say they represent "the little guy."
But who pockets those colossal fees?
At his office in Pensacola, Fla., attorney
Fredric G. Levin discusses campaign contributions with disarming candor. "It is
nothing for this law firm to pay $200,000, $300,000 a year toward political
campaigns," he says. "And that was before the tobacco money." Levin smiles,
then begins to laugh. Buoyed by the tens of billions in fees they expect to receive from
the autumn 1998 settlement between the states and the tobacco industry, trial lawyers such
as Levin will no doubt be spending more in the future on the political process than they
already are. And thats plenty.
During Californias 1998 gubernatorial
race, for example, trial lawyers funneled $3.4 million to victorious Democrat Gray Davis
and $200,000 to Dan Lungren, his Republican opponent. Between July 1 and October 24, 1998,
the Texas Democratic Party received $4.3 million from all sources - but $2.4 million, or
55 percent, came from the plaintiffs bar.
No other profession funnels anywhere near as much into politics today. In 1997 and 1998,
according to the Washington, D.C.-based Center for Responsive Politics, all lawyers and
law firms combined contributed $59.7 million to both parties and their candidates. For
Democrats especially, trial lawyers have become a vital funding source - "right up
there with labor and Hollywood," says University of Virginia political science
professor Larry Sabato.
These vast sums - and the influence they are intended to create - come mainly from a small
subsection of the legal profession, whose practitioners handle personal-injury,
product-liability and medical-malpractice cases. Unlike other attorneys who bill clients
at an hourly rate, trial lawyers usually charge a contingency fee. If they lose your case,
they get nothing. But if they win, theyll take as much as 50 percent of your award.
Since litigation is expensive, contingency fees are justified as a way to give plaintiffs
of modest means a way to sue wealthier defendants. "We try to level the civil-justice
playing field," says Richard H. Middleton, Jr., president of the Association of Trial
Lawyers of America.
But theres a catch. Contingency fees, along with other devices such as the class
action (which enables trial lawyers to sue on behalf of victims who may not even be aware
litigation is proceeding in their name), encourage far more lawsuits, for much higher
damages, than in other countries. All of this litigation is costly - more than $150
billion a year and rising, according to Daniel J. Popeo, chairman of the Washington Legal
Trial lawyers say the system works just fine, and work hard to keep it in place. Critics -
and not just corporate defendants - say its out of control. Lets take a look.
Junk Science. Until a decade or so ago, more than 1.5 million American women had received
silicone-gel breast implants - and while studies indicated that complications could arise
from surgery or leaking implants, there was little evidence that they caused anything
worse. Enter Dr. Sidney Wolfe, president of the Public Citizen Health Research Group.
Concerned about ruptures, systemic disease and a study showing that small amounts of the
gel inserted under the skins of rats had caused cancer, he urged the FDA to ban breast
The agency investigated and found insufficient evidence to support the cancer charge. Then
in December 1990, CBS aired a segment of "Face to Face With Connie Chung," in
which two physicians claimed a link between implants and disease. Both were involved in
pending litigation as paid experts for the plaintiffs bar, though that wasnt
As lawsuits multiplied rapidly, then-FDA Commissioner David Kessler announced a
"moratorium" on the sale or use of these implants. Three months later he would
backtrack on the moratorium, making implants available in certain instances with informed
consent. And in 1995 he told Congress that there was reasonable assurance that the
implants did not cause a significant increase in the risk of connective-tissue disease. By
that time, the trial lawyers offensive had forced Dow Corning, the largest implant
manufacturer, into bankruptcy.
Last June the National Academy of Sciences Institute of Medicine released the
results of a two-year study into the possible link between implants and connective-tissue
diseases. Its conclusion matched that of at least 17 other probes: there was no link.
Nevertheless breast-implant litigation had resulted in settlements totaling $7 billion -
with trial lawyers pocketing approximately one-third.
"There has never been anything but junk science to support the claims," writes
attorney and National Journal analyst Stuart Taylor, Jr. Nevertheless, neither the trial
lawyers nor the plaintiffs have to give the money back.
No Problem. Critics have long complained that the litigation stirred up by trial lawyers
drives good products off the market and discourages further innovation. Contraception is
exhibit No. 1. A generation ago at least eight major companies were researching new
birth-control methods. According to Fordham law professor Marc Arkin, thats down to
two. Product-liability worries are one big reason.
Lawsuits drove the Copper-7 IUD, a safe and effective contraceptive device, off the market
several years ago. The same thing is happening today.
When Wyeth-Ayerst Laboratories, a division of American Home Products Corp., brought
Norplant onto the market in 1991, it had been tested for 20 years and proved to be safe,
effective and easy to use. The device - six tiny capsules inserted by a doctor under the
skin of a womans upper arm - inhibits pregnancy for up to five years.
With a failure rate of less than one percent, the method is more reliable than the
birth-control pill, and within a month after its introduction Norplant was jumping off
pharmacists shelves. Encouraged, Wyeth-Ayerst began working on a smaller,
two-capsule version that would be easier to remove.
Then in May 1994, in another CBS segment with Connie Chung, women were quoted saying that
theyd experienced pain, numbness and scarring when their capsules were removed.
Almost overnight, Norplant sales began to decline; lawyers advertised in newspapers, on
billboards, radio and TV, and then filed suit in their new clients names.
The FDA examined Norplant again and found "no basis for questioning [its] safety and
effectiveness." But that didnt stop the litigation train.
Initially, the trial lawyers charged that the tiny amount of silicone contained in the
device triggered auto-immune disease. Lack of evidence caused that theory to collapse.
No problem. Lawyers found a new culprit - side effects (vaginal bleeding, headaches,
nausea) that they said Wyeth-Ayerst had not issued sufficient warnings about.
In defense, the company said these side effects, when experienced, were temporary, no
different from those caused by other hormonal contraceptives, and that adequate warnings
were part of the package inserts. Still, by last spring Wyeth-Ayerst faced 3732 lawsuits
encompassing the claims of 39,580 plaintiffs.
Most striking was that many of the plaintiffs were still using Norplant themselves. How
come? Trial lawyers, like Houstons Arturo González, claim their clients have
limited access to clinics where implants can be removed. Thats true, but other
factors also come into play. "A lot of them will tell you they dont want to go
back to the pill," says González, who has shepherded the cases of 3700 plaintiffs
himself. "Others will say, Maybe theres something here. Lets go
sign up. That happens everywhere."
With an avalanche of cases scheduled for trial, Wyeth-Ayerst agreed to settle for about
$50 million last August. And what of a new two-capsule Norplant that won FDA approval in
1996? Because of the litigation, Wyeth-Ayerst has thus far declined to make it available.
Changing the Rules. In 1996 Maryland Attorney General J. Joseph Curran (D.) reached
agreement with trial lawyer Peter Angelos, the so-called King of Torts. Angelos would sue
the tobacco industry to recover Medicaid funds that Maryland had spent on smokers
illnesses. His fee: 25 percent of all he could collect.
A year later a judge threw a monkey wrench into Angeloss suit. Maryland law was
clear. Angelos would have to prove damages on a case-by-case basis.
Angelos knew he couldnt win that way. Curran agreed. So they convinced Maryland
lawmakers to change the rules. Angelos would now be able to cite health statistics to
demonstrate tobaccos toll instead of having to show cause-and-effect evidence of
each smokers ills. Once that happened, the industry threw in the towel and agreed to
a $4.43-billion settlement. Angelos will walk away with up to $1.1 billion, the final
amount to be set by arbitration.
Its not the first time that settled rules of law have been changed. For years the
tobacco companies defended themselves with a long-standing common-law doctrine called
assumption of risk. Smokers knew that what they were doing endangered their health;
therefore, the tobacco companies werent responsible for what happened to them.
Then Fredric Levin discovered a Florida law that said the state could recover costs from
anyone who harmed a Medicaid recipient. He approached Democratic State Sen. W. D. Childers
(now a Republican) who, in April 1994, during the legislative sessions final hours,
introduced Levins amendment to remove such defenses as assumption of risk and to
allow the use of statistics to prove causation of damages, calling it a measure to crack
down on Medicaid fraud. With few legislators paying attention, it passed both houses and
was signed into law. Its defenses stripped away, the industry has agreed to a
$13.3-billion settlement that will net the lawyers a whopping $3.4 billion in fees.
Levins firm will collect more than $300 million.
Smoke Screen. States that are seeking to recover Medicaid fees for smokers from tobacco
companies have used trial lawyers to handle their cases. This has led to disputes over
Kansas Attorney General Carla J. Stovall (R.), for example, selected two out-of-state
firms to represent Kansas in its tobacco suit. Then she picked her former law firm,
Topekas Entz & Chanay, to be local counsel. Entz & Chanay was to receive
$196 million in fees, the final amount to be set by arbitration.
"How many hours did you put in on this?" Readers Digest asked partner
"We have no way of knowing," Entz replied. His contract contains this caveat:
"Counsel are not required to maintain time records."
"Thats bizarre," says Kansas State Rep. Phill Kline. "As an attorney
I have never been in a circumstance where we didnt maintain records."
Readers Digest tried to ask Stovall about this, but she declined repeated requests
for an interview.
In January 1998, Texas Attorney General Dan Morales (D.) announced that his trial-lawyer
team - "junkyard dogs," he called them - had reached a $17.3-billion settlement
with the tobacco industry, which led to a stupendous $3.3-billion fee awarded by federal
arbitrators. Houston attorney Marc Murr, a Morales friend and fund-raiser, demanded $520
million. The other trial-lawyer firms said Murr had played no visible role in the case.
Secretly Murr and Morales selected the three members of a state arbitration panel to weigh
the merits of Murrs claim, then appeared before the panel as its only witnesses. The
panel awarded Murr $260 million - or $130,000 for every hour he claimed to have worked on
Last May a new Texas attorney general, John Cornyn (R.), filed papers in federal court
charging that Morales had created bogus contracts for Murr. The trial lawyers fee
award, he said, had been "procured by fraud." One day later Murr withdrew his
request for the $260 million. The FBI entered the case, and a federal grand jury has
convened. Morales has denied any wrongdoing, and Murr claims that he worked behind the
scenes as a strategist.
Meanwhile, trial lawyers are looking for new worlds to conquer. Gun manufacturers are a
prime target, and the lawsuits against them are mounting. Next up: legal assaults against
lead-paint and latex-glove makers. Theres even talk of holding car makers liable for
high-speed crashes, because they dont install "speed governors" in their
The prospects for reform are limited. While the Supreme Court has begun to eliminate junk
science from federal cases, most state courtrooms are still wide open. And many state laws
to cap damage awards have been struck down.
Most promising is a "loser pay" rule, which is the norm in most other countries.
Whoever loses a lawsuit must pay the other sides legal fees. "No other single
reform would apply the brakes to runaway litigation more effectively," says author
Walter Olson, a senior fellow at the Manhattan Institute for Policy Research and the
editor of "Overlawyered.com," a popular Internet site. "A loser-pay rule
will encourage plaintiffs and their lawyers to think twice before filing frivolous
lawsuits. It will also encourage defendants to settle cases that have real merit."
Meanwhile, measures to cap contributions to candidates for statewide judicial offices make
sense. And surely judges should not accept campaign contributions from lawyers with cases
pending before them. (Under Ohio law, for example, thats okay.)
Trial lawyers already exercise significant influence among legislators and governors
today; many observers believe the courts are not immune. "Theyre going to use
their billions to get a kind of pliant, plaintiff- oriented bench," predicts John
Langbein, a law professor at Yale. "They already have their yachts and condos. The
danger is enormous that theyre going to buy the bench so they can have more."