The Truth About Health Care and Tort Reform, Part II

(This is the second post in a series. For the first post, see “The Truth About Health Care and Tort Reform, Part I“)

In 1992, tort reform found its poster child in a product liability suit — Liebeck v. McDonald’s Restaurants, more commonly known as the McDonald’s Coffee Case. The complainant, 79-year-old Stella Liebeck, spilled a cup of McDonald’s coffee on herself and suffered third-degree burns serious enough to require skin grafts.

Initially, Liebeck asked McDonald’s for $20,000 to cover her medical expenses, but McDonald’s offered only $800. Liebeck’s attorney discovered that McDonald’s required its franchises to serve coffee at a scalding hot temperature, and that other customers had received serious burns. A jury eventually awarded Liebeck $2.7 million in punitive damages, which was slashed to a little more than $600,000 by the judge. Liebeck eventually settled for an undisclosed amount less than $600,000 after appeals.

The Right seized upon this story as an example of greedy lawyers and litigation-crazed loonies who clog up courts with frivolous suits. The extent of Liebeck’s injuries or the facts of the case didn’t seep into the public consciousness; all most people knew is that some woman got millions of dollars for spilling hot coffee.

I bring this up because the McDonald’s Coffee Case still seems to haunt us. For example, this diatribe from Rush Limbaugh is from March 2009:

So you, you’re in McDonald’s. You order some Chicken McNuggets. They don’t have to any. You call 911. This happened in Port St. Lucie, Rio Linda East. You go to McDonald’s, you order some Chicken McNuggets, they don’t have any, you call 911, you call 911 not once, you call 911 not twice, you call 911, you call the cops and the fire department because McDonald’s doesn’t have Chicken McNuggets. Call Obama. The answer to this problem, call Obama. Okay, so this person that calls 911 three times over no Chicken McNuggets, some fast moving lawyer sees the story, calls her up and says, “I’ll take your case on contingency. We’ll sue McDonald’s for $25 million for misrepresentation in advertising, menu and so forth. They didn’t have what they promised, they wanted to charge you for it nevertheless, and you were so distraught you had to call the cops.”

Rush’s point? The diatribe is titled “Tort Reform Is Key Health Care Fix.” If those greedy litigants and their ambulance-chasing trial lawyers would stop filing nonsense suits, everyone’s health care costs would go down.

And the American public seems to have bought this. No one likes the greedy woman who got millions of dollars from McDonald’s just because she spilled her coffee. That’s not what happened, but ask around — that’s what many people think happened.

And because the McDonald’s Coffee Case has seeped into national consciousness, Rush Limbaugh doesn’t have to come up with examples of real-world litigation to make his point. He just has to evoke McDonald’s. Perhaps someone did call 911 because a restaurant didn’t have what she wanted, but that bit of silliness has nothing whatsoever to do with tort reform.

Who Is Behind Tort Reform?

Who’s really behind the disinformation campaign seeling tort reform? Rush Limbaugh didn’t begin it. He’s just one of the water carriers, albeit a prominent one.

Let’s start by asking, Who benefits? As I said in Part I, when a state enacts tort reform measures, often substantial cuts in medical malpractice insurance costs do result. However, there is evidence these savings are passed on to the medical consumer or have any impact whatsoever on overall health care costs within that state.

It’s not hard to see that business interests — insurance companies, tobacco companies being sued by emphysema patients manufacturers of asbestos-related products being sued by mesothelioma patients– came up with tort reform as a way to protect themselves from lawsuits. But these interests have very powerful allies with a broader agenda.

For an indispensable guide to Who’s Behind Tort Reform, please read “The Attack on Trial Lawyers and Tort Law” by Dave Johnson of the Commonweal Institute. Johnson documents how a small group of extremely wealthy, and extremely right wing, family foundations built a mighty propaganda machine to sell their agenda to the American Public. These foundations include the Lynde and Harry Bradley Foundation, the Koch Family foundations, the John M. Olin Foundation, the Scaife Family foundations and the Adolph Coors Foundation.

These foundations in turn fund a vast network of organizations — more than 500 at the time Johnson wrote this report — that work in concert to influence public opinion. Among these are groups that try to pass as part of a “grassroots” movement, such as American Tort Reform Association (ATRA) and Citizens Against Lawsuit Abuse (CALA). There are also a number of “think tanks” in the movement, such as the Heritage Foundation, the Washington Legal Foundation, the Cato Institute and the American Legislative Exchange Council.

These organizations pretend to be separate from each other, but in fact they are interconnected, and their messaging often is coordinated. Because they appear to be independent, they give each other an aura of credibility when they site each others’ “research,” which, unremarkably, contain much of the same data and reach the same predetermined conclusions. Dave Johnson writes,

The majority of the “conservative” experts and scholars writing newspaper op-ed pieces, books and magazine articles, and even the organizations that generate the “talking points” and position papers used by TV pundits and radio talk show hosts, are directly funded by, work for organizations supported by, or receive some form of support from this core group of funders.

Regarding “tort reform,” the strategy includes circulating of false lawsuit scare-stories, defaming and diminishing trial lawyers in the public mind, and even disseminating anti-lawyer jokes and cartoons.

Thus, it is widely believed a woman got millions of dollars from McDonald’s just because she spilled her coffee.

Bush and His Brain

Karl Rove is another major player in the tort reform story. In the 1980s, when he was gaining a reputation in Texas as a killer political consultant, Rove began to push tort reform as a winning wedge issue for Republicans. Trial lawyers usually were Democratic Party supporters and so could be demonized without penalty to Republicans. And the interests lining up in favor of tort reform had very deep pockets. Win/win!

Tort reform was a major plank in George W. Bush’s gubernatorial campaign in 1994, and he signed a sweeping tort reform bill into law in 1995. When Bush ran for president in 2000, the Bush campaign claimed tort reform as one of the governor’s great successes. Most of the alleged benefits of the bill can be explained by other factors; for details, see Richard A. Oppel Jr. and Jim Yardley, “Bush Calls Himself Reformer; the Record Shows the Label May Be a Stretch,” The New York Times, March 20, 2000.

I might mention that the claims made by the Bush campaign in 2000 are still being repeated on the website of the American Tort Reform Association.

The Bigger Picture

Dave Johnson writes that the ultra-conservative interests behind the tort reform movement have two major goals:

1. Weakening constraints on corporations and financial institutions, such as insurance companies;
2. Limiting the income of trial lawyers, which limits their ability to lobby and contribute money to the Democratic Party and progressive causes.

I would add one more:

3. Tax relief for the wealthy.

Part of this picture is the extreme Right’s total opposition to government health-care programs, even for the poor, the retired, and children, never mind a national health care program for everyone. For years, tort reform has been pushed as the magic bullet that will solve the health care crisis without raising taxes. Expect to hear more of the same over the next few months.

Part III will focus on the tort reform message the Right is generating today.

Barbara O’Brien
May 12, 2009

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