Chamber of Horrors

In 1994, officials from the American Tort Reform Association (ATRA) told the group’s annual legislative conference in Washington, D.C. that since substantial “tort reforms” were passed in Texas, Mississippi, North Dakota, Arizona and Michigan in 1993, their next step would be to work on judicial elections.

By 1998, this effort had become a major activity for ATRA. Concerned by the number of “tort reforms” — laws to reduce victims’ rights to sue wrongdoers — being struck down by state courts, ATRA General Counsel Victor Schwartz said that since amending constitutions and enacting federal legislation were not viable options, Big Business’ only option was to influence judicial elections.

A decade later, this “tort reform” electoral movement is in high gear and has substantially remade state judiciaries and state law.

In addition to direct assaults on judges they do not like, business interests are now amending state constitutions, and ousting federal lawmakers and electing those whom they prefer.

Central to the business campaign has been the aggressive efforts of the U.S. Chamber of Commerce. In 1988, the U.S. Chamber of Commerce created what it calls its “Institute for Legal Reform” (ILR) to pursue the Chamber’s agenda of protecting corporations from liability, weakening the civil justice system and blocking U.S. courthouse doors to sick and injured people. The ILR has become a major funnel for major industry money moving into election campaigns.

The ILR started its efforts to influence elections, like other “tort reform” groups, with judicial races and funding negative attack ads against judges. For example, in 2000, the Chamber, through its affiliate Citizens for a Strong Ohio, flooded the airwaves with attack ads against Supreme Court Justice Alice Robie Resnick, who in 1999 authored a Supreme Court decision declaring Ohio’s “tort reform” law unconstitutional. The Chamber argued that these were “issue ads,” allowing it to conceal its corporate contributors. But the Ohio Elections Commission disagreed, subpoenaing the group in the course of an investigation as to whether the Chamber used illegal corporate money and seeking to find out who financed these attack ads against Justice Resnick. The group is now challenging the Commission and a lower court decision upholding it.

The 2000 Ohio Supreme Court campaign was only a harbinger of what was to come. Last year, the Chamber spent large amounts of money to influence elections at every level of government.

In a letter dated December 6, 2004, U.S. Chamber of Commerce President and CEO Tom Donohue reported to the Chamber’s Board of Directors about the Chamber’s success in the 2004 elections.

“To briefly recap, the Chamber put 215 people on the ground in 31 states; sent 3.7 million pieces of mail and more than 30 million e-mails; made 5.6 million phone calls; and enlisted hundreds of associations and companies in our web-based ‘VoteForBusiness.com’ program to educate and mobilize voters,” Donohue wrote. “Combining these activities with ILR’s voter education efforts in 16 state Supreme Court and Attorney General contests, as well as our targeted campaign to make so-called tort reform a factor in the presidential race, the Chamber invested up to $30 million in the November 2 elections.”

Without taking full credit, Donohue noted that Chamber ran education and get-out-the-vote campaigns in Wisconsin, New Hampshire, New Mexico, Florida, Iowa, Nevada and Ohio, and that all but New Hampshire and Wisconsin went for the Bush-Cheney ticket.

Donohue was not grandstanding. The Chamber did in fact have a major impact on the 2004 elections.

It helped infuse the “tort reform” issue into the presidential campaign and Congressional contests across the country. And it continued to affect dramatically judicial and other state electoral campaigns.

Senate Success

The Chamber endorsed 269 House and Senate candidates and 249 of them won. According to Donohue, the Chamber specifically targeted several “very tough races” and, in those, was successful in seven of nine Senate races, including John Thune’s win over Tom Daschle, and 20 of 28 House races.

Key U.S. Senate races in which the Chamber invested included:

• Alaska. In November 2003, the Chamber spent nearly $100,000 on a nine-day TV ad campaign that backed Republican incumbent Lisa Murkowski. The Chamber’s Political Director Bill Miller told The Hotline that the ads are “not aimed at encouraging Alaskans to vote for Murkowski in next year’s election. … We just want people to recognize what a good senator they have in Lisa Murkowski and the fact that we in the business community feel that she’s been a great asset to the business community.” Murkowski also received $3,500 in Chamber Political Action Committee (PAC) money. Murkowski was re-elected.

• North Carolina. The Chamber spent more than $500,000 promoting Republican Representative Richard Burr in his effort to take a Senate seat. It conducted mail and phone campaigns and relocated a staff member from Los Angeles to Raleigh to recruit support for Burr among business people and find more volunteers for his campaign. The Chamber also gave Burr $10,000 in PAC money. Burr won the North Carolina Senate seat, defeating Democrat Erskine Bowles, White House chief of staff during the Clinton administration.

• South Carolina. The Chamber ran a campaign strategy called “Team DeMint” on behalf of Republican candidate Representative James DeMint, spending more than $100,000 on TV ads before the state primary. Chamber President Tom Donohue went to South Carolina to promote the group’s endorsement before the state primary. “Jim DeMint sees the big picture — that we need to unleash the job creation potential of U.S. businesses by reining in big government, lifting heavy-handed regulation and ending lawsuit abuse,” said Donohue. DeMint, who also received $15,000 in Chamber PAC money, made “tort reform” an issue in the campaign. He prevailed in the election.

• South Dakota. The Chamber endorsed former Republican Representative John Thune in his effort to unseat Senate Minority Leader Tom Daschle, gave him $1,500 in PAC money and spent hundreds of thousands of dollars on pro-Thune ads that criticized Daschle for his positions on taxes and civil lawsuits.

  For example, in June 2004, the Chamber helped pay for a two-day newspaper ad campaign that targeted Daschle’s role in the progress of a corporate tax bill. And in August 2004, the Chamber launched a two-week, $400,000 TV and radio ad campaign across South Dakota attacking Daschle’s opposition to “tort reform.” One 30-second TV ad blamed Daschle for not backing a federal medical malpractice bill that imposed a $250,000 cap on non-economic damages for patients hurt by negligent doctors. Other ads blasted Daschle for blocking the class action bill.

  Thune narrowly defeated Daschle, by a 51-49 margin.

The “Secret War” on the States

The Chamber’s involvement in federal elections did not distract it from its recent mission of influencing state electoral contests.

Influencing judicial elections continues to be a growing focus for the Chamber. Forbes magazine called the effort a “secret war on judges now being waged by the chamber.” In a 2003 article, Forbes reported that “the chamber has won in 21 of 24 judicial elections in eight states — and prevailed in 11 attorney general races,” and had helped to defeat at least 10 incumbents in 2002.

It is unclear exactly how many judicial races the Chamber was involved in during the 2004 elections.

According to the National Law Journal, the Chamber conducted so-called “voter education” programs with partner groups or on its own in 15 Supreme Court races in a dozen states, including Illinois and West Virginia. Roll Call reported that the Chamber’s Institute for Legal Reform was successful in 12 out of 13 Supreme Court elections.

In a post-election news release, the Chamber declared that pro-“tort reform” attorneys general and state judges, such as Illinois Judge Lloyd Karmeier, were elected in 15 out of 16 key races. According to the release, “pro-legal reform” candidates also prevailed in West Virginia, Mississippi, Ohio, Michigan, Pennsylvania, Washington, Texas, Alabama and Indiana. Donohue told Chamber board members in his December 2004 letter that the Chamber’s ILR “participated in voter education efforts in 16 important races across the country. ‘Pro-tort reform’ candidates prevailed in 15.”

The Chamber “won every race in which we were involved,” Stanton D. Anderson, the Chamber’s executive vice president, chief legal officer and coordinator of the Chamber’s “tort reform” efforts told the National Law Journal. “We were very fortunate this time.”

“Phony opinion,” real results

There is no question that the Chamber exerted significant influence over state electoral outcomes. Its advertising campaigns helped shape the terms of debate in numerous judicial, state attorney general and initiative elections.

In March 2004, the Chamber released a “survey” of 1,400 corporate lawyers, including the in-house counsel for major corporations, about what they think of the U.S. “litigation environment.” The “survey” drew immediate criticism from the American Bar Association (ABA), among others. In an open letter to the Chamber, ABA President Dennis Archer condemned the Chamber for having “camouflaged a campaign against judges in fabricated figures and a phony opinion poll” and “waging war on the judges who protect the rights and safety of Americans.”

To promote the survey’s findings, the ILR ran a national print advertising campaign. The campaign featured full-page ads in national newspapers, as well as regional ads in newspapers in the survey’s lowest ranking states, like Illinois (44), West Virginia (49) and Mississippi (50), all of which had upcoming Supreme Court elections in November.

In addition, the Chamber’s ILR reportedly sponsored so-called “voter-education” TV ads aimed at influencing Supreme Court elections in Alabama and other key states.

• In Illinois, the Chamber ran a newspaper ad campaign in Mach 2004 calling for “tort reform,” never mentioning that the respondents in its survey were all corporate defense lawyers. “Nobody celebrates being number 44,” the ad stated under a picture of a yelling, bare-chested college fan with a “#1” painted on his face. “Illinois needs legal reform now. Demand that your elected officials fix the flaws in the justice system. Require fairness from your judges.”

  The Chamber also poured $2.3 million into Republican Circuit Court Judge Lloyd Karmeier’s election campaign, mostly through the Illinois Republican Party and the Illinois Civil Justice League. Karmeier was battling Democrat Gordon Maag to represent a southern Illinois district containing Madison County, an alleged hotbed of personal-injury and product-liability litigation.

• In 2004, Citizens for a Strong Ohio said it raised close to $3 million to support Republican candidates for judgeships in Ohio. Of the $3 million, the Chamber’s Institute for Legal Reform contributed $1 million; the American Insurance Association, $375,000; Nationwide Insurance, $200,000; and Procter & Gamble, $160,000. Republicans won four Supreme Court races in 2004. They now hold six of seven seats on the state Supreme Court.

• The Chamber’s most remarkable intervention in a state attorney general race was undoubtedly in Washington state. In September 2004, right before Washington’s Democratic primary, a group called the Voters Education Committee (VEC) ran a series of attack ads targeting former state insurance commissioner Deborah Senn, a Democrat.

  The state’s Public Disclosure Commission sought financial information about the VEC but was denied. After the state filed a lawsuit, the Chamber was revealed as the VEC’s sole contributor, spending $1.5 million on the anti-Senn ad campaign. Senn won the primary.

  In October 2004, the Republican State Leadership Committee, a national GOP fund-raising group whose members include the U.S. Chamber, ran a $1.3 million ad campaign against Senn. She lost the attorney general race.

• The Chamber was active as well in state “tort reform” ballot initiatives. In California, the Chamber’s ILR supported and helped fund Proposition 64, spending $500,000 to support its passage. And in Colorado, the Chamber spent $100,000 in a successful effort to defeat Amendment 34, which sought to repeal a state law capping non-economic damages at $250,000 in construction defect lawsuits over bad workmanship or injury. The amendment also would have limited the state legislature’s ability to enact future damages caps in construction defect cases and eliminated the requirement that homeowners give builders the chance to fix any mistakes before bringing a lawsuit.

The Chamber’s Murky Investments In 2003, the Chamber had said it planned to spend $50 million or more in Supreme Court races around the country, targeting areas where courts were not “business-friendly.” Yet tracking how much the Chamber invests in judicial elections is extremely difficult. It appears that the Chamber does not spend any money directly on state judicial elections but rather funnels funds into state chambers, independent groups or political action committees, making it difficult to track down exact information on the Chamber’s involvement in judicial races. And the Chamber’s spending on state judicial races has become more covert with each election cycle, according to Deborah Goldberg, director of the Brennan Center’s Democracy Program at New York University School of Law, as it plays a more behind-the-scenes role and relies on front groups to fund provocative issue ads. The Chamber’s ILR does not have to divulge how much money it spends on campaign-related activities, publicly identify donors or reveal much about anything it does. The group is only required to file an annual report with the Internal Revenue Service six months after elections are over. — E.G.

Emily Gottlieb is deputy director of the Center for Justice & Democracy, which works to educate the public about the importance of the civil justice system and the dangers of so-called “tort reform.”