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Tort Reform Hypocrisy

After our recent article on Trent Lott's lawsuit against State Farm, we began to wonder if there were any other leaders of the tort reform movement that had particularly litigious pasts.

The Center for Justice and Democracy has an interesting list of some influential tort reform advocates who have no problem with filing lawsuits themselves, but view the practice as dangerous to business, capitalism and democracy when someone else attempts the same thing.

President George W. Bush: As Governor of Texas he declared a “state of emergency” over frivolous lawsuits, and during his two terms in Austin he signed quite a few pieces of legislation that severely limited the amount of money that an injured person could recoup in damages. His adherence to tort reform continues to this day, as he recently decried “junk lawsuits” during his 2007 State of the Union Address. However, his devotion to the cause did waver slightly in 1999 when he sued Enterprise Car Rental after his daughter was in a minor accident where no one was seriously injured. The reason for then-Governor Bush’s lawsuit? Enterprise had rented a car to a person with a suspended license, who then got into an accident with his daughter. Mr. Bush settled the matter for a little over $2000.

While this is not an enormous amount of money, Mr. Bush used the courts to remind Enterprise that their actions have consequences. It seems that he has misgivings about other citizens doing the same thing.

John Stossel: Every year, this ABC correspondent opines before groups such as The Cato Institute on the dangers of lawsuits. One of his more memorable quotes on the subject is to explain that “…we all have pain and suffering in our lives. And if each time we hang onto it until we get some kind of compensation, society can’t work,” Mr. Stossel views himself as a champion of common sense, as you can tell by listening to this interview.

Mr. Stossel’s take on compensation for pain is an interesting one, especially considering what happened to him in 1986. Mr. Stossel was interviewing professional wrestler David Schultz for a segment on 20/20. Mr. Stossel asked Mr. Schultz if professional wrestling was fake. Mr. Schultz did not respond very well to this line of questioning, and struck Mr. Stossel several times.

Mr. Stossel then decided to “hang on” to his pain and suffering until he was able to file a lawsuit against Mr. Schultz. Mr. Stossel was awarded $200,000.

Ken Lay: Mr. Lay presided over one of the largest corporate scandals in history. Mr. Lay caused the savings of thousands of his employees to be wiped out once it was discovered that Enron was nothing more than a house of cards.

While running this enormous display of smoke and mirrors, Ken Lay threatened to take Enron out of Texas unless serious tort reform legislation was enacted. Considering how often Mr. Lay used the courts of Texas, it seems strange that he found so much wrong with it. During his tenure as head of Enron, Mr. Lay did the following:

- Filed dozens of suits in Harris County involving contract disputes between Enron and other corporations. Apparently trivial matters over physical injuries were not as important as warring CEO’s quibbling over million dollar decimal points.

-Sued a driver that rear ended his daughter’s car for over $10,000.

-Initiated a lawsuit against financial officers at the University of Houston who were involved in a kickback scheme

Sterling Cornelius: Mr. Cornelius presides over an agricultural empire, and is also the founder and trustee of a group called Citizens Against Lawsuit Abuse. According to their manifesto, “…Lawsuit abuse is a huge problem growing out of control. The severe damage it's causing to American small-business owners, taxpayers, consumers, retirees and working families is shocking. And it's getting worse every day.”

We find it interesting that Mr. Cornelius became such a stern advocate of tort-reform only two years after he filed a $100 million dollar lawsuit against the DuPont Corporation. In 1993, Mr. Cornelius brought suit against the chemical manufacturer because he claimed that one of their fungicides damaged his crops. Of that $100 million, $75.3 million were in the much decried “punitive damages” category.

While his lawsuit was still in progress, Mr. Cornelius helped enact severe caps on punitive damages under the Texas’ Deceptive Trade Practices Act, which was the exact same statute under which he brought suit against DuPont. Fortunately for Mr. Cornelius, his suit was completely safe from the caps as it was initiated before the new regulations came into effect.

These are just some of the many examples of glaring hypocrisy when it comes to the tort reform movement. There is an enormous double standard at play here. Mr. Cornelius in particular and all of these men in general serve as a reminder that questioning the motives of those with expensive microphones is not always a bad thing. For more information, we recommend going to the Center for Justice and Democracy website.

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