The Little-Known Lawsuit Lobby

The Little-Known Lawsuit Lobby

The Capital Research Center (CRC) works to shed light upon activist groups that seek to influence American public policy. Such groups are important to a healthy civil society, but the fact that many are not widely known—or their activities not widely understood—is problematic if one values a well-informed citizenry. To illustrate this, consider CRC’ s new report on the “Lawsuit Lobby,” or the organized special interests representing plaintiff-side trial lawyers.

In the 2020 election cycle, OpenSecrets rated sixteen of the twenty top political action committee (PAC) contributors to Democratic federal candidates as being either “solidly Democrat” or “leans Democrat” (the remaining four gave heavily to candidates from both parties). Of these sixteen PACs, one was affiliated with Rep. Adam Schiff (D-CA), and fourteen were associated with labor unions—a traditional and widely-recognized Democratic constituency. The lineup for 2022 looks very similar.

The last of those sixteen PACs, however, was rather different. It sent 97 percent of its contributions to Democratic candidates, yet it represents a constituency that most Americans probably don’t readily associate with Democratic politics: trial lawyers. Few are likely familiar with the American Association for Justice (AAJ), the membership association that lobbies on behalf of the professional interests of more than 20,000 plaintiff-side civil litigators nationwide. Fewer still understand what that means in practice. Indeed, the AAJ’s very name is unlikely to prompt thoughts of lawyers and lawsuits.

That was not always the case. When the AAJ decided to change its name from the Association of Trial Lawyers of America in 2006, its reasoning essentially boiled down to the fact that it was concerned with being seen as a special interest group for lawyers. Perceiving a need to “win back the public in both the jury box and the ballot box,” the group’s research had apparently demonstrated that “if our message is or seems to be only about helping lawyers, we lose.”

Of course, promoting the interests of trial lawyers is what the AAJ does, and Democratic lawmakers certainly appear to have reciprocated for the support they receive. Take a notable example from last year. Buried in the 2021 budget bill passed by the Democratic-controlled House was an amendment to the Internal Revenue Code that would have permitted lawyers operating on a contingency fee basis to immediately deduct expenses related to their lawsuits. Not only is it easy to see how this might incentivize certain attorneys to bring less-than-ironclad cases, but the estimated cost—as much as $2.5 billion over 10 years—would have amounted to “a direct income transfer to plaintiffs’ lawyers, who will turn around and finance Democratic election campaigns,” to quote the Wall Street Journal. The paper’s editorial board called it “the definition of a corrupt political bargain.”

Were it not for the substantial media coverage that the provision received, the effort might well have flown under most Americans’ radars. That might have been the point. The AAJ has long sought this particular tax break on behalf of its members, yet it also recognized that “a stand-alone bill to help lawyers” had little chance in Congress. Instead, the group determined that it needed “to tuck it into something.” Its inclusion in the budget bill was brazen enough for the Washington Examiner to write that the provision alone “would be sufficient grounds for voting it down.”

Another example can be found in the AAJ’s strong opposition to limits on attorney’s fees, such as those that were included as part of the proposed Fairness in Class Action Litigation Act of 2017—which the AAJ vigorously attacked. While the relative merits of everything that was included in that bill are open to reasonable debate, one of its objectives was to limit attorney’s fees to a percentage of the benefit actually received by the plaintiffs themselves. Not only would this seem like common sense to many ordinary observers, but mounting evidence suggests that excessive fees relative to plaintiff benefit is a legitimate problem in class actions and elsewhere. The bill passed the House over uniform Democratic opposition, but ultimately died in the Senate.

The point of all this is twofold. First, understanding the influence of nonprofit activist groups and special interests is key to understanding the country’s sociopolitical landscape, and the public is considerably less familiar with the activities of many of these groups than they probably should be. Second, it is worth thinking about the Lawsuit Lobby specifically. Attorneys have every right to promote their own professional interests, but all Americans have a vested interest in our civil justice system. Even if the vast majority of the bar dutifully accepts the considerable responsibility entrusted to it, we should constantly monitor how well-aligned those interests actually are with one another.

To read CRC’s full report on the Lawsuit Lobby, click here.

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Robert Stilson is a Research Specialist at Capital Research Center and runs several of CRC’s specialized projects.

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