Copyright 2000 The Washington Post
The Washington
Post
February 10, 2000, Thursday, Final Edition
SECTION: A SECTION; Pg. A06; CAMPAIGN 2000
LENGTH: 1780 words
HEADLINE:
'Tort Reform': Mixed Verdict; Bush's First Priority in Office
Pleased Business, Spurred Donations and Cut Public's Remedies
BYLINE: George Lardner Jr., Washington Post Staff
Writer
DATELINE: AUSTIN
BODY:
Three days after taking office in January 1995, Texas Gov. George W.
Bush proclaimed an emergency situation demanding the Legislature's immediate
attention.
The issue was not education, welfare or the state's juvenile
justice system, all of which Bush had vowed to tackle, but another, more arcane
policy matter at the top of his to-do list: curtailing what he called "the junk
lawsuits that clog our courts."
By the time the bill-signing ceremonies
ended in June following the close of the biennial legislative session, Bush
could claim to have delivered. He signed into law seven major bills that put a
pro-business face on the state's tort laws, making it harder for aggrieved
parties to win damages against big and small businesses, doctors, hospitals and
insurers.
Ralph Wayne, president of the Texas Civil Justice League, one
of the business groups pushing hard for such measures, said the new laws
represented "more tort reform in one session than any state in the country in
the last 15 to 20 years." In the years following tort reform, the number of
personal injury cases dropped by almost one-fourth in Texas--once renowned as a
Mecca for trial lawyers--even as other types of filings rose.
As he
campaigns for president, Bush frequently cites the new tort laws in Texas as a
major part of his record as "a reformer who gets results." He says that if
elected, he would be "a president who's tough enough to take on the trial bar."
But if his work on tort reform offers Bush an accomplishment to trumpet
on the campaign trail, it has also helped him attract significant amounts of
campaign cash, both in his two gubernatorial races and now as he runs for
president.
"Business groups flocked to us" when Bush began to press the
issue during his first run for governor in 1994, said Karl Rove, Bush's chief
political adviser. Bush's early identification with tort reform "excited" the
business community and spurred it "to be more aggressive in helping him," said
Kent Hance, a former member of Congress who arranged a briefing for Bush on the
issue even before he announced for governor.
According to Texas election
records analyzed by Texans for Public Justice, an Austin-based advocacy group,
the state's two leading tort reform organizations and their members gave Bush
more than $ 4 million, 10.6 percent of his total, for his two gubernatorial
campaigns.
While Bush proudly claims in campaign ads that the
legislation helped curb "junk lawsuits," trial lawyers and consumer advocates
say the reforms have been far less of a success for Texas consumers than Bush's
rhetoric suggests. They say the new laws went too far, keeping even meritorious
cases out of court and unduly curtailing damages to those horribly injured by
negligent companies while letting insurance companies reap windfall profits.
David Bragg, former chief of the Texas attorney general's consumer
protection division who represented consumer interests as Bush and state
legislators cut away at the state's Deceptive Trade Practices Act, said the
changes in that statute made it virtually impossible to use.
"You might
as well be tilting at windmills," Bragg said. "Under the law as it now stands .
. . you could more easily prove negligent homicide."
For
business groups in Texas, Bush's election--and subsequent work on tort
reform--was the culmination of years of effort. They had already spent hundreds
of thousands of dollars to help elect a conservative Republican majority on the
state Supreme Court, and they had succeeded in ousting some particularly
troublesome Democratic trial lawyers from strategic positions in the state
Legislature and winning a pro-tort-reform majority in the state Senate.
Bush's involvement in the issue began well before he launched his 1994
campaign for governor. In 1992, while still managing partner of the Texas
Rangers baseball organization, he was listed on the board of advisers for the
Texas Public Policy Foundation, a conservative think tank devoted to curbing
"lawsuit abuse." Bush sent a letter to Texas businessmen on the group's behalf
decrying "this runaway tort system."
Bush announced his candidacy for
governor on Nov. 8, 1993, but before that, he made a few appearances to
road-test his message, including his dedication to tort reform. The events were
closed to the press, but Rove said word quickly filtered out to the trial
lawyers.
"We knew if we made it an issue, it would gin up the trial
lawyers," Rove said. "Emissaries were sent to say that if we dropped the issue,
we [trial lawyers] won't pour money into this. We will be restrained in our
giving" to Bush's opponent, Democratic Gov. Ann Richards. Officials of the Texas
Trial Lawyers Association said they knew nothing of such an approach.
On
June 17, 1994, Bush laid out a nine-point plan "to prevent frivolous and junk
lawsuits." It matched many of the proposals and rhetoric of the tort reform
groups, protesting that punitive damage awards were being used to "terrorize
small business owners."
Some who have studied the issue say that what
Bush has called "the litigation explosion in Texas" was nonexistent. "There is
really no evidence that frivolous or totally unfounded lawsuits pose a
significant problem," said University of Wisconsin law professor Marc Galanter.
The candidate's indignation may have been heightened when, just 10 days
after he issued his tort reform plan, a little-noticed lawsuit was filed in
Henderson County against him and other members of an exclusive hideaway in East
Texas called the Rainbo Club. The former caretaker of the club, J.W. Moseley,
accused Bush and other club members of conspiring to get rid of him out of
"spite and ill will."
Eventually, Bush won a summary judgment dismissing
the case against him, but it took almost two years, until May 1996. Moseley's
lawyer, Kay Davenport of Tyler, Tex., reached an out-of-court settlement with
the other defendants the next month. By then, she said in an interview, "they'd
slashed plaintiffs' rights in Texas. He [Bush] had a personal reason to do that:
this lawsuit. This was a thorn in his side."
Bush denies that. "By June
of 1994," he said, "I had already made tort reform a major priority in my
campaign for governor."
The fight over the legislation was
Bush's first test as governor. Even before Bush was sworn in, Lt. Gov. Bob
Bullock (D), the most powerful man in the Legislature, knew he'd have to deal
with the issue. Twenty-one senators, Republicans and conservative Democrats,
were in favor of tort reform, a two-thirds majority, and that was enough to
bring bills to the floor whether Bullock liked it or not.
Bullock, who
died last year, was inclined to be more sympathetic than the popular new
governor to the trial lawyers, but he was a hard-nosed pragmatist and he
recognized new laws were inevitable.
As the legislators and other key
players dickered over various proposals in Bullock's conference room, Bush made
plain early on that he didn't intend to yield much. On the morning of the third
day, as one participant recalled, they were thick in debate over a draft bill
that would have abolished the doctrine of "joint and several liability"--a rule
that often requires the wealthiest defendants to pay the full damage award. The
arguments were getting heated when the door flew open and in walked Bush.
The chief spokesman for the trial lawyers, Mike Gallagher of Houston,
used the occasion to lobby the governor. Another lawyer at the table, defense
counsel Russell Serafin of Houston, recalled the exchange:
"You know,
Governor," Gallagher told Bush, "I represent a dear friend of yours from West
Texas, a gentleman by the name of Bobby Holt."
"Is that right, Mike?"
Bush responded.
"Yes," Gallagher said. "In fact, we're discussing
something that's near and dear to Bobby Holt's heart and that is the law of
joint and several liability."
"The governor, looking straight into
Gallagher's eyes, said: 'You know, Mike, I've known Bobby Holt all my life. Grew
up with Bobby Holt. One of my warmest, closest personal friends.' "
Bush
paused, then added: "[Expletive] Bobby Holt."
Asked about the episode,
Bush said that he didn't remember using the particular expletive in question,
but whatever the word, he said: "I think my point to Mr. Gallagher was it
doesn't matter who my friends are."
State Sen. David Sibley, a strong
advocate of tort reform, remembered Bush's intervening at another crucial point,
during the fight over punitive damages, which are designed to punish grossly
negligent, malicious or outrageous behavior. A 1994 Texas Supreme Court decision
had just sharply limited the definition of "gross negligence," but tort
reformers wanted still more restrictions, contending that punitive awards
amounted to windfall gains for plaintiffs and too often enriched their
attorneys.
Bullock was insisting on a $ 1 million cap. Bush refused to
go that high, and the impasse threatened the entire package, Sibley said.
He went to Bush's office and told him they had a problem. "Bush said,
'Nah, don't give up,' and invited me to the governor's mansion for dinner,"
Sibley said.
As they were eating, Sibley's office called and told him to
call Bullock. After a testy conversation, Bush proposed a compromise formula,
which Bullock accepted.
Later some tort reformers tried to get a better
deal in the House, but Bush has written that he wouldn't go along "even though
some who had contributed to my campaign were putting on the heat. . . . Bullock
and I had agreed, and I would not back down."
Bush hailed the final
measures as "a job creation package." Besides new caps on punitive damages and
limits on the liability of "deep pockets" defendants, they included provisions
that made it much harder to file medical malpractice lawsuits; cracked down on
venue shopping; raised the standard of proof for punitive damages; and narrowed
the definition of "gross negligence."
The trial lawyers contend that all
the talk about "junk lawsuits" obscures the tort reformers' real goal: reducing
corporate liability. And while huge punitive damage awards make big headlines,
said Hartley Hampton, president of the Texas Trial Lawyers Association, there
are very few of them. In the year before the reforms, he said, "more people
froze to death in Texas than actually collected punitive damages."
Staff researcher Lynn Davis and database editor Sarah Cohen
contributed to this report.
Gov. George W. Bush responds to well-wishers
after his January 1995 inauguration. Three days later, he proclaimed an
emergency that required immediate attention: "junk lawsuits."
LOAD-DATE: February 10, 2000 
