We return to the topic of the litigation lobby’s influence on the health care debate in Congress, the powerful special interest that has escaped scrutiny from the major media even as the trial lawyers block any effort to restrain medical liability costs.

Senate Minority Leader Mitch McConnell (R-KY) gave a floor speech yesterday that addressed the political dynamic, remarks entitled, “Something’s Missing.” The opening:

Throughout the debate over health care reform, the administration has made a point of asking various stakeholders to come together and do their part: Doctors and hospitals are being asked to find significant savings; seniors are being asked to make major sacrifices, and so are the states. Every week, it seems, the White House hosts an event aimed at showcasing some sacrifice being made by one group or another — every group, that is, except personal injury lawyers.

It’s a glaring omission, since everyone knows that the constant threat of lawsuits is one of the reasons health care premiums for families have skyrocketed more than 100 percent over the past decade and the primary reason that many doctors today spend a fortune on malpractice insurance even before they open up their doors for business. To take just one example, neurosurgeons in Miami can expect to spend more on malpractice insurance every year than many families in Miami can expect to spend on a new home.

This is a serious problem, everyone knows it, and yet we don’t hear a word about it from any of the Democratic-led committees in Congress that are working on reform.

And the conclusion:

Americans don’t want a government takeover of health care. They want reforms that everyone can understand and all of us can agree on. And nothing could be simpler or more straightforward than putting an end to lawsuits that drive up costs and put doctors out of business. Americans don’t want grand schemes. They want common sense proposals. Medical liability reform would be a very good place to start.

Here’s the media coverage we found this morning of the Senator’s remarks. Sparse.

This is not a purely partisan issue. A very interesting report from LegalNewsLine notes that the trial lawyer association’s lobbyist, Linda Lipsen, is worried that liability reform may gain legislative ground because of bipartisanship. Speaking at the American Association for Justice convention in San Francisco, she cautioned that Sen. Max Baucus (D-MT) could support tort reform in a Senate Finance Committee vote.

Lipsen told trial lawyers in the AAJ’s Birth Trauma Litigation Group meeting this week that the lawmakers are “business Democrats that aren’t necessarily that great for us,” referring to plaintiffs’ lawyers.

That’s quite an implicit admission: If you care about business, you’re bad for the trial lawyers.

The Washington Post reports today that the House leadership’s attempt to quickly pass a food safety bill through the suspension calendar — no amendments, limited debate — failed when it supporters could not achieve the two-thirds majority required for passage under the rules.

The bill, H.R. 2749, the Food Safety Enhancement Act, is a 134-page piece of legislation that imposes new inspection and safety requirements up and down the food-production chain. As the Post reports, “It also gives the FDA new power to set safety standards for growing and processing food and requires it to sharply increase inspections and enforcement. In turn, the agency would gain significant authority to contain outbreaks of food-borne illnesses.”

The Grocery Manufacturers Association has expressed its support for the general thrust of the legislation, noting in this June news release that the legislation contains many of the GMA’s food-safety proposals. Major farm groups are raising red flags, warning of unintended consequences and the possibility of the legislation actually making it harder to ensure food safety.

Of course, as a general matter, it’s almost impossible to oppose legislation that embraces “safety” or “safety enhancement” or “consumer product safety improvement.” But the widespread economic and individual harm caused by last year’s top “safety” bill, the Consumer Product Safety Improvement Act, has encouraged people to look more closely at the food safety bill. Walter Olson at Overlawyered has been writing updates on the various food safety bills Congress has considered this year and the widespread unease they’ve caused, especially among small producers. (See this call to action.) The term, “CPSIA for food,” is enough to make one take notice.

House sponsors, which include Rep. Henry Waxman (D-CA), plan to bring the bill back up this week on regular order, meaning a more complete debate and only a simple majority will be required for passage. (It failed yesterday on a 280-150 vote.) Our fear is that the impetus for the bill comes from “consumer groups” and House members who, when presented with the idea the bill is indeed the “CPSIA for food,” they say, “Yeah, isn’t that great!”

P.S. It sure seems like there are an unusual number of substantive bills on the suspension calendar this week, along with saying Happy 50th, Hawaii.

From The Examiner, today: “Kate Cyrul, a spokesman for Sen. Tom Harkin (D-Iowa), the measure’s lead sponsor in the upper chamber, told The Examiner that negotiations continue in search of a compromise that can gain 60 votes in Senate.”

And from Congress Daily, yesterday, “Harkin and other senators and aides involved in discussions on the union organizing bill said the group has not met in two weeks and has no plans to talk again before the August recess.”

From The Hill, “Dems warn Baucus with gavel threat“:

In an apparent warning to Senate Finance Committee Chairman Max Baucus (D-Mont.), some liberal Democrats have suggested a secret-ballot vote every two years on whether or not to strip committee chairmen of their gavels.

Baucus, who is more conservative than most of the Democratic Conference, has frustrated many of his liberal colleagues by negotiating for weeks with Republicans over healthcare reform without producing a bill or even much detail about the policies he is considering.

“Every two years the caucus could have a secret ballot on whether a chairman should continue, yes or no,” said Sen. Tom Harkin (D-Iowa), the chairman of the Senate Agriculture Committee. “If the ‘no’s win, [the chairman’s] out.

“I’ve heard it talked about before,” he added.

Senator Harkin is the chief Senate carrier of the Employee Free Choice Act, which eliminates secret ballots in the workplace during union representation elections.

In other speculation-rife speculation, here’s more speculation about Senate Majority Reid’s plans for the legislation. From The Examiner, “Reid plan could force Card Check without compromise.” Reporter Kevin Mooney cites the Coalition for a Democratic Workplace — in which the National Association for Manufacturers is an active member — reacting to the casually sourced Roll Call article about the possibility of union-legislation being “railroaded” through the Senate.

“Forced card check coupled with the job-killing binding interest arbitration provision suggests that the EFCA still remains politically toxic, despite efforts to produce what appears to be a one-sided ‘compromise,’ ” said Brian Worth, chairman of the CDW. “Apparently ‘compromise’ means whatever Big Labor can get passed notwithstanding their ultimate plan for denying workers secret ballots.”

We tend to think an attempt to shove the Employee Free Choice Act through the Senate in a brutal power play would be even more politically toxic. So the Roll Call story was yet another trial balloon from labor, trying to identify some strategy that might work.

Senator John Barrasso (R-WY) has drawn on his medical expertise — he’s an orthopedic surgeon — to become an effective Republican voice on health care legislation. Today he spoke on a conference call with some bloggers, and we had the opportunity to pose a question about the absence of medical malpractice limits from the bills currently being debated.

Senator Barrasso noted that his fellow Wyoming Senator, Mike Enzi, had sought to amend the Senate bill in the HELP Committee, where Enzi is the ranking minority member. Barrasso:

[We] all believe that there are so many tests ordered that don’t really help an individual get better but help a doctor avoid a suit that’s very costly, it’s probably hundreds of billions of dollars, different estimates out there…. [Sen.] Enzi brought in an amendment, and he just wanted to put in a pilot project to take a look at some different ways to deal with liability. And even the pilot project was defeated in the HELP Committee

When the President went to the American Medical Association and said we need tort reform, and he got a big cheer, and then he said, but I don’t mean caps, and then there were boos – there’s nothing in any of these bills, not the Finance Committee bill that they’re working on, not the House bill or not the Senate bill — the Senate HELP Committee bill – that in any talks about what everyone knows is a major cost of wasteful spending in the American health care system.

To just ignore that to me is the President just paying lip service to it, but not really in any way wanting it done.

When I tell people that they ought to read the bill, they ought not read the bills to see what’s in the bill, but they’ve got to think what things are not included in the bill. There’s nothing in any of these bills that deal with lawsuit abuse.

Senator Enzi issued a news release on July 9, “Democrats Reject Enzi Proposal to Cut Health Care Costs
by Reducing Frivolous Lawsuits.” The amendment tracked with a bill he and Senator Max Baucus (D-MT) introduced in 2007, S. 1481, the Fair and Reliable Medical Justice Act.

(Barrasso sound clip.)

UPDATE (4:15 p.m.): Here’s the entire blogger call, .mp3 file.

So, just a day after Roll Call reported that Majority Leader Harry Reid planned to “railroad” a version of the Employee Free Choice Act through the Senate, we have Congress Daily reporting the legislation is on hold, maybe through this entire session.

Senate efforts to compromise on a watered-down version of the Employee Free Choice Act have been put firmly on the chamber’s back burner — perhaps for the rest of the year — as senators, aides and lobbyists focus on health care and other legislation, participants said.
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“We’re not doing anything right now,” Sen. Tom Harkin, D-Iowa, said of talks he has led among a group of Democrats since it became clear in late March that a more ambitious “card check” bill to help unions organize could not win 60 Senate votes.

So we have a “compromise” that’s not a compromise being rammed through one moment being returned to the back burner, but then heated up and shoved down Senators’ throats, depending on whether the playing field is level or not.

Depends on which gandydancer you’re talking to. Metaphorically speaking.

We tend to take this latest account seriously because the reporter spoke to Senator Harkin on the record and doesn’t seem to have been spun by labor sources. And if Senator Harkin wants to attribute the inaction on this ABSOLUTE MAJOR PRIORITY to the heavy schedule of other economic legislation, that’s fine.

But we’ll be watching the signals and listening for the blast of a railroad torpedo just in case.

Elsewhere…

• Associated Press, “Arbitration is key in fight over union bill“
• Kausfiles, “At kf It’s All-Platform Game-Changers 24/7″ (About “railroading”)
• TPDMC, “Specter: I’ve Been Perfectly Consistent On EFCA“
• The Truth About EFCA, “SEIU’s Reliance on Pro-Card Check Profs: It’s Only Academic“
• Fargo Forum, Letter to the Editor, “Free Choice Act changes no help,” from Dave McIver and Keith Hovland of the North Dakota Chamber of Commerce.

And finally…

• New York Times, “Democrats Drop Key Part of Bill to Assist Unions.”

This is the July 16 NYT article that prompted so much reporting and commentary and blogging and speculation about the “card check” provisions being dropped. Just interesting to reread two weeks later.

Yesterday’s forum at The New America Foundation, “Manufacturing a Better Future for America,” featured a discussion of federal support — the term “bailout” was used — for GM and Chrysler.

The context: Speakers advocated a national industrial policy and more restrictive trade policies to invigorate the U.S. manufacturing sector. We think of the panel as representing the organized labor wing of the Democratic Party.

Asking a question, Bill Frymoyer, director of government relations at the Stewart and Stewart and a former Gephardt aide, hailed what he described as the apparently successful rescue of the domestic auto industry. He elicited this response from Leo Hindery, Managing Partner of Intermedia Partners, chairman of the foundation’s Smart Globalization Initiative, and an influential Democratic activist. Hindery:

The reason the auto recovery worked so well is Ron Bloom largely steered it. And Ron Bloom, for those of you who don’t know, came out of the Steelworkers. He spoke more cogently and capably about the need for a manufacturing policy before a lot of us…and I think he brought a sense of manufacturing policy to that initiative, not strategy but policy.

And this is an issue that Scott [Paul] and I have gone back and forth on: Are what we talking about here, is it a strategy or is it a policy? And we think, Scott and I and Ron, I think, would say, it’s a policy. And when you have a policy, then you save CIT if it needs saving, because it does certain things, you approach GM and Chrysler as he tried to drive the administration, because it would fit under his sense of policy. Strategy is transient. Policy’s the same.

Also commenting was Scott Paul, executive director of the Alliance for American Manufacturing: (continue reading…)

From Chris Rizzo at LegalNewsline, engaging in the lonely exercise of reporting on the AAJ summer convention in San Francisco, “Lobbyist: AAJ looking to quietly pass plaintiff lawyer tax break“:

SAN FRANCISCO (Legal Newsline)- Federal legislation that would afford trial lawyers a special tax break faces an uncertain future, says one of the chief lobbyists for the nation’s trial lawyers.

The proposal would allow attorneys to deduct fees and expenses up-front for filing contingency-fee lawsuits. The proposal amounts to about a $1.6 billion tax break for plaintiffs’ attorneys, estimates indicate.

“Everyone wants to do it, but the problem is there is not a tax vehicle yet,” said Linda Lipsen, American Association for Justice (AAJ) Senior Vice President of Public Affairs.

Lipsen was speaking to the Birth Trauma Litigation Group at the annual meeting this week of the AAJ, the trial lawyers’ trade group.

“You cannot have a stand alone bill to help lawyers … so we have to tuck it into something,” she said.

In the Senate the bill is S. 437, to allow the deduction of attorney-advanced expenses and court costs in contingency fee cases, introduced by Sen. Arlen Specter (D-PA) when he was still a Republican. The bill includes three Republican cosponsors (Crapo, Martinez, Graham), so they might be less inclined to support the legislation following Sen. Specter’s switch. The House bill is H.R. 2519.

But as Lipsen herself admits, the AAJ will be looking for a vehicle to attach those provisions to. The bills above are unlikely to move.

Victor Schwartz and Chris Appel of Shook, Hardy & Bacon had a Washington Legal Foundation paper published in May on the legislation, “Federal Government Bailout for Trial Lawyers.”

The Commerce Department reported today that new orders for durable goods declined by 2.5 percent in June, after rising in April and May.

At first glance, today’s report was a setback.  However, much of the decline in new orders was due to the volatile transportation sector.  Excluding transportation, new orders rose 1.1 percent last month, marking the second consecutive monthly increase and the best performance since February.  Driven mainly by new orders for machinery, where orders were up for a third consecutive month in June, today’s report is an early signal that demand for big-ticket manufactured products is starting to stabilize heading into the third quarter.

The other piece of good news in today’s report is that manufacturers are finally starting to work off excess inventories that were built up during the second half of last year. Today’s report showed that inventories fell by 0.9 percent in June. This marks the third time in the past five months that inventories fell faster than shipments.  Working off excessive inventories is a critical ingredient for a turnaround in manufacturing production going forward and today’s report is good news on that front.

On the negative side, today’s report also showed that shipments of nondefense capital goods fell at an annual rate of 19 percent in the second quarter.  While this is beter than the 28 percent decline during the first quarter, it nonetheless indicates that both business investment and goods exports, which are dominated by capital goods, will likely be negative contributors to growth when the Commerce Department reports second quarter GDP on Friday.      

USA Today’s lead page one story today is “Industry donates to drug plan foes” focusing on the pharmaceutical industry. The sidebar looks at a related issue of generic pharmaceuticals competing with “biologic” drugs, “Industry donates to drug plan foes.”

Meanwhile, at The Examiner, columnist Tim Carney submits yet another dispatch about big business running the country, “How industry kidnapped Obama’s health ‘reform’.”

Well, good. Report those stories. The same stories…over and over…ad nauseum…refreshing them every quarter when new lobbying or campaign contribution reports are out.

But maybe there’s a different and equally important story to tell. Yes, it’s the one we’ve been harping on for three weeks now, but it’s valid and woefully underreported: the role of the trial attorneys in blocking medical malpractice reform or federal liability limits.

To repeat ourselves (over and over), we’ve yet to see any major newspaper or wire service or broadcast outlet report on the gathering of thousands of trial lawyers in San Francisco at the American Association for Justice’s summer convention, which ends today. House Speaker Nancy Pelosi, a key player in the Congressional health care debate, addressed a powerful special interest and political constituency, and no mainstream media cared. (With apologies to LegalNewsline.) The peripatetic Tim Kaine lights down in San Francisco for political purposes and nada.

So here’s a new angle. On September 24-25 the AAJ is holding a seminar and Continuing Legal Education session at The Venetian in Las Vegas, “Litigating Toxic Tort, Pharmaceutical, and Medical Device Cases Seminar.” It’s two days in which attorneys will be trained how to make the U.S. health care system more expensive. And they get CLE credit for it!

Just consider the morning session, 8:30 a.m. to noon, as listed on the agenda, which includes sessions on the hot new topic of Chinese drywall, discovery in the post-Levine world — that is, the opportunity for more lawsuits against drugmakers in state instead of federal courts — and being prepared when lawyers try to dismiss personal injury suits because of statutes of limitation or assumed risk.

The two-day schedule also includes sessions on how to more effectively sue the manufacturers of drugs and devices.

The list of faculty is revealing too, including an attorney who sued pharmaceutical companies on behalf of the attorney general of West Virginia, and a university research fellow, litigator and former staff attorney for the Natural Resources Defense Council. Indeed, there’s a list of 13 attorneys who, if they succeed in their efforts and inculcating the session’s students, will drive up the costs of health care in America.

There’s big money being spent, political influence being wielded, and our nation’s health care costs being driven through the roof while medical innovation is inhibited. So here’s a story idea: “Personal injury lawyers work to drive up health care costs.”

It’s a reasonable expection, that journalists covering the health care beat should apply the same kind of scrutiny to the plaintiffs’ bar as they do to the pharmaceutical, hospital and insurance industries. How about it, USA Today? Page one, above the fold…