March 2003 - VOLUME 24 - NUMBER 3
T h e C o r p o r a t e D r i v e f o r L e g a l I m m u n i t y
For the last two decades, insurance companies, manufacturers of dangerous products and chemicals, the tobacco industry and other major industries have been engaged in an effort to roll back the U.S. civil justice system. In nearly every state and in Congress, corporations and their insurers have waged a relentless campaign to change the laws that give sick and injured consumers the ability to hold their offenders responsible for the injuries they cause.
While most of their legislative initiatives have been stymied at the federal level -- where corporations have sought national laws to override the rights that states grant to injured parties -- the corporate coalition has had enormous success in the states themselves. Going state by state, they have succeeded in obtaining liability caps, elimination of various causes of action, and procedural rules making it much harder to sue wrongdoers.
The business-led effort to take away consumers' legal rights (called "tort reform" by its corporate proponents; "tort deform" by its pro-consumer opponents) has had at its helm the American Tort Reform Association (ATRA) located in Washington, D.C. In turn, ATRA has contracted with APCO & Associates, one of the nation's leading "grassroots" lobbying/PR firms.
Because large corporations have found their message more effective when delivered by what appear to be citizen groups than when conveyed by business associations openly advancing their pecuniary interests, they have come to rely on a network of front groups, corporate-funded think tanks and industry-funded academics to articulate their message.
Among the national groups representing the corporate interests are organizations like Citizens for a Sound Economy, the American Legislative Exchange Council, Americans for Job Security, the Center for Individual Rights, the Federalist Society, the Manhattan Institute, the Competitiveness Enterprise Institute and the Washington Legal Foundation.
At the state level, more important has been a network of supposed grassroots organizations spontaneously formed to confront "lawsuit abuse." This network of local organizations was created by APCO. The groups euphemistically call themselves any number of names, typically: Citizens Against Lawsuit Abuse (CALA), Lawsuit Abuse Watch, Stop Lawsuit Abuse, or People for a FAIR Legal System (collectively referred to here as "CALAs.")
Since 1991, "tort reform" advocates have set up dozens of tax-exempt groups in at least 18 states to plant their "lawsuit abuse" message in the media and the public consciousness, and to influence legislation, the judiciary and jurors. These groups claim to speak for average people and represent themselves as grassroots citizens groups determined to protect consumer interests. But their tax filings and funding sources indicate that they actually represent major corporations and industries seeking to escape liability for the harm they cause consumers -- whether it be from defective products, medical malpractice, securities scams, insurance fraud, employment discrimination or environmental pollution.
The money trail from many of these groups leads directly to large corporate donors, including tobacco, insurance, oil and gas, chemical and pharmaceutical companies, medical associations and auto manufacturers. They are also funded by ATRA, as well as professional associations, local businesses and industries that also wish to be shielded from consumer lawsuits.
The tobacco industry has been perhaps the leading supporter of the CALAs. The huge cache of documents made public during the state attorneys general litigation against the tobacco industry in the late 1990s reveals that Big Tobacco spent millions of dollars a year (and in at least one year $15 million) supporting ATRA, state CALAs and other activities to weaken tort laws in many states. For instance, in 1995, Big Tobacco allocated $5.5 million for ATRA, more than half of ATRA's budget. In some cases, CALAs, such as the one in Louisiana, were virtually created by the tobacco industry. Tobacco money has gone directly to ATRA, APCO and state organizations.
"David" and the Vice President
Initial financing for the effort, which became the first Citizens Against Lawsuit Abuse group (Weslaco CALA), was provided by the Chamber, corporations doing business in the valley, and the local medical association seeking to stop medical malpractice lawsuits. Its chair, Gonzalo Sandoval, was an executive with Central Power and Light.
The Weslaco CALA launched its first campaign in January 1991, leasing five billboards along the busiest roads in the Rio Grande Valley with such messages as, "Lawsuit Abuse: Guess Who Picks Up the Tab? You Do." "Lawsuit abuse" became the poll-tested solution to the dilemma faced by advocates of "tort reform" -- how to convey their agenda in terms average people could understand.
The first "lawsuit abuse" television ad ran in 1991 as part of the Weslaco CALA's $20,000-a-month publicity program. The ad portrayed a gloomy business environment in south Texas, citing the "near closure" of the sugar mill that had wrongfully dismissed two workers. The Weslaco CALA also aggressively took on trial lawyers by posting ads that read: "Fairness Yes -- Greed No."
"It was kind of like David versus Goliath," Opelt says. "We were David and the trial lawyers were Goliath."
It turns out, however, that David had the vice president of the United States and an alliance of Fortune 500 companies on his side.
The same year that Weslaco CALA ran its first ads, the White House Council on Competitiveness, headed by then Vice President Dan Quayle, embraced "tort reform" as a priority issue and assigned then-Solicitor General Ken Starr the task of developing a plan to overhaul the country's civil liability laws. Starr has represented tobacco companies and General Motors, among other clients, in products liability litigation. A "Starr report," not destined to receive as much attention as the subsequent Starr report on President Clinton's affair with Monica Lewinsky, was ready in August 1991, and presented 50 recommendations for "tort reform" which it said were necessary to "maintain America's competitiveness." President George Bush embraced the recommendations at an October White House ceremony in which he signed an Executive
Order on Civil Justice Reform.
Following the meeting between Quayle and Summers, similar campaigns were launched in San Antonio, Corpus Christi, Victoria and Beaumont. The right-wing Texas Public Policy Foundation and the Texas Chamber of Commerce were instrumental in helping to develop this statewide CALA network.
Following that, CALAs started springing-up around the country. The Weslaco CALA had become the CALA blueprint, growing from a regional campaign in the South Texas oilfields into a nationwide crusade.
THE ATRA/APCO CONNECTION
By 1992, ATRA had hired a public relations firm to help it reach its "tort reform" goals by creating local "grassroots" front groups. The contract was with a subsidiary of public relations titan Grey Advertising called APCO & Associates, a company that had specialized in "tort reform" lobbying since the 1980s and had worked both for insurance companies, like State Farm, and the tobacco industry.
APCO knew the issue well. Founded in 1984 by the beltway law firm, Arnold & Porter, and first known as the Arnold & Porter Consulting Group, APCO was later sold to Grey Advertising after having consulted for Philip Morris and other tobacco companies on civil justice issues for years. Indeed, an internal Philip Morris document indicates that APCO and Neal Cohen, its "principal account executive on the PM [Philip Morris] Family Tort Project" had been, since 1988, "assisting the PM Family [on] national and state tort coalitions and other tort reform advocates with political, communications and grassroots strategies and related programs."
This concept of corporate "grassroots lobbying" in which APCO specializes is a relatively new public relations strategy, which the New York Times described as "a technique often used to camouflage an unpopular or unsympathetic client." One of the faster growing areas of corporate public relations, grassroots lobbying, which supplements legislative lobbying, involves forming a coalition on behalf of wealthy companies and trade associations and generating sympathy for legislation sought by the unsympathetic client.
A memo from the now-closed Tobacco Institute highlights the importance of these "astroturf" efforts appearing to be independent "grassroots" initiatives. Describing the grassroots lobbying strategy long used by tobacco companies, the 1986 memo says, "The primary purpose of [grassroots lobbying] is to substantiate and support [the] Tobacco Institute position presented [to] Congress, state legislatures or local councils by our lobbyists. In order to be totally effective, the grassroots effort must appear to be spontaneous rather than a coordinated effort. The goals of the Committee should be set by the Tobacco Institute. Invite suggestions and discussion, however, steer the discussion so that it ends up at our predetermined objective."
A 1996 campaign by the Louisiana CALA, which was created with the help of tobacco companies, illustrates how astroturf lobbying works. According to Louisiana CALA Executive Director Ron Gomez, a former state representative, the Louisiana CALA generated some 4,000 constituent calls, faxes or letters urging key legislators to vote for three "tort reform" bills pending in the state Senate that year. Drawing from a list of 18,000 names compiled from calls to toll-free numbers advertised on the CALA television, radio and billboard ads produced by APCO, the Louisiana CALA set up phone banks to coordinate calls and letters to legislators. "That's effective," he says. "I can tell you as a former legislator."
In 1994, APCO's Cohen explained the CALA "grassroots" strategy in a speech before a gathering of corporate public affairs executives sponsored by the Public Affairs Council, an organization of some 500 corporations and trade associations. "Rule No. 1 for me is stay away from substance," Cohen said. "Don't talk about the details of legislation. Ö Talk about Ö frivolous lawsuits, lawsuit abuse, trial lawyer greed." He explained the need for front groups. "In a tort reform battle," he said, "if State Farm -- I think they're here, Nationwide -- is the leader of the coalition, you're not going to pass the bill. It's not credible, O.K., because it's so self-serving. Everybody knows the insurance companies would be one beneficiary of this."
The APCO/CALAs grassroots campaign has been effective. At the 1994 seminar, Cohen showcased his CALA work with Mississippi for a Fair Legal System (M-FAIR), a CALA he had set up in Mississippi in 1993. APCO orchestrated a blitzkrieg public attack on trial lawyers, which included an 800-number on billboards, and TV ads. The idea was to use "every campaign tactic we had in order to bring in as many people, and we made sure that it was typical people mixed in with large employers and political contributors." The coalition soon had over a thousand people who had responded to the "greedy trial lawyer" message.
According to Cohen, "we have 1,500 Mississippians mixed in with who our clients were" and since Mississippi had "no reporting requirements, Öthey [the trial lawyers] didn't really know who was at the heart of everything." In the end, they "caved in completely." The group was "instrumental" in the passage of H.B. 1270, Mississippi's 1993 "tort reform" legislation, according to ATRA. The Tobacco Institute was involved in the Mississippi effort as well, and several APCO documents documenting the M-FAIR strategy were uncovered in the Tobacco Institute's files.
Other state lawmakers have undoubtedly been influenced by APCO/CALA grassroots lobbying efforts. In 1994, Liability Week reported that in addition to Mississippi, Neal Cohen and APCO had a "key role" in developing the system which resulted in substantial tort overhauls in Texas, North Dakota, Arizona and Michigan in 1993. Cohen also boasted in a 1995 interview published by the PR industry magazine, Reputation Management, that CALAs have helped pass significant "tort reform" bills at the state level in California, New Jersey, Texas, Mississippi and Michigan.
In 1995, the Illinois Civil Justice League, which was the principal author and proponent of the state's Civil Justice Reform Amendments of 1995, organized an Illinois CALA. It used direct mail to collect contributions and build a list of names supporting "tort reform." This CALA was short-lived as the bill was signed into law in March of that year (though the law was declared unconstitutional two years later).
As another example, weeks before the Ohio House considered a massive "tort reform" bill in 1996, Ohio Citizens Against Lawsuit Abuse (OCALA) appeared on the scene. The bill passed but it was later declared unconstitutional. As the Alabama state legislature was debating proposals in May 1999 to, among other things, cap punitive damages, Alabama Voters Against Lawsuit Abuse (AVALA) organized pro-business demonstrations outside the capitol in Montgomery, and sent out letters to its mailing list asking people to urge their legislator to vote for the package of tort restrictions. The legislation passed.
In a 1996 memo originally obtained by the publications Counterpunch and PR Watch, Neal Cohen highlighted APCO's involvement in the formation of CALA groups. With regard to OCALA, for example, Cohen wrote, "In Ohio, we are working with the local business community to form a new citizens group focusing on lawsuit abuse." In Michigan, he said, "we are working with the local business community to form a new citizens group focusing on lawsuit abuse." He also said, "In California, we work with both a statewide group Ö as well as six local CALA groups." And in Alabama, Cohen said, "we work with an extremely active statewide citizens coalition, Alabama Voters Against Lawsuit Abuse." In addition to these states, Cohen's memo mentioned a number of other states in which APCO was involved, including Louisiana, Minnesota, Mississippi, Texas and West Virginia.
While ATRA/APCO have not advertised their role in creating the CALA movement, they do admit to supplying the groups with limited guidance. Likewise, in its own materials, ATRA admits to working with local groups to "set their legislative agenda and strategies," as well as provide them with "briefing materials, model bills, witnesses and speakers," and a "communications ėtool kit'" including "hard-hitting television ads and radio spots as well as billboard and information handouts."
In 1997, ATRA spun off a foundation to provide funds of approximately $1 million annually to local groups for purposes of conducting public education programs and other consulting services that are pursuing the ATRA agenda. According to ATRA's newsletter and web site, one of the Foundation's top jobs will be "enhancing the communications tool kit that ATRA currently makes available to grassroots organizations across the country. This program, which includes award-winning television and radio commercials and other communications materials, helps to communicate the ėStop Lawsuit Abuse' message in a way that avoids legalese and is understandable to the public."
Indeed, widespread national coordination of message and strategy, focused on developing public scorn for the civil justice system, is evident in virtually every aspect of local CALAs' activities:
Show Me the Money
CALAs work to maintain the appearance of local citizen groups -- a spontaneous, folksy backlash by ordinary citizens against a legal system that is "out of control." A typical story is the one Bill Bloomfield told the Sacramento Bee, about the founding of the Los Angeles CALA. Bloomfield said the group came into being after "organizing some friends including two attorneys, a teacher and a sheriff's detective" and then "passing the hat to raise funds."
However, for CALAs for which financial information is publicly available, the evidence shows they are sustained by local industries, large corporations or trade associations, which are generally represented on their boards, and/or support them with financial or in-kind contributions. CALAs are also often backed by the tobacco and insurance industries.
ļ Founded in 1992 primarily with the help of the tobacco industry, the Louisiana CALA has also received financial support from Louisiana Power & Light, Freeport-McMoran, Pfizer, Abbott Laboratories, Union Pacific, Georgia Pacific, Texaco and local businesses.
ļ Minnesota Lawsuit Abuse Watch was incorporated in 1996. Its initial supporters, donating more than $100,000 in its first six months, included the Independent Business Association of Minnesota, the National Federation of Independent Business (NFIB) Minnesota, the Minnesota Civil Justice Coalition and the Minnesota Chamber of Commerce.
ļ In 1995, Oklahoma CALA, formed a year earlier, ran a statewide initiative campaign to put tort restrictions on the ballot. By March, it had raised $2 million, but not from average Oklahoma citizens. Oklahoma CALA's supporters who contributed or pledged at least $50,000 each to this effort were: CITGO Petroleum Corporation of Tulsa, Phillips Petroleum Company of Bartlesville, the Oklahoma Publishing Company, publisher of The Oklahoman, Southwestern Bell Telephone, Boatmen's First National Bank of Oklahoma, American Fidelity Group, Kerr-McGee Corporation and State Bank & Trust Company.
In addition to the financial and public relations support they receive from corporate-backed ATRA and APCO, CALAs are often run not by citizen activists, but by hired public relations or marketing consultants. Texans Against Lawsuit Abuse (TALA), which is operated by ROSS Communications, a company with which APCO is formally partnered, is one such example. But they are not alone. In papers filed with the IRS, Alabama Voters Against Lawsuit Abuse says, "AVALA's activities Ö will be conducted in the state of Alabama by independent consultants and professional research and polling firms retained and paid by AVALA." In addition, several CALAs have been run by individuals who are in and out of the PR world.
CALAS: Carved in the Landscape
While some of the CALAs have had a fleeting existence, appearing just before major legislative fights and disappearing just as quickly thereafter, the nationwide CALA phenomenon is now a permanent part of the national political landscape.
And some of the CALAs, with ongoing infusion of corporate funding, have shown significant staying power. The Texas CALAs continue to function more than a decade after starting the national trend.
In February, the network of Texas CALAs emerged as the public face of a corporate-driven effort to rewrite again the state's tort laws and further restrict consumer and injured party rights in Texas.
Speaking straight from the text of a decade earlier, Jon Opelt, still the Houston Executive Director of CALA, told the Dallas Morning News, "this bill provides a far-reaching fix to the state's lawsuit abuse problem."
Carl Deal is a freelance journalist based in New York City. Joanne Doroshow is the executive director of the Center for Justice & Democracy. This article is based on their report, The CALA Files: The Secret Campaign by Big Tobacco and Other Major Industries to Take Away Your Rights, published by Public Citizen and the Center for Justice & Democracy.