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After years of being forced to play defense in Washington, the trial lawyer lobby is preparing to go on the offensive in 2009.

When Republicans controlled Congress from 1995 to 2006, and during most of President Bush's two terms, trial lawyers were demonized on Capitol Hill and forced back on their heels. The president and GOP leaders pleased their business allies--while targeting a sector that is a mainstay of Democratic fundraising--by passing laws curbing the ability to file class-action suits and tightening the bankruptcy laws. Republicans also tried to restrict medical-malpractice lawsuits and limit asbestos-litigation claims.

It reached the point where the Association of Trial Lawyers of America rebranded itself in 2006 to become the American Association for Justice. The message was simple: out with Denny Crane of Boston Legal, and in with Erin Brockovich.

But with Democrats running Congress over the past 18 months--and the strong likelihood they will have an even larger majority after the November election--the AAJ is looking to score some legislative victories of its own.

The group is fast building a case that argues against the use of mandatory arbitration clauses in consumer, employment, and franchise contracts. The AAJ contends that the mandatory language is now commonplace in everyday arrangements such as signing up with a cellphone provider, opening a credit card account, and joining a health insurance plan. Arbitration allows companies to avoid paying millions of dollars in legal bills, the group says, and denies consumers their fundamental right to trial.

At the same time, the trial lawyer group, also known as the plaintiffs' bar, is moving along a slower track to fight next year for the repeal of federal rules that pre-empt state laws on consumer protection, highway safety, medical liability, and other matters.

In the first quarter of 2008, the AAJ spent $1.1 million on lobbying in Washington, according to disclosure reports it filed with Congress. Lawyers and law firms are also playing in the political arena--they are the No. 1 sector among donors to federal candidates in this election cycle, with $83 million in contributions, according the Center for Responsive Politics. Of that amount, the American Association for Justice political action committee has contributed $1.9 million to candidates, 95 percent to Democrats.

If presumptive Democratic nominee Barack Obama captures the White House, the plaintiffs' bar will be in a commanding position. Rep. Chris Cannon, R-Utah, ranking member of the House Judiciary Committee's Commercial and Administrative Law Subcommittee, said that under a new Democratic administration, "there is no question that they are going to try to make [the anti-arbitration language] into law."

Business interests are gearing up for a pitched battle. The U.S. Chamber of Commerce, a perennial top player on K Street, spent $9.8 million on lobbying in the first quarter of this year. The chamber's Institute for Legal Reform, which has long led the charge to curb tort filings, spent an additional $4.7 million on its own lobbying expenditures. However, the overall business sector--the chamber, the National Association of Manufacturers, and many other groups--has not kept up with the AAJ in terms of donations to candidates in this election cycle. So far, it has contributed $897,409, about 79 percent of which has gone to Republicans.

For the trial bar, the best-case scenario would be for Congress to pass measures sponsored by Rep. Hank Johnson, D-Ga., and Sen. Russell Feingold, D-Wis., banning mandatory arbitration clauses in contracts. Although that won't happen this year, the AAJ is trying to build its case through stories from "aggrieved" individuals: a family whose grandmother was severely injured because of nursing home negligence; a franchisee who is being driven into bankruptcy because of disputes with the parent company; an Ohio woman who purchased an auto that turned out to be a lemon.

At the top of the list is the story of Jamie Leigh Jones, who worked as a contractor in Iraq for a former subsidiary of Halliburton and has alleged that she was drugged and gang-raped by fellow employees. No criminal charges have been filed in the case, but Jones has been stymied in pursuing a civil case against Halliburton because her 18-page employment contract contains an arbitration clause. "Jamie Leigh Jones is an important example," said Linda Lipsen, the AAJ's chief lobbyist in Washington. "Instead of being able to hold her employers accountable for creating an environment that produced this level of danger, she has a contract that says she has to go to [Halliburton's] arbiters. It's just unfair on its face."

LEGAL AFFAIRSLawyers' Black EyeBill SwindellAs trial lawyers press their case on Capitol Hill, they have to deal with the embarrassing black eye their profession has suffered as a result of criminal convictions against some of its most prominent members.
The list of the downfallen is a Who's Who of plaintiffs' attorneys who were major contributors to the Democratic Party. William Lerach, who made millions of dollars representing investors in class-action lawsuits against high-tech companies, pleaded guilty in September to conspiracy charges that he concealed from judges secret payments he made to plaintiffs in class-action cases. He received a two-year prison sentence in the kickback scheme [more...]

Jones appeared before the House Education and Labor Committee's Health, Employment, Labor, and Pensions Subcommittee in February. "I had no idea what arbitration was," she testified, "other than a tiny paragraph included in the lengthy document that mandated that I could not get justice from the civil court system."

Proponents of mandatory arbitration don't dispute that Jones has suffered, but they say her experience was an exception that should not be used to revamp the Federal Arbitration Act, which provides the bases for private dispute resolution outside the jury trial system.

"They are trying to change a very broad area of the law using one example," said Lisa Rickard, president of the Institute for Legal Reform. "That's not a good way to legislate. That's not good public policy. And I think fundamentally, the Congress knows that."

Rickard argues that it is exceedingly difficult to persuade a complainant to accept arbitration once a dispute has arisen; thus the need for a predispute clause. Arbitration is the perfect forum for most consumer cases, she adds, because such cases typically do not involve enough money for a lawyer to take the case.

Still, lawmakers have sponsored at least 10 bills to strip away mandatory arbitration in different sectors, and they already have had some success. The recently passed farm bill contained language allowing farmers to opt out of such clauses with certain companies. That particular clause, which jumped across party lines, was championed by Sen. Charles Grassley, R-Iowa, who complained that his state's hog farmers had little recourse outside of arbitration in disputes with major meatpackers. Grassley serves on the Judiciary Committee, which could be a plus for trial lawyers when anti-arbitration bills come up next year.

Another target is the nursing home industry. A bill sponsored by Rep. Linda Sanchez, D-Calif., who chairs the Judiciary Committee's Commercial and Administrative Law Subcommittee, would invalidate predispute, mandatory arbitration clauses in long-term-care contracts. Sanchez argues that families are typically unaware during the hectic and emotional rush to move a parent into a nursing home that they will be signing away their rights to a jury trial.

Proponents of the bill have targeted Florida lawmakers because that state is home to more seniors than any other--17 percent of its population is 65 or older, and that number is expected to grow. Sanchez recruited Rep. Ileana Ros-Lehtinen, R-Fla., as a co-sponsor on her bill. Sens. Herb Kohl, D-Wis., and Mel Martinez, R-Fla., are sponsoring a companion measure in their chamber.

In testimony in June before Sanchez's subcommittee, the American Health Care Association, which represents nursing homes, said it has developed a model arbitration contract for operators to use that does not alter the rights or remedies available to a resident under state law, clarifies that agreeing to arbitration is not a basis for admission to a nursing home, and provides a 30-day period for patients to rescind the arbitration agreement.

But such technical details were hard to match against a woman who testified that her 92-year-old grandmother's broken leg went unnoticed at a Texas nursing home until it was too late and doctors had to amputate the leg. The woman, who has worked as a nursing director in a long-term facility, was forced to settle the case under a mandatory arbitration clause in her grandmother's contract.

Opponents of mandatory arbitration believe that they also have a strong case with car sales. In 2002, Congress passed legislation preventing automakers from forcing dealers into mandatory binding arbitration in franchise disputes. The politically powerful National Automobile Dealers Association pushed for the legislation; but to see the bill advance, the NADA agreed to remain neutral on any subsequent legislation that gave car buyers the same right to opt out of arbitration.

The NADA's promise to remain neutral has severely hindered car dealers who oppose a Sanchez bill that would prevent mandatory arbitration in auto sales. The American International Automobile Dealers Association is trying to recruit state dealer associations, minority dealer organizations, and other auto groups against the Sanchez bill, arguing that automaker-franchisee disputes are much more complex than those involving dealers and consumers and that, in the current car-selling downturn, dealers have every incentive to ensure the customer is fully satisfied. But Sanchez doesn't buy the argument, saying that only the threat of large legal damages can ensure that dealers will treat their customers properly.

In addition, the American Association of Justice and other proponents of anti-arbitration bills see franchisees as a crucial ally because franchise owners often can be forced to use mandatory arbitration in their disputes with the parent corporation from which they bought their franchise. Peeling off a segment of the small-business community could give advocates such as the AAJ a boost in their fight to pass legislation limiting arbitration clauses. "Every small business should be for this, because they want to have options, too," said Lipsen of the AAJ.

However, Rickard of the Institute for Legal Reform said she hasn't "seen any divisions within the business community on the arbitration issue." Meanwhile, the chamber is trying to play offense by highlighting stories of consumers who have gone through arbitration quickly and efficiently in cases that a lawyer would not take. One such story involves a 63-year-old Michigan woman who went through arbitration with Sears in a dispute over a maintenance contract and collected $281 plus a $25 arbitration fee.

Still, the trial lawyer lobby and other advocates believe they have the upper hand. "If you talk about Jamie Leigh Jones or you talk about people lying in their own bedsores ... we have got some messengers to talk about the problem," said Ed Mierzwinski, program director of U.S. Public Interest Research Groups. He conceded that many of these personal stories could be considered low-hanging fruit to aid their cause. "But," he said, "it is easier to talk about this story when you have a clear victim."