Legal Reform Debate Changed Forever

Robert McConnell*

Whatever the future holds for federal legal reform efforts, the debate was changed forever by the 104th Congress.

Coming into this historic Congress, concentrated legal reform efforts had been underway for well over a decade. Often referred to as "tort reform," the primary focus of these on-going efforts had been federal reform of product liability law. Over the years reforms had been sponsored by many congressional champions, and their efforts had been supported by many private sector organizations. Nevertheless, the consistent political and legislative reality was that the congressional majority and especially key congressional leaders simply opposed the proposed reforms. And, the congressional opponents to reform were backed by the most powerful single-issue lobby in Washington, the plaintiff's bar.

Then, in 1994, Republicans running for the House of Representatives signed the Contract With America, promising that if elected to a majority they would bring to a vote in the House a number of proposals within the first 100 days of the 104th Congress. One of the provisions of that Contract was "Common Sense Legal Reform." Briefly summarized, the Contract called for a vote on product liability reform, securities litigation reform, and an important series of other reforms. So, when the public elected a Republican majority in the House, the legislative realities for legal reform changed dramatically. For the first time there was a majority that favored reform. There were committee chairmen that were pledged to report legal reforms from their committees.

In the opening days of the 104th Congress the provisions of the Contract With America were introduced as legislative proposals. "Common Sense Legal Reform" was divided into three legislative proposals. Primary jurisdiction of the securities litigation reform proposals was vested in the Committee on Commerce. Primary jurisdiction for the other reforms was vested in the Committee on the Judiciary.

With the reality of a Congress that would consider legal reform seriously came renewed interest in the substance of the reforms under consideration. During all of the years that product liability reform efforts had been held hostage by congressional supporters of the plaintiff's bar, a significant evolution had been underway in the nation's courtrooms. While product liability law continued to be in need of substantial reform, the abuses of our legal system had expanded into many areas outside of products litigation. With the chance that this new Congress would consider legal reform seriously, the enduring product liability supporters were joined by a broad range of constituencies with interest in broad legal reform. Support came from small businesses, the service industries, financial services, non profit organizations, and even other parts of the companies that had consistently supported product liability reform. The potential for legislative action led to private sector support reflecting the significant changes that had taken place in the nation's legal system since product liability reform was first proposed at a national level.

As a result, within the first 100 days of the 104th Congress, the House of Representatives passed and sent to the Senate several major legal reform proposals. The legislation that included product liability reform also included reform of joint and several liability and punitive damages in "all civil actions."

While Senate procedures and makeup were less hospitable to legal reform efforts, the fact is that the Senate debate in the 104th Congress was much broader than it had been ever before. Importantly, Senator Dole was the primary sponsor of expansionist efforts in the Senate. With little hope of success and political wisdom arguing that the senator/presidential candidate needed legislative wins, the then Majority Leader sponsored the primary expansionist amendment on the Senate floor. Senator Dole's amendment would have made the Senate bill apply to "all civil cases" - not just product liability cases. During the extended Senate debate on legal reform the Majority Leader filed numerous cloture motions and pushed for expansion until it was absolutely clear the needed votes could not be gained. In the end, the Senate passed a product liability reform proposal and eventually, faced with the situation in the Senate, the House-Senate Conference submitted essentially a products liability bill that was passed by each chamber and sent to the President.

Like the securities litigation reform legislation that had proceeded it, the product liability bill was vetoed by President Clinton. The plaintiff's bar pressed the White House hard on both proposals. Congress overrode the veto on securities litigation reform, but reformers could not gather the necessary votes for the product liability bill. However, the fact is that the dynamics of federal legal reform have changed during this Congress. The plaintiff's bar, despite a massive campaign to preserve the status quo in securities litigation, lost on securities litigation reform. And, new lines have begun to emerge in what has historically been seen as the product liability debate. Because of the debates in this Congress, light has been cast on the broad range of abuses in our civil legal system. Small businesses, non-profits, and many others have focused on the problems and begun to understand that there are reforms that could restore balance to the legal system. Many Members of Congress have begun to develop a better understanding of the problems being faced by businesses, school districts, municipalities, non-profit organizations and many other citizens.

Whatever happens in this year's elections, the legal reform debate will forever have been changed by the 104th Congress. If President Clinton is re-elected, any effort during his remaining tenure must recognize that the President is a reliable fail-safe for his strong supporters in the plaintiff's bar. Without a major change in the make-up of the 105th Congress, especially the Senate, significant reforms will be highly unlikely. There would be little justification for expending the resources that would be required to present President Clinton a second opportunity to veto product liability legislation. Of course the fight for reform necessarily would have to be waged in order to keep the issue alive for the future, but creativity in exploring new approaches to reform will be mandatory if any incremental success is to be achieved with Clinton in office.

On the other hand, if Bob Dole should win the presidency, he certainly will not be satisfied with a limited product liability proposal. He has taken a position for broad reform and has made legal reform an issue in his campaign. Dole has criticized the extraordinary influence of the single-issue plaintiff's bar and, if elected, surely would seek reforms at least as inclusive as those he sponsored in the Senate.

Finally, the outcome of November's congressional elections will influence heavily the future approach to federal legal reform. If the Republicans remain a majority in the House, it would appear that Henry Hyde, a strong advocate of broad legal reform, will remain the chairman of the critical House Committee on the Judiciary. Tom Bliley should remain the chairman of the House Committee on Commerce. Together, these two chairmen provide a strong alliance for reform. If the Republicans lose their majority, the Judiciary Committee will be chaired by John Conyers of Michigan, one of the House's strongest opponents to reform. The Commerce Committee would be chaired by John Dingell who supports only very narrow changes in the status quo. In the Senate, the Republican chair would continue to be Orrin Hatch, a supporter of reform. On the Democratic side, due to retirements and other committee assignments it is not clear who would take the chairmanship. Among the candidates are Joe Biden, Ted Kennedy, and Pat Leahy - none of whom would promise much opportunity for reform. In the Commerce Committee, a Democratic majority would lead to Ernest Hollings becoming chairman. Hollings is one of the Senate's most outspoken opponents of any kind of reform.

For federal legal reform there is a lot at stake in the coming elections. The 104th Congress has raised the awareness of the issues and the problems that have evolved within our civil justice system. The recent legislative effort has raised the bar of expectations regarding what Congress can do to stem abuse and what will be considered satisfactory reform. The current Congress has changed the debate forever.

* Robert McConnell is a partner at Gibson, Dunn & Crutcher, Washington, D.C.


2001 The Federalist Society