Are Lawyers Running America?


    FRED FURTH: When he isn't winning antitrust cases, he's making wine at his 1,200-acre Chalk Hill vineyard in Sonoma County, Calif.

    Mississippi trial lawyer Dickie Scruggs walked into a Connecticut Medical Society forum with the smile and swagger of a man who knows he's the main attraction. Not long ago, an aggressive plaintiffs' lawyer entering a roomful of doctors could have used a bodyguard. That's how much the medical profession hated the "ambulance chasers" who were driving up their malpractice premiums. On this visit, however, Scruggs was introduced so gushingly that even he was embarrassed. "You forgot to mention," he chided the society's head, "that I rested on the seventh day."

    These days some of Scruggs' best friends have M.D. after their names. Scruggs is the lawyer who, more than any other, was responsible for the $246 billion settlement agreed to by tobacco companies in 1998 to defray the medical costs of smokers who fall ill. And he arrived in Connecticut with a message those managed care- weary doctors were eager to hear: HMOs are next on his target list. "They are second-guessing doctors' medical decisions with accountants and bean counters," he told the crowd indignantly.

    Scruggs is confident he can change that--despite a pair of recent Supreme Court decisions that will make it more difficult to collect damages from managed-care companies. He and David Boies, who represented the U.S. Justice Department in its humbling of Microsoft, are leading a syndicate of seasoned plaintiffs' lawyers that is suing seven of the nation's largest HMOs. The lawsuits, which were recently combined before a single federal judge in Miami, allege that the HMOs engage in what Scruggs calls "garden-variety consumer fraud." He argues that HMOs routinely recruit customers by touting their concern for patient health but run their businesses in ways that put cost cutting ahead of optimal care. "What's personally most offensive to me is that the HMOs are creating a fundamental conflict of interest for doctors between their wallets and their duty to their patients," he says.

    Scruggs isn't looking for money--or at least not just money. He is aiming to use his lawsuit to do what Bill and Hillary Clinton and the leaders of Congress have failed to do: rewrite the rules of American health care. If Scruggs succeeds, medicine will join a growing list of industries, from asbestos to tobacco to guns, that are being overhauled and regulated by trial lawyers and lawsuits rather than by elected officials.

    That may make a dramatic plotline for such hit movies as Erin Brockovich and The Insider, but it is not how the civics textbooks say our government is supposed to work, and it's already a hot issue in the presidential campaign. George W. Bush, whose campaign and Republican Party are financed in large part by the executives who are often defendants in personal-injury lawsuits, promises to be "a President who is tough enough to take on the trial bar." Al Gore and the Democratic Party, who collect big contributions from trial lawyers, supported President Clinton's veto of a 1996 tort-reform bill backed by business interests. Advocacy groups are already running dueling TV ads. One suggests that lawmakers who would limit damages in lawsuits are out to deny victims of asbestos-related illnesses their just compensation, while another depicts trial lawyers as sharks in a feeding frenzy.

    Critics of trial lawyers say Scruggs and a cabal of his colleagues are using litigation to hijack hot-button social issues that should be resolved in Congress and the state legislatures. "Trial lawyers are an unelected fourth branch of government," fumes Walter Olson, an author and trial-lawyer foe. Corporate executives complain that the cost of fighting lawsuits, let alone losing them, drives up prices of products ranging from ladders to automobiles and holds down wages and job creation and profits. Adding to the outrage: many plaintiffs' lawyers are getting very rich. The tobacco-settlement legal fees--to be shared by more than 100 law firms--are already approaching $10 billion. Scruggs alone will get about a third of the $1.2 billion being paid to his firm.

    Plaintiffs' lawyers retort that they are the only force in public life today that can be counted on to stand up for everyday Americans. "We're the last bastion," says Pensacola, Fla., trial lawyer Fred Levin, a key player in his state's tobacco litigation. "We're the last fighters available for the little guy." They say they've been on the right side of the big issues for decades, from getting air bags in cars to limiting tobacco companies' advertising to minors to forcing gun companies to install trigger locks.

    Congress and the White House are so dependent on special-interest campaign contributions and so mired in partisan gridlock, plaintiffs' lawyers say, that it is often impossible to get anything done there. Exhibit A is Congress's failure to act on the Patients' Bill of Rights before it fled Washington for its summer recess. Ask Scruggs if trial lawyers are trying to run America, and he doesn't bother to deny it. "Somebody's got to do it," he says, laughing.

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