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Trial Lawyers Now Playing Defense

The American Association for Justice, the biggest organization representing trial lawyers, is ramping up its efforts on Capitol Hill and with the administration this week after President Barack Obama put the group on defense.

Obama, in a Monday speech to the American Medical Association, said the current medical system forces doctors to practice “defensive medicine— for fear of medical malpractice lawsuits.

While Obama’s comments were a small part of his speech, trial lawyers are worried that when the White House and Congress start cutting deals to craft a final health care bill, tort reform could end up as choice leverage to win over Republicans, conservative Democrats and business stakeholders.

The fact that Obama used the term “defensive medicine— was a red flag to trial lawyer advocates.

“Defensive medicine is a buzzword that encompasses a myth that doctors are doing unnecessary tests, thereby elevating the cost of health care because they’re worried about lawsuits,— said Linda Lipsen, the AAJ’s top lobbyist. “We haven’t seen any evidence from any reputable organization that there’s really a link between getting people to do unnecessary tests and being sued. The reason doctors do the tests is they have a profit motive.— She said the Congressional Budget Office and the Government Accountability Office have concluded the same.

Lipsen, who leads a team of a dozen lobbyists, said the AAJ plans to bolster its efforts. “We’re going to step it up because the issues are front and center.—

Lipsen said she was unable to offer specifics of the AAJ’s efforts. “We’re trying to get more details as to what he’s talking about,— she said. “It’s hard to react, because it’s pretty general at this point.— But she added that doctors and trial lawyers could agree on efforts to prevent medical errors. “If you want to save money, you could prevent those injuries and deaths from occurring in the first place,— she said.

Trial lawyers around the country say tort reform would not help lower health care costs.

“Anytime there is a bill that deals with any form of health care, it’s been our experience that some of the people who are nothing more than corporate shills in Congress will add [tort reform] so that this becomes the Trojan horse for something that doesn’t have much effect on the cost of health care,— said Kirk Wagar, a Florida-based trial lawyer who is on the AAJ board.

Added Jeff Padwa, a Rhode Island trial lawyer: “Certainly trial lawyers are listening and paying attention and are sensitive to the issue, but I don’t think the president said anything at this point that would warrant us to really push back in a major hard sort of way.—

Obama’s health care remarks and their implied criticism of the trial bar didn’t translate into conservatives endorsing health care reform. U.S. Chamber of Commerce Institute for Legal Reform President Lisa Rickard, for instance, said that while the move was “encouraging,— it didn’t change the chamber’s overall reservations about the shape health care reform is taking.

“The medical liability issue is one of a number of critically important issues facing the country in this historic health care debate,— Rickard said in a statement.

“However, it is important to note that medical liability reform alone is not enough to balance out the threats posed by an employer pay-or-play mandate, a new government-run insurance plan, or an unelected bureaucracy that takes decisions away from employers, employees, insurers, doctors, and patients,— she added.

Trial lawyers may also be aided by their longtime Democratic ties, especially when it comes to campaign contributions.

The AAJ’s political action committee doled out 95 percent of its $2.7 million in federal campaign cash to Democrats. And this election cycle is shaping up to be no different. Of the $439,000 the AAJ’s PAC has given out, 96 percent has gone to Democratic coffers.

And when it comes to lobbying, the AAJ remains a top spender. So far for 2009, according to lobbying disclosure reports, the group has spent some $1.2 million on its efforts. Last year, the AAJ reported spending $5.4 million on lobbying.

It retains a stable of outside consultants headed by Patton Boggs, which last year reported earning more than $1 million from the client. Other outside lobbyists include the Palmetto Group, Forscey & Stinson and NVG, among others.

Meanwhile, the AAJ is looking for a new CEO after Jon Haber resigned this spring. Tom Henderson, a longtime veteran of the group, is serving as interim CEO. “They’re going forward with a search, but I can’t tell you when it’s going to be filled,— Lipsen said.

Health care reform is hardly the only issue on AAJ’s legislative plate. The group is pushing for bills that would change a Supreme Court ruling in Riegel v. Medtronic that said patients could not sue medical device makers if the equipment had been approved by the Food and Drug Administration and for bills that would make arbitration voluntary. Trial lawyers have also been particularly concerned with the General Motors and Chrysler bankruptcies and what they could mean for defective-product lawsuits.

As for trial lawyers’ relationship with Obama, sources said they got off to a somewhat rocky start early in Obama’s Senate career when he voted in favor of the Class Action Fairness Act of 2005, a measure opposed by the AAJ, which at that time was known as the Association of Trial Lawyers of America.

However, trial lawyers say Vice President Joseph Biden’s presence in the White House has helped shore up any nervousness among their ranks. Biden has been a longtime supporter of plaintiffs’ lawyers. As a member of the Senate Judiciary Committee, he opposed legal liability proposals and bills that would limit claims against health care providers.

For all the anti-lobbyist talk in the Obama administration, the chief of staff to Valerie Jarrett, who heads the White House Office of Public Engagement, is Mike Strautmanis, a former lobbyist with the trial lawyers.

Still, Obama continues to garner strong support from plaintiffs’ lawyers.

In particular, lawyers pointed to Obama’s commitment to legal principles when in a speech he pledged not to cap medical malpractice damages.

“Most of us were heartened by his statement that he is opposed to caps on damages,— said Wagar, who was Florida finance chairman for Obama during the presidential election.

Yet Wagar and several other trial lawyers disputed that any tort reform provision added to health care reform would actually reduce medical costs.

“The question is who pays for people who are horrifically injured. Too often the insurance companies have used the ruse of lawsuits to justify either not protecting their clients, the doctors, or justifying raising rates in a really bogus manner,— Wagar said.

Trial lawyer Jeremy Alters agreed.

“It is clear that the one thing that needs to occur in relation to medicine is insurance reform,— said Alters, who sits on AAJ’s executive committee. “There needs to be significant insurance reform that takes place to make it so doctors don’t have to practice defensive medicine.—

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