False alarm: how the media helps the insurance industry and the GOP promote the myth of America's "lawsuit crisis."

Washington Monthly, Oct, 2004 by Stephanie Mencimer

Over the next decade, the institute produced a blizzard of reports, conferences, op-eds, books, and mailings all decrying the "litigation explosion" and greedy trial lawyers. They cultivated sympathetic and influential journalists such as "20/20'"s John Stossel, then-New Republic editor Michael Kinsley, and TNR columnist Fred Barnes, and more recently, Stuart Taylor, who frequently, cites their work in his columns for Newsweek, The National Journal, and The Atlantic Monthly. The "research" conducted by the institute usually purported to show how lawsuits impact the average consumer's daily life by raising the cost of groceries or auto insurance or driving their favorite physicians out of business. But some of the institutes "scholars" played a little fast and loose with the facts.

Take the idea of a "tort tax," the financial hit allegedly taken by every citizen because of the legal system, which Taylor raised in his December Newsweek article. It dates back to 1988, when Manhattan Institute fellow Peter Huber coined the term in his book, Liability, and claimed that the tort system cost Americans $300 billion a year. Three years later, the figure made its way into a speech given by Vice President Dan Quayle, who blamed lawyers for wrecking the economy. After the speech, several researchers examined the methods Huber had used to arrive at that figure. Huber, they found, had simply made it up. As The Economist observed in 1992, "the $300 billion figure has no discernible connection to reality."

While the Manhattan Institute targeted the media elite, large corporations also set about creating the appearance of a "grassroots" movement to persuade lawmakers that tort reform had broad populist appeal. As Neal Cohen, one of the PR geniuses behind this project explained to a meeting of the Public Affairs Council in 1994, "In a tort reform battle, if State Farm ... is the leader of the coalition, you're not going to pass the bill. It is not credible. OK? Because it's so self-serving." Cohen was speaking from experience Since 1988, be bad been running Philip Morris's "family tort project" through the D.C. consulting firm APCO, where be helped the tobacco industry wage a multi-million stealth campaign to insulate itself from smokers' lawsuits. By 1995, the tobacco industry was providing almost half the budget--$55 million in a single year--for the American Tort Reform Association (ATRA).

ATRA, in turn, helped flannel money to state level organizations called Citizens Against Lawsuit Abuse (CALA). These chapters were responsible for holding "lawsuit abuse awareness week," buying ads on buses and billboards, providing experts for reporters, generating "polls" that claimed 99 percent of Americans believe there are too many frivolous lawsuits. The groups were hardly grassroots organizations of inflamed citizens; the original chapter, in Weslaco, Texas, is just a shell corporation housed in the local chamber of commerce.

Even after the corporate backing of these groups came to light (thanks in part to Cohen's speech, a tape of which was obtained by some muckraking reporters), tort reformers have continuted to use variations of the technique. Most recently, doctors seeking to restrict medical malpractice lawsuits have worked with corporate front groups like Texans for Patient Access and Californians Allied for Patient Protection.