Bush Putting Trial Lawyers on Defensive

May 13, 3:53 AM EDT

By PETE YOST
Associated Press Writer

WASHINGTON (AP) -- Renewing a battle from President Bush's days as Texas governor, the White House and its GOP congressional allies are putting trial lawyers on the defensive, from immunizing drug makers from lawsuits to cutting into the fees of attorneys who sue major corporations.

The latest effort, ahead of the 2004 elections, was unveiled last month when two Republicans allied with the White House introduced legislation that would sharply curtail lawyers' contingency fees in lawsuit awards topping $100 million.

Democrats point out that the legislation is aimed at a group of attorneys who traditionally are a major source of campaign donations for their party.

The Association of Trial Lawyers of America contributed $3.8 million to Democrats in the 2002 election cycle, compared to $335,000 to Republicans, according to the Center for Responsive Politics.

"We've heard of enemies' lists, but this now looks like the White House and their friends in Congress want to start employing an enemies tax," Democratic consultant Jenny Backus said.

Tort reform has long been of interest to Bush, predating his first race for governor in 1994, the White House says.

In a recent book about Bush, presidential adviser Karl Rove is quoted as persuading Bush to elevate the importance of tort reform in the governor's race. In a memo obtained by The Associated Press in December, the White House identified legal reform as one of 10 possible "signature issues" heading into the president's bid for re-election in 2004.

The barrage of proposals by Republicans - from legislation to presidential executive orders - has trial lawyers working several fronts to protect their turf. The trial lawyers association spent $3.5 million lobbying Congress last year.

"On the other side, there's every corporation in America, thousands of lobbyists and many millions of campaign contributions," pointed out Carlton Carl, a spokesman for ATLA.

Republicans say the effort isn't about punishing a Democratic constituency, but about excesses in the legal system that the Bush administration says ultimately drive up insurance rates and other costs for consumers.

"The president has always been a strong supporter of efforts to stop lawsuit abuse," White House spokesman Scott McClellan said.

The latest effort to create a federal excise tax on lawyers' fees is part of a broader attack by Republicans in Congress.

Medical malpractice bills in Congress would cap some economic damages for insurance companies, HMOs, nursing homes, pharmaceutical companies and medical device manufacturers.

Separate legislation would push more class action lawsuits out of state courts and into federal courts where delays are common and where legal requirements make it harder for plaintiffs to pursue cases brought by large numbers of people. Another bill would effectively immunize the makers of a vaccine additive that may cause autism.

Bush and corporate America have long been at odds with plaintiffs' lawyers.

Sinking tens of millions of dollars into lawsuits against well-heeled corporations, trial lawyers receive a percentage of any money awarded in a case. If the lawsuit fails, the clients who often have few assets owe their lawyers nothing, while the attorneys lose the money they put into the effort.

Lawsuits have become an avenue of potential relief for groups such as asbestos workers whose health has been harmed in the workplace and consumers injured by defective products.

The bill sponsored by Republican Sens. John Kyl of Arizona and John Cornyn of Texas would force lawyers who won a landmark $246 billion settlement against the nation's big tobacco companies to pay $9 billion to the states. In other types of cases, the fees of trial lawyers would be limited to no more than five times an hourly rate.

"If $2,500 an hour isn't enough, I'm not sure I can help," Cornyn spokesman Don Stewart said.

Lawyers question the bill's emphasis on big money. "It's interesting that this proposed tax wouldn't apply to lawsuits filed by corporations like Enron against its employees but it would apply to lawsuits filed by employees against Enron," says Carl of the trial lawyers group.

Supporters of the bill say it would apply only to the largest lawsuits, but Carl says the measure actually would have much broader coverage. The $100 million threshold requirement can be met by adding up awards in many similarly filed cases, said Carl.

The bill, which faces uphill struggle in the Senate, resurrects a Texas political battle that pitted Bush and Cornyn against Democratic state Attorney General Dan Morales, a Democrat.

Morales hired a team of plaintiffs' lawyers, sued the tobacco industry and won a settlement in which the companies will pay $17.3 billion to the state and $3.3 billion to the private lawyers over 25 years. Bush denounced the legal fees and Cornyn made them a major issue in a successful campaign to succeed Morales as attorney general.

As soon as he was elected state attorney general, Cornyn announced an investigation of the legal fees, leading to Morales' federal indictment two months ago for allegedly steering hundreds of millions of dollars in attorneys' fees in the tobacco case to a friend. Morales says he is innocent and his legal team says the case was politically motivated.