The Manhattan Institute’s Center for Legal Policy has launched a new web site, ProxyMonitor.org, designed to shed light on trends in shareholder proposal activity. As the center’s director, James Copland explains, public attention to corporate governance and shareholder activism is even more timely since passage of the Dodd-Frank financial regulation bill. 

The database contains information on all shareholder proposals submitted for shareholder vote between 2008 and 2010, for the 100 largest American public companies. The news release provides details on what information is available, and a report by Copland gives background and explains the database’s use.

More from Copland at Point of Law.com: 

We think this is a very valuable tool for investors, reporters, academics, and policymakers interested in corporate governance.While we’ve yet to do the deep empirical work that the site enables, we have done some preliminary research looking at summary statistics that does illuminate some interesting trends:�

• Perhaps unsurprisingly, the largest companies are targeted by the highest number of shareholder proposals. Energy and financial companies seem to be particular targets.
• The most significant sponsors of shareholder proposals are individual investors (e.g., Evelyn Davis, John Chevveden); labor unions (e.g., the AFL-CIO, AFSCME); and certain religious orders. (continue reading…)

At the Manhattan Institute’s Point of Law blog, we have two reports on the 111th Congress, the absence of tort reform and the general failure of bills to expand liability and litigation. It was pretty quiet in the world of civil justice reform.

• Oct. 6, 2010, “Things Congress did and didn’t do before leaving, Part II“
• Oct. 1, 2010, “Things Congress did and didn’t do before leaving“

Also at Point of Law, we  noted the claims of the American Association for Justice, the trial lawyer lobby, that it had achieved some notable successes during the session. Notice AAJ’s emphasis on preemption.

• Oct. 1, 2010, “As Congress leaves, litigation lobby claims partial victory“

Congress returns for its lame-duck session on Nov. 15, and it would be a good thing for Congress not to push for action on civil justice or liability-related legislation. There is one priority, and one priority only for the lame duck: Taxes.

Byron York of The Examiner answers the question of why the “One Nation” rally organized by Big Labor last Saturday failed to match the earlier Glenn Beck Rally.

Because the labor movement is shrinking, aging and divided. Because the best program its leaders (and co-sponsors at the NAACP) could put together was one featuring Al Sharpton, Jesse Jackson, Richard Trumka, Van Jones and Harry Belafonte. And because George W. Bush is no longer in the White House. Put those factors together, and Big Labor’s big march fell flat

York notes several points we cited prior to the march: The public sector unions are growing, the private sector ones shrinking.

In broad terms, the public-sector unions lean farther left, while the private-sector unions still count among their number old-fashioned blue-collar moderates who don’t necessarily want to pay higher taxes to hire more public-sector employees. “The differences between them aren’t violent, angry, screaming differences,” says Fred Siegel, a scholar in residence at New York’s St. Francis College and a fellow at the Manhattan Institute, “but they’re important differences.”

What does a tired and aging movement do? It puts on a program with tired and aging leaders. Sharpton has long ago worn out his welcome among anyone beyond the hard-core Democratic base; the same is true for [Jesse] Jackson. The 83-year-old Belafonte’s appearance at the rally was impressive, but mostly as a vision from an earlier era. Trumka’s appeal does not go beyond the labor movement, and the young gun in the group, Van Jones, left the White House last year amid scandal. It wasn’t exactly an all-star lineup.

Is “impressive” the right term for Belafonte’s remarks? He railed against President Obama and the wars in Iraq and Afghanistan. If you were a union member who believes those military efforts are justified, you were out of place at the One Nation rally. If you were a union member who did not support the hard-left “progressive” agenda at the rally, well, why were you there?

Congratulations to Walter Olson, who has joined the Cato Institute and is making the move south to the Mid-Atlantic. Walter pioneered legal blogging at his Overlawyered.com, and he has had a tremendous influence on civil justice reform, making the issues understandable for the general public.

From Walter’s announcement at Overlawyered, “Joining Cato, and a farewell to the Manattan Institute“:

I’m delighted to announce that I’ve joined the Cato Institute as a senior fellow, effective this week. As most readers of this site know well, Cato is the premier voice for individual liberty in our nation’s capital, and a think tank of tremendous accomplishments across the board. Its program on law, led by Roger Pilon, includes such outstanding thinkers as Tim Lynch, Ilya Shapiro and Robert Levy. Cato is particularly known as a place where free speech, civil liberties, and the Bill of Rights are given the centrality they deserve in legal thinking, and it’s also a powerhouse in studying the ill effects of government regulation. In fact, the publication where I got my real start in the policy world, the magazine Regulation (originally published by the American Enterprise Institute), has made its home at Cato for many years now. In short, it’s hard to imagine a better fit with my writing and research interests. (continue reading…)

James R. Copland, director of the Manhattan Institute’s Center for Legal Policy, has started a week of posts at PointofLaw.com on the Institute’s new contribution to its series on the excesses of the litigation industry, “Trial Lawyers, Inc. — K Street .” This edition focuses on the political and lobbying clout of the litigation industry and how it achieves its policy goals.

From Copland’s post today, he answers the question, why should we care? Quoting from the report:

The annual direct cost of American tort litigation–excluding much securities litigation, punitive damages, and the multibillion-dollar settlement reached between the tobacco companies and the states in 1998–exceeds $250 billion, almost 2 percent of gross domestic product. The indirect costs of excessive litigiousness (for example, the unnecessary tests and procedures characterizing the practice of “defensive” medicine, or the loss of the fruits of research never undertaken on account of the risk of abusive lawsuits) are probably much greater than the direct costs themselves.

Of course, tort litigation does do some good, and it does deter some bad behavior. The problem is that it deters a lot of good behavior, too. Indeed, the legal system does such a poor job of distinguishing between good and bad behavior that the high cost of litigation is effectively a “tort tax” paid by every American. The share of America’s economy devoted to lawsuits is far higher than that of other developed nations such as Germany and Japan. Yet America is hardly safer as a result.

See also Copland’s Wall Street Journal op-ed, “How the plaintiffs bar bought the Senate.”

The Manhattan Institute’s Center for Legal Policy has released another in its series of reports on the litigation industry, “Trial Lawyers Inc., K Street.” From the Message for the Director, James R. Copland:

With business groups now fighting back against Trial Lawyers, Inc.’s longtime grip on state judiciaries, the litigation lobby has turned its attention to state legislatures, where it is not only blocking tort reforms but working to expand its portfolio of litigation opportunities. Among other things, state legislators are authorizing new kinds of lawsuits, raising damage caps, and giving private lawyers authority to sue on behalf of the state.

Of course, the growth in federal regulation and law has made it necessary for Trial Lawyers, Inc. to lobby Congress as well. Thanks to large contributions, both to the Democratic Party and to individual legislators, lawyers have not only blocked most federal efforts at tort reform but are also working to coax goodies from Congress that pad their bottom line. Such efforts include:

• Lengthening statutes of limitations in employment law to make it easier to file discrimination suits;
• Spurring securities litigation by allowing suits to be filed against the vendors of corporations accused of fraud;
• Cutting contingent-fee lawyers a tax break worth over a billion dollars;
• Gutting arbitration contracts designed to encourage resolution of disputes that are too expensive to take to trial; and
• Allowing state juries to override federal regulations.

The full report is available here as a .pdf file (3MB). The Center’s “Trial Lawyers, Inc.” series is especially valuable as a thorough introduction to the political power and economic clout wielded by the trial bar — and the harm it does. The authors provide history, big picture, footnotes and economic analysis.

In a Feb. 8 op ed in The Wall Street Journal, “How the Plaintiffs Bar Bought the Senate,” Copland also put the U.S. Supreme Court’s decision in Citizens United v. FEC in the context, explaining why the trial lawyers were so incensed by the decision upholding First Amendment rights.

[For] those, like me, who view factions as inherent in democracy, the decision was welcome. Labyrinthine campaign-finance laws serve mainly to entrench incumbents and empower those special interests either exempted from regulation (i.e., the institutional media) or best able to navigate the maze of rules. Among the latter group, no lobby has been more empowered than the legal profession—specifically the trial lawyers.

More: John O’Brien, Legal NewsLine, Blog of Legal Times.

House Speaker Nancy Pelosi last Thursday unveiled the latest health care reform bill, the Affordable Health Care for America Act (H.R. 3962), with floor consideration possible even as early as Friday. Jennifer Ruben at Commentary reports the legal element, “A Gift for Lawyers“:

A friend points out a little nugget of absurdity and political mendacity in the Pelosi health-care bill. Remember Obama’s effort to try a “test” for tort reform? (We don’t actually need a test, since it has worked to lower medical malpractice coverage and help increase access to doctors in states that have tried it.) Well, Pelosi’s bill has an anti-tort-reform measure. On pages 1431-1433 of the 1990 spellbinder, there is a financial incentive for states to try “alternative medical liability laws.” But look — you don’t get the incentive if you have a law that would “limit attorneys’ fees or impose caps on damages.”… [This] will go a long way toward ensuring that tort lawyers remain rich, malpractice insurance remains high, and unnecessary defensive medicine remains a fixture of the health-care system.

• The Hill, “House healthcare bill cuts incentives to states that cap attorney fees, damages.”
• James Copland, Manhattan Institute, New York Post, “Tort-Bar Treat”
• Stanley Goldfarb, M.D., Weekly Standard, “The Malpractice Problem — We can’t have health care reform without tort reform.”
• Lawrence McQuillen, Pacific Research Institute, Wall Street Journal, “CBO Underestimates Benefits of Malpractice Reform.”
• Dennis Prager, “A Society that Venerates Lawyers More than Doctors”

Walter Olson of the Manhattan Institute summarizes the many deleterious affects of the Consumer Product Safety Improvement Act in the prime editorial spot, the Wall Street Journal’s opinion pages. The news peg is last Thursday’s hearing by a subcommittee of the House Energy and Commerce committee, where only Inez Tenenbaum, chairman of the Consumer Product Safety Commission, was invited to testify.

From “A Destructive Toy Story Made in Washington“:

This law has saddled businesses with billions of dollars in losses on T-shirts, bath toys and other items that were lawful to sell one day and unlawful the next. It has induced thrift and secondhand stores to trash mountains of outgrown blue jeans, bicycles and board games for fear there might be trivial, harmless—but suddenly illegal—quantities of lead in their zippers and valves or phthalates in their plastic spinners. (Phthalates are substances that add flexibility to plastic.) Even classic children’s books are at risk: Because lead was not definitively removed from printing inks until 1985, the CPSC has advised that only kids’ books printed after that date should be considered safe to resell.

Olson also follows up on the underreported angle of the law’s depredations, the product label requirements.

(The) law’s latest shock hit businesses on Aug. 14. That’s when the law’s tracking-label mandate went into effect, requiring that makers of childrens’ goods “place permanent, distinguishing marks on the product and its packaging, to the extent practicable.” The idea is to facilitate recalls and make it easier to trace safety problems. The result will be to capsize yet more small businesses.

In an opening statement at the committee hearing, Chairman Henry Waxman (D-CA) could only bring himself to say that implementation of the CPSIA had been “uneven”:

Now that we are a year away from the recalls, and the most dramatic stories have left the front pages, some suggest that we didn’t really need to enact such a strong law. But the fact remains that the system we had in place was a failure. This law was necessary to protect kids and families across the country.

To retreat now from the proven consumer protections achieved under this law would be a huge mistake.

Is there any wonder that the public is suspicious of other major “reforms” a la health care? In the case of the CPSIA, we have members of Congress and their allies among the “consumer activists” who are so ideologically attached to the legislation that they refuse to countenance any changes to fix the law’s overrreach or to save businesses.

Sen. John Cornyn (R-TX) held a Senate Republican Conference (i.e., partisan) hearing Monday, “Protecting Main Street Jobs From Lawsuit Abuse,”  highlighting the absence of any serious consideration of legal reform during the 111th Congress. From Cornyn’s opening statement:

As the president talked today about his efforts to help small business, it’s important to acknowledge that litigation costs can have a disproportionately high impact on small businesses and their ability to retain and hire new employees. Large corporations usually carry significant insurance and have robust budgets to cover the litigation costs, but smaller businesses may find that one lawsuit can result in legal fees approaching a year’s revenue. And that’s even if you win the lawsuit in the end.

Small entrepreneurs who are netting $100,000 a year after taxes and payroll are prospering and likely creating jobs, but that $100,000 can easily be destroyed by legal fees from even one lawsuit. Too often for American Main Street businesses, the costs of being sued, even if the suit lacks merit, can be tantamount to a death sentence for their business.

Nevertheless, the leadership of this Congress seems oblivious to these facts and determined, to reward political allies and benefactors in the trial bar by passing legislation designed to not decrease but rather increase the number of lawsuits in America.

We have three posts on the hearing over at the Point of Law website sponsored by the Manhattan Institute.

• “Senator Cornyn: Expect attack on Class Action Fairness Act“
• “Testimony from the Senate GOP hearing on legal reform”
• “Philip Howard: Bills to watch for (watch out for!) in Congress“

Ted Frank of the American Enterprise Institute, who testified, wrote about the hearing at Overlawyered.com, “On C-SPAN tonight: ‘Protecting Main Street From Lawsuit Abuse’”

Both Frank and Howard’s statements provide excellent summaries of the economic and personal harm caused by meritless and frivolous lawsuits. Highly recommended.

Walter Olson of the Manhattan Institute joins host Mike Hambrick on “America’s Business” radio program this week to talk about the legal and regulatory headache that is the Consumer Product Safety Improvement Act.

We’ve linked to Walter’s Overlawyered.com posts quite a few times in recent days, as he covers the grassroots reaction from entrepreneurs and others — toy makers, clothing manufacturers, even thrift stores — who discover that the CPSIA’s testing requirements are onerous and expensive and will force the removal of many items from shops. (Stock up now for your child’s First Communion, because the products are going away.)

For the full interview as an .mp3 file, click here. And marvel at the excesses that result when Congress legislates in excited response to “consumer groups” stirring up a media frenzy.

We’ll have the full America’s Business program up later this evening.