They should just sue their membership. From The Washington Times, “Trial lawyers lobby sinks $6.2M in debt“:

The trial lawyers lobby has been awash in debt and bleeding members – just as it embarks on a national campaign to block any clampdown on medical malpractice lawsuits as part of President Obama’s health care overhaul.

The American Association for Justice, the most prominent group representing plaintiffs’ attorneys, has seen a shake-up in its executive suite and has struggled to deal with what appears to be a mounting budget shortfall. To help it fight congressional efforts to make it harder for patients to sue doctors and lawyers, it recently sent out an extra solicitation to its members, asking them to fork over money for a lobbying campaign.

The most striking evidence of its financial woes is a swift decline in income, which resulted in a more than $6.2 million deficit in its operating budget for the fiscal year ending July 31, 2008, the most recent year for which data are available.

Congrats to the Wash Times for reporting the story, including the news about the group’s failed lawsuit against Wachovia over loans to finance the association’s building. When Jon Haber, AAJ’s CEO, resigned in April, no one covered the leadership issues at AAJ beyond the most perfunctory of reports. (See our commentary at Point of Law.) Considering the group’s major political influence — and now, we see, its financial problems — reporters missed a good story.

We also wrote about the trial lawyers’ latest anti-tort reform campaign on September 15. You can see the AAJ’s message here.

P.S. The group’s Florida affiliate, the Florida Justice Association, has suffered damaging public relations this month after trial lawyers financed a race-baiting mailing in a special state Senate race. The head of the FJA, Scott Carruthers, has apologized, saying, “We had a moral duty to stop it and we didn’t.” As TampaBay.com headlined the latest news, “Things can’t get much worse for trial lawyers in Florida.”

Not a good time to be launching the group’s first ever gala inaugural fundraiser, the FJA Justice Ball.

The Washington Examiner, “Majority to Obama: Get serious on tort reform“:

Although most of his health care speech consisted of the same talking points he has been offering for months, President Obama last week offered up one surprise as he sought to make his increasingly unpopular health reform bill more palatable for the American public. “I don’t believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs,” Obama said. He added that he was authorizing Secretary of Health and Human Services Kathleen Sebelius to begin “demonstration projects” in various states to deal with malpractice reform.

HHS Secretary Sebelius, the Examiner notes, spent eight years as executive director of the Kansas Trial Lawyers Association.

In an interview, The Washington Post asked Secretary Sebelius about her role in promoting demonstration projects and other legal reforms. The Weekly Standard reports her response:

I think I’m just the person to do it because I think I understand the system of litigation very well. I understand that we want to, as the President has always said, compensate injured victims, but the defensive medicine is not helpful to the overall cost in the system. The best opportunity is to raise the quality of care and lower medical errors, so there are lots of strategies we can put in place.

Standard contributor Mary Katherine Ham comments: “Indeed, as I’ve consistently said, the fox is uniquely qualified to guard the henhouse, because he understands the delicious taste of poultry very well.”

The health care reform legislation released by Senate Finance Committee Chairman Max Baucus yesterday also mentions tort reform. In passing. As an idea worth considering. Eventually.

The Chairman’s Mark would express the Sense of the Senate that health care reform presents an opportunity to address issues related to medical malpractice and medical liability insurance. The Mark would further express the Sense of the Senate that states should be encouraged to develop and test alternatives to the current civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual’s right to seek redress in court. The Mark would express the Sense of the Senate that Congress should consider establishing a state demonstration program to evaluate alternatives to the current civil litigation system.

Commentary and developments worth noting on the issue of health care legislation and medical liability reform…

The Washington Times editorialized today in “Obama’s malpractice lip service,” reacting to President Obama’s health care speech last week.

Reformers in both parties want to curb abusive lawsuits that drive medical costs through the roof. Yet Mr. Obama could not even bring himself to say that any suits are abusive, but merely that doctors are for some reason practicing “defensive medicine [that] may be contributing to unnecessary costs.” To help pacify them, the best he could offer was to “direct” Secretary of Health and Human Services Kathleen Sibelius to “authorize demonstration projects in individual states to test these issues.”

That is to say, the President was demanding reforms be included in health care legislation, EXCEPT when it came to medical liability reform, which was going to be left to pilot projects overseen by Sibelius — former executive director of the Kansas Trial Lawyers Association. So if a bill actually becomes law, the non-statutory initiatives can fade away.

Even that faint acknowledgement has prompted push back from the trial lawyers. As the Times reports, “Malpractice plan low on support“:

Trial lawyers bristled that a Democratic president had ceded any ground on the issue.

“It has no place in the debate,” said Anthony Tarricone, president of the American Association for Justice (AJJ) [sic], which lobbies for trial lawyers. “Limited accountability will never improve the quality of health care.”

He said malpractice law was a distraction from the real issues of improving quality of care, reducing medical errors and expanding coverage to the millions of uninsured Americans.

The AAJ initially laid low on the issue, figuring that its allies in Congress could keep any prospects for tort reform out of the bill. But business groups, tort reformers and free-market advocates kept up the pressure, and Howard Dean’s frank admission of the trial lawyers’ political power brought much more attention to the issue.

The AAJ has now decided to make a virtue out of necessity, aggressively raising money from its membership to oppose medical liability reform. Yesterday the group sent out a mass email asking for contributions for its Protecting Patients Rights Campaign, a lobbying campaign to oppose medical malpractice provisions in the health care bill. From the website version:

A contribution to the Protecting Patients Rights Campaign is an investment in your practice and in your clients’ future. All the money raised for this campaign will go directly towards educating lawmakers about the dangers of medical malpractice reform, and towards debunking the myths spewed by the other side. We can win, but we need your help today to make a difference in this fight. We need your help today to make a difference in this fight. Please make a contribution via the attached form.

It’s not unusual for trade associations to raise money by pointing to legislative threat, but the AAJ has been politically ascendant since 2008 elections and hence on the offensive. It’s a change to see them return to the defensive posture they were so accustomed to earlier in the decade.

Clearly the AAJ must think the medical malpractice issue has legs. That, or the lawyers’ elected allies on Capitol Hill are asking for some help. (Contributions are non-tax deductible, so they can be used for both partisan and lobbying purposes.) Or warning against catastrophe is a good way to raise money.

Here’s what they’re fighting to preserve (again from the editorial):

A 2006 study by the Harvard School of Public Health found that 40 percent of medical malpractice lawsuits involve either no actual injuries or no medical error — yet of those meritless cases, more than 27 percent resulted in compensation. Meanwhile, the researchers concluded, “The overhead costs of malpractice litigation are exorbitant.”

Similar observations previously made at this Point of Law post.

The Wall Street Journal’s Kim Strassel is very, very tough on President Obama’s speech on health care Wednesday, finding within the tort reform rhetoric more status quo trial lawyer. From “The President’s Tort Two-Step“:

On Wednesday the president told Congress “I will not stand by while the special interests use the same old tactics to keep things exactly the way they are.” In fact, the administration is standing by to allow its most special, special interest to drive this debate. What the tort bar wants, the tort bar gets. Health insurers should be so lucky.

The legal question has become the starkest symbol of a broken health discussion, and offers insight into this presidency. For Republicans, legal reform has become a litmus test, proof that Democrats have no interest in a deal, and therefore a reason to step back. For many Americans, legal reform has become proof that President Obama is more interested in an ideological triumph than his stated goal of lowering health costs.

Another reason for skepticism? From The Heritage Foundation, “Obama Taps Ex-Trial Lawyer Lobbyist To Lead Tort Reform.” That would be Kathleen Sebelius, secretary of Health and Human Services, who used to be head of the Kansas Trial Lawyers Association.

From last night’s speech:

Now, finally, many in this chamber — particularly on the Republican side of the aisle — have long insisted that reforming our medical malpractice laws can help bring down the cost of health care.  (Applause.)  Now — there you go.  There you go.  Now, I don’t believe malpractice reform is a silver bullet, but I’ve talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs.  (Applause.)  So I’m proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine.  (Applause.)  I know that the Bush administration considered authorizing demonstration projects in individual states to test these ideas.  I think it’s a good idea, and I’m directing my Secretary of Health and Human Services to move forward on this initiative today.  (Applause.)

The Baltimore Sun leads its story about House Majority Leader Steny Hoyer’s town hall meeting in Waldorf last night with the tort reform angle, “Hoyer grilled on health care“:

WALDORF – House Majority Leader Steny H. Hoyer said Tuesday night that Congress is likely to consider caps on medical lawsuits as part of its health care overhaul deliberations, but stopped short of assuring his Southern Maryland constituents that he would push for changes in malpractice awards.

At a town hall meeting that in its often angry tone and hostile questioning echoed dozens around the country over the past month, the No. 2 Democrat in the House of Representatives was repeatedly pressed about tort reform.

“You kind of glossed over this before,” Dr. Michael Magee, an orthopedist from Edgewater, said after Hoyer told another questioner that he “certainly” expected the issue to be considered.

Hoyer, a leading recipient of campaign contributions from lawyers and law firms, said he is concerned about excessive jury awards in malpractice suits. But he also said that if noneconomic damages are capped, some victims of medical malpractice “may not get anything of substantial value through the years.”

“I intend to look at this very seriously and discuss it with my colleagues,” Hoyer said. “We do want to prevent specious suits. I think we can all agree on that.”

At this point, the Democratic leadership in Congress has to consider it — at the very least — medical liability limits to prove its independence from the litigation industry. Former Democratic National Committee Chairman Howard Dean described issue starkly last week at Rep. Jim Moran’s Town Hall meeting in Reston: “The reason that tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on, and that is the plain and simple truth.”

The National Journal has a thorough report on the issue in “Health Care Push Revives Tort Reform Debate.”

The trouble with the health care legislation now working its way through Congress — starting with H.R. 3200 — is that it overturns all the advantages of employer-based health care and replaces them with mandates, taxes, more government and less choice.

Since we’re headed into the last big summer weekend, the National Association of Manufacturers has used the summertime picnic as a way to tell the story.

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.

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.

Sincere questions:

Do the reporters get together beforehand and organize their questioning, agreeing that the questions  will be about the President’s topic of choice?

The President was obviously working off a list of reporters to select for questions, an understandable practice in a prime-time news event. But did the reporters say or agree or imply with White House staff that they would pose a health-care related question in an understanding he would pick them?

Now we don’t know all the details…so we’ll stop right there.

We do know this. According to the transcript, the number of times President Obama mentioned:

• The costs of litigation in the health care system: 0
• Malpractice reform: 0
• Tort, or tort reform: 0
• Caps on non-economic damages: 0
• Trial lawyers: 0
• Trial lawyers as a special interest: 0
• Trial lawyers or their lobbyists who attended White House health care meetings.
• Lobbying by the American Association for Justice: 0

But then the reporters posed no questions along those lines, either.

For more on the litigation industry’s lobbying efforts on health care, see this post at PointofLaw.com.

And here’s a news release from the New York law firm of Parker Waichman Alonso LLP, “Bronx Jury Awards 60 Million Dollars to Woman in Medical Malpractice Case.”