What if Democrats Win? Spotlight on the Judiciary

CONGRESSDAILY SPECIAL REPORT: WHAT IF DEMOCRATS WIN? Spotlight On The Judiciary
By Bill Swindell, CongressDaily© National Journal Group Inc.Monday, Oct. 23, 2006
This is the sixth in a series of articles exploring the impact on key committees and issues if Democrats win control of the House and Senate in November’s elections.
A decade-long push to overhaul the tort system to make it harder for consumers to sue businesses will likely come to an end if Democrats take control of the House or the Senate. Led by the U.S. Chamber of Commerce, business lobbyists have successfully pushed through an overhaul of class-action suits, changes in the bankruptcy system to make it harder for borrowers to escape paying debts, and limits on shareholder lawsuits. As a critical ally to the Democratic Party, the trial-lawyer lobby wants the “tort reform” campaign curbed. If the trial lawyers have their way, that campaign would be replaced by a greater focus on efforts to protect the rights of Americans to have their day in court, especially against mandatory arbitration clauses that restrict a consumer’s ability to sue such entities as a creditor, insurance company or loan provider.
The Chamber of Commerce would not view a Democratic takeover of Congress as an end to its effort to limit abusive lawsuits, a Chamber official says.

“Consumer groups, not just lawyers, are concerned about [this]. It is a fairly standard practice now to get consumers to sign away their legal rights through a mandated system of arbitration,” said Travis Plunkett, legislative director for the Consumer Federation of America.
Consumer groups and trial lawyers also are asking that Congress explore removing the antirust exemption for the insurance industry, which was established under the 1945 McCarran-Ferguson Act. Senate Judiciary ranking member Patrick Leahy, D-Vt., who would become Senate Judiciary chairman if his party rules the Senate, has previously sponsored legislation that would repeal the exemption for medical malpractice insurance. Leahy argued that under the antitrust exemption, insurers can collude to set rates and prevent free-market competition.
“Why not apply the competition statutes to the business of insurance,” said Linda Lipsen, senior vice president for public affairs at the Association of Trial Lawyers of America. “We saw the mess that emerged following Katrina. It is the only consumer product that when you need it, it might not be there.”
But the Chamber would not view a Democratic takeover of Congress as an end to its effort to limit abusive lawsuits that it says harm the U.S. business climate. Lisa Rickard, president of the Chamber’s Institute for Legal Reform, noted that Judiciary Committee Democrats including Sens. Dianne Feinstein of California, Herb Kohl of Wisconsin, and Rep. Rick Boucher of Virginia, have backed previous efforts to curb plaintiff lawsuits. Rickard contends those lawmakers could work with moderate Republicans to craft measures that would have enough support to pass in a Democratic-controlled chamber.
In addition, Leahy has shown some flexibility for bipartisan compromise, working with Senate Judiciary Chairman Specter on legislation that would provide compensation to those who suffered health problems as a result of asbestos exposure. That measure died in the Senate earlier this year amid disputes between insurers, trial lawyers and labor unions. “[House Minority Leader] Pelosi’s been pretty vocal how she hopes to have an inclusive bipartisan approach to their agenda. We’re hopeful that we can take that at face value and that would include the areas in the litigation arena that need to be examined,” Rickard said.
She added that bipartisan support is emerging to nullify a recent Justice Department policy to seek waivers of attorney-client privilege from corporate executives in boardroom criminal investigations.
On another subject matter, Democrats are likely to push for an overhaul of the nation’s patent system to make it easier for high-tech and financial services firms to protect and obtain patents, though pharmaceutical companies are resisting such widespread changes. Leahy has sponsored legislation with Sen. Orrin Hatch, R-Utah, that would streamline patent litigation by limiting the defense of a willful infringement or “inequitable conduct” cases, in which a patent is challenged because the holder did not operate in good faith in its application to the Patent and Trademark Office.
In the House, Rep. Howard Berman, D-Calif., would take over the chairmanship of the Judiciary Courts, the Internet and Intellectual Property Subcommittee. He would look to protect his nearby Hollywood interests by cracking down on piracy and protecting against copyright infringement of TV, music and movie productions.