Texans for Lawsuit Reform: How the Texas Tort Tycoons Spent Millions in the 2000 Elections
The three Houston tycoons who founded Texans for Lawsuit Reform (TLR) in 1994 personify their group's goals. TLR's founders-like the funders who still supply most of its PAC money-made fortunes in industries with heightened legal liabilities. These men (see accompanying profiles) are united by a shared fate: they will become even wealthier if they get politicians to lower the costs that businesses face when they harm customers, workers or communities.
Co-founders Richard Weekley and Leo Linbeck, Jr. both made their fortunes in construction, an industry that prompts endless contract disputes and that leads the state in its grossly disproportionate share of on-the-job fatalities. TLR's third founder, Richard Trabulsi, Jr., owns a liquor store chain. The special liabilities of Trabulsi's industry stem from the fact that alcohol-related diseases and accidents are the nation's third leading cause of preventable deaths.
These personal finances provide insight into the agenda of TLR, which has tirelessly promoted policies that further enrich its wealthy donors. TLR advanced this agenda in its first legislative session in 1995 and-to a lesser degree-in 1997. Liability limits passed in those sessions include:
Since its 1995 honeymoon session, however, TLR's legislative agenda has floundered; the headline of its own newsletter published at the end of the 1997 session read, "Tort Reform Dies!" Indeed, after TLR got so much of what it wanted in 1995, some lawmakers were disgusted to see the group return to demand more hand outs in 1997. Key tort bills that failed in that and subsequent sessions would have:
- Punitive Damages: Juries use punitive damages to punish the worst wrongdoers. A 1995 law caps punitives at $200,000 or two times the economic damages inflicted (whichever is greater);
- Deceptive Trade: Texas' Deceptive Trade Practices Act punishes deceitful business practices with triple damage awards. A 1995 law eliminates this penalty for sales exceeding $500,000 and for personal injury or death claims. 1
- Joint & Several Liability: To be held jointly liable, defendants once had to be at least 11 percent responsible for harming a plaintiff. A 1995 law raised this threshold to 51 percent.
- Venue: Additional tort laws limit where Texas lawsuits can be filed and who can file them. A 1995 law requires suits to be filed where the defendant has his or her principal place of business rather than, for example, where the plaintiff's injury occurred. A 1997 law retroactively dismissed all lawsuits filed by out-of-state asbestos victims.
TLR even played defense in 2001 to kill two bills that would have increased the liabilities of certain businesses. The so-called "Ford-Firestone" bill, which never made it out of legislative committee, would have increased penalties for companies that knowingly sell dangerously defective products. Another 2001 bill that did pass the legislature would increase the liability of health insurers that fail to pay medical bills promptly. After the session ended, Governor Rick Perry told a Texas Hospital Association meeting that this bill was one of the chief medical milestones of the session. But shortly thereafter Perry-who received $3.2 million from TLR members over the preceding five years-vetoed this and three other bills on TLR's kill list.
- Curtailed class-action lawsuits;
- Shielded accountants who attest to the validity of bogus financial statements;
- Protected property owners-including nursing homes and slum lords-for injuries and violent crimes that reasonable security measures could have prevented; and
- Put further limits on third-party liabilities.
Given TLR's agenda, it is not surprising that this group has found considerable common ground with the reigning champion of preventable deaths. TLR has admitted that it received $15,000 in early seed money from the tobacco industry. TLR also teamed up with Phillip Morris on a secret 1995 smear campaign that was seeking to portray Texas consumer and environmental organizations as tools of wealthy trial lawyers. The targeted groups-which oppose pollution, tobacco and liability limits-included the Sierra Club, Audubon Society, Public Citizen and Consumers Union.
TLR and the tobacco industry also have shared a common pool of lobbyists and spin doctors. Lobbyists who simultaneously represented TLR and tobacco interests in the 1997 legislative session included Michael Toomey, Stan Schleuter, Randy Schleuter, Ed Lopez and Eddie Cavazos. TLR and big tobacco also depended on the same PR firms: State Affairs Co. and Temerlin McClain (which has since been bought out by BSMG Worldwide/Southwest).
In 1998 TLR helped organize Texans for Reasonable Fees to criticize the huge contingency fees that lawyers received under the $17 billion settlement that the state reached in its lawsuit against the tobacco industry. Joining this effort were the tobacco-funded Citizens for a Sound Economy and the Texas Association of Business and Chambers of Commerce (which has had Philip Morris lobbyist Jack Dillard on its board).
TLR also has collaborated with New Right proponents of school vouchers in their efforts to establish a GOP majority in both chambers of the Texas Legislature. The Dallas Morning News uncovered a 1998 fund-raising letter from voucher group Putting Children First that solicited wealthy, out-of-state New Right funders such as Wal-Mart heir John Walton and Amway founder Betsy DeVos. The letter said that Putting Children First was teaming up with TLR to try to oust Democratic House Speaker Pete Laney. Texas New Right powerhouse James Leininger is a major funder of both TLR and Putting Children First.
1 It also makes it harder to get such damages from deceitful
professionals or for mental anguish.
2 This ended accountability for those who sell alcohol to intoxicated customers, since drunk drivers are almost always more than 50 percent responsible for their actions.
3 Lawmakers exempted Alabama's Robert Beatty, who testified that he did not want to die from asbestosis cancer before seeing justice done.
4 See "Suit-Reform Group Finds Money Can't Guarantee Action," Dallas Morning News, May 30, 1997; "Tort-Reform Advocate Getting Under Legislators' Skin," Austin American-Statesman, April 26, 1999.
5 "Bill Targets Hidden Safety Defects," Austin American-Statesman, March 22, 2001; "Bush's 'Tort Reform' in Texas May Benefit Firestone in Tire Cases," Wall Street Journal, November 8, 2000.
6 "Suit-Limits Group Is Top Perry Donor," Dallas Morning News, August 19, 2001.
7 "Texas Group Targeting Consumer Organizations," Dallas Morning News, October 17, 1996.
8 "Bullock Quits School-Voucher Group," Dallas Morning News, March 6, 1998.