives must understand that the business of America is business. Most people are involved with business. Most people are honest and want to do the right thing. Trust is an essential component of a healthy, functioning business economy. But there are dishonest, unscrupulous business people that undermine that trust. We must emphasize that the marketplace itself is under threat from those bad actors. Lawyers are necessary to bring the suits that ferret out those who undermine trust and threaten the health of the marketplace.

Lakoff: Plaintiffs are and should be portrayed as courageous souls. After having suffered harm at the hands of the defendant, they must stand up to the rigors of the justice system, including intense cross-examination and personal attacks, and must display the great patience to withstand the delays of the process. They do it not just for themselves, but for the public as well.

I should emphasize that though I feel strongly about these ideas, none have yet been researched and tested. That’s something that we at Rockridge have on our plate.

Lakoff: We must create narratives that reclaim the moral high ground: unscrupulous businesses against lawyers — the police and prosecutors — who protect the public. An important image is the open door to the courthouse. Conservatives want to slam the courthouse door shut. We want to keep it open. That concept encompasses everything from preserving the laws that protect the public, to the right of juries to impose fair damage awards that won’t be taken away by judges, to the right of plaintiffs to be able to contract with their lawyers without government interference.

Lakoff: Of course. I’ll give you a couple of examples. I’ve already mentioned the phrase “tort reform.” This plays so well into the conservative frame. Progressives should not repeat this phrase. They should point out over and over that conservatives are trying to destroy our precious system of justice. Another example is “trial lawyers.” It’s a label that conservatives have been vilifying for a long time. It would take a lot of effort to try to revive any positive connotations. More importantly, it doesn’t communicate the frames that I’ve discussed. By contrast, “public protection attorneys” communicates the right frames and avoids the negative connotations. But this can’t be used until the idea of the civil justice system and protection is first in place in the public mind.

Remember that it’s not just a matter of words. It is a matter of conveying a complex truth to the public, a truth in the form of a high-level complex frame. This cannot be done just by describing it once. The civil justice system has to be described over and over, and portrayed in the arts and the media. Words are important, but ideas come first.

This is not a matter of one ad campaign. It must become part of the system of progressive ideas, part of the framework progressives use to think about public issues.

Lakoff: That’s what Rockridge is all about. We are in the process of writing a Progressive Manual that will offer a fresh, reframed approach to the whole range progressive values and issues. The issues we’ve talked about today will be included in our section about public protection. With help from the progressive community, we’ll be able to do our work quickly and well, and generate a product that will help reshape the political dialogue for the long term. We are running a marathon here, not a sprint.

Defense of the civil justice system is not just a trial lawyers’ issue. It is an issue for all progressives, just as “tort reform” is an issue for conservatives in general. The trial lawyers should not be standing alone here. They should be supported by the environmental community, the labor community, the anti-poverty community, and every other progressive in America. Trial lawyers are not just defending their clients; they are defending all of us by making the civil justice system possible.

Tall tales of outrageous jury awards have helped bolster business-led
campaigns to overhaul the civil justice system.

Merv Grazinski set his Winnebago on cruise control, slid away from the wheel and went back to fix a cup of coffee.

You can guess what happened next: The rudderless, driverless Winnebago crashed.

Grazinski blamed the manufacturer for not warning against such a maneuver in the owner's manual. He sued and won $1.75 million.

His jackpot would seem to erase any doubt that the legal system has lost its mind. Indeed, the Grazinski case has been cited often as evidence of the need to limit lawsuits and jury awards.

There's just one problem: The story is a complete fabrication.

It is one of the more comical tales in an anthology of legal urban legends that have circulated widely on the Internet, regaling millions with examples of cluelessness and greed being richly rewarded by the courts. These fables have also been widely disseminated by columnists and pundits who, in their haste to expose the gullibility of juries, did not verify the stories and were taken in themselves.

Although the origins of the tales are unknown, some observers, including George Washington University law professor Jonathan Turley, say their wide acceptance has helped to rally public opinion behind business-led campaigns to overhaul the civil justice system by restricting some types of lawsuits and capping damage awards.

"I am astonished how successful these urban legends have been in influencing policy," Turley said. "The people that created these stories did so with remarkable skill."

The tales are making the rounds at a time when business lobbyists and conservative politicians seem to have gained the upper hand in their drive to rein in lawsuits — a campaign that they call tort reform but that trial lawyers and consumer groups say is an assault on the legal rights of ordinary people.

According to the American Tort Reform Assn. — which is backed by insurance, drug, auto and other major industries — 49 states have enacted at least one measure on the group's wish list over the last two decades, including limits on punitive damages and caps on awards for pain and suffering in medical malpractice claims.

In February, President Bush signed a federal law that will make it harder to bring class-action suits in state courts.

And some polls suggest that there is public support for further change.

For example, a survey conducted for the American Tort Reform Assn. in 2003 found that by a ratio of 2 to 1, respondents believed that lawsuits were harming the economy and stifling job creation. In a survey released in June by Common Good, a conservative legal reform group, 83% of respondents said it was too easy to file invalid lawsuits, and 55% agreed with the statement that "many people use the justice system almost like a lottery — they start lawsuits to see if they can win millions."

Such fears, fanned by anecdotes like the Grazinski tale, have no empirical basis, said Joanne Doroshow, executive director of the Center for Justice and Democracy, a consumer group that opposes the agenda of the business groups. "The data tends not to support the allegation that there is an out-of-control crisis with the legal system," she said.

She and others point to surveys by the National Center for State Courts and the federal Bureau of Justice Statistics showing an apparent decline in personal injury suits and in the size of jury awards to successful plaintiffs.

But advocates of reining in lawsuits say there is no need to invent fictitious examples of legal abuse. "All false stories should be exposed," said Victor Schwartz, general counsel of the tort reform association. But "you don't have to go to the surreal" to find dubious verdicts, he added.

The group's website includes a link to what it says are real but "Looney Lawsuits," including a recent case in which a Portland, Ore., jury awarded $1.6 million to a woman who was seriously disfigured in a botched liposuction surgery. The jury imposed the judgment on the publisher of a phone directory after concluding that the company had knowingly allowed a dermatologist to falsely advertise himself as a board certified plastic surgeon.

Whether it's the rich detail of the phony yarns that resonates or the fact that people are prepared to think the worst of the legal system, the bogus tales have attracted crowds of believers.

The first time he heard of the Grazinski case, Cornell University law professor Theodore Eisenberg was a guest on a Rochester, N.Y., radio talk show. Annoyed by Eisenberg's defense of the justice system, a caller flung the Winnebago windfall in his face.

"You're saying the system's not crazy," Eisenberg recalled the man saying, "but what about this case?"

Besides the Grazinski saga, there's the mythical case of Amber Carson of Lancaster, Pa., who got into an argument with her boyfriend in a restaurant, threw a drink at him and then broke her tailbone when she slipped on the wet spot on the floor. Naturally, Carson sued — and won $113,500.

Then there's Kara Walton, a Delaware woman so eager to avoid a $3.50 cover charge that she tried sneaking into a nightclub through a bathroom window but fell and lost a couple of teeth. Walton sued and won $12,000 plus payment of dental bills.

A database search shows the Grazinski, Carson and Walton tales have been cited as true by a wide range of media outlets, including CNN; U.S. News & World Report; the American Spectator; the Oakland Tribune; the Ft. Worth Star-Telegram; the Deseret News of Salt Lake City; the Akron Beacon-Journal; the Greensboro, N.C., News & Record; and the Augusta, Ga., Chronicle.

Some later issued corrections. Chuck Thomas, a columnist for the Ventura County Star, offered a mea culpa in a follow-up column, anointing himself winner of the "Chucklehead Award."

Wide acceptance of the myths has been an eye-opener for Sheila Davis, public relations manager for Winnebago Industries in Forest City, Iowa. Davis says she has repeatedly had to explain that, no, there was no Grazinski lawsuit, and, no, the company did not have to change the owner's manual to avoid a swarm of copycat claims.

"Unfortunately, we do have some people who write about it and don't call us," Davis said.

The cases are often listed together on Internet postings as winners of the "Stella Awards," — supposedly a dubious achievement list of the nation's most outrageous and ridiculous lawsuits. Although entirely fictitious, the Stellas take their name from the real-life case of 79-year-old Stella Liebeck, whose hot-coffee case against McDonald's became the poster child for frivolous claims.

According to popular accounts of the lawsuit, Liebeck coaxed nearly $3 million from an Albuquerque jury in 1994 after being scalded by McDonald's coffee she spilled on herself while riding in a car. These are the story's best-known elements, but filling in the missing facts puts the case in a different light.

Trial testimony showed that at 180 to 190 degrees, McDonald's coffee was much hotter than that served by other restaurants or by people in their homes. The fast-food chain had received at least 700 complaints about hot coffee in the previous decade and had paid more than half a million dollars in settlements, according to trial testimony cited by the Wall Street Journal.

Liebeck's injuries were hardly minor. She suffered third-degree burns on her thighs and groin area, was hospitalized for a week and had to undergo painful skin grafts. Before filing a lawsuit, she wrote McDonald's requesting that it lower the temperature of its coffee and cover her uninsured medical bills and incidental costs of about $20,000. McDonald's offered $800.

Later, as the case neared trial, a mediator recommended that McDonald's pay a settlement of $225,000. The company refused.

Jurors ultimately awarded Liebeck $160,000 in compensatory damages and about $2.7 million in punitive damages. "The facts were so overwhelmingly against the company," one of the jurors told the Journal. "Their callous disregard was very upsetting," another said.

Soon after the verdict, the trial judge slashed the punitive damages by more than 80% to $480,000. Then the case settled for an undisclosed amount.

"The irony about the McDonald's case is that it actually, in my view, was a meaningful and worthy lawsuit," George Washington University's Turley said. Yet advocates and pundits have "made it synonymous with court abuse."

Unlike the popular version of the McDonald's case, the Stella Awards push mythmaking past mere exaggeration.

Barbara Mikkelson of Agoura Hills, who with her husband, David, operates a website dedicated to debunking urban legends (www.snopes.com), says the Stellas have sometimes appeared with an e-mail chain letter in which the mythical law firm of Hogelman, Hogelman & Thomas exhorts people to "assist our law offices in a tort reform program" by publicizing "insane jury awards." Mikkelson noted that with the way information travels on the Internet, it would be impossible to determine the original authors.

Randy Cassingham, a Colorado resident who also debunks the Stellas on his website http://www.stellaawards.com , says he is angry about the tales — not only because they are false but also because they divert attention from what he believe are real abuses in the legal system.

According to Cassingham, the Stellas allow trial lawyers to say, "See, there is no problem with frivolous lawsuits. Our opponents have to make up cases to make a point."

Although business groups are obvious beneficiaries of the fables, Schwartz of the tort reform association said his group had had nothing to do with them and was careful to verify all of its claims. "We try to be absolutely accurate in anything we're presenting," including examples of outrageous suits, Schwartz said.

In fact, Schwartz said, over-the-top self-promotion by some trial lawyers have made the best case for the need for change. "Their ads making things seem as if it's just free money" have done "more to convince the American public that we have jackpot justice than anything put out by any tort reform organization — including the 'looney lawsuits' stories," he said.

It didn't take a neurosurgeon to spot the thread connecting the three award winners at the American Trial Lawyers Association conference in Atlantic City.

The first medal went to a 24-year-old cerebral palsy sufferer, a victim of a botched delivery who told his story at a string of legislative hearings in Trenton on medical malpractice.

The second went to a journalist who exposed "how doctors shield themselves from state law" and hide medical records from patients.

The final honor belonged to ATLA New Jersey President Bruce Stern, introduced as "the best example of learning the process of being able to deliver a sound bite." By way of explanation, the speaker, ATLA member Drew Britcher, offered this Stern gem about February's doctor work stoppage: "It doesn't matter if it's a mobster or a doctor, extortion is extortion."

When he stepped down from the podium, Stern showed off his medal-winning form.

"Doctors have misdiagnosed the problem and misdiagnosed the solution," Stern told a reporter. "The New Jersey Medical Society's only interest is to destroy lawyers and the civil justice system."

About the only thing missing from the ceremony was a pinata in a white coat.

That same weekend, the American Medical Association prepared for its third Statehouse rally in Trenton, taking doctors away from their patients for another day. At the last picketing, doctors tried to win support for their cause with signs such as "When your water breaks, call your lawyer" and "Gov. McGreevey, who delivered your Jersey girl?"

A photographer caught two doctors trying to rip away a sign from a man who dared claim the real malpractice crisis was the number of preventable deaths that occur in New Jersey each year.

Marcus Welby versus Perry Mason this isn't. From the start, the debate on how to lower medical malpractice premiums has been long on hyperbolic sound bites and short on compromise. That is, unless you talk to those hurt most by the rising rates: obstetricians and neurologists.

Michelle Torchia, an obstetrician who practices in Vineland and Mays Landing, attended the first physician rally.Looking back, she said she doesn't think the event accomplished anything beyond exciting doctors. Thegovernor, Torchia noted, never acknowledged the crowd.

"We've had rhetoric and teeth gnashing on both sides," Torchia said. "Doctors are still moving out of the state ... As long as attorneys stand on one side and physicians stand on the other, we're not getting anywhere."

The Medical Society and the Trial Lawyers Association actually agree malpractice premiums are posing a problem for doctors. They disagree on the cause of the problem and thus how to solve it. The divide can be summed up in one four-letter word: caps.

Doctor groups, supported by Republicans, say the only way to lower rates is to limit pain and suffering awards in malpractice cases. Attorney groups say such limits are unconstitutional and unhelpful. They favor a plan, sponsored by Democrats in the Assembly, to subsidize doctors facing the highest premium increases.

Each group clings to its side of the caps issue like a shipwreck passenger to a life preserver. If there is a middle ground, neither side has taken a step toward it. Instead, each group offers reams of statistics and surveys to convince the Legislature and the media that they are on the right side of the caps issue. Both accuse the other side of intentionally distorting the facts.

The appeal to the public, however, consists of simple, emotional, often misleading arguments.

A national television ad paid for by the American Medical Association shows a father dying when the local trauma center where his life could have been saved is closed due to skyrocketing medical insurance rates.

Advertisements from the Association of Trial Lawyers of America trot out malpractice victims who claim their rights to a trial by jury are being taken away by greedy politicians.

Although the commercials have yet to air in New Jersey, both are running in a number of states where lawmakers are considering legislation aimed at lowering malpractice insurance rates.

Torchia said she thinks caps on pain and suffering awards are the best long-term solution for lowering rates in New Jersey, but she wouldn't turn down subsidies if that's what politicians can offer. The Medical Society dismisses subsidies as "a Band-Aid."

"We could use a Band-Aid right now," Torchia said. "At least then, calmer heads could sit down and work on the (caps) issue ... I'd just love to see a strong political figure stand up and fix it. Even if they didn't fix it to my liking, at least they'd be willing to fix it."

That's the mindset Sen. Joseph Vitale, D-Middlesex, counted on when he walked into a crowd of doctors picketing outside his Woodbridge office and borrowed one of the bullhorns.

Vitale, adamantly opposed to caps in any form, told the physicians he did not necessarily agree with their solution to the malpractice crisis, but he had their interests in mind and was trying to fashion legislation that would be fair to both their profession and their patients.

Months later, Vitale and other Senate Democrats softened their position on caps and helped pass a bill that limits doctor liability for pain and suffering awards to $300,000 but allows patients to recover an additional $700,000 from a state Excess Liability Fund.

"Both sides have to give a little," Vitale said. "In the end, it's about what we can all ultimately decide is in everyone's best interest."

Count Torchia among those willing to compromise. She's too desperate to be stubborn.

"Physicians have an obligation to put down the battle ax and enter into meaningful dialogue to solve the problem, "Torchia said. "I think we owe that to our patients."

To e-mail Pete McAleer at The Press: PMcAleer@pressofac.com

WASHINGTON – New Jersey doctors should have been jubilant last month when the House passed a bill that would limit how much money patients could collect if they win lawsuits over improper treatment.

Although doctors have long sought a cap on certain medical malpractice awards, they realize the bill has little chance of passing the Senate, where it has died twice before. And Garden State physicians think a federal cap is the only way they'll get relief from soaring insurance costs because the state Assembly won't enact one.

"A lot of people are getting discouraged that it's just not going to happen," said Dr. Eileen Moynihan, a Gloucester County rheumatologist and president of the Medical Society of New Jersey. "We're not getting anywhere in the state. We're not getting anywhere nationally. It's getting a lot of people down."

Worried that the insurance industry may finally win, they've renewed efforts to convince senators that such limits are arbitrary and hurt patients who might have to live with a lifetime of pain from a doctor's mistake.

"They should not be penalized because they are the victims," said Peter Guzzo, executive director of Consumers for Civil Justice.

The legislation, strongly backed by President Bush and most Republicans, would limit to $250,000 the amount a patient could receive for "non‑economic" damages, such as pain and suffering. There would be no limit to awards for medical expenses and lost wages as a result of medical malpractice. It would also limit lawyers' fees, a provision designed to curb what some see as frivolous lawsuits.

The House passed the measure July 28 on a largely party‑line vote, 230‑194. All six Republicans from New Jersey voted for the bill while the Democrats voted against it except for Rep. Rob Andrews, D‑1st Dist., who was absent for the vote.

New Jersey's two senators, Democrats Jon Corzine and Frank Lautenberg, oppose the House bill.

Doctors pushing for the cap say rising medical malpractice insurance premiums ultimately hurt patients because doctors – especially those in high‑risk specialties such as neurosurgery and obstetrics – are leaving the state and aren't being replaced.

The number of people applying for medical licenses in New Jersey dropped from 3,117 in 2002 to 2,688 in 2004, according to Jeff Lamm, a spokesman for the state Division of Consumer Affairs.

Premiums for neurosurgery, cardiology and other disciplines have doubled since 2001, according to the Medical Society of New Jersey. Neurosurgeons, for example, paid on average more than $111,000 last year for malpractice insurance, up from $55,676 in 2001.

Dr. Rick Scott, managing partner of the Orthopedic Center in Middletown, said the annual insurance premiums for his eight‑doctor practice more than doubled to over $600,000 within three years.

"It's extremely hard to recruit doctors to New Jersey when they know the malpractice costs are high," he said. "Why would you want to go to work (here) when you could lose everything you have on the whim of a jury."

But a study released in May by the Rutgers Center for State Health Policy found that the risk of an exodus of specialty doctors has been overstated. "If we're looking for a smoking gun of physicians leaving we haven't seen it yet, though clearly they're expressing dissatisfaction," said Joel Cantor, director of the center. Echoing Guzzo and other consumer activists, Cantor said much of the blame for rising premiums should be placed on insurance companies, which have had to recoup losses from poor investments by charging doctors more. But insurers and doctors say it's clearly due to an increase in lawsuits that are costly to defend.

Twenty‑seven states now have caps that limit non‑economic damages, according to researchers at the Maryland-based Agency for Healthcare Research and Quality. The researchers found that states with caps have lower premiums on average and more doctors per capita, especially in rural areas.

But in a Feb. 15 letter to Consumers for Civil Justice, Corzine cites research that states with caps tend to have higher premiums.

“Unfortunately, the idea that if we lower caps, premiums will fall is wishful thinking,” he wrote.

He has earned virtually every distinction in his field. He teaches at one of the country's best medical schools. And he is one lawsuit away from abandoning the delivery room.

Quartell's malpractice insurer charges him $61000 a year, its lowest price for doctors who deliver babies. Still, if Quartell lost just one malpractice case, that rate would double.

"' I deliver about 110 babies a year, so I'd be working more than half the year just to pay the insurance bill," said Quartell, who practices at St. Barnabas Medical Center in Livingston. "I'd quit before I'd do that."

Given the enormous stakes, Quartell has adopted strategies designed to keep him out of court. He is not alone.

Until recently, continuing medical education meant new technologies and new techniques. These days, however, doctors from Livingston to Trenton to Los Angeles also learn a whole new science: the science of avoiding litigation.

Some lawsuit reduction strategies benefit everyone—they reduce lawsuits by improving care. Others benefit doctors, but cost society money and lives.

"'The best strategy is a simple one: Don't see risky patients," said Steven Kearn, general counsel for the Medical Society of New Jersey, a doctors' trade group based in Lawrence.

"The vast majority of snits come from people who started off with high risk conditions, which is why many doctors today simply reject the hard cases.

It hurts the quality of care, but there we are. If society wants better care for the sickest patients it should create a legal system that does not punish doctors for treating them."

Doctors today learn the dangers of risky patients - and other malpractice-related information - at seminars, at hospital staff meetings, at educational retreats, in journal articles and on the Internet.

St. Francis Medical Center in Trenton, like many other hospitals, keeps its doctors informed by maintaining an entire department for risk management.

Meanwhile, doctors who lack hospital affiliation often get lawsuit-avoidance information from medical malpractice insurers such as NJ PURE in West Windsor.

The company charges 15 percent more to those doctors who do not attend at least one of the four lawsuit-avoidance classes it presents each year.

The company's enthusiasm for the seminars is exceeded only by that of its more than 600 policyholders. Doctors get full credit for attending just one class a year, but nearly 9 in 10 NJ PURE physicians choose to attend two or more classes per year.

Whatever the venue, litigation-avoidance advice typically follows a standard format. Attorneys review individual malpractice cases and extract universal lessons.

Much of the advice boils down to two things: Improve your practices and minimize your mistakes.

The practices in question begin at a baste level, such as forcing yourself to study a patient's entire medical record, even when you think you know what is wrong.

"If you're a doctor, listening is the most important thing you can do," said Scott Heller, an attorney with Giblin & Combs in Morristown.

"The majority of reaching a correct diagnosis lies in getting a full history, which means that the more attention doctors pay to their patients, the more they avoid the sort of bad outcomes that lead to suits.

"Also, and this may be more important, patients hate, hate, hate the feeling that their doctors are ignoring them. It makes them much more likely to sue if things go wrong."

Heller estimates that he's shared this advice - and much more - a dozen times in recent years, during talks in hospitals, hotels and private practices.

At first, demand for such talks was sporadic, but it has grown far steadier for Heller and other malpractice specialists.

For example, studies consistently show that medical errors plummet after doctors substitute electronic record-keeping systems for handwritten notes, which are hard to read and easy to lose.

Such systems do more than replace paper: They monitor treatment and notify doctors when it seems they have made mistakes or forgotten things.

Unfortunately, such programs can be costly and confusing. And with no common standards, doctors worry that they'll spend a fortune on one system, only to be forced into buying a replacement when some other system becomes the standard.

Even low-tech solutions such as listening more to patients - can challenge doctors. Listening is a time-consuming practice. It reduces the number of patients a doctor can see and, in a world where many insurance companies refuse to pay for lengthy consultations, it reduces the money a doctor can make.

Still, advisers see no excuse for doctors who ignore the best lawsuit-avoidance technique: building good relationships with patients.

"Even if there are grounds for a suit, the patient will feel guilt and remorse that prevent him from suing - if he feels that the doctor cares deeply about him and tried as hard as possible," said Eric Poe, vice president for marketing and business development at NJ PURE.

Relationships play such a role in malpractice cases that they help explain why certain types of specialists get sued more often than others.

Compared to their colleagues, family doctors rarely get sued. Of course, family doctors generally avoid the life-or-death cases that generate suits, but they have another advantage over specialists. Almost uniquely among doctors, they build relationships that last decades, so their patients feel much more connected to them.

Radiologists, on the other hand, hardly ever build lasting relationships with patients. Indeed, many patients never even meet the radiologists who read their images, which may be why they feel no guilt about suing them so frequently.

In addition to building relationships with patients, attorneys also advise doctors to manage patient expectations downward.

Patients who undergo procedures with absolute confidence of success often sue when things go wrong. Patients who recognize the possibility of disaster sue far less when it occurs.

With this in mind, doctors now warn patients, at length, about every conceivable risk of medical treatment. A growing number of doctors spend an entire consultation, often lasting an hour or more, discussing. risks.

To hammer the topic home, some make patients watch videos that show patients dying on the table or suffering handicap and disfigurement. Others end their warnings by quizzing patients, in writing, about how badly things could go.

Patients in such cases must sign the completed quizzes, which may then be used in court to discredit patients who claim they never understood the possibility of disaster.

Indeed, proving things in court lies at the heart of many lawsuit-avoidance techniques.

Most doctors still rely on notes they write immediately after consultations to demonstrate what they discussed with patients. (Lawyers recommend that doctors take very thorough notes.)

However, as the quiz example shows, many doctors go much further these days. Malpractice experts say that some doctors even take the precaution of taping all conversations with patients.

As conversations about lawsuit avoidance turn to practices like tape recording - i.e. practices that may anger patients—doctors and lawyers begin talking in generalizations rather than specifics, yet evidence shows that such practices do take place.

For example, few doctors brag about rejecting patients with a history of lawsuits, but the Internet sites that track such people have not disappeared for lack of business.

With so many people reluctant to talk, even the experts struggle to gauge the effectiveness of anti-litigation strategies. Still, some striking anecdotal evidence suggests that aggressive education programs work.

After warning that people sometimes sue years after undergoing a medical treatment, NJ PURE is happy to disclose the number of claims made for 2004 by the more than 600 doctors it insures.

"I read and hear advice all the time, and I incorporate it into my life," said Thomas Gallagher, a radiologist at Capitol Open MRI in Hamilton. "Much of it seems very good, but deep down in my gut, do I feel like I'm less likely to get sued? No.

"When you are a doctor, particularly a doctor who has been sued, the risk of a lawsuit is just there, in your mind, all the time."

An Open Letter from Jim Grogan of the Asbestos Workers Union Regarding S. 852 the "Fairness in Asbestos Injury Resolution Act of 2005 (FAIR Act)"

Recently, a daughter of one of our members was diagnosed with mesothelioma, an extremely aggressive cancer of the outside lining of the lung or stomach wall whose only known cause in the U.S. is exposure to asbestos. Her exposure to asbestos probably came from just living in the house of an insulator or asbestos worker, as asbestos would be brought in on a worker’s clothes and shoes.

In recent days, since the Asbestos Bill (S.852) has been introduced, there has been talk in press releases from industry and insurance sponsored groups that suggest that industry is somehow a victim. They have it wrong. Asbestos disease was preventable, but Industry, Insurance Companies, and even our Federal Government found reasons to hide, suppress, or minimize the dangers of exposure to asbestos for decades.

Asbestos is odorless and tasteless. So when people work with products that contain asbestos fibers (or when they were exposed at home), they don’t even know they are getting injured. Asbestos fibers that get into the lungs are invisible. Asbestos disease does not show up in many people until 15-40 or more years after exposure.

Now those that suppressed or downplayed or hid the information about the hazards of asbestos don’t want to take responsibility for their outrageous misconduct. Consider, if you would, the following:

From the 1930s through the 1970s Industry, Insurance Companies, and Even Our Own Government Hid or Suppressed Information About The Dangers of Asbestos

Industry knew in the 1930s and before that asbestos had a toxic effect on humans; and knew by the 1930s that asbestos was associated with lung cancer and death. By the 1950s the link between asbestos and cancer was undisputed to industry medical directors and scientists. See documents on opposite page.

Insurance companies knew in the 1930s and before that those exposed to asbestos came to premature death, and some advised against selling insurance to asbestos workers. Claims under workers compensation and occupational disease acts showed an alarming trend. Metropolitan Life, the Travelers, and a host of other insurance companies realized that asbestos exposure was causing illness, disease, and death. See Internal Travelers Insurance Company document to the left.

The Federal Government knew by 1918 that asbestos was dangerous. Specifically, the Department of Labor wrote in June 1918: "in the practice of American and Canadian life insurance companies asbestos workers are generally declined on account of the assumed health-injurious conditions of the industry." The title of this 1918 article was "Mortality from Respiratory Diseases in Dusty Trades (Inorganic Dusts)." Later in the 1930s and 1940s the Federal Government published that U.S. shipyard workers were coming down with asbestosis, a disease known at that time to cause death in advanced stages. See U.S. Government document from 1918 below.

No one was more patriotic than those who were exposed to asbestos dust while constructing, repairing, or living aboard Naval or flagged ships. But if those who knew that asbestos was harmful would have told us of the dangers, we would have taken measures to protect ourselves. We wouldn’t have taken our asbestos laden clothes home and exposed our families.

Asbestos Disease Continues at an Alarming Rate Asbestos exposures that started in the 1950s are still causing asbestos cancers and death today in record numbers. We have not even seen the full crest of the thousands of asbestos deaths from exposures that started in the 1960s, 1970s, 1980s and beyond.

The incidence of asbestos disease is not yet going down. The asbestos manufacturers and their insurance companies want to minimize forecasts of asbestos disease in the future. They don’t want to put adequate funds in a Trust Fund today for asbestos disease and death that will occur in the decades to come.

The Center for Disease Control confirms that in the last two reportable years, the incidence of mesothelioma (the cancer whose only known cause is asbestos) is averaging over 2,500 deaths in the U.S. Asbestos will kill over 7,000 Americans each year for decades to come when one considers mesothelioma, asbestos induced lung cancer, and disabling asbestosis.

The Recent Explosion of Asbestos Claims and Lawsuits for People Who Have No Breathing Problems or Impairment: The popular press has reported the recent explosion of non-malignant asbestos claims or lawsuits by persons without any breathing problems or impairment. This has contributed, in a significant way, to the present asbestos claims that now are some 600,000 or so in number.

Many have had to legitimately file their un-impaired asbestos claim or lawsuit to stop the statute of limitations from running, even though they are not now sick. Industry claims that there have been some fraudulent practices regarding this explosion. In true catastrophes, medical care is triaged. That is, those that are less sick give up their place in line for those that are truly in need of medical care. In a similar way, we believe a person who has no breathing problem from asbestos (in technical terms, a person without impairment) should not be paid under the asbestos Trust. They should be timely paid if and when they develop some impairment, and they should be able to come back for additional payment if their impairment gets worse. Some law firms represent over 10,000 un-impaired asbestos claimants. Many un-impaired asbestos claims have been said to average $100,000 or more.

Do the third grade math: 10,000 un-impaired claims times $100,000 each would yield $1 Billion dollars. That $1 Billion would go to a group of individuals who had no breathing problems or impairment from asbestos! Claims managers for insurance carriers and industry are rewarded for paying low amounts on large blocks of un-impaired claims, because they keep a corporation’s average asbestos settlement down, which in turn is reported to Wall Street. This practice must stop.

We believe there must be some objective medical evidence or markers of asbestos exposure in order for a lung cancer claim to qualify for payment under any Trust Fund established by legislation--whether it be pleural thickening, calcification, underlying asbestosis, or some elevated asbestos count in lung tissue. If lung cancer claims without markers are to be considered in some cases, they should be individually reviewed to determine the threshold question of whether asbestos exposure was a cause of the lung cancer. CT scans should be able to be used in making this determination. Since mesothelioma is a signal cancer for asbestos exposure, and unrelated to tobacco or other industrial carcinogens, no pleural markers are required.

So What’s New: Industry Wants a Bailout by Short Changing the Value of a Life, and by Proposing Unsafe Work Practices for Asbestos Removal in Public and Private Buildings: So why should a catastrophic asbestos death be valued any differently than other well-recognized insurance values? It has been estimated that a death case in the United States, a case against a negligent or reckless individual corporation that caused a death...is worth $2-3 Million or more. So why should a catastrophic asbestos death be valued significantly less just because industry profiteered for decades selling asbestos? We believe industry and their insurance carriers are using a double standard to the detriment of thousands who will die each year from asbestos disease caused by reckless industrial conduct. And that’s wrong.

And do you think industry ever tries to influence federal regulators? Recently, the popular press has reported efforts by industry to shortcut safety regulations for asbestos removal. The Cow Town Inn of Ft. Worth, Texas and the St. Louis Airport were recently involved in a scandalous attempt to have our government approve an unsafe shortcut for asbestos removal. And why do you suppose...for safety’s sake, or for the sake of the almighty dollar. The AFL-CIO, many affiliates including the Asbestos Workers, and trial attorneys gave of their time and effort to stop this un-tested and dangerous practice.

Who Will Pay this $140-150+ Billion Liability Under this Proposed Legislation? The proposed Asbestos Bill does not name the corporations, insurance companies, or reinsurance companies who will pay. We have asked numerous times for the names of those entities who will be responsible for the successful funding of the Asbestos Trust, but conferees on behalf of industry and insurance have refused such a disclosure. Before being able to support any such national legislation, the identities of the parties and their participation levels must be disclosed.

A recent review of the death certificates of the Asbestos Workers does not support the claim of industry that the incidence of asbestos disease is going down. Now daughters of asbestos workers are coming down with mesothelioma from exposures in the 1960s and 1970s. Significant exposures to asbestos that started in the 1970s and 1980s have not even started to show the full extent of mesothelioma deaths we are told are certain to come. We need real teeth in this bill to prevent industry from needlessly exposing another generation to asbestos in the workplace.

We support a legislative solution to the Asbestos Compensation Crisis. But victims of asbestos disease must not be victimized again by passage of legislation that is unfair. Timely and full payments must be made to asbestos victims. If that cannot be accomplished, access to appropriate state court forums must be preserved. Specifically, there must be a speedy return to the tort system if the Trust fails to timely meet its obligations.

There must be adequate upfront money paid to the Trust by Insurance and Industry so the Trust can timely pay true victims of asbestos. And our own Federal Government must take responsibility for their own part in suppressing information about the hazards of asbestos by guaranteeing any shortfall to the Trust.

It is only in this way that we could face a young woman today (or a young man tomorrow) and tell them we supported this legislation because it was fair and equitable and properly funded.

There may be more than a few special interest groups--including those who refuse to participate in the Trust Fund--seeking to derail the bi-partisan efforts of Senator Specter and Senator Leahy to bring some sense of proportion and equity to the asbestos crisis. To be sure, the Bill needs some additional and important work that could be addressed during and after initial markup.

We will continue in a constructive way to see if a fair, equitable, and adequately funded Bill can be passed. If not, we will fight for the right of any asbestos victim--union or nonunion--to a trial by a jury of their peers in an appropriate State Court.

James A. Grogan, General President
International Association of Heat and Frost Insulators and Asbestos Workers

CENTER FOR JUSTICE & DEMOCRACY APPLAUDS NEW STUDY
FINDING NO MEDICAL MALPRACTICE LITIGATION “CRISIS”

The Center for Justice & Democracy applauds the meticulous work of four scholars – three law professors and one professor of law and medicine – who researched years of litigation in Texas, and found that neither jury verdicts nor payouts to patients were responsible for causing skyrocketing premiums for doctors.1 The study was released today.

The Texas study, along with others done in past years of other states, undermines one of the central assertions of those pursuing misdirected efforts to cap damages for patients as a way of bringing down doctors’ insurance rates. Payments, total costs, and jury verdicts have all remained stable and have not driven recent premium increases. The causes and solutions to that problem lie with a largely unregulated insurance industry.

We hope that state legislatures and Congress will be inspired by this latest study, as well as the recent actions by Washington State’s insurance commissioner to refund excessive premiums to doctors, to explore real reforms that will end the unfair price-gouging of doctors. Lawmakers must stop blaming juries, lawyers and injured patients for a problem that is clearly not their fault – the price-gouging of doctors by insurers around the country.

The New York Times
March 10, 2005
OP-ED
False Diagnosis
By BERNARD BLACK, CHARLES SILVER, DAVID HYMAN and WILLIAM SAGE

Austin, Tex.

MEDICAL malpractice litigation reform is a high priority for President Bush, who contends that juries are running amok, multimillion-dollar settlements are on the rise and greedy trial lawyers are filing frivolous suits. The results, Mr. Bush and others argue, include skyrocketing insurance prices, abandoned medical practices, defensive medicine and a crisis of access to care. Their proposed solution: caps on jury awards to patients and on lawyers' contingent fees.

No one disputes that insurance premiums have risen significantly. The question is whether a crisis in states' tort systems accounts for the increase. Consider Mr. Bush's home state of Texas, America's second most populous state and the third largest in terms of total health care spending. After studying a database maintained by the Texas Department of Insurance that contains all insured malpractice claims resolved between 1988 and 2002, we saw no evidence of a tort crisis. Adjusting for inflation and rising population, we arrived at the following findings:

Large claims (with payouts of at least $25,000 in 1988 dollars) were roughly constant in frequency.

The percentage of claims with payments of more than $1 million remained steady at about 6 percent of all large claims.

The number of total paid claims per 100 practicing physicians per year fell to fewer than five in 2002 from greater than six in 1990-92.

Mean and median payouts per large paid claim were roughly constant.

Jury verdicts in favor of plaintiffs showed no trend over time.

The total cost of large malpractice claims was both stable and a small fraction (less than 1 percent) of total health care expenditures in Texas.

In short, as far as medical malpractice cases are concerned, for 15 years the Texas tort system has been remarkably stable. Texas's situation is not unique. One study of Florida's experience from 1990 to 2003 also found declines in paid claims per 100 practicing physicians as well as per 100,000 population. Over the same period in Missouri, the total number of malpractice claims fell by about 40 percent and the number of paid claims dropped almost by half.

Malpractice premiums have risen sharply in Texas and many other states. But, at least in Texas, the sharp spikes in insurance prices reflect forces operating outside the tort system.

The medical malpractice system has many problems, but a crisis in claims, payouts and jury verdicts is not among them. Thus, the federal "solution" that Mr. Bush proposes is both overbroad and directed at the wrong problem.

Bernard Black and Charles Silver are law professors at the University of Texas at Austin. David Hyman is a professor of law and medicine at the University of Illinois. William Sage is a law professor at Columbia.

`There are not a dozen of those men alive'

HAMILTON - For the past four years, Helen McCall has been a widow in mourning, and now she is a grieving mother as well.

Her husband, Jim, died when he was 66 after a years-long struggle with lung and heart disease. Her son Bobby Lee, who developed lung cancer in his 30s and suffered from acute bouts of asthma, died a month ago. He was just 49.

Both men worked for a now-defunct plant in Hamilton that made attic insulation by processing vermiculite ore from a mine in Libby, Mont., that contained a rare, naturally occurring form of asbestos called tremolite.

Bobby Lee had cancer, his mother said, noting, "They took half of one of his lungs and it spread to his liver." Her husband had been treated at Temple University Hospital in Philadelphia by doctors who specialized in asbestos-related illnesses, among others.

The McCalls were not the only workers at the plant, operated by W.R. Grace & Co. until the mid-1990s, to fall sick. Looking back, Helen McCall, a Trenton resident, says she is stunned by how little attention the plant has received.

"There were three shifts a day, and there are not a dozen of those men left alive," she said.

But the plant - and the fate of its workers - are now the subject of intense scrutiny by federal and state agencies. W.R. Grace is under indictment for concealing information about the hazardous nature of the ore it mined in Libby, where 1,200 residents are now suffering from some kind of asbestos-related abnormality, according to the U.S. Environmental Protection Agency.

More than two dozen facilities around the country that processed large amounts of the ore from Libby, including the plant in Hamilton, are being studied by health investigators trying to determine how much asbestos was released, how far it traveled and who may have been exposed to it.

The federal Agency for Toxic Substances and Disease Registry "needed to find out if other communities had health problems as great as Libby's," said John Florence, a spokesman for the agency.

Next month, the state Department of Health and Senior Services, which is investigating the site on behalf of the ATSDR in Atlanta, plans to release studies that look at "exposure pathways" over the course of the plant's 4 1/2 decades of operation as well as cancer rates in the U.S. Census tracts close to it.

"We are estimating the historic air dispersion around the site," said Donna Leusner, a spokeswoman for the department who would not comment on results from either of the studies.

Under EPA supervision last year, an environmental services contractor carted away more than 9,000 tons of asbestos-tainted soil from the former plant's grounds on Industrial Drive, an isolated stretch of road dotted with decades-old factory buildings, according to EPA spokesman Richard Cahill.

A spokesman for Grace acknowledged last week there had been asbestos at the plant, but said the company took careful measures to contain it as "industrial knowledge related to asbestos evolved."

"I don't think Grace would ever dispute that asbestos was on-site," said Greg Euston, a spokesman for the Columbia, Md.-based manufacturer of building materials, specialty construction chemicals and other industrial products.

Euston said the company milled the ore in Libby to remove as much asbestos as it could, took air samples at its plants, installed dust-control devices and ventilation systems, enclosed the silos where the ore was stored and required workers to wear respirators. By the early 1970s, he added, the company required "annual X-ray testing of all employees."

The name Zonolite is just legible on the outside of the brick building where an insulation business was in operation from the late 1940s until the mid-1990s, according to state health officials. W.R. Grace bought the Montana mine and the so-called "exfoliators" it supplied from the Zonolite Co. in 1963.

In Hamilton, as in other locations that processed vermiculite, trains delivered the ore by way of a rail spur on the grounds.

Workers at the plant made the insulation by "popping" it from the lightweight ore they heated to 1,500 degrees or more in furnaces on-site.

ATSDR, working with state health agencies in some regions, has already investigated several of these plants, in such cities as Beltsville, Md.; Denver, Colo.; and West Chicago, Ill. The agency has concluded that employees at the facilities that processed the Libby vermiculite were exposed to elevated levels of asbestos.

The studies also warned workers may have carried fibers home on their clothes, skin or hair, exposing family members as well. The review of operations at the Beltsville plant recommended that former workers and the people who lived with them undergo health evaluations.

"It is very important that health messages get out," said Barbara Anderson, an environmental health scientist with the ATSDR and director of the study of the 28 vermiculite processors.

She added that investigators are also trying to determine what happened to waste rock left over from processing.

Breathing asbestos increases a person's risk of developing mesothelioma, or cancer of the lining of the lungs and other internal organs, as well as a different type of cancer in the lung tissue itself. An asbestos-related condition called asbestosis produces scarring of the lungs that makes it difficult to breathe.

Bobby Lee McCall's wife, Denise, said her husband did not fully understand the dangers of his work until his father overheard managers at the plant discussing the then-young man's X-ray report.

"His Dad said to him, `Go in and ask to see your X-ray report,' " the Browns Mills resident recalled. "He came home that night and said, `Babe, that job is killing me.' "

After learning his lungs had been compromised, Denise McCall said, her husband started wearing a mask and began showering at the plant. "Before that, he would come home and wash his clothes," she said, noting that he was often "covered" in white dust. He had been on long-term disability for more than a decade before he died in January, she said.

The current occupants of the site, a commercial paper shredder whose clients include the state of New Jersey, said they never understood the potential perils on the property until environmental regulators knocked on their door about a year and a half ago and told them they would need to test the grounds for asbestos.

"The fact that we had asbestos came as a bit of a surprise," recalled Stephen Mandarano, general manager for Accurate Document Destruction Inc., adding that the facility came with a "book-sized" clearance from state environmental regulators when the company bought it in the late 1990s. The company moved to the property in March 2000, he said.

Indeed, the property got a clean bill of health when W.R. Grace closed it in 1994 and performed the obligatory site evaluation, state regulators said.

The report stated that the Montana vermiculite processed at the site contained only trace amounts of tremolite that amounted to .3 to 1 percent of the material by weight and that the processor used only a very small amount of it in the final years of operation.

Under state and federal guidelines, there are no restrictions on the use of materials that contain less than 1 percent asbestos by weight, said Fred Mumford, a spokesman for the state Department of Environmental Protection.

"They represented to us that there were no asbestos-related issues on-site and that (assessment) was approved," said Mumford. "We didn't require any further remedial tests."

After recent sampling at the site, however, contractors overseen by the EPA found enough evidence of residual asbestos that the agency required them to remove more than 9,000 tons of dirt in what is just the first phase of remediation at the site, said the EPA's Cahill.

"Hundreds of trucks took away soil," Mandarano recalled, noting, however, that company officials were relieved to learn that no asbestos particles were detected inside the buildings. The fibers must be airborne to be hazardous, federal health officials said.

The cleanup, which lasted from November 2003 to May 2004, cost $1.4 million, Cahill said, adding, "There will be another phase when we remove `hot spots' from contiguous areas."

W.R. Grace was indicted earlier this month for knowingly endangering the residents of Libby, Mont., and for concealing evidence of the health effects of its mining operations. Federal prosecutors have alleged that company officials knew of the dangers of their vermiculite products as far back as the 1970s and conspired to hide it.

W.R. Grace voluntarily entered Chapter 11 bankruptcy in 2001 as the number of asbestos claims against the company mounted sharply. Last November, the company filed a plan to deal with the claims that includes establishing a trust to pay pending and future claims.

The McCalls say they and other former workers with significant health problems and their families have filed claims against the company.

"(Grace) sent me a letter saying they had filed for bankruptcy," Helen McCall said, adding, "That was six months ago."

Section 3; Column 1; SundayBusiness; Pg. 1
Bush's Next Target: Malpractice Lawyers

By STEVE LOHR
CHICAGO

TODD A. SMITH is one of the nation's leading medical malpractice lawyers, renowned and feared in the courtroom, having extracted a lengthy string of multimillion-dollar settlements and verdicts from doctors, hospitals and insurers over the years. Though wealthy even by the standards of his profession, Mr. Smith, 55, seems to have lost none of the intensity and passion that fuel his 12- to 14-hour workdays and make him a persuasive trial lawyer.

Seated in his law firm's conference room, with an Olympian view high above Lake Michigan, Mr. Smith recited the details of his first courtroom victory in the summer of 1977, when he was a $12,000-a-year assistant public defender in the Cook County criminal courts. The defendant, he recalled, was an American Indian who was accused of armed robbery in a case that was based mainly on his race. The man was identified as the robber, for example, in a lineup that included him and a collection of off-duty, white police officers. ''It was terribly unfair,'' Mr. Smith said.

What drives Mr. Smith now, he says, is what drove him then: a desire to seek justice for people who need it, whether criminal defendants too poor to hire lawyers or victims of medical lapses whose lives have been ruined and face huge bills for care. ''You can make a significant contribution to someone's life, someone who might be in desperate straits,'' he explained. ''That's as rewarding as it gets for me. It's not really, or mostly, about money.''

The Bush administration wants to make Mr. Smith's profession far less financially rewarding. Medical malpractice lawyers are cast as the marquee villains in the administration's war against what it regards as a litigious culture run amok. If there were a face in the bull's-eye in this political battle, it would be Mr. Smith's. He is not only a big-name medical malpractice lawyer, but he is also serving this year as the president of the Association of Trial Lawyers of America, the principal advocacy and lobbying group for trial lawyers. And within conservative circles and inside the White House, the term ''trial lawyer'' is an epithet.

This month, the administration won the first round in its fight to curb litigation, as Congress passed legislation to sharply restrict class-action lawsuits against companies. Next up is medical malpractice. In his re-election campaign, Mr. Bush repeatedly decried ''junk lawsuits'' as the bane of the nation's doctors. The issue was deftly framed, and the subtext was clear: greedy lawyers were attacking the Marcus Welbys of America, good doctors doing their best.

In a speech last month in Illinois, Mr. Bush again called for strict limits on medical malpractice suits, including ''a hard cap of $250,000'' on what patients could recover for non-economic damages like physical and emotional pain and suffering. Returning to his election-year themes, Mr. Bush said doctors ''should be focused on fighting illnesses, not fighting lawsuits.''

''We need to fix a broken medical liability system,'' he said, and he called on Congress to act this year. This month, a medical litigation overhaul bill, mirroring the administration's proposals, was introduced in the Senate by two Republican senators, John Ensign of Nevada and Judd Gregg of New Hampshire.

THE medical liability system, health care analysts agree, is deeply flawed. But they also generally agree that the solution offered by the administration and the Republican Congress -- putting a ceiling on damages -- addresses only one aspect of the problem.

Medical liability policy, said Dr. William M. Sage, a physician and a law professor at Columbia University, should seek three goals: restraining overall costs, compensating the victims of medical mistakes and providing incentives for doctors and hospitals to reduce medical errors.

''There is a strong consensus among people who have really studied the issue that caps on damages would tend to keep costs down and make liability insurance more affordable for doctors,'' Dr. Sage said. ''And there is a universal consensus that caps would do absolutely nothing to reduce medical errors or to compensate injured patients. If anything, caps on damages would make those problems worse.''

Medical malpractice laws vary state by state. But California offers a glimpse of a future preferred by the administration and many Republicans in Congress. In 1975, California passed the Medical Injury Compensation Reform Act, which included a cap of $250,000 for damages like pain and suffering in malpractice cases. It did not limit economic damages for things like the cost of continuing care for a person disabled or wages lost because of medical errors. The law also curbed attorneys' fees on a sliding scale that prohibited them from collecting more than 15 percent on award amounts over $600,000, with higher percentages for the amounts below that sum. (In states without limits on fees, contingency payments to malpractice lawyers are typically about one-third of awards.)

Research varies on the likely impact of curbs on awards and fees, but a RAND Corporation study last year concluded that the California law had reduced the net recoveries for plaintiffs by 15 percent and had cut attorneys' fees by far more, an estimated 60 percent. Defendant liabilities, it calculated, were trimmed 30 percent because of the law.

California malpractice lawyers say the law also discourages them from taking wrongful-death cases if the victims are children or retirees. Those groups have no economic value by the cold logic of the courtroom because they are not earning salaries, so the maximum award would be $250,000. Complex cases, which often require many expert witnesses and years of research, can cost that much to bring to trial.

Linda Fermoyle Rice, a medical malpractice lawyer in Woodland Hills, Calif., said she recently told the family of a 14-year-old boy who died unexpectedly in a hospital -- apparently from medical negligence, Ms. Rice said -- that she could not afford to pursue the case. ''The law has made it impossible for many victims to get access to the court,'' she said.

Even plaintiffs who get to court often come away empty-handed. Nationally, defendants prevail in nearly 80 percent of the medical malpractice cases that go to trial. Many malpractice suits, legal analysts say, are filed by personal-injury lawyers, accustomed to handling simpler cases like those involving auto accidents, but not as experienced in medical negligence work. In a 2002 survey by the trial lawyers association, only 11 percent of its 60,000 members said medical malpractice was their primary area of practice; 40 percent replied that medical negligence cases were some part of their practice.

Mr. Smith, a partner at Power, Rogers & Smith in Chicago, resides at the top of the medical malpractice mountain. He does some aviation litigation, but medical negligence claims account for 70 percent of his cases; in the last 17 years, he has won more than $300 million in verdicts and settlements for clients. Contingency fees collected by his firm would typically be 20 percent of the total, a limit set by Illinois state law on all awards over $1 million.

So how much does he earn? ''Far less than you might expect,'' Mr. Smith replied. His firm employs 11 lawyers -- six working on medical malpractice cases, the remainder focusing on other personal-injury claims. It also employs four nurses as full-time researchers. Complex cases can require reams of expert testimony, years of investigation and hundreds of thousands of dollars to prepare. Medical malpractice lawsuits are custom work, focusing on one victim at a time, as opposed to large class actions against an entire industry, like the $246 billion tobacco settlement that trial lawyers helped 46 states win in 1998.

There are no hourly fees and no well-heeled corporate clients paying for expenses. Trial lawyers are the venture capitalists of the legal system, putting their money on the line and taking upfront risk. The occasional big paydays cover the daily expenses.

For all the costs, there is still plenty left over for Mr. Smith. He won't say precisely, but he concedes that his yearly income is routinely in the high six figures, and seven figures in good years, which appear to have been plentiful recently. That would put him on a par with partners at leading corporate law firms.

At one time, corporate law would have seemed the natural choice for Mr. Smith. In 1973, he was a freshly minted M.B.A. from Northwestern University's graduate school of business, now called the Kellogg School of Management, and most of his job offers were from banks in the Chicago area. But he says he balked at what struck him as an anonymous career within the crowded managerial ranks of a big bank. He became intrigued by the law and enrolled at the Loyola University law school; while there, he started working for the public defender's office.

In that office, Mr. Smith got his first taste of trial work, and he vividly described the thrill of standing in the huge courtrooms of the Cook County criminal court and the exhilaration of presenting cases. ''It was real life, and the outcome really mattered to people's lives,'' he said.

The most skilled trial lawyers, legal professionals agree, truly savor the theater of the courtroom, the adrenaline rush of verbal combat, the on-the-fly decisions made in cross-examination and the challenge of winning over an audience. ''In the end, it all depends on the judgment of 12 people,'' Mr. Smith noted.

But medical malpractice work requires more than a deft touch in court. According to colleagues and courtroom adversaries, Mr. Smith combines a relentless work ethic -- needed to absorb the arcane details of medical science -- and an underlying belief that his clients are victims who have suffered grave injustices.

''The best plaintiffs lawyers in this field, like Todd Smith, almost have a crusader mentality,'' said Brian C. Fetzer, a leading malpractice defense lawyer in Chicago, who has represented physicians, hospitals and insurers in cases against Mr. Smith for more than 20 years. ''They are true believers.''

Joseph W. Balesteri, a lawyer who joined Power, Rogers & Smith in 2000, after five years working the defense side of medical negligence cases, said of his colleague: ''Todd gets into the medicine. He wears his emotions on his sleeve, and listening to him you really see that he believes what he says. It's a credibility that is felt by the jury.''

Mr. Smith says his success rate is higher than 80 percent -- including jury verdicts and settlements -- far higher than the national average for medical malpractice plaintiffs' lawyers. Being picky in his selection of cases helps explain the high winning percentage. He says he decides to take fewer than 3 in 100 cases that are brought to his firm. ''We say to people right off that a bad outcome does not mean you have a medical negligence case,'' he said.

The plaintiffs' lawyer must argue that a doctor or hospital failed to meet the profession's acknowledged standard of care for a certain operation, test or treatment, and, more important, must be able to prove it.

Cases worth pursuing, Mr. Smith said, are typically ones in which the victim has suffered a major injury that results in continuing pain, suffering and disability. Brain damage, loss of a limb and facial disfigurement, he noted, are good candidates.

AT his firm, potential cases go through rigorous screening that can take months and cost costs tens of thousands of dollars. The victim's medical records are collected after receiving the authorization of the patient or family. Those records are reviewed, and one of the firm's nurse-researchers assesses the care that the patient received.

Next, the case is sent to a consulting specialist -- often more than one. If the case still seems promising, the accumulated information is sent to a physician who determines whether the care was negligent enough to write a certificate of merit, required in Illinois and some other states, to be presented to the court.

''In his speeches, Bush makes it sound as if every lawsuit that is brought is junk or frivolous,'' Mr. Smith said. ''But we do everything we can to weed out cases that are without merit. We have to. Our own money is at risk.''

The work, time, risk and potential rewards in complex malpractice suits are illustrated by a $20 million settlement Mr. Smith won last June. The origins of the case go back to 1997, when Huong Nguyen, then a 19-year-old sophomore at the University of Illinois at Chicago, was experiencing shortness of breath doing ordinary things like climbing stairs. She was diagnosed as having a faulty mitral valve, a pair of triangular flaps that regulate blood flow between two of the heart's chambers. The valve had to be repaired or replaced.

The surgery lasted more than eight hours, though the procedure usually takes about half that long, Mr. Smith said. The next morning, Ms. Nguyen could squeeze her right hand, but she was otherwise paralyzed and could not speak. She had suffered severe brain damage.

A lawyer referred the family to Mr. Smith, who began investigating. After an initial screening by Mr. Smith's firm, the family filed suit against the surgeon, Dr. Bradley S. Allen. Over the next several years, in preparation for trial, the law firm spent $375,000, much of it for the work of specialists like a cardiothoracic surgeon, neurologists, economists and a forensic videographer.

Mr. Smith contended that Dr. Allen did not properly remove air from the patient's heart during the procedure and that the resulting air embolus caused brain damage. Dr. Allen's lawyer, Kevin T. Martin, said Ms. Nguyen's resulting disability was a risk in this kind of surgery and ''very unfortunate, but not a medical error.''

The surgery had been videotaped, but when a court ordered Dr. Allen to produce the tape, there was a lengthy gap that included brief segments of television commercials. Had the case gone to trial, Mr. Smith would have contended that the defendant tampered with evidence, an assertion denied by Mr. Martin, who said the gap in the tape had resulted from a mechanical malfunction.

Ms. Nguyen is unable to move her arms or legs and cannot sit up or speak on her own. She communicates by tapping her right forefinger on a special keyboard. She suffers from depression and seizures but is cognitively intact. ''She is totally aware of her desperate straits,'' Mr. Smith said. ''This is as bad as it gets and she knows it.''

Mr. Smith's economists estimated that lifetime care for her would cost up to $20 million. The settlement talks, Mr. Smith said, began a few months before the trial was scheduled to start, with the defense offers starting at $5 million and the Nguyen family deciding to settle at $20 million. ''It was entirely the family's decision,'' Mr. Smith said. ''I think we could have gotten more in trial.''

Indeed, the risk for the defense, legal analysts say, is that the pain and suffering damages in such a heart-wrenching case, handled by a skillful medical malpractice lawyer like Mr. Smith, could lift the total award far higher. ''There wouldn't have been a dry eye in the house'' if Ms. Nguyen's case went to trial, said Mr. Martin, the surgeon's lawyer, who estimated that a jury award could have gone up to $100 million.

In settlements, defendants make no admission of guilt and typically try to add confidentiality agreements to the deal. Mr. Smith's firm, as a matter of policy, does not sign such agreements.

In big malpractice cases, the administration's proposed cap of $250,000 for pain and suffering would change the terms of trade in settlement talks. In the case of Ms. Nguyen, for example, there were sizable economic costs -- for the care of the disabled patient -- though the defense would surely have argued that they were less than $20 million. But it is the prospect of unknown, and potentially astronomic, damages in a trial that can give plaintiffs a powerful hand in settlement negotiations.

To Mr. Smith, the administration's battle against medical malpractice lawyers is simple to explain. ''It's about politics and money; it's not really about health care,'' he said. ''If you want to address the medical malpractice crisis in this country, do something about the medical errors. That's the real problem.''

THE quality of medicine across the country is uneven, analysts agree, and that represents a huge problem. Medical errors are estimated to be responsible for 45,000 to 98,000 deaths a year -- more than those caused by breast cancer, AIDS or motor vehicle accidents, according to the Institute of Medicine of the National Academy of Sciences.

So Mr. Smith has a point. But improving the quality of health care raises a separate set of complex issues about incentives for improvement, investment in information technology and changes in the culture of medicine.

Pointing the finger elsewhere will not get Mr. Smith and his fellow lawyers off the political hook. There have been calls to overhaul medical malpractice before. But this time the White House, doctors, insurers and other business interests, who see curbs on malpractice suits as one step in reducing their health costs, are pushing hard together.

The champions of tort reform are spending heavily. Last year, the Institute for Legal Reform, an affiliate of the Chamber of Commerce, and the American Medical Association, the physicians' advocacy group, spent a total of $33.8 million on lobbying, according to PoliticalMoneyLine, which tracks federal lobbying. The trial lawyers' association spent $2.9 million on federal lobbying, PoliticalMoneyLine reported.

''We're outgunned financially, and we're being targeted because we have supported candidates who support Americans' rights to access to a jury trial,'' Mr. Smith said.

He has done his part. In the 2003-2004 campaign cycle, he contributed just under $100,000, nearly all of it to Democrats and Democratic political action committees, according to the Center for Responsive Politics, a nonpartisan group.

Yet even if the Bush administration prevails and malpractice awards are curbed, the impact on Mr. Smith will probably be limited. It may crimp his style but not change his game. ''There will always be plenty of work for people like him, the best litigators on the plaintiffs side,'' said Dr. Sage, the Columbia law school professor.

Bush's Calls for Tort Overhaul Face Action in Congress

BYLINE: By STEPHEN LABATON
DATELINE: WASHINGTON, Feb. 2

With President Bush pressing Congress for a swift overhaul of the nation's civil liability system, action in the Senate Judiciary Committee this week is quickly turning into the political laboratory for what will be doable and what will be difficult.

In his State of the Union address on Wednesday evening, Mr. Bush once again urged lawmakers to rewrite the tort law rules to do away with what he has called frivolous and costly lawsuits, which he has repeatedly said have become a significant drag on the economy.

''We must free small business from needless regulation and protect honest job-creators from junk lawsuits,'' Mr. Bush said in the address. ''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.''

His critics, led by the trial lawyers and labor and consumer groups, say that the crisis is not one of litigation, but of public health and safety. They say his proposals are meant to protect big companies and their insurers from claims of injury, environmental neglect and consumer fraud.

Still, there is broad bipartisan support for some pieces of Mr. Bush's tort law plan, while serious obstacles stand in the way of passage of others.

On Thursday, the Senate Judiciary Committee is expected to approve by a wide margin a measure that would transfer most class-action lawsuits from state courts to federal courts. That measure, the first in the package of changes to the tort system, is expected to reach the Senate floor next week, and Republican and Democratic supporters say it will be quickly approved.

The bill has seven Democratic co-sponsors: Senators Herb Kohl of Wisconsin, Thomas R. Carper of Delaware, Christopher J. Dodd of Connecticut, Dianne Feinstein of California, Mary L. Landrieu of Louisiana, Blanche Lincoln of Arkansas, and Charles E. Schumer of New York.

The measure is opposed by federal judges who say they fear it will clog their dockets, and by consumer, environmental and civil rights groups that say it could close the courthouse door to cases that are not frivolous, or at least defer action on them.

They say that federal judges are likely to dismiss class-action cases that involve the laws of several states, like major consumer-protection suits, and that because there are many more state judges than federal judges, one likely effect of the legislation would be a significant delay in class actions.

Lawmakers supporting Mr. Bush's efforts say they hope that the quick adoption of the class-action measure will provide political momentum for the two other major tort-law bills: one to remove all asbestos injury cases from the courts and the other to limit damages in medical malpractice suits.

But at a hearing on Wednesday before the Senate Judiciary Committee, the lawmakers explored several issues that threaten to derail the asbestos measure. Congress has for years tried without success to adopt legislation to address the growing number of asbestos lawsuits.

The bill, a complex piece of legislation that would channel all asbestos claims out of the courts and into a $140 billion special trust program, is being worked out by Senator Arlen Specter, Republican of Pennsylvania, the new chairman of the Judiciary Committee, and Senator Patrick J. Leahy of Vermont, the panel's ranking Democrat.

Mr. Specter has assigned a friend and senior appeals court judge, Edward R. Becker of Philadelphia, the task of coordinating negotiations and drafting sessions with representatives from the defendant asbestos makers, insurers, as well as labor groups and trial lawyers.

The measure would force plaintiffs who say they are victims of asbestos poisoning out of the courts, requiring them to apply for relief to the new trust to be run under the auspices of the Labor Department.

Judge Becker and Mr. Specter still face a list of difficult issues, any one of which could ultimately derail the legislation. On Wednesday, the committee heard testimony about the medical and legal issues surrounding the growing number of cases in which workers are filing claims for injuries that they assert were caused by exposure to asbestos from construction and to silica from activities like sandblasting and mining.

Like many other aspects of the legislation, the debate over the treatment of silica illnesses by the courts essentially boils down to devising a measure that would be able to set up mechanisms to distinguish legitimate claims of injury from spurious ones.

Some lawmakers said they did not want legislation that would push silica cases into the new asbestos trust, but neither did they want to create a mechanism for plaintiffs to get into state courts by claiming to have simultaneously suffered from asbestos and silica exposure.

Complicating the policy decisions was new evidence suggesting that thousands of workers are claiming to be suffering from both silica and asbestos exposure in many cases that could be fraudulent. Senator Feinstein, Democrat of California, said, ''We do have to preclude dual claims'' without restricting legitimate silica cases.

A panel of medical experts testified Wednesday that it was extremely rare for a person to suffer from both asbestos and silica diseases, and that it was simple to distinguish symptoms of each disease.

That conclusion seemed to hearten the senators, particularly Mr. Specter, who suggested that the courts would be able to separate meritorious from frivolous claims with relative ease.

URL: http://www.nytimes.com

A Push in States to Curb Malpractice Costs

BYLINE: By JAMES DAO
DATELINE: ANNAPOLIS, Md., Jan. 13

As state legislative sessions open across the country this week, Republican governors and lawmakers in many states are mounting major campaigns to control medical malpractice insurance premiums by limiting civil litigation.

In Georgia, Missouri, Washington and more than a dozen other states, Republican legislators have made malpractice premiums a priority this year, groups that track such legislation said. In Kentucky, Maryland and Mississippi, Republican governors have already waded into the fray.

The impending battles over malpractice costs have in some states been wrapped in the broader cloak of ''tort reform,'' intended to restrict the civil liability of many types of businesses. They also come at a time when President Bush has pledged to push for federal restrictions on medical malpractice lawsuits.

But in most of the states, soaring malpractice premiums have been the driving force for the campaigns -- in part because compelling stories about doctors and their patients have put human faces on the larger issue. In some regions, soaring premiums have led doctors to strike, stop delivering vital services and even quit.

''Medical malpractice costs have driven tort reform across the country,'' said Gretchen Schaefer, spokeswoman for the American Tort Reform Association, a nonprofit group that advocates restrictions on a wide range of personal injury lawsuits. ''When you get an issue like that, where people are feeling the impact, having to do things like drive across state lines to have babies, it opens the door to a broad discussion of our class action system.''

The movement to restrict litigation is being propelled mainly by Republicans, led by a new generation of first-term governors. In Mississippi, Gov. Haley Barbour, the former chairman of the Republican National Committee, pushed restrictions on litigation through the Legislature last year then went on a ''tort tour'' to urge other governors to do the same.

In Kentucky, Gov. Ernie Fletcher, a doctor and former congressman, also made malpractice costs a priority after taking office last year, but failed to get legislation enacted. He has pledged to try again this year.

And in Maryland, Gov. Robert L. Ehrlich Jr., who also came from the House Republican caucus, took a page from Mr. Barbour, calling the General Assembly into special session late last year to combat the high cost of malpractice insurance.

On Monday, Mr. Ehrlich vetoed a bill approved by the Democratic-controlled legislature that he considered too weak. The legislature overrode his veto on Tuesday.

Significant measures to restrict lawsuits are considered likely to pass in several states, including Georgia and Missouri, where Republicans now control the executive and legislative branches.

The issue is potent enough that Democrats in some states, like Illinois, Pennsylvania and Virginia, have begun to push lawsuit limits, even as the Democratic leadership in Congress resists such proposals.

The battles pit two of the nation's most powerful campaign contributors: trial lawyers and doctors.

In the 2004 campaign, the American Trial Lawyers Association political action committee gave $2.1 million to federal candidates, almost all of them Democrats. The American Medical Association's political committee contributed nearly $2 million, with 81 percent going to Republicans.

The American Medical Association said that nearly 20 states were facing malpractice crises, with premiums having risen by 50 percent or more in the last two years. The group cites skyrocketing litigation costs.

Julie Rochman, senior vice president for the American Insurance Association, a trade group, said malpractice litigation was costly not only because judgments could be very large, but also because many doctors practiced ''defensive medicine'' involving unnecessary but costly procedures to avoid lawsuits. Ms. Rochman also said that many insurance companies had stopped issuing policies, reducing competition and causing premiums to rise.

The medical association and insurance groups have called for measures that would cap awards, tighten standards for expert witnesses, allow judgments to be paid out over extended periods, partially shield emergency room doctors from liability and limit lawyers' fees.

Trial lawyers say that personal injury litigation represents a relatively small part of rising insurance costs, blaming profit-taking and declines in investment returns for soaring premiums.

Citing premiums that rose by more than 70 percent in the last two years and record payouts last year by the Maryland's largest malpractice carrier, Mr. Ehrlich called a special legislative session in December.

But the lawmakers approved legislation that rejected several of Mr. Ehrlich's plans for limiting litigation and that allowed higher caps on wrongful death payments. The Democratic plan also imposes a 2 percent tax on health maintenance organizations to pay for reducing malpractice premiums and increasing Medicaid reimbursements.

The Maryland Republican Party began running advertisements in several swing legislative districts calling the Democratic bill a ''tax on patients.'' On Monday, Mr. Ehrlich, surrounded by doctors in white coats and a child wearing a bumper sticker that read, ''Support a lawyer, become a doctor,'' announced he would veto the measure.

But despite last-minute arm twisting by Mr. Ehrlich, the legislature overrode his veto. The final bill sets a cap on wrongful death payments at $812,500, half the current cap, and freezes for four years a limit on noneconomic payments at $650,000.

MedChi, the Maryland state medical society, supported Mr. Ehrlich's plan, but opposed his veto on the grounds that the Democratic bill at least provided some relief for doctors. But Dr. Willarda Edwards, the society's president, said much more needed to be done.

A primary care physician in a low-income south Baltimore neighborhood, Dr. Edwards said her premiums had soared more than sixfold since 2002.

''Almost everyone I know who is an ob-gyn is now just gyn because of rising premiums, and I'm talking about colleagues who have been delivering babies for 20 years,'' she said, referring to obstetricians-gynecologists.

As the fight continues in Maryland, Georgia and Missouri are examples of how recent Republican victories are expected to lead to restrictions on personal injury lawsuits.

In Georgia, Republicans won control of the House last November for the first time in 140 years. House Democrats blocked malpractice bills twice in the last two years, but Republicans now predict that legislation restricting lawsuits will pass.

In Missouri, the Republican-controlled legislature twice passed bills restricting lawsuits in the past two years, only to have the Democratic governor, Bob Holden, veto them. But a Republican, Matt Blunt, was elected governor in November, and one of his first promises was to enact ''meaningful litigation reform.''

Though Mr. Blunt cited rising malpractice premiums as the reason for his pledge, trial lawyers say the measures are likely to restrict lawsuits against an array of businesses.

''This is about the business community using physicians as a battering ram, because they are the ones with the highest sympathy level,'' said Randy McConnell, spokesman for Missouri Association of Trial Attorneys.

URL: http://www.nytimes.com

GRAPHIC: Photo: Dr. Karl Riggle has been working to change insurance in Maryland. (Photo by Chris Gardner/Associated Press)Chart: ''Revising Malpractice Laws''A look at some states' efforts to revise their medical malpractice laws in the past year. Many of the measures focused on capping noneconomic damages, commonly called ''pain and suffering,'' and were backed by doctors and the insurance industry.Florida -- Voters approved a constitutional amendment that limited lawyers' fees. They also approved two amendments supported by patient advocacy groups that allow patients to review health care providers' records of adverse medical incidents and prohibit doctors found guilty of three or more incidents of malpractice from practicing medicine.Kentucky -- Two medical malpractice bills died in the Legislature, including one that would have put a constitutional amendment allowing limits on noneconomic and punitive damages before voters.Maryland -- On Tuesday, the legislature overrode a veto of a malpractice bill, which the governor had said did not do enough to rein in insurance costs. The bill caps noneconomic damages at $650,000 and rolls back an increase in malpractice premiums to 5 percent this year.Mississippi -- Gov. Haley Barbour signed legislation limiting noneconomic damages to $500,000 in medical malpractice cases and to $1 million in other cases. Judges may prevent juries from considering punitive damages, which would be capped by the defendant's net worth.Nevada -- Voters approved a ballot question that capped lawyers' fees and limited noneconomic damages to $350,000.Oklahoma -- The governor signed legislation that capped noneconomic damages at $300,000. The caps can be lifted if the judge or jury determines the defendants actions were negligent.Oregon -- Voters rejected a constitutional amendment that would have limited noneconomic damages.Pennsylvania -- A measure that would have amended the Constitution to allow limits on noneconomic damages died in the Legislature.Wyoming -- Voters rejected a constitutional amendment that would have allowed the Legislature to enact limits on noneconomic damages, but approved an amendment to let the Legislature require that malpractice suits go to a review board before going to court.(Sources by National Conference of State Legislatures
The Associated Press)

LOAD-DATE: January 14, 2005

LIBBY, Mont. - They're getting ready for the Asbestos Health Fair in this old mining town.

Posters promise "Door Prizes!" and "Blood draw to participate in ongoing research!" Companies that sell home oxygen supplies will send reps. Doctors and researchers will be here. There will be consultants to help asbestosis victims apply for public aid. And there will be advice on finding help with the housework when the disease becomes too much.

To visitors in the town of some 8,000 people, it all must seem surreal. To the locals, this has, sadly, become part of life in Libby.

Asbestos released into the air from the now-closed W.R. Grace and. Co. vermiculite mine just down the road is blamed by some health authorities for killing some 200 people and sickening one of every eight residents.

Last week, a federal grand jury indicted the company and seven executives, accusing them of conspiring for decades to hide the danger. Grace has denied any criminal wrongdoing and said it looks forward to "setting the record straight" in court.

For many in town, the indictments mean those responsible will finally be held accountable.

"One person anywhere along the line could have said enough is enough, and they didn't," said Gayla Benefield, who lost her parents to asbestos diseases. Her father worked in the mine. She believes her mother became sick from the dust her father brought home on his clothes.

Grace employees "knew the dust would get them," she said. "But no one knew their wife would die the same way."

"I'd like to tell you I feel sorry" for the men indicted, added Les Skramstad, who worked at the mule for 2X years. "But so help me, I can't, because I don't think they feel sorry for us."

Now 48, Skramstad is among those sickened by asbestos and said he has been given less than two years to live. His wife and two of his grown children also have respiratory disease, which the family blames on the dust Skramstad brought home.

News reports six years ago brought to light a link between the vermiculite mine, which closed in 1990, and the health problems among townspeople.

Vermiculite ore from the Libby mine was used in a number of household products, including a popular type of insulation. Grace alsa made the vermiculite available around Libby for use as mulch in home gardens and a running surface on school tracks.

But the ore contained naturally occurring tremolite asbestos, an especially dangerous form of the mineral; The long, needlelike asbestos fibers can easily become embedded in the lungs and cause such illnesses as asbestosis, which is often fatal, and mesothelioma, a rare, fast-moving cancer that attacks the lining of the lungs.

In the past few years, the town and the mine have been declared a Superfund site, and the Environmental Protection Agency has spent some $55 million on the cleanup. Residents have undergone health screenings, and more are under way. The Asbestos Health Fair begins March 5. This is the second year in a row it has been held.

"To come out and say that these guys are basically responsible for crimes that hid things, that hurt the people of Libby, is baloney," said Ed Baker, a former city councilman whose father died from asbestos-related disease in 1983 after working at the mine for 30 years.

"He'd go back to work for them today if he was alive. My dad knew in the '60s that his lungs were turning to concrete. Like he always told me, he took his chances and he could have quit at anytime. But they were good jobs."

Baker's downtown clothing store, Ed's Threads, stands near Epperson Mountaineering, which has begun making a backpack-style carrier for oxygen tanks used by people who need help breathing because asbestos scarred their lungs.

Also downtown is the EPA's office. The agency's cleanup has turned into an economic engine for Libby, a community hungry for high-paying jobs to replace those lost with the closing of the mine in 1990 and a sawmill two years ago.

Mike Noble, who lost his father to asbestosis and has lung damage himself, welcomed the indictment, saying, "Corporate America needs to stand up and be held accountable for the decisions it makes." But he added: "I don't feel we want to put W.R. Grace out of business. I want them to stay in business so they can pay."

(Trenton) A Victims Rights Summit will be held at the Woodbridge Sheraton Hotel located on Route US 1 South on Tuesday, February 15, 2005 in Conference Room -----starting at 1:30 pm. The Summit is being organized by consumer and victims rights organizations who are committed to protecting the rights of consumers and victims in the face of the Bush Administration's drive to appease big business and corporate interests by pushing legislation through Congress that would limit the rights of victims of medical malpractice, asbestos related injuries and pharmaceutical drugs or medical devices that turn out to be harmful. Attendees will include representatives of Consumers for Civil Justice, Sheet Metal Workers Local Union 27 (AFL-CIO), NJ PIRG, NJ Citizen Action, Voices for Patient Protection, NJ Hemophilia Association, NJ Brain Injury Association, MADD-NJ, the NJ AARP and (waiting for environmental and labor organizations to sign on). Speakers will include representatives from several of these organizations as well as victims of medical malpractice, asbestos related injuries and pharmaceutical drugs or medical devices. The entire New Jersey Congressional Delegation and New Jersey's two U.S. Senators will be invited as well as legislators from the New Jersey State Senate and the New Jersey general Assembly.

The theme of the Summit is that the most critical function of preserving the rights of injured victims to bring lawsuits is to make society safer. The participants in this event believe that lawsuits deter culpable manufacturers, polluters, hospitals and other entities from repeating their negligent behavior or misconduct and give them the proper economic incentive to become safer and more responsible. By the same token when disputes are resolved without trial and without a public record, wrongdoers can prolong misconduct and suppress for years information about dangerous products and practices. Lawsuits are often the only means for the public and government regulators to learn about dangerous products, drugs, environmental hazards and unsafe practices. The Summit will emphasize that the civil justice system saves lives and that society would suffer tremendously if it were weakened as the Bush tort reform agenda proposes to do. Furthermore, the amount of money saved as a direct result of this deterrence functions---injuries prevented, health care costs not expended, wages not lost, etc.---is incalculable.

Additionally, a new website, sponsored by Consumers for Civil Justice, that will make available to journalists, lawmakers and the general public the documentary evidence that drug companies have repeatedly caused avoidable deaths and injuries and misled stockholders about the risk they were knowingly taking.

SENATE APPROVES MEASURE TO CURB BIG CLASS ACTIONS
BYLINE: By STEPHEN LABATON
DATELINE: WASHINGTON, Feb. 10

Handing President Bush a significant victory, the Senate overwhelmingly approved a measure on Thursday that would sharply limit the ability of people to file class-action lawsuits against companies.

The measure, adopted 72 to 26, now heads to the House of Representatives, where Republican leaders say it will be approved next week and sent to the White House for Mr. Bush's signature.

The measure would prohibit state courts from hearing many kinds of cases they now consider, transferring them to federal courts. Experts say many cases will wind up not being brought because federal judges have been constrained by a series of legal precedents from considering large class actions that involve varying laws of different states.

The legislation also makes it more difficult for class-action lawsuits to be settled by payments of coupons for goods and services instead of cash by the defendants, a practice that has been heavily criticized by Democrats and Republicans.

The measure does not affect pending cases.

Mr. Bush issued a statement praising the vote, his first legislative victory of his second term.

''Our country depends on a fair legal system that protects people who have been harmed without encouraging junk lawsuits that undermine confidence in our courts while hurting our economy, costing jobs and threatening small businesses,'' the president said. ''The class-action bill is a strong step forward in our efforts to reform the litigation system and keep America the best place in the world to do business.''

The legislation has long been promoted by large and small businesses, particularly manufacturers and insurance companies, and failed by a single vote in the Senate in 2003. It could have an especially significant effect on cases involving accusations of defective products, like drugs and cars; plaintiffs in such cases have had success in bringing large class actions in state courts. Automakers and drug makers have worked for years with manufacturers and insurers to press Congress to adopt the bill.

The business groups have asserted that the legislation is necessary to curtail frivolous litigation that benefits lawyers more than plaintiffs. They have said it is important to eliminate the unfair practice of lawyers' shopping for state courts that were more favorable to plaintiffs.

''This is a modest bill which will help reform a class-action regime that many times serves no one but the lawyers who bring these class-action lawsuits,'' said Senator Charles E. Grassley, Republican of Iowa, who was the chief sponsor of the measure and who introduced a version of it eight years ago. ''Out-of-control frivolous filings are a real drag on the economy. Many a good business is being hurt by these frivolous claims.''

But the measure has been attacked by civil rights organizations, labor groups, consumer organizations, many state prosecutors and environmental groups, who say it would sharply curtail important cases and provide new protections for unscrupulous companies. Many federal and state judges and state lawmakers have also criticized the bill, saying it would strip states of an important role in judging such contests and could add a considerable number of cases to already burdened federal dockets.

''This bill is one of the most unfair, anticonsumer proposals to come before the Senate in years,'' said Senator Harry Reid of Nevada, the minority leader. ''It slams the courthouse doors on a wide range of injured plaintiffs. It turns federalism upside down by preventing state courts from hearing state law claims. And it limits corporate accountability at a time of rampant corporate scandals.''

In the vote on Thursday, 18 Democrats joined 53 Republicans and the lone Senate independent, James M. Jeffords of Vermont, in supporting the measure. Democrats cast all 26 dissenting votes. Two Republicans, Rick Santorum of Pennsylvania and John Sununu of New Hampshire, did not vote.

Republicans say they hope the vote will provide momentum for two other major bills overhauling the tort law system, one on asbestos litigation, the other on curbs on medical malpractice lawsuits. Critics of these bills say that part of the effort by the White House is to attack trial lawyers, a vital financial base of support for the Democratic Party. They have also said that like Social Security and the war in Iraq, tort law problems have been exaggerated by the Bush administration, and that proposed solutions go much further than necessary.

The legislation approved by the Senate would prohibit state courts from hearing most of the kinds of class actions that have most troubled corporate America -- those in which the class consists of many consumers or employees from around the nation who assert significant injuries of one sort or another. It precludes state courts from considering cases involving claims of more than $5 million and having a member of the class living in a state different from the defendant's.

Critics of the legislation say that since the Supreme Court and several appeals courts have imposed limits on the ability of federal district judges to consider cases involving the varying laws of multiple states, the legislation will deter the filing of meritorious lawsuits.

Some experts in civil procedure and class actions said they believed that the fight would now move to federal courts and that some federal judges might become more receptive to hearing such claims now that they know that their dismissal would mean that no one else would hear them.

''The assumption of business interests was that federal courts will continue to dismiss them blindly, ignorant of the fact that there is nowhere else for these cases to go,'' said Samuel Issacharoff, an expert on civil procedure at Columbia Law School who is the main author of a coming treatise on different kinds of cases involving many parties, including class actions, for the American Law Institute, an influential organization of lawyers, academics and judges. ''I think more highly of federal courts,'' Mr. Issacharoff said, ''that they will realize that they stand between justice and the breach.''

Stephen B. Burbank, an expert on class actions and civil procedure at the University of Pennsylvania School of Law, also expects federal judges to try to find ways to hear the cases.

''Don't underestimate the ability of federal judges to find ways around this if they can,'' Professor Burbank said.

But he said lower federal courts would remain constrained by the precedents set by the Supreme Court and appeals courts that sharply limit their ability to hear cases involving the differing laws of multiple states.

Professor Burbank, who recently completed a study on the sharp decline in the trials of all civil cases, said he feared that one impact of the legislation would be a further reduction in such cases, particularly since federal judges must give priority to criminal cases and already have heavy dockets. Class-action lawsuits rarely make it to trial but require considerable time because judges are called upon by lawyers from both sides to rule on a variety of pretrial motions.

Prof. Arthur R. Miller of Harvard Law School, a longtime critic of the legislation who in previous years worked with organizations that tried to soften the measure, said that the legislation could lead to the balkanization of class-action litigation by encouraging plaintiffs' lawyers to file smaller suits in different courts, rather than a single large nationwide action.

''This will clearly have a dampening effect on class actions,'' Professor Miller said. ''But accomplished law firms will figure out how to work with it.''

He also said that the vague language of the new legislation was certain to spawn a significant amount of new litigation over the law's terms.

''This is not neat and crisp like the Ten Commandments,'' he said.

Lawyers at several firms specializing in class actions said they had not begun to think about what legal maneuvers were possible to get their highly profitable class actions heard. One lawyer at a prominent class-action firm said that part of the reason plaintiffs' lawyers had not prepared a strategy yet was that many lawyers had expected the legislation to take longer to adopt as Senate and House members wrangled over terms.

URL: http://www.nytimes.com

WASHINGTON - The Senate approved a measure yesterday to help shield businesses from major class-action lawsuits like the ones that have been brought against tobacco companies, giving President Bush the first legislative victory of his second term.

Under the legislation, long sought by big business, large multistate class-action lawsuits could no longer be heard in small state courts. Such courts have handed out multimillion-dollar verdicts.

Instead, the cases would be heard by federal judges, who have not proven as open to those type of lawsuits.

Instead, the cases would be heard by Federal judges, who have not proven as open to those type of lawsuits.

The Senate passed the bill 72-26, and it now goes to the House. Both New Jersey senators, Democrats Jon Corzine and Frank Lautenberg, voted against the bill.

"Our country depends on a fair legal system that protects people who have been harmed without encouraging junk lawsuits that undermine confidence in our courts while hurting our economy," Bush said in a statement released in Pennsylvania, where he was promoting his Social Security proposals.

Thomas Donohue, president of the U.S. Chamber of Commerce, said, "Now it's time for the House to finish the job and take back our civil justice system from plaintiffs' lawyers seeking jackpot justice."

But Todd A. Smith, president of the Association of Trial Lawyers of America, said, "Every

American's legal rights are diminished by this anti-consumer legislation." The association said insurance, tobacco, drug, chemical and other companies had financed the push to get the legislation through the Senate.

For 50 years, the American civil justice system has been the last best line of defense for the average Joe against the abuse of corporate power and a government that too often fails to protect its citizens.

"Tort" litigation won redress for Vietnam War veterans suffering from exposure to Agent Orange and for blacks denied service at Denny's restaurants and it may finally also do so for the Enron shareholders who lost pensions and life savings when that company imploded.

Now the Bush White House and its friends in Congress want to close courthouse doors to many such lawsuits. Tort reform legislation is on a fast track. First up are class actions.

Traditionally, U.S. courts provided for group litigation under common law. It wasn't until 1966, with the influence of the civil‑rights movement, that class actions were formalized in the Federal Rules of Civil Procedure. Where a widespread pattern of discrimination, systemic abuse or, other unlawful conduct has occurred, class actions allow a few plaintiffs to represent all the injured, streamlining the legal process and providing plaintiffs with strength in numbers.

The proposed reform - championed by conservatives who otherwise tout states' rights - would ` federalize most class actions, taking them away from local courts and juries. Already overburdened, federal courts would be required to resolve complex issues of state law and adjudicate factual disputes - resulting, at best, in slow justice, while many victims kiss justice and compensation goodbye.

It is no coincidence that trade groups representing chemical companies, the pharmaceutical industry and manufacturers associations are on the record as supporting the reform; these are businesses that are frequently subject to successful class actions in the state courts.

The attack on your day in court is occurring against a backdrop of kickback scandals in the insurance industry, unsafe drugs such as Vioxx slipping through government oversight and corporate power abuses unmatched since the Roaring '20s.

Instead of cleaning up such abuse - after dismantling much of the regulatory regime - the Bush administration seeks to further unshackle American business through tort reform. As with deregulation, for the average American, tort "reform" will simply mean more unsafe products, unfair markets and unchecked monopolies.

Why care? Because you can never know when you'll need the protection of the civil justice system

Consider the citizens of Avila Beach, about 150 miles north of Los Angeles. They awoke one morning to find a massive crude oil leak from an old Unocal pipeline just 25 feet beneath their town. Class action and public-interest-group litigation was filed in the local county court in 1997, invoking California's tough environmental laws. Within 18 months, Unocal agreed to finance a $200 million cleanup and pay $43.8 million in fines.

Under the proposed legislation, this case would have gone straight to federal court in Los Angeles, with one of the longest dockets in the nation. The people of Avila Beach would probably still be awaiting trial.

The fishermen of Valdez, Alaska, for example, have yet to receive a penny through federal class-action litigation against Exxon brought 16 years ago, after the greatest environmental disaster in U.S. history

Clas-action lawsuits are not perfect. Abuses such as "forum shopping" - filing lawsuits in what are considered plaintiff friendly courts - and excessive legal fees do occur. But remedies for these problems are already available through established court procedures. In fact, no other type of lawsuit is subject to as much judicial oversight and control as the class action.

Laws do not enforce themselves. Civil lawsuits provide a critical backstop to government oversight -and never more than when regulators don't regulate, and when Congress is asleep at the switch.

Watch how your representatives vote on tort reform: It will signal whether they represent the public interest or, instead, runaway corporate power.

Al Meyerhoff is a partner with Lerach, Coughlin, Stoia, Geller, Rudman and Robbins in Los Angeles; he is co-counsel for the plaintiff class in the Enron securities litigation.

Consumers for Civil Justice
P.O. Box 7781, Trenton, New Jersey 08628
(609) 883-7481 Fax (609)883-1982

(Trenton) A Victims Rights Summit will be held at the Woodbridge Sheraton Hotel located on Route US 1 South on Tuesday, February 15, 2005 starting at 1:30 pm. The Summit is being organized by consumer and victims rights organizations that are committed to protecting the rights of consumers and victims in the face of the Bush Administration's drive to appease big business and corporate interests by pushing legislation through Congress that would limit the rights of victims of medical malpractice, asbestos related injuries and pharmaceutical drugs or medical devices that turn out to be harmful.

Attendees will include, among others, representatives of Consumers for Civil Justice, the Sheet Metal Workers Local Union 27 (AFL-CIO), NJ PIRG, NJ Citizen Action, Voices for Patient Protection, NJ Hemophilia Association, MADD, CWA-District 1, NJ Environmental Federation, Sierra Club of New Jersey and the NJ AARP. Speakers will include representatives from several of these organizations as well as victims of medical malpractice, asbestos related injuries and pharmaceutical drugs or medical devices. The entire New Jersey Congressional Delegation and New Jersey's two U.S. Senators will be invited to attend or to send representatives as well as legislators from the New Jersey State Senate and the New Jersey general Assembly.

The theme of the Summit is that the most critical function of preserving the rights of victims to have access to the courts is to make society safer. The participants in this event believe that the Seventh Amendment right of the U.S. Constitution for victims to have access to the courts is to deter culpable manufacturers, polluters, hospitals and other entities from repeating their negligent behavior or misconduct and give them the proper economic incentive to become safer and more responsible. One need only point to a few examples, such as the recall of the 1971 through 1976 Ford Pintos for fuel system modification, the ban of the synthetic estrogen called DES in 1971 and the harm caused to women using the Dalkon Shield IUD which would never have been dealt with by the manufacturer without its growing concern with the rising tide of punitive damages claims against the company. By the same token when disputes are resolved outside the courts and without a public record, wrongdoers can prolong misconduct and suppress for years information about dangerous products and practices. Lawsuits are often the only means for the public and government regulators to learn about dangerous products, drugs, environmental hazards and unsafe practices.

The Summit will emphasize that the civil justice system saves lives and that society would suffer tremendously if it were weakened as the Bush tort reform agenda proposes to do.

Furthermore, the amount of money saved as a direct result of this deterrent function—injuries prevented, health care costs not expended, wages not lost, etc.—is incalculable.

Additionally, a new website that will make available to journalists, lawmakers and the general public the documentary evidence that drug companies have repeatedly caused avoidable deaths and injuries and misled stockholders about the risk they were knowingly taking will be made available. The proceedings of the Summit will be broadcast live over the internet as well as taped and made available to interested parties. The link for the broadcast website is http://www.ibctv.com/wstv/event_framephp?event_id=313. The program will be available 30 minutes prior to the scheduled start time of 1:30 pm.

Anyone interested in attending the Summit may call peter Guzzo at 609-883-7481 or e-mail him at njttp@msn.com.

SECTION: Section A; Column 4; National Desk; Pg. 13
LENGTH: 976 words
HEADLINE: Senate Committee Passes New Lawsuit Rules
BYLINE: By STEPHEN LABATON
DATELINE: WASHINGTON, Feb. 3

Congress took the first step toward overhauling the nation's civil liability system on Thursday when the Senate Judiciary Committee overwhelmingly approved legislation that would shift most class-action lawsuits from state courts to federal courts.

The committee voted 13 to 5 to approve the measure and send it to the full Senate, where it will be considered as early as Monday.

But even as Republicans rejoiced about the quick passage of the measure, an interesting showdown appeared to be developing between Senator Arlen Specter, the Pennsylvania Republican who recently became chairman of the Judiciary Committee, and the Senate majority leader, Bill Frist of Tennessee.

The two men staked out opposite positions over an amendment that will be offered when the measure reaches the Senate floor. Business groups say the amendment would have the effect of gutting the bill, and consumer groups and some Democrats and Republicans say the change is vital because it would allow many meritorious lawsuits that would otherwise be killed under the legislation to move forward.

Mr. Specter said Thursday morning that he supported the amendment, which is to be offered by Senator Jeff Bingaman, Democrat of New Mexico. Dr. Frist said that he hoped the legislation would be adopted without any amendments.

White House officials and Republican leaders in Congress say they hope that the swift adoption of the measure will create political momentum for two other major proposals to change the tort law system. Those measures, which are more contentious, would impose new limits on medical malpractice lawsuits and would preclude people who claim they have asbestos poisoning from filing lawsuits. Instead, they would have to apply for compensation from a special trust.

The class-action legislation is expected to be approved relatively quickly because enough Democrats support it and so a filibuster cannot block it. Similar legislation was overwhelmingly adopted by the House last June but stalled in the Senate.

At the hearing on Thursday, some of the most passionate supporters of the measure were Democrats.

''This legislation addresses the continuing problems in class-action litigation, particularly unfair and abusive settlements that shortchange consumers across America,'' said Senator Herb Kohl of Wisconsin, a co-sponsor of the measure. He joined two other Democrats, Dianne Feinstein of California and Charles E. Schumer of New York, in supporting the bill, along with the committee's 10 Republicans.

But the five Democrats on the committee who voted against the measure sharply criticized it, saying that it was special interest legislation at its worst, and that it would go a long way toward protecting corporate misconduct.

''This legislation would make it harder for American citizens to protect themselves against violations of state civil rights, consumer, health and environmental protection laws by forcing these cases out of their local state courts,'' said Senator Patrick J. Leahy of Vermont, the ranking Democrat on the Judiciary Committee. ''This is a high-handed override of the rights of the American people, intending to benefit wealthy and powerful special interests.''

Also voting against the measure were Edward M. Kennedy of Massachusetts, Joseph R. Biden Jr. of Delaware, Russell D. Feingold of Wisconsin and Richard J. Durbin of Illinois.

The legislation, sponsored by Senator Charles E. Grassley, Republican of Iowa, would give federal courts the authority to hear any class action in which the money at issue exceeds $5 million and a single member of the class is from a different state than the defendant. It would also make it harder for defendants to settle class-action lawsuits by issuing coupons. Some past settlements have been criticized because plaintiffs received coupons -- to exchange, for example, for airline tickets -- while their lawyers made a lot of money.

The legislation has been heavily promoted by business interests and opposed by consumer and civil rights organizations. Its supporters say it will curtail abusive suits and forum shopping, while its critics maintain that it will close the door to many worthy lawsuits involving consumer fraud, employment discrimination and environmental issues.

One major problem, according to critics of the legislation, is that the measure creates a Catch-22 situation in which, once a case is removed from a state court, a federal court might not be able to hear it. The Supreme Court ruled in 1985 that a court cannot approve, or certify, a class action of nationwide proportions when there are ''material'' differences in state laws. Since then, some state courts have continued to certify such cases when the differences in the state laws are relatively inconsequential, although federal courts have not.

Thus the fear among the critics is that if the legislation were adopted without changes, a significant group of cases could not be brought in either federal or state courts.

''This is the class-action moratorium act,'' Mr. Durbin said.

Mr. Bingaman said Thursday that he would introduce an amendment that would seek to correct that problem. It would permit federal courts to entertain such claims by giving federal judges the discretion to select a state law to apply.

At the hearing Mr. Specter said he would support that amendment, which is opposed by business groups like the United States Chamber of Commerce.

After the hearing, Stanton Anderson, a lawyer for the Chamber of Commerce, said the Bingaman amendment would ''gut the bill.''

And Dr. Frist said later that he hoped the Senate would pass the bill without amendments.

''If we can succeed in passing a clean bill through the Senate, it is my expectation that the House will act quickly and we can send a bill to the president,'' Dr. Frist said.

URL: http://www.nytimes.com

LOAD-DATE: February 4, 2005

WASHINGTON - A fragile compromise that would limit class-action lawsuits and achieve one of President Bush's second-term goals survived its first test yesterday when senators foiled attempts to alter the legislation.

But Democrats are hoping to make changes to a bill that many of them would not mind seeing fail.

"This is a bad idea whose time has apparently come," said Sen. Joseph Biden (D-Del.).

By a 13-5 vote, the Senate Judiciary Committee approved the overall bill, which would send most class-action suits to federal court rather than state courts. The Republican-controlled Senate will consider the measure next week.

Federal courts are assumed to be less likely than state courts to award multimillion‑dollar verdicts to people suing big companies.

Supporters will try to get the legislation to the GOP-dominated House, which has agreed to support the bill if it is not substantially changed.

"We have a very sensitive agreement with the House of Representatives on this bill, and if there are amendments, it may jeopardize the acquiescence of the House on our bill," said the chairman of the Senate Judiciary Committee, Sen. Arlen Specter (R-Pa.).

Democrats, however, already are preparing amendments, including proposals to raise judges' salaries and let federal judges decide which state's law would apply in multistate suits. Making those changes will break the agreement with the House and kill the bill, Republicans said. "That would be a poison pill on this bill," said Sen. Jon Kyl (R-Ariz.).

The president has called curbing class-action cases a secondterm priority. Senators who support the bill say some lawyers make more money from these cases than do the actual victims, and that lawyers sometimes threaten companies with legal action just to get quick financial settlements.

"That system is broken and it needs fixing," said Sen. Tom Carper (D-Del.). "There are too many instances where consumers are getting very little or nothing from their settlements, while companies are not being forced to change the way they do business."

As written, the bill has enough Democratic and Republican support to survive a filibuster attempt in the Senate.

House GOP leaders, including Judiciary Chairman James Sensen (R-Wis.), will make sure the bill receives a warm reception if it is not substantially changed, lawmakers said yesterday.

A Gift For Drug Makers

BYLINE: By BOB HERBERT.

Vioxx, Celebrex, Prozac. . . .

With all the problems and the bad publicity that drug companies have been facing recently, you might think that this would not be a good time for the Bush administration to toss yet another bonanza their way.

But the administration is like an ardent lover in its zeal to shower the rich and powerful with every imaginable benefit. So tucked like a gleaming diamond in proposed legislation to curb malpractice lawsuits is a provision that would give an unconscionable degree of protection to firms responsible for drugs or medical devices that turn out to be harmful.

The provision would go beyond caps on certain damages. It would actually prohibit punitive damages in cases in which the drug or medical device had received Food and Drug Administration approval. We know the F.D.A. has failed time and again to ensure that unsafe drugs are kept off the market. To provide blanket legal protection against punitive damages in such cases is both unwarranted and dangerous.

We learned just last month that Celebrex, the phenomenally popular painkiller from Pfizer, more than tripled the risk of heart attacks, strokes and death among those taking high doses in a national trial. Those findings, as noted in an article in The Times, ''raised new questions about how well federal drug regulators protect the public and worsened drug makers' already dismal image.''

Senator Chuck Grassley, an Iowa Republican who held hearings on recent F.D.A. actions, said, ''At this point, no one can say with confidence whether the worst drug safety problems are behind us or ahead of us.''

The Celebrex disclosure came on the heels of a decision by Merck to withdraw its arthritis drug Vioxx from the market after a study showed a link between long-term use of the drug and an increased risk of heart attacks and strokes.

Two weeks ago, an article in The British Medical Journal suggested that Eli Lilly & Company had long concealed evidence that the antidepressant Prozac could cause violent and suicidal behavior. The company denies the accusation, which the journal forwarded to the F.D.A.

If the malpractice legislation so relentlessly touted by President Bush became law, Pfizer, Merck and Eli Lilly would be immunized against even the possibility of punitive damages arising from any harm to patients that resulted from use of these drugs -- as long as the companies followed F.D.A. rules. All three drugs were approved by the F.D.A.

The whole idea behind punitive damages is to severely punish the most egregious offenders. Huge punitive damage awards are supposed to serve as a deterrent to extremely bad behavior.

''It's an important system to have in place,'' said Joanne Doroshow, executive director of the Center for Justice and Democracy, a nonprofit consumer advocacy group. ''The F.D.A. is certainly not doing its job. The legal system is a very important backup. It's really the last line of defense to ensure that the marketplace only has safe products.''

If Mr. Bush has his way, that line of defense will be substantially weakened. With the possibility of punitive damages eliminated, drug companies will be even less vigilant than they are now about problems with products that pose a serious -- even fatal -- threat to patients.

The Democratic leader in the Senate, Harry Reid of Nevada, was blunt on the matter. He said, ''Congress should not be giving a free pass to big drug companies at a time when millions of Americans may have had their health put at risk by pharmaceutical giants.''

The drug companies have an incredible racket going, as Marcia Angell, the former editor in chief of The New England Journal of Medicine, documents in her book ''The Truth About the Drug Companies.''

''Now primarily a marketing machine to sell drugs of dubious benefit,'' she wrote, ''this industry uses its wealth and power to co-opt every institution that might stand in its way, including the U.S. Congress, the Food and Drug Administration, academic medical centers, and the medical profession itself. (Most of its marketing efforts are focused on influencing doctors, since they must write the prescriptions.)''

Among those co-opted is the president himself. Nothing's too good for the drug companies. If ordinary Americans got the same sweet treatment from this administration as the great pharmaceutical houses, we'd all be in a much better place.

President Bush concluded a week of campaigning to overhaul the nation's civil justice system on Friday by urging swift Congressional approval of legislation that would sharply limit the steadily growing number of lawsuits by workers and others who claim to have been injured from asbestos.

Mr. Bush, who was accompanied in this northern suburb of Detroit by two business executives, the daughter of an asbestos victim and a law professor sharply critical of the current system, said that the wave of asbestos-illness claims had ''bankrupted a lot of companies'' and that the ''truly sick are denied their day in court'' because many claims involve people with no major medical impairments.

''This is a national problem,'' he said, urging Congress to adopt a measure that would allow the sickest victims to receive money more quickly and limit the companies' liability.

''The system isn't fair,'' he said. ''It's not fair to those who have been harmed. It's not fair to those who are trying to employ people. It's just not fair.''

More than 1,100 Michigan residents have died from asbestos diseases in the last 20 years, according to government data compiled by the Environmental Working Group, a research organization.

Mr. Bush has long argued for major changes in the tort system, many advanced by business interests, but his effort on Friday was his first major push to overhaul the process for handling asbestos claims. Critics have said that one reason the White House may have been less visible on the issue in the past is that until recently a main beneficiary of such a measure could have been Halliburton, the large oil field services and construction company once headed by Vice President Dick Cheney.

Halliburton has sought to limit its legal liabilities from asbestos claims against Dresser Industries, a company that made many products that contained asbestos and that Halliburton, under Mr. Cheney, acquired in 1998. On Monday Halliburton announced that two of its units had emerged from bankruptcy protection after formalizing a $4.7 billion settlement of asbestos claims that could involve more than 400,000 people.

Halliburton's experience is hardly unique.

Asbestos has been widely used as an insulation and construction material, and exposure to it in the workplace -- in construction sites and shipyards, for example -- may not manifest itself in harmful ways until decades later. Illnesses it may cause range from the relatively minor to the fatal.

Experts say that more than 100,000 asbestos claims were filed in 2003 alone, and that federal and state courts already laboring under a deluge of such cases could face significant new numbers as more people show symptoms of asbestos poisoning.

A 2002 study by the RAND Corporation found that more than 600,000 people had filed claims for asbestos-related compensation, costing businesses more than $54 billion. It predicted that 500,000 to 2.4 million more claims could be filed in the years ahead, costing businesses as much as $210 billion. The study also found that 65 percent of compensation over the last decade was paid to people with noncancerous conditions.

Previous efforts to find a legislative solution, including one last year, have foundered, and there remain significant political obstacles this year even though Senator Arlen Specter, the Pennsylvania Republican who heads the Judiciary Committee, plans to circulate a new proposal soon and the Senate majority leader, Bill Frist of Tennessee, has hopes to get a measure to the floor quickly.

Mr. Specter has announced a hearing on the issue on Tuesday. He has been relying on Edward R. Becker, a senior federal appeals judge from Philadelphia, to try to broker a deal between the various parties that would create a large fund sponsored by companies and their insurers to supplant the courts.

Last year, such a deal proved elusive.

The fight over an asbestos measure pits one of the most important constituencies of the Republicans -- big and small businesses and their insurers -- against two traditional bases of the Democrats: the trial lawyers and the labor unions. The lawyers and the unions have maintained that last year's proposals would not provide enough money for victims, would unfairly shield many companies from liability and would adversely affect plaintiffs who are close to completing their cases in the courts.

The critics of the administration say the White House is approaching revisions in asbestos and tort law just the way they say it has done with Social Security: exaggerating the nature of the problems as well as catering to special interests.

Senator Patty Murray, Democrat of Washington, denounced the president's plan as inadequate and said the administration should instead focus on prohibiting the production and use of asbestos.

''I am deeply troubled that the president spoke of ending liability for companies that have used asbestos without addressing the need to ban this deadly substance,'' Senator Murray said. ''The current asbestos liability crisis is not just a function of a high number of lawsuits. It is also a function of the deadly nature of asbestos and the long latency period for asbestos disease, which can be up to 40 years.''

Mr. Bush's presentation on Friday was the third time in three days that he has advanced the cause of changing the tort system.

On Thursday he met with senior lawmakers on a proposal that would move many class-action lawsuits to federal courts from state ones. The proposal is widely supported by businesses and strongly opposed by consumer, environmental and civil rights organizations, which say it would close the door to many meritorious claims. The federal judiciary, whose members have maintained that the change could jam their courts with new claims, also opposes it.

The class-action bill, which has broad bipartisan support, is widely expected to be the first tort law measure taken up by the Senate early next month.

On Wednesday, Mr. Bush traveled to Madison County in southwestern Illinois, the site of courts that business interests say are among the most sympathetic to plaintiffs in the nation, to urge Congress to impose tight limits on medical malpractice litigation.

Panel Seeks Better Disciplining of Doctors

ASHINGTON, Jan. 4 - Experts retained by the Bush administration said on Tuesday that more effective disciplining of incompetent doctors could significantly alleviate the problem of medical malpractice litigation.

As President Bush prepared to head to Illinois on Wednesday to campaign for limits on malpractice lawsuits, the experts said that states should first identify those doctors most likely to make mistakes that injure patients and lead to lawsuits.

The administration recently commissioned a study by the University of Iowa and the Urban Institute to help state boards of medical examiners in disciplining doctors.

"There's a need to protect the public from substandard performance by physicians," said Josephine Gittler, a law professor at Iowa who supervised part of the study. "If you had more aggressive policing of incompetent physicians and more effective disciplining of doctors who engage in substandard practice, that could decrease the type of negligence that leads to malpractice suits."

Randall R. Bovbjerg, a researcher at the Urban Institute, said, "If you take the worst performers out of practice, that will have an impact" on malpractice litigation. "Most doctors have few or no claims filed against them," he added. "But within any specialty, a few doctors have a high proportion of the claims."

The focus on doctor discipline is noteworthy because Mr. Bush, in numerous speeches, has sided with doctors against plaintiffs' lawyers.

Mr. Bovbjerg said several factors appeared to work against medical boards. The boards usually have small budgets and small numbers of employees to cope with thousands of complaints each year, he said. Moreover, he said, revoking an incompetent doctor's license can take months or years and cost a great deal, especially if the case goes to a full hearing before a board of examiners.

State medical boards took 5,230 disciplinary actions against doctors in 2003, according to the Federation of State Medical Boards, the national umbrella group for the state agencies. The total was up 7 percent from 2002 and up 41 percent from 1993.

Timothy S. Jost, a law professor at Washington and Lee University and a former member of the Ohio State Medical Board, said: "It is extraordinarily difficult to discipline a doctor based on incompetence. Everybody knows that some doctors are incompetent, but identifying them is a very difficult task."

Massachusetts has adopted an approach that experts say may provide a model for other states. Without waiting for a complaint to be filed, the Massachusetts Board of Registration in Medicine conducts a clinical review of any doctor who has made three or more malpractice payments to patients as a result of jury verdicts or settlements.

Nancy Achin Audesse, executive director of the board, said: "Three is a magic number. Doctors who have to make three or more payments are also more likely to be named in consumer complaints and to be subject to discipline by hospitals and the medical board."

In Massachusetts in the last 10 years, Ms. Audesse said, "one-fourth of 1 percent of all the doctors - 98 of the 37,369 doctors - accounted for more than 13 percent of all the malpractice payments, $134 million of the $1 billion in total payments."

On Wednesday, President Bush is to take his campaign to Collinsville, in southwestern Illinois. The city is in Madison County, where business groups say judges often favor plaintiffs in personal injury suits.

In December, the American Tort Reform Association, a coalition of business and professional groups that want to limit personal injury suits, called Madison County the nation's No. 1 "judicial hellhole."

Laws governing malpractice cases have historically been controlled by the states. But Scott McClellan, the White House press secretary, said Tuesday, "It's a national problem that requires a national solution."

Mr. McClellan asserted that "unlimited and unpredictable liability awards raise the cost of health care for all Americans through higher premiums for their health insurance." And rising costs of malpractice insurance have forced some doctors to "close up shop," he said.

But Representative Jan Schakowsky, Democrat of Illinois, said: "President Bush is offering a solution that is irrelevant to the problem. The insurance industry has repeatedly refused to say that it will lower rates even if caps are imposed."

The House has passed several bills that would set a $250,000 limit on payments for noneconomic damages like pain and suffering, but the measures have died in the Senate. White House officials said they hoped such legislation would sail through Congress this year because Republicans gained seats in the Senate.

Dr. James N. Thompson, president of the Federation of State Medical Boards, said that most disciplinary actions had been taken because of criminal conduct, drug or alcohol abuse, sexual misconduct or other unprofessional behavior.

"But increasingly," Dr. Thompson said, "state boards are taking disciplinary action because of issues involving the quality of care. They are trying to identify doctors who provide marginal or substandard care, before the doctors put more patients at risk."

Bush Begins Drive to Limit Malpractice Suit Awards

OLLINSVILLE, Ill., Jan. 5 - President Bush demanded Wednesday that Congress take immediate action to impose strict limits on medical malpractice litigation, saying doctors "should be focused on fighting illnesses, not on fighting lawsuits."

Kicking off a campaign for sweeping changes in the nation's civil justice system, Mr. Bush received a standing ovation here when he said Congress should establish "a hard cap of $250,000" on the amount that patients could recover for noneconomic damages like physical and emotional pain and suffering.

"We need to fix a broken medical liability system," he said. "The United States Congress needs to pass real medical liability reform this year."

Mr. Bush said he had come here, to Madison County in southwestern Illinois, because the county illustrated the problems he wanted to solve. The proliferation of "baseless lawsuits," he said, has led to immense increases in malpractice insurance premiums, prompting doctors to curtail services or move to other states.

A coalition of business and professional groups recently named Madison County and adjacent St. Clair County as the best places in the United States for plaintiffs to file and win civil lawsuits.

Mr. Bush spoke in front of a large banner that promised "affordable health care," on a stage filled with dozens of doctors in white coats. He noted that he had often talked about malpractice litigation in last year's campaign, and he said he now had a mandate, because "voters made their position clear on Election Day."

Expanding his focus beyond malpractice cases, Mr. Bush said Congress should also establish new rules for class action lawsuits and asbestos cases, which he described as "the longest-running mass tort litigation in U.S. history."

Mr. Bush seemed to relish the prospect of victory in a battle with plaintiffs' lawyers, who have donated hundreds of thousands of dollars to Democratic candidates around the country, just as business groups have supported Republicans.

"It's hard work for some in Congress to stand up to the trial lawyers," Mr. Bush said. "I understand that."

"Junk lawsuits are so unpredictable, they drive up insurance costs for all doctors, even for those who have never been sued, even for those who have never had a claim against them," he said.

He asserted that doctors were turning away patients with complicated life-threatening conditions because those cases often carried "the highest risk for a lawsuit."

The House has repeatedly passed bills to limit damages in malpractice cases, but the measures have died in the Senate, where Republicans now hope to prevail after gaining seats in the November elections.

Mr. Bush has strongly supported the House bills, which would protect not only doctors, but also health maintenance organizations, nursing homes and manufacturers of drugs and medical devices.

Senator Edward M. Kennedy, Democrat of Massachusetts, said Wednesday, "The president's medical malpractice plan is nothing but a shameful shield for drug companies and health maintenance organizations that hurt people through negligence."

Senator Richard J. Durbin of Illinois, the new Senate Democratic whip, did not dispute the existence of a problem but said Congress should take a balanced approach.

"Many good doctors are innocent victims of skyrocketing medical malpractice premiums," Mr. Durbin said. "Many good people are innocent victims of medical malpractice. Lawyers who exploit the system for injured patients must be curbed. A health care system that allows too many medical errors must be fixed, and insurance companies that exploit doctors and patients with exorbitant premium increases must be held accountable."

Mr. Bush did not say what, if anything, states might do to discipline incompetent doctors or to beef up insurance regulation. He denounced "junk lawsuits," but did not say how he would distinguish frivolous from meritorious claims, a task that has historically been performed by judges and juries.

In a summary of Mr. Bush's proposals, the White House said they would protect patients and "stop the skyrocketing costs associated with frivolous lawsuits."

"Frivolous lawsuits and excessive jury awards are driving many health care providers out of communities and forcing doctors to practice overly defensive medicine," the White House said. "This reduces access to medically necessary services and raises the costs of health care for all."

The president said his proposals would still allow anyone injured by a negligent doctor or hospital to recover the full amount of any economic damages, including medical expenses and lost earnings.

The Senate Democratic leader, Harry Reid of Nevada, said, "If the president is serious about bringing down health care costs, Senate Democrats stand ready to work with him."

But Mr. Reid said, "Congress should not be giving a free pass to big drug companies at a time when millions of Americans may have had their health put at risk by pharmaceutical giants."

SECTION: Section A; Column 1; National Desk; Pg. 13
LENGTH: 550 words
HEADLINE: Doctors Try Labor Tactics In Bid to Cut Insurance Cost
BYLINE: AP
DATELINE: FREDERICK, Md., Dec. 26

Doctors around the country are increasingly using methods popularized by labor unions to gain leverage in their fight against rising premiums for malpractice coverage.

Over the past few years, their tactics have included large-scale marches, limiting treatment to emergencies or suspending service altogether.

The doctors have not always been successful in gaining insurance changes, but experts say the pressure has helped move the issue up on the political agenda.

Maryland doctors have tried to galvanize support for changing how state courts judge damages in malpractice cases. Last month, about 50 doctors in Prince George's County declined nonemergency cases for a day. A similar number in Washington County refused to schedule nonemergency appointments for a week.

In February 2003, most of New Jersey's 20,000 physicians took part in a slowdown for several days, canceling routine checkups and rescheduling elective surgery in one of the nation's largest walkouts ever by doctors. Emergency rooms were inundated with patients, and a rally in Trenton drew 4,000 doctors.

About a dozen general and cardiac surgeons took ''leaves of absence'' in Wheeling, W.Va., in January 2003 as higher malpractice premiums came due, halting most surgery at three local hospitals.

In Maryland, the doctors have helped generate the pressure that led Gov. Robert L. Ehrlich Jr. to call a special session of the Legislature, set to convene on Tuesday.

''There hasn't been a single state that's enacted major tort reform without physician job action,'' said Dr. Manuel A. Casiano, who has been practicing in Frederick for more than 15 years.

Randall Bovbjerg, a researcher at the Urban Institute who follows malpractice issues, said physician activism ''has become progressively more widespread'' as managed care has squeezed doctors' reimbursements and made it harder to pass on their higher costs.

Doctors have traditionally concentrated on their medical practices and left the lobbying to professionals. But doctors say they now have little choice but to resort to direct action, especially as the influence of the American Medical Association has declined.

Dr. Gregory Saracco, a surgeon in Wheeling, said that before taking action, doctors in West Virginia had been making little headway in getting the attention of state officials.

''The governor wouldn't talk to us for a month,'' said Dr. Saracco, who was president of the Ohio County Medical Society at the time. ''The day the leaves of absence started, I was in his office that very afternoon.'' The governor quickly put together a package to overhaul the system, and the surgeons began returning to work after two to three weeks.

Doctors are potentially subject to antitrust complications if they are seen to be colluding. They are careful to say they have made their decisions on job actions individually or within their practice.

Carlton Carl, director of media relations for the Association of Trial Lawyers of America, a group that opposes doctors over changes in tort law, describes the doctor protests as strikes or job actions.

''Clearly, this is an organized effort by the A.M.A. and state medical associations,'' Mr. Carl said. ''It raises serious antitrust issues. And the denial of even nonemergency care is questionable for a doctor.''

URL: http://www.nytimes.com

SECTION: Section A; Column 4; National Desk; Pg. 20
LENGTH: 1136 words
HEADLINE: Debate on Malpractice Looms for Senate
BYLINE: By DAVID E. ROSENBAUM
DATELINE: WASHINGTON, Dec. 19

Republicans, who favor limits on medical malpractice lawsuits, have stories about towns in Ohio with no obstetricians to deliver babies and places in southern Illinois with no neurosurgeons -- the doctors having taken down their shingles because of the high cost of malpractice insurance.

Democrats, who oppose restrictions on lawsuits, have their own tales: about the surgeon in Wisconsin who performed an unnecessary double mastectomy on a woman, for instance, or the 2-year-old boy in Nebraska who died from dehydration because of a hospital's neglect.

With legislation on Social Security and taxes still in the early stages of development, malpractice is likely to be one of the first of President Bush's campaign issues that Congress takes up in the new year. ''We've done it before, and it's a pretty well-worn path,'' said John P. Feehery, the spokesman for Speaker J. Dennis Hastert.

Seven times since Republicans gained control of Congress in 1995, the House has passed legislation to curb medical malpractice claims. Each time the measure has been blocked in the Senate, falling well short of the 60 votes needed to bring the matter to a vote.

With their larger majority in the Senate after last month's elections, Republican leaders say they expect to prevail next year.

''This is a majority priority,'' Senator Bill Frist of Tennessee, the majority leader, said in an interview. ''I am convinced that over this Congress, we will have a meaningful federal solution.''

Democrats say they still have the votes to stop the legislation. ''With the new configuration, I'm not going to assume anything,'' said Senator Richard J. Durbin of Illinois, a staunch opponent of limits on malpractice suits who will be the assistant Democratic leader in the new Congress. But Mr. Durbin observed that proponents of such limits had only 48 and 49 votes the two times the matter was before the Senate this year and added, ''It seems to me the shift shouldn't change the outcome.''

In the Senate this year, only one Democrat, Zell Miller of Georgia, favored limits on lawsuits, and he did not run for re-election. Three Republicans opposed limits: Michael D. Crapo of Idaho, Lindsey Graham of South Carolina and Richard C. Shelby of Alabama, who were courtroom lawyers before they entered politics.

Republicans picked up four seats in last month's election. But one of the four, Mel Martinez of Florida, was a leading trial lawyer in Orlando who helped defeat a measure before the Florida Legislature in 1988 that would have put a cap on malpractice damage awards.

The last time the House voted on the issue was in March 2003. By a vote of 229 to 196, it passed a bill that would have put a $250,000 ceiling on jury awards for pain and suffering caused by medical malpractice, limited punitive damages and restricted the contingency fees plaintiffs' lawyers could charge.

Dr. Frist said the political calculus would change this year because of Mr. Bush's commitment and strong public support for restricting malpractice awards.

In his re-election campaign, Mr. Bush emphasized curbs on medical liability.

In his third debate with Senator John Kerry, for example, Mr. Bush asserted that malpractice lawsuits and ''the defensive practice of medicine'' by wary doctors and hospitals cost the government $28 billion a year and ''our society between $60 billion and $100 billion a year.''

Independent analyses suggest that the president's cost estimates were exaggerated.

The nonpartisan Congressional Budget Office reported in January that malpractice costs were less than 2 percent of overall health care spending and that even a 30 percent reduction in malpractice costs would lower health care spending by less than 0.5 percent.

Few other policy issues are so driven by anecdote, hyperbole and campaign donations.

Dr. Donald J. Palmisano, whose term as president of the American Medical Association ended in June, said in an interview that ''as much as 50 or 60 percent'' of the cost of malpractice insurance could be attributed to unjustified awards to plaintiffs for ''noneconomic damages,'' which usually means pain and suffering.

The medical association gave more than $2 million to candidates in this year's elections, mostly to Republicans running for the House and Senate and organizations supporting them. Other associations representing doctors, dentists and hospitals gave millions more.

Todd A. Smith, president of the Association of Trial Lawyers of America, said that the high insurance cost had ''nothing to do with noneconomic damages'' and ''everything to do'' with greedy insurance companies.

The trial lawyers' association donated $2.5 million to this year's candidates, almost all of it to Democratic candidates and their supporting organizations. Lawyers and law firms gave millions more.

The actual size of malpractice awards is impossible to calculate, since so many suits are settled before they reach trial. The Congressional Budget Office reports that 15 claims are filed for every 100 doctors each year and that about a third of the claims result in an insurance payment.

Public opinion is clearly on the side of curbing malpractice damages. A Gallup poll last year found that about three-quarters of those surveyed supported ''a limit on the amount patients can be awarded for their emotional pain and suffering.''

The National Conference of State Legislatures says that 34 states have enacted such caps. The experience in those states suggests that limits on awards do result in lower insurance costs.

For example, according to Medical Liability Monitor, a newsletter that tracks malpractice issues, obstetrician-gynecologists in California, which has had limits on malpractice claims since 1975, pay no more than $90,000 a year for malpractice insurance, while those in Illinois, which has no restrictions, pay as much as $230,000.

But the newsletter's data suggest that legal limits are not a cure-all. In Minnesota, for instance, which has no such limits, the annual malpractice premium for a general surgeon can be as low as $11,000. But in Michigan, which has limits, general surgeons pay more than $190,000.

The Congressional Budget Office concluded that a measure like the one the House passed last year would lower insurance premiums nationwide by 25 percent to 30 percent.

But the budget office questioned whether this would actually solve the problem of doctors abandoning certain communities. It cited a study by another nonpartisan agency, the Government Accountability Office, which found some places where people's access to emergency surgery and obstetrics had indeed become limited because doctors had left. But it then went on to say that many reported doctor shortages could not be substantiated or did not result primarily from the cost of malpractice insurance.

URL: http://www.nytimes.com

White House forum holds lawyers in contempt
Bush, panelists blame lawsuits for economic ills

WASHINGTON -- A White House conference on the economy turned into a forum for bashing trial lawyers yesterday as President Bush and his allies demanded congressional action to limit lawsuits.

Surrounded by a panel of enthusiastic supporters, Bush said lawsuits against businesses and manufacturers were a drag on the economy and must be reined in. He called for a new system to deal with asbestos-related cases, and new limits on medical malpractice cases and class-action lawsuits involving groups of plaintiffs.

He chuckled and nodded as panelists at the two-day conference aired their contempt for trial lawyers.

"What you have today is business on one side, and you've got the trial lawyers on the other side. ... You've got deep pockets colliding with shallow principles," Robert Nardelli, the chief executive at Home Depot, said to laughter from the audience and the president.

Todd Smith, president of the Association of Trial Lawyers of America, said in a statement:

"President Bush's economic plan pretends that taking away the legal rights of American families will reduce health care costs. He unashamedly advocates legislation that would protect insurance industry profits and prohibit any punishment for the makers of dangerous drugs like Vioxx, while penalizing your mother for being abused in a nursing home or your daughter for having her baby killed by medical malpractice.

"That's not an economic plan. It is yet another giveaway to the insurance, drug, HMO and nursing-home industries."

The hour-long session on "the high costs of lawsuit abuse" was one of several examining various aspects of Bush's second-term domestic agenda. With nary a word of dissent, the panelists -- all of them selected by the White House -- endorsed the president's plans to partially privatize Social Security, permanently extend his first-term tax cuts and limit lawsuits.

"We're tickled to death that your exodus was postponed for four years," Nardelli told Bush, expressing a viewpoint widely shared at the gathering.

Nardelli was one of several Republican donors at the conference. The Center for Responsive Politics, a nonpartisan group that tracks campaign spenders, found that conference participants donated nearly $195,000 to various Republican candidates or causes in recent years, including $40,000 to Bush.

Panelists included a Mississippi drugstore owner who said she was driven out of business by lawsuits, an Ohio gynecologist who stopped delivering babies to avoid the cost of malpractice insurance and one of the gynecologist's pregnant patients, who said she was still looking for a backup doctor. All pointed the finger of blame at trial lawyers.

"I think we need to hold these people to a higher standard -- the same standard that physicians are held to," said gynecologist Barbara Coen of Norton, Ohio.

Carlton Carl, a spokesman for the trial lawyers' group, dismissed the White House conference as political theater.

Opening the conference, Vice President Dick Cheney said Bush's previously enacted tax cuts should be made permanent, and also touted his proposal for private investment accounts as part of Social Security reform and to streamline the tax code.

On Social Security, the vice president said a "realistic discussion" was needed about its future but did not delve into sensitive subjects, such as the estimated $1 trillion to $2 trillion in costs for the transition to private accounts.

Turning the president's agenda into law won't be easy. A variety of powerful interest groups are gearing up to challenge his ambitious plans. Even some of his fellow Republican lawmakers aren't sold on some issues. There's no consensus plan to revise the federal tax system, and some Republican lawmakers remain wary of any major changes to Social Security.

Some of the president's proposals to restrict lawsuits, including his plan to limit damages for "pain and suffering" in medical malpractice cases to $250,000, stalled in the Republican-controlled Senate in his first term.

Bush signaled his determination to push the changes through Congress and promised to say more about them in his State of the Union address early next year.

"We expect the House and the Senate to pass meaningful liability reform on asbestos, on class action and medical liability," he said. "I am passionate on the subject. ... And I can assure you all that I intend to make this a priority issue."

Some political ads have started to air with blatantly false reports about the exodus of doctors and hospital closings due to medical malpractice lawsuits. These spots also support the widely discredited notion that limiting lawsuits will bring down doctors' insurance rates, as repeated studies - and actual experience - show that the cause and solutions to those problems lie with the insurance industry, not the legal system.

The U.S. General Accounting Office (GAO) found that doctors' groups have misled, fabricated evidence, or, at the very least, wildly overstated their case about how medical malpractice problems have limited access to health care. Analysis of Medical Malpractice: Implications of Rising Premiums on Access to Health Care, General Accounting Office, GAO‑03‑836, 2003 (pp.12‑24)

The health care access problems that GAO could confirm were isolated and the result of numerous factors having nothing at all to do with the legal system. Specifically, GAO found that these pockets of problems "were limited to scattered, often rural, locations and in most cases providers identified longstanding factors in addition to malpractice pressures that affected the availability of services." (p. 13) For example:

o In Flordia, GAO found, "Reports of physician departures in Florida were anecdotal, not extensive, and in some cases ... inaccurate." (p. 17). "Hospital association representatives reported that access to newborn delivery services in Florida had been reduced due to the closures of five hospital obstetrics units. However, [GAO] contacted each of these hospitals and determined that ... demand for [each] now closed obstetrics facility had been low and that nearby facilities provided obstetrics services." (p. 16)

o "In Nevada, 34 OB/GYNs reported leaving, closing practices, or retiring due to malpractice concerns; however, confirmatory surveys conducted by the Nevada State Board of Medical Examiners found nearly one‑third of these reports were inaccurate... Random calls [GAO] made to 30 OB/GYN practices in Clark County found that 28 were accepting new patients with wait-times for an appointment of 3 weeks or less." (p. 18)

o "In Pennsylvania, despite reports of physician departures, the number of physicians per capita in the state has increased slightly during the past 6 years…." (p. 18)

o "In West Virginia, although access problems reportedly developed because two hospital obstetrics units closed due to malpractice pressures, officials at both of these hospitals told [GAO] that a variety of factors, including low service volume and physician departures unrelated to malpractice, contributed to the decisions to close these units. One of the hospitals has recently reopened its obstetrics unit." (p.16-17).

· An August 2004 study by the National Bureau of Economic Research [NBER] found: "The fact that we see very little evidence of widespread physician exodus or dramatic increases in the use of defensive medicine in response to increases in state malpractice premiums places the more dire predictions of malpractice alarmists in doubt. The arguments that state tort reforms will avert local physician shortages or lead to greater efficiencies in care are not supported by our findings." Katherine Baicker & Amitabh Chandra, NATIONAL BUREAU OF ECONOMIC RESEARCH, The Effect of Malpractice Liability on the Delivery of Health Care (Aug. 2004), p. 20.

· Local news stories have reached similar conclusions. For example, in Illinois, "Tales of doctors fleeing Illinois to escape soaring malpractice insurance costs have captured media attention and fueled the push for limits on jury awards, but the numbers tell a different story. Overall, the number of doctors in Illinois is rising, according to data from the state agency that licenses physicians." Bob Tita, "More does in Illinois; Numbers don't bear out idea of fleeing physicians, Crains Chicago Business, July 05, 2004.

· Weiss Ratings, an independent insurance-rating agency, found that between 1991 and 2002, states with caps on noneconomic damage awards saw median doctors' malpractice insurance premiums rise 48 percent - a greater increase than in states without caps. In states without caps, median premiums increased only 36 percent. Weiss speculated that state regulation of insurance premium increases made the difference. Jyoti Thottam, "He Sets Your Doctor's Bill; A Chastened Insurer," Time Magazine, June 9, 2003.

· NBER: "Surprisingly, there seems to be a fairly weak relationship between malpractice payments (for judgments and settlements) and premiums - both overall and by specialty." (p. 14). "Past and present malpractice payments do not seem to be the driving force behind increases in premiums. Premium growth may be affected by many factors beyond increases in payments, such as industry competition and the insurance underwriting cycle. (p. 20). Katherine Baicker & Amitabh Chandra, NATIONAL BUREAU OF ECONOMIC RESEARCH, The Effect of Malpractice Liability on the Delivery of Health Care (Aug. 2004).

· GAO: A study released by the congressional General Accounting Office in 2003, Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates, found absolutely no support for capping damages as a solution to bring down insurance rates for doctors.

For more information, contact the Center for Justice & Democracy, http://centerjd.org

WHOLESALE COLLAPSE OF INSURANCE RATES IS NOW UNDERWAY; EVEN MEDICAL MALPRACTICE RATE HIKES CLOSE TO MEDICAL INFLATION

NEW YORK - Americans for Insurance Reform (AIR) and consumer rights organizations have long maintained that the "crisis" of skyrocketing insurance rates for doctors and other policyholders would end when the insurance investment cycle stabilized, and that this would occur whether or not "tort reform" laws were enacted. Insurance industry data now unmistakably confirms this prediction.

According to the third-quarter Council of Insurance Agents and Brokers survey of market conditions, commercial insurance rates are now dropping significantly. Even medical malpractice insurance, which has been skyrocketing for some doctors over the last two years, has now slowed to the point that med mal rates hikes (6 percent) are nearly as low as medical inflation (currently 4.4 percent).

"We are now witnessing the wholesale collapse of insurance rates," said J. Robert Hunter, AIR spokesperson, Director of Insurance for the Consumer Federation of America, former Federal Insurance Administrator and Texas Insurance Commissioner. "Rate increases in commercial property insurance are dropping across the board. The end of the `hard market' of sharp rate increases, less competition and cutbacks in coverage has occurred and a `soft market' is now fully in place."

A "hard" insurance market is characterized by higher rates, less competition and limited coverage. This is the result of the cyclical nature of the insurance business. Prior to the "hard market" of the last two years, the last such "hard market" occurred in the mid-1980s. But like today, the insurance cycle turned after two to three years and prices began to fall. This had nothing to do with tort law restrictions enacted in particular states, but rather to modulations in the insurance cycle everywhere. In 1991, for example, Washington State's insurance commissioner Dick Marquardt concluded that it was "impossible to attribute stable insurance rates to tort-law changes or the damages cap," since rates also improved in states that did not pass "tort reform," and that "requiring frequent rate review and reporting of investment income probably was more likely than tort reform to stabilize the insurance market." "Health Care Reform - [George H.W.] Bush's insurance cap plan a proven failure." The Seattle Times, May 16, 1991.

From the late 1980s until late 2000, the nation had enjoyed a "soft" insurance market for over a decade - with rates of liability insurance not only stable but down, at least in real, inflation‑adjusted terms. But the cycle turned from a "soft" to a "hard" market in late 2000. The September 1 I " terrorist attacks accelerated the rate increases that were already underway.

"The hard phase of the insurance cycle clobbers American businesses and professions every ten to fifteen years," said Hunter. "Although these hard markets last only about two to three years, they can no longer be tolerated. State regulators must enforce the rating laws in order to end the boom and bust swing from illegal overpricing, such as the rates some policyholders have been asked to pay today, to illegal and inadequate underpricing, which will be seen when the market softens too much later in the cycle. Fortunately, the hard market price jump is behind us and we are now entering the softer market so legislators have a decade or so to grapple with how best to do this before the next hard market hits the nation. And there is now clearly no need to rush into quick legislative fixes, such as legal limits on patients' rights.

· The property-casualty insurance industry's after‑tax net income for the first half of 2004 was the highest ever: a record-breaking $23.5 billion!1 1

· First half-year income in 2004 was up 62.2% from the first half‑year income of 2003, and comes on the heels of an earlier, astounding 997 percent increase from 2002 to 2003. 2

· The property/casualty industry's surplus also is at the highest level ever: over $370 billion.3

Health insurers' profits (and their executives' salaries) have also skyrocketed, as they raise premiums and limit reimbursement to doctors.

· "Despite a weak economy and soaring medical costs, U.S. health insurers have raked in earnings at a far greater pace than the rest of corporate America, with annual profits and margins doubling in the last four years." 4

· "Average pay for the five top executives at [the top] health insurers almost doubled [over the last four years] to $3 million a year."5

While telling lawmakers that payouts to injured patients are costing insurers too much money, internally the insurance industry is "celebrating" its rapidly rising profits.

· "The first half [of 2004] result is far better than what was expected by industry observers earlier this year... The financial and underwriting performance of the property/casualty insurance industry during the first half of 2004 was nothing short of outstanding." Robert P. Hartwig, Insurance Information Institute7

· 2003 "was an excellent year for the property/casualty industry and well ahead of the past several years' results." - John Ward, Ward Group8

· "I think the industry should have peak (return on equity) years the next couple of years." - Cliff Gallant, Keefe, Bruyette & Woods9

Notes

1Insurance Services Office, Inc. [ISO] & Property Casualty Insurers Assoc. of America [PCI], PropertylCasually Industrys First-Half Income and Surplus Rose on Strong Underwriting Results and Investment Gains (Oct. 18, 2004).

2 ISO & PCI, Sharp Increase in PIC Industry's Net Income Propels Surplus Upward in 2003 (April 2004).

3 ISO & PCI, Oct. 18 2004

4 Russ Britt, "Health insurers getting bigger cut of medical dollars," Investors' Business Daily, Oct. 15, 2004, http://investors.com/breakingnews.asp?journalid=23544168&brk=1

5 Ibid.

6 Kaiser Family Found. & Health Research and Educational Trust, Employer Health Benefits.‑ 2004 Annual Survey 16 (2004)

7 Insurance Information Institute, 2004 ‑ First Half Results, Oct. 18, 2004.

8 Judy Greenwald, "Results likely to remain strong," Business Insurance, Mar. 22, 2004

9 Ins. Info. Inst., 2004 - First Half Results.

For Release
October 12, 2004

Contact: J. Robert Hunter, 703/528-0062;
Joanne Doroshow, Geoff Boehm, 212/267-2801

INSURERS CONTINUE TO PRICE-GOUGE DOCTORS DESPITE
DROPPING MEDICAL MALPRACTICE PAYOUTS

NEW YORK — With the issue of medical malpractice and “tort reform” becoming an increasingly discussed topic this election year, Americans for Insurance Reform (AIR) announced today the release of a comprehensive new study of medical malpractice insurance around the country, based on the insurance industry’s own data. Its findings may be startling to some:

According to Joanne Doroshow, Executive Director of the Center for Justice & Democracy and AIR co-founder, “These findings undermine one of the central claims of interest groups who seek to blame the legal system for doctors’ insurance woes. In fact, the study shows that the causes of and solutions to this crisis lie not with the legal system (i.e., “tort reform”) but with reforming regulation of the insurance industry, which has been unfairly charging doctors excessive rates to make up for their own investment losses.”

The study by AIR, a coalition of over 100 consumer and public interest groups representing more than 50 million people, makes nearly identical findings to those reached in similar AIR studies of national trends released in 2001 and 2002. Specifically, the study, Stable Losses/Unstable Rates 2004, shows that the real reasons medical malpractice insurance rates have risen so dramatically in the last two years are market forces and dropping interest rates – not, as the insurance industry claims, because of a sudden massive increase in medical malpractice jury awards or payouts, which, in constant dollars, have been decreasing for the last decade.

Author of the study, J. Robert Hunter, Director of Insurance for the Consumer Federation of America, former Federal Insurance Administrator and Texas Insurance Commissioner, said, “The current jump in prices doctors pay is a result of a combination of two insurance company practices: (1) the insurer’s aggressive under-pricing to gain market share when interest rates were high, coupled with (2) the insurer’s classification plan that charges some high-risk doctors (such as OB/GYNs and neurosurgeons) for all of the cost of the high-risk cases referred to them by all other doctors. What is crystal clear is that what did not cause this crisis was an increase in losses. There simply is no evidence of that!”

Hunter said, “There is only one way to solve this problem: reforming the insurance industry. State lawmakers must strengthen state insurance laws in order to end the boom and bust swing from illegal overpricing, such as the rates doctors are being asked to pay today, to illegal and inadequate underpricing, which will be seen when the market softens later in the cycle. Fortunately, the hard market price jump is behind us and we are now entering the softer market so legislators have a decade or so to grapple with how best to do this before the next hard market hits the nation.”

The full study can be found at: http://insurance-reform.org.

By John M.R. Bull of the Morning Call
Copyright 2004, The Morning Call
John.bull@mcall.com

HARRISBURG. Doctors can't keep malpractice lawsuit settlements a secret anymore because the public is footing the bill, a Lackawanna County judge has ruled in a groundbreaking legal opinion.

"This is huge," said Dan Fee, spokesman for Pennsylvania Citizens for Fairness, a consumer group that sides with lawyers against doctors on malpractice issues. "The judge has correctly said it's time to rip the veil of secrecy off this issue."

Common Pleas Judge Terrance R. Nealon last week refused to seal the settlement in the case of an obstetrician-gynecologist sued for misdiagnosis in the case of a Lackawanna County woman who subsequently died.

While the single‑county case doesn't set a statewide precedent, the ruling could set the stage for further court decisions to prohibit sealed settlements in malpractice cases paid from a $230 million fund established by the Legislature last year to benefit doctors complaining of high insurance rates.

According to Nealon's ruling, Lucille M. Korczakowski died of an ovarian cyst in 1999 that went undetected for at least three years. She was 47. Her husband, James, sued her doctor, Jung Jang Hwan of Clarks Green, 15 miles north of Scranton.

Three weeks ago, the doctor's insurance company - the Pennsylvania Medical Society Liability Insurance Co. - offered to settle the case for $725,000 after court-ordered mediation.

As a condition of settlement, the insurance company insisted on a confidentiality clause that prohibited anyone involved in the case from discussing it publicly.

Except in rare cases doctors or their insurers' insist such cases be sealed from the public. When that was agreed to earlier this month, the judge then was asked to seal the terms of the settlement, as has been customary in medical malpractice cases for the last 20 years.

Hwan's privacy needs to be protected, the insurance company's lawyer contended. The judge refused, in an order obtained Wednesday by The Morning Call.

Judge Nealon ruled that the settlement of this, and possibly any, medical malpractice case in Pennsylvania is a matter of public interest because the medical community has made a big issue over the past few years out of rising malpractice insurance premiums.

In fact, the medical community claimed doctors have been fleeing the state in large numbers because of rising premiums and frivolous malpractice lawsuits, and demanded the state Legislature enact court reforms and appropriate money for doctors.

Lawmakers in December increased the state tax on cigarettes and allocated that $180 million a year to a state fund to help doctors pay insurance claims not covered by their primary insurance carrier. An additional $40 million a year in surcharges on moving vehicle violations also goes for that purpose.

Because 70 percent of the settlement in the death of Lucille Korczakowski is being paid from that state fund ‑ more than $500,000 of taxpayer money - the terms of payment can't be allowed to remain secret, the judge ruled.

"Since the. funds which will be used to pay the majority of the plaintiff s settlement with Dr. Hwan are derived from public taxes or surcharges, any documents relating to disbursement of those settlement proceeds are clearly public records under the Right to Know Act," according to the court ruling.

The state agency that administers that fund, the MCare fund, declined to comment. Nor would it reveal whether Dr. Hwan has lost or settled other malpractice lawsuits, something that is not a matter of public record in Pennsylvania.

A spokesman for the Pennsylvania Medical Society, a lobbying group for state doctors, said he didn't know if Judge Nealon's ruling would be appealed, and had no further comment. The husband of the woman who died also wouldn't comment because he had signed a confidentiality agreement.

Because of that agreement, his attorney wouldn't say how old Lucille Korczakowski was when she died, or reveal what was alleged to have caused her death - details revealed in the judge's order.

"We have a confidentiality agreement that prevents me from discussing the case or disclosing anything about the case to the media," said attorney Ezra Wohlgelernter of Philadelphia. Dr. Hwan's attorney did not return a phone call seeking comment.

If the judge had allowed the settlement to be sealed, no one would know that a half-million dollars of public money is being spent on a doctor's mistake, said Fee.

Court-sealed settlement of malpractice cases became commonplace over the past 20 years because doctors didn't want their mistakes publicized and because people injured - or their survivors - preferred a settlement to a public fight, said Clifford Rieders, former head of the Pennsylvania Trial Lawyers Association.

"People couldn't get valid claims resolved without agreeing to the extortion of silence," he said. "You can't talk about the case. You can't e-mail about it. Doctors just don't want their dirty laundry aired in public."

Judge Nealon's ruling is unlikely to be appealed because that could pave the way for a statewide precedent if a higher court agrees with it, Rieders said.

"It's what we lawyers call persuasive authority. It's well researched and likely will be used by other judges in the future," he said. "He basically said: 'You doctors wanted public money . the public's right to know comes with that.' I would say it is groundbreaking by that standard."

	2001	2Q-02	3Q-02	40-02	10-03	2Q-03	30-03	4Q-03	1 -04	30-04
OVERALL RESULTS
Small Comm. Accounts	+21%	+20%	+15%	+08%	+11%	+07%	+04%	+04%	+03%	-03%
Mid-size Comm. Account	+32%	+27%	+22%	+19%	+14%	+08%	+05%	+05%	+O1%	-06%
Large Comm. Accounts	+36%	+34%	+25%	+21%	+15%	+08%	+04%	+04%	-03%	-09%
SPECIFIC LINES
Business Interruption	+30%	+21%	+16%	+13%	+09%	+05%	+03%	+02%	-01%	-05%
Construction	+46%	+44%	+30%	+34%	+22%	+17%	+13%	+13%	+08°/a	+02%
Commercial Cars	+28%	+27%	+18%	+18%	+15%	+11%	+06%	+07%	+03%	-05%
Property	+47%	+42%	+24%	+21%	+12%	+06%	+01%	+05%	-05%	-10%
General Liability	+27%	+24%	+18%	+19%	+14%	+11%	+07%	+06%	+03%	-04%
Umbrella Liability	+56%	+52%	+36%	+34%	+26%	+18%	+11%	+11%	+04%	-02%
Workers' Compensation	+24%	+26%	+19%	+21%	+17%	+15%	+10%	+09%	+04%	-05%
D&O			+35%	+32%	+29%	+21%	+16%	+13%	+07%	-05%
Employment Practices			+19%	+32%	+19%	+17%	+12%	+10%	+05%	-02%
Medical Malpractice			+61%	+63%	+54%	+48%	+28%	+34%	+19%	+06°/o
Surety Bonds			+14%	+18%	+18%	+13%	+06%	+07%	+06%	+01°/o
Terrorism				+63%	+13%	+06%	+02%	+02%	00%	-02%
Source: Analysis of Council of Insurance Agents and Brokers quarterly survey of market conditions.

Asbestos Bill Is Sidelined by the Senate

Asbestos fund bill withdrawn in Senate

Discusses "Tort Reform"

`There are not a dozen of those men alive'

Panel Seeks Better Disciplining of Doctors

Bush Begins Drive to Limit Malpractice Suit Awards

White House forum holds lawyers in contempt Bush, panelists blame lawsuits for economic ills

White House forum holds lawyers in contempt
Bush, panelists blame lawsuits for economic ills