A Sweeping Victory for Lawsuit Reform

The 2010 Elections Advance the Cause of Tort Reform

Whither the Texas Democratic Party?

Massive Trial Lawyer Campaign Spending Continues in 2010

A Sweeping Victory for Lawsuit Reform

The November 2nd elections in Texas were not only traditional partisan contests, but also a reflection of the continuing battle to maintain and improve the successful lawsuit reforms of the last fifteen years, which have helped make Texas the best state in the nation in which to start or grow a business and create jobs. A handful of personal injury trial lawyers spent millions of dollars in a futile effort to elect legislators who would roll back or diminish tort reform. One trial lawyer, Steve Mostyn, put in nearly ten million dollars of his own money to influence Texas elections in this cycle. In contrast, the funding for TLR PAC, and therefore for the candidates we support, comes from scores of different professions and occupations, including homemakers, consultants, retailers, ranchers, farmers, manufacturers, miners, developers, entrepreneurs, physicians, lawyers, accountants … and the list goes on.

The 2010 elections resulted in a significant improvement in the Texas Legislature for the cause of a fair, balanced and predictable civil justice system in Texas. Our State has made great strides in improving our litigation system since TLR came on the scene in 1994. Texas used to be ridiculed throughout the world as "The Wild West of Litigation," but now we are an admired leader in discouraging or preventing abusive litigation. Texas tort reform is widely acknowledged around the nation as being an essential factor in making Texas the nation's leader in job creation. According to the Bureau of Labor Statistics, Texas created over one-half of all of the net new jobs created in America for the period of August 2009 to August 2010. Economic growth and job creation allow families to support themselves and provide a tax base that can support essential government services such as public safety and education. Compare well-governed Texas, which created 119,000 new jobs, to California, which lost 112,000 jobs in the same period.

In the 27 truly contested fall races in which TLR actively participated, 25 TLRsupported candidates won. This is our report on the contested fall races and on the most meaningful primaries last spring. We hope you will support our PAC efforts with financial contributions and volunteer efforts, because your support is critical to our continuing success.

The 2010 Elections Advance the Cause of Tort Reform

This year's primary and general elections for state offices produced stellar results for civil justice issues. TLR played a significant role in numerous campaigns, which would not be possible without your continued financial and volunteer support for TLR.

Governor Rick Perry

Governor Rick Perry was the only statewide officeholder who faced a serious contest. The Governor won decisively with 54.97% of the vote. TLR PAC contributed $156,000 to Governor Perry's campaign. With Governor Perry's leadership, Texas has enacted the most comprehensive lawsuit reforms in our nation's history, and successfully defended against hundreds of efforts to dilute or repeal reforms. The Governor consistently appoints men and women of the highest caliber to the Texas judiciary. Rick was viciously attacked by Steve Mostyn, the incoming president of the Texas Trial Lawyers Association, through Mostyn's “Back to Basics” political action committee.

Judicial Races

TLR PAC supported the three conservative incumbent Supreme Court Justices who were challenged by opponents funded by personal injury trial lawyers. Justices Paul Green, Eva Guzman and Debra Lehrmann all handily won re-election.

There were several important appellate court races around the State, one of which was seriously in play: an open seat on the Third Court of Appeals in Austin. TLR supported Melissa Goodwin and she won with 57.13% of the vote.

The Texas Senate:

There were no seriously contested State Senate races. It is notable, however, that Sen. Kip Averitt (R-Waco) resigned his seat and was replaced in a special election by Brian Birdwell (R), a former U.S. Army Colonel who was badly burned in the 9-11 terrorist attack on the Pentagon. Senator Birdwell has two brothers who are Texas judges. Sen. Averitt had aligned himself with the personal injury trial lawyer lobby in the 2009 legislative session.

The Texas House of Representatives

The most contested races, other than the Governor's race, were for State House seats. There were numerous House races in which a pro-trial lawyer Democratic incumbent was opposed by a pro-tort reform Republican challenger. In contested races, the Republican challengers won twenty-one seats against incumbent Democrats who were allied with the Texas Trial Lawyers Association (TTLA). There were two pro-reform Democratic incumbents who had general election challenges. In those two races, Rep. Patrick Rose of Dripping Springs lost and Rep. Mark Strama of Travis County won. There were six pro-tort reform Republican incumbents who had serious to semiserious challenges by Democrats backed by personal injury trial lawyers. All six of those Republican incumbents won: Representatives Doc Anderson, Dwayne Bohac, Joe Driver, Linda Harper-Brown, Tim Kleinschmidt and Ken Legler. Rep. Will Hartnett (R-Dallas) also won reelection; TLR PAC did not participate in his race.

The make-up of the Texas House in the 2009 session was 76 Republicans to 74 Democrats. The make-up of the Texas House in the 2011 session will be 99 Republicans to 51 Democrats. Several of those Democrats are philosophically aligned with TLR on civil justice issues and we hope to expand the number of Democrats who will support TLR's pro-jobs policies. Only a few of the 99 Republicans are not philosophically aligned with TLR, but we are not yet giving up on them. In sum, there will be a solid majority in the Texas House for a fair, balanced and predictable civil justice system.

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Whither the Texas Democratic Party?

A Democrat Has Not Been Elected To A Single Statewide Office Since 1994. Why?

My first active involvement in politics was during my freshman year in high school, when I would drive to the Shamrock Hilton hotel after school each day to work as a volunteer in the Kennedy-Johnson Harris County headquarters. Through my school days and early adulthood, I did volunteer work for presidential candidates Hubert Humphrey, Jimmy Carter, Walter Mondale and Gary Hart, Senator Lloyd Bentsen, Congressman Mike Andrews, Lt. Governors Ben Barnes and Bill Hobby, Governors John Connally, Dolph Briscoe and Mark White, Attorney General John Hill, and Mayor Fred Hofheinz, to name the most prominent Democrats for whom I campaigned, raised money, or even managed campaigns.

In those days, most Texas Democrats promoted both social progress and economic development. Their campaigns were financed by a broad segment of the Texas community. Today, the Texas Democratic Party has allowed itself to become snared in a net of campaign financing from a tiny sliver of the Texas community – in fact, almost all of its funding (over 90%) comes from a handful of extraordinarily wealthy mass tort plaintiff lawyers. In politics as in the economy, bad money drives out good. Because the mass tort lawyers – many of whom have engaged in litigation that most business people consider to be abusive in nature – are funding Democrats, business-oriented contributors flock to Republicans.

In the two year election cycle that ended on November 2 with a tidal wave of Republican victories in Texas, one trial lawyer put almost ten million dollars of his own money to fund Democratic candidates for state offices. He had exceedingly few victories. It is notable that no Democrat has won a statewide office in Texas since 1994, sixteen years ago. It is no accident that the decline of the Democratic Party in Texas elections coincides with the trial lawyer dominance of Democratic funding.

Fortunately, there are Democrats who believe that the tort reforms of recent years have been necessary to the creation of a fair, balanced and predictable civil justice system. And that our civil justice system, as a consequence of tort reform, is one of the reasons that Texas creates more jobs by far than other states. These Democrats know that abusive lawsuits harm business activity and destroy jobs, and that economic growth and wealth creation produce the tax revenues that are necessary for government to provide essential services such as public safety and education.

Unfortunately, because of the smothering trial lawyer influence in Democratic politics, it takes courage as well as conviction for an elected Democrat (or a Democratic candidate) to oppose the trial lawyer agenda. Democrats who support tort reform risk the vengeance of trial-lawyer funded opponents in primaries. Fortunately, there are Democratic legislators who have the requisite courage and conviction. But for the Democratic Party to become competitive again, there needs to be many more.

I believe a vigorous two party system is beneficial to governance, and I hope, both as a tort reformer and as a citizen interested in a wide range of public policies, that Texas Democrats will break the stranglehold of the personal injury trial bar, allowing more Democrats to embrace the pro-jobs policies that most Texans support. Only when Democratic candidates can again count on the financial support of the Texas business community, as did the Texas Democrats of my youth, will Democrats be in a position of strength to influence public policy in our State.

Massive Trial Lawyer Campaign Spending Continues in 2010

By Sherry Sylvester, TLR Senior Communications Advisor

Personal injury trial lawyers broke their own record for campaign spending in Texas in the 2010 election cycle with contributions totaling over $17 million in contested races, according to the most recent campaign finance reports filed with the Texas Ethics Commission.

Once again, trial lawyers spent far more in campaign contributions than any other profession, business or industry group in Texas. A relatively new player on the scene, Houston hurricane attorney, Steve Mostyn, provided over half of that total – nearly ten million dollars. Mostyn and other wealthy trial lawyers backed candidates who would have worked to overthrow the lawsuit reforms that have created a fair and predictable civil justice system, bolstered the Texas economy in these tough times and increased access to health care throughout our state.

Fortunately, when the votes were counted on November 2, almost all trial lawyer-backed candidates were defeated.

Governor Rick Perry, the strongest pro-tort reform governor in the country, was decisively re-elected despite the early contribution of a million dollars funneled through the Democratic Governors Association by Mostyn and three of the "Tobacco Five" attorneys, John Eddie Williams, Walter Umphrey and Harold Nix, who gained much of their wealth from their share in the $3.3 billion in attorneys' fees in the tobacco settlement for the State of Texas. (A scandal related to the Texas settlement with the tobacco companies that ultimately led to the indictment and conviction of former Attorney General Dan Morales.)

Steve Mostyn – Top Trial Lawyer Funder in 2010

Mostyn, the incoming president of the Texas Trial Lawyers Association, contributed $9,858,313* this election cycle, given mostly to political action committees, but also to individual candidates. Mostyn created the Back to Basics PAC, a political attack machine, which he used to target Governor Perry and launch vicious personal attacks against candidates who support lawsuit reform. Mostyn also almost single-handedly funded the House Democratic Campaign Committee and was the largest contributor to Texans for Insurance Reform, another trial lawyer political action committee with a name that hides from the public the fact that 99% of its contributions came from personal injury trial lawyers.

Mostyn also supported other anti-lawsuit reform candidates and funded those candidates through several newly created political action committees, including Texans for Public Education, the Texas Forward Committee, Turn Texas Blue and the Valley Political Action Committee.

Mostyn, who has been disciplined by the State Bar Association for settling a case without his client's consent, see www.thetruthaboutSteveMostyn.com, was the lead attorney in the recent $189 million Texas Windstorm Insurance Association settlement of Hurricane Ike claims, which reportedly netted about $75 million in attorneys' fees.

Mostyn has gone to court to keep the details of the settlement secret. At least two state lawmakers – State Rep. Craig Eiland (D-Galveston) and State Rep Jim Dunnam (D-Waco) – have filed windstorm cases with Mostyn. State Rep. Trey Martinez-Fischer (D-San Antonio) is “of counsel” to Mostyn's firm. Dunnam, who has led the effort in the Texas House against tort reform, was defeated by Marva Beck on November 2.

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TLR PAC supported 19 Republican challengers against Democratic incumbents tied to the personal injury trial lawyers:

Two Republican challengers won in races in which TLR PAC did not make financial contributions:

TLR PAC supported two Democratic incumbents in challenged races:

TLR PAC supported six Republican incumbents in challenged races; each of these Members have been strong supporters of tort reform:

The March Republican and Democratic primary elections produced many notable changes, including:

Fred Baron's “Texas Democratic Trust” Shuts Down

Mostyn followed the model of the late asbestos lawyer, Fred Baron, in creating a number of political action committees with names that served to mask direct trial lawyer contributions to candidates. Baron, who died in 2008, established the Texas Democratic Trust in 2005 and announced his goal to revitalize the Democratic Party and take the state back from conservatives and tort reform advocates. Baron's target was to regain a number of statewide offices and seats on the Texas Supreme Court and capture a majority in the Texas Legislature before the 2010 redistricting process.

Baron spent an estimated $15 million on the Democratic Trust, which has been the primary funder for the Texas Democratic Party for the past five years. The Democratic Trust also funded the Texas Progress Council, which does opposition research, and the Texas Values in Action Coalition, which pushes trial lawyer backed candidates in North Texas. The Democratic Trust had provided most of the funding for the House Democratic Campaign Committee until this year, when Mostyn provided about sixty percent of the funding for that group.

Baron's widow, Lisa Blue, who is also a personal injury trial lawyer and was a partner in her late husband's firm, contributed $1,556,586** to the Democratic Trust this election cycle, making her the second largest Democratic contributor in Texas. Following the election, Baron's Washington based political operative, Matt Angle, announced that the Democratic Trust would shut down after the 2010 election, as Baron had planned. Despite spending millions, the Texas Democratic Trust did not achieve their goal. They failed to elect even one statewide officeholder or Supreme Court justice and now hold 12 fewer seats in the State Legislature than when they started.

The “Tobacco Five” – A Decade of Big Campaign Spending

Before Baron and Mostyn, the top Texas trial lawyer campaign contributors were the five Texas trial lawyers who shared the $3.3 billion fee awarded in the 1998 settlement between tobacco companies and the State of Texas.

Then Attorney General Dan Morales selected Beaumont attorneys Walter Umphrey and Wayne Reaud, Houston attorneys John O'Quinn and John Eddie Williams and Dangerfield attorney Harold Nix to handle the lawsuit, which was virtually identical to similar lawsuits in a number of other states. Morales was later convicted for felonious conduct related to the tobacco settlement.

The “Tobacco Five” immediately began pouring millions of dollars into Texas political campaigns to try to stop the tort reform movement, but Texans continued to enthusiastically embrace lawsuit reforms and were electing lawmakers who would stand up to personal injury trial lawyers.

O'Quinn, who made the largest single campaign contribution in Texas history, $2.2 million to failed Democratic gubernatorial nominee Chris Bell, died in 2009, but the remaining “Tobacco Five” lawyers are still major contributors to groups that funnel trial lawyer contributions to legislative candidates. Williams contributed $1,428,773** in 2010 and Nix (Nix Patterson Roach) contributed $908,880.** (For TLR's 2002 report on the “Tobacco Five” see “Hiding Their Influence” under special reports at www.tortreform.com)

Trial Lawyer Funding in Local Judicial Races

Personal injury trial lawyers also contributed hundreds of thousands of dollars to local judges in many Texas counties. In 2010, Mostyn contributed $923,942** to a political action group he created, the Coalition of Harris County Democratic Elected Officials, which not only provided campaign funds to dozens of local judges, but also bankrolled “Get Out the Vote” activities in Harris County (Houston). Republican judicial candidates nevertheless swept the judicial elections in Harris County.

In San Antonio, personal injury trial attorney Mikal Watts, who once bragged that his campaign contributions had gained him influence over Nueces County judges and the 13th Court of Appeals in Corpus Christi (see Houston Chronicle, Sept 5, 2007), combined with other local personal injury trial lawyers to fund “Get Out the Vote” operations in Bexar County using his own political action committee, innocuously named “Vote Texas.”

Despite their defeat at the polls this year, the contribution history of personal injury trial lawyers for more than a decade makes it clear that they will continue their massive spending in Texas politics. They clearly believe if they are successful in reversing a single tort reform, they would be on their way to undermining the Texas protections against lawsuit abuse – in medical liability, asbestos-silica, workers compensation, class actions, venue and other areas of the law. They know that if they can change the laws so that even one jackpot judgment or settlement is achieved, their campaign spending would have been worthwhile.

Lawsuit reform advocates must remain vigilant to make sure they are not successful, which is why TLR needs your continued financial and volunteer support.

* Including contributions to the Democratic Governors Association.
** All campaign finance contributions referenced in this report were obtained from the Texas Ethics Commission, http://www.ethics.state.tx.us.