8 Challenges to Plaintiff Attorneys in the Age of Trump
The electoral upset has sent every sector scrambling to recalibrate their outlook on the future. The upcoming president isn’t making it easy for the prognosticators and pundits: as consumer- and worker-advocate Paul Bland notes: president-elect Donald Trump “ran a campaign where there was less release of detailed position papers than in any other modern presidential campaign.”
Even those points where he was most assertive are being challenged by the team he’s putting into power, adding more knots to the complex inner conflict between populism and business interests which Trump represents.
Among those parsing out this knot are legal experts. What are we to make of this president who has been either a plaintiff or defendant in around 100 federal lawsuits, and whose companies have been involved in more than 200 civil lawsuits in federal courts? And even supposing we can read through the lines of his widespread court use to find some set of values, how will those interact with the Republican-controlled Congress and the pet projects of those Trump is nominating for his team?
Much remains uncertain, but here are 8 possible arenas where we might see changes in plaintiff-side law when this real-estate mogul and reality-TV star becomes the real president of the United States.
What Will Happen to Tort Reform Under Trump?
The debate around this question is illustrated by one example:
In a recent interview with Tony Buzbee, the Texas Lawyer reports his predictions that All’s Well for plaintiff’s lawyers under a Trump regime. The high-profile Houston trial lawyer originally fundraised for Trump, until the damning Access Hollywood video turned him away from the real estate mogul. Nevertheless, Buzbee asserts “I don’t expect the President-elect to attempt any sort of tort reform. Based on his history, he appears to understand and appreciate the importance of the court system, and the necessity to make it accessible to all.”
However, underneath this calm prediction is one single comment, that comes from a key staffer of the American Tort Reform Association (ATRA). Communications Director Darren McKinney taunts:
“Mr. Buzbee’s whistling past the graveyard. In addition to reasonable statutory tort reforms that will surely make it to the new president’s desk and be signed into law, executive branch regulators in 2017 will immediately begin to roll back many of the regulatory expansions of civil liability that the Obama administration has quietly doled out to the parasitic plaintiffs’ bar.”
Should plaintiff-side attorneys seeking to understand the near future of their profession follow the calm dismissal of Buzbee or worry over the celebrations of the American Tort Reform Association, who proclaimed on November 9th that the biggest loser of the election was the “lawsuit industry”?
Here are some general outlooks for the big questions on tort reform for the next four years:
1. Attacks on so-called ‘frivolous litigation.’
Early on in Trump’s political career, conservatives who favored tort reform noted their alarm at Donald Trump. The Club for Growth, which supports tort reform, noted in their white paper on Trump: “Tort reform is an area where Donald Trump has a proven record, and that record is abysmal.” They fish out a few of Trumps many lawsuits to prove their point, such as his demand for $5 billion from a New York Times journalist who said he wasn’t worth as much as he claimed; suing comedian Bill Maher for breach of contract when he offered $5 million for Trump to prove he’s not the child of an orangutan; or the latest step in 20 years of suing Palm Beach County, in which Trump requested $100 million in damages from the fumes of planes flying over his mansion.
The Club for Growth concludes:
“While there are many more examples, these three instances illustrate how Trump has repeatedly engaged in frivolous, retaliatory litigation, and how he regularly appears to abuse the legal system as a tool for publicity or political gain, as opposed to an instrument of legal remedy and relief.”
However, with a Republican congress interested in tort reform, many are now predicting, like ATRA, that they’re likely to see victories in legislation that makes filing lawsuits more difficult. Following the election, Wall Street law firm Skadden, Arps, Slate, Meagher & Flom published a prospective on the future of the legal and regulatory environment under Trump. They predict that even with Trump’s love of hair-brained lawsuits, “[w]ith a Republican in the White House, congressional leadership will likely reintroduce and pursue litigation reform ideas that received attention in the current legislative Session.”
Defense attorney Mark Behrens, who works for Shook, Hardy & Bacon in D.C. notes that this likely includes legislation similar to the failed Lawsuit Abuse Reduction Act of 2015, which required federal courts to impose sanctions and damages against an attorney or law firm that files a frivolous complaint. While Rule 11 of the Federal Rules for Civil Procedures already permit the imposition of monetary sanctions against lawyers who file non-meritorious claims, the Act would require the sanction, as well as cut out a provision that allows parties and attorneys to avoid sanctions by withdrawing frivolous claims within 21 days after a motion is served.
The ABA argues that a similar mandatory sanction provision was in effect from 1983-92, but was shown to actually increase non-meritorious lawsuit filings instead of reduce them. The Act would strip away the incentive to withdraw frivolous filings at the beginning of litigation, and possibly “impede the administration of justice by encouraging additional litigation over sanctions motions, which would increase, not reduce, court costs and delays.”
Skadden also predicts Congress will revisit the House Judiciary Committee focus on the “growing trend of mass tort litigation claims being lodged in federal courts (particularly multidistrict litigation proceedings) without proper pre-filing investigation.”
So even with Trump’s itchy trigger-finger for filing lawsuits himself, there’s a good chance he’ll empower the Republican-majority Congress to move forward on legislation opposed by many legal organizations.
2. Reduction in class action lawsuits
Another piece of legislation that is likely to return is the Fairness in Class Action Litigation Act which the House passed this year. The bill reduces the scope of class actions to ensure that everyone in a class has suffered the same type and scope of injury.
According to Linda Lipsen from the American Association for Justice, laws like this would “eliminate most consumer class actions” and “take away citizen’s rights to form a class and take on Goliath corporations. It means that corporations [. . .] would be immunized while their consumers are left holding the bag. It means there would be fewer consequences for a company’s dishonest dealings and that, in the future, a corporation may well decide it’s better for the bottom line to lie to their customers than to fix a serious problem.”
Others, such as plaintiff’s advocate Jocelyn Larkin, don’t foresee any major changes to Fed. R. Civ. P. 23, the rule that governs class actions.
3. Obstacles to asbestos litigation
Another tort reform bill which the House championed this year and is likely to resurface is the Further Asbestos Claim Transparency Act, which requires public disclosures of payments made to plaintiff’s by the trusts that pay out asbestos exposure claims made against bankrupt companies.
Opponents of the bill, such as the Asbestos Disease Awareness Organization and the Asbestos Cancer Victim Rights Campaign, argue that public disclosure would hurt the privacy of victims and make their claims more difficult.
4. Restrictions on transfers of federal cases to state courts.
The final tort reform House bill that’s likely to return under Trump is the Fraudulent Joinder Prevention Act, which will make it harder for plaintiffs to transfer their cases from federal to state courts. While proponents believe the current system creates unfair ‘magnets’ for mass tort controversies which may not have any relationship with the jurisdiction, opponents claim:
“The process contemplated by this bill would be not only unfair to and incredibly expensive for the plaintiff, but also an enormous waste of judicial resources. There is no reason for these state based claims to be heard in federal court other than corporations’ desire to engage in forum shopping. Yet, there is no evidence whatsoever that national corporations, who choose to avail themselves of the marketplaces in states across the country, complying with multiple state laws in the process, should then have a problem appearing in state court.”
5. Restrictions on third-party financing
Skadden also notes that lawsuit investments could be revisited, since the Senate’s Judiciary Committee leadership has already expressed interest over “potential abuses arising out of the increasing use of third-party litigation financing.” This course could lead to disclosure and regulation proposals in the future.
It’s worth noting, however, that even with Trump’s approval, any of these potential bills would still require 60 votes in the Senate to be filibuster-proof.
6. Re-entrenchment of mandatory arbitration
The Obama administration’s restrictions on mandatory arbitration are unlikely to survive the arrival of Trump, according to Bloomberg BNA.
Liz Kramer, a defense attorney who writes for Arbitration Nation, notes in an interview with Bloomberg that “Trump and his businesses seem to have been big proponents of arbitration, using it as a way of getting disputes out of courts and therefore out of the public eye.”
“Given his overall ‘change’ message, and repeated criticism of all things Obama,” she says, “my gut tells me his administration will roll back these regulations.”
On the other hand, Paul Bland notes that rolling back arbitration bans could go against Trump’s populist message: “I feel strongly the U.S. Chamber’s views on forced arbitration and banks is overwhelmingly at odds with the Republican voters — they are very strongly opposed to it.”
He continues: “It will be interesting to see if Mr. Trump doesn’t give a damn about the voters to go with the industry lobbyists, or shakes things up to go a different direction. [. . .] I hope he surprises us. But if he’s a predictable industry hack, he’s going to face a lot of battles.”
Here are the specific regulations safeguarding the right to a trial, and how they could fare in the future:
Financial Services: Under Obama, the Consumer Financial Protection Bureau proposed a rule to bar banks and other financial institutions from using mandatory arbitration clauses to prevent class action lawsuits. Now, defense attorney and consumer financial service expert Alan S. Kaplinsky, believes those proposed rules “are in jeopardy.”
Since the CFPB anti-arbitration rule is still only a ‘proposed’ rule, it could be quickly reversed, without a required notice and comment process. The rule is especially vulnerable following an Oct. 11 decision in a D.C. federal appeals court that ruled the CFPB is an executive agency, and the president can change its leadership at will.
However, Bloomberg also notes that others believe Trump will have to be more cautious with meddling in arbitration issues. Defense attorney Liz Kramer states: “part of Trump’s campaign message was one of populism and empowering the ‘little guy,’” which could “translate into supporting regulations that allow more consumers and employees to keep their disputes in court.”
Deepak Gupta, who is a plaintiffs’ attorney and opponent of arbitration, believes Trump’s “mandate reflects a deep distrust of Wall Street and the financial system” which might work in favor of consumers and workers. “Nobody really thinks he was elected because his supporters think Wall Street should get a free pass,” Gupta notes.
It’s still too early to predict what will happen. As Gupta notes: ”[i]t’s unclear whether Trump even knows what the CFPB does.”
Education: The Department of Education has put forward a final rule limiting mandatory arbitration in for-profit college agreements. Since this rule has been finalized, any changes or reversals would require a process that would take at least a year to complete. These changes could also spur a court challenge, since at this point the agency would have to justify the change. These rules aren’t supposed to flip simply with a change in administration, but rather have a meaningful notice and comment process which aims to benefit the public good.
However, this rule isn’t scheduled to go into effect until July 2017, and there are some loopholes a Trump administration could use to hold off on implementing it while they review and possibly reverse it. Considering that Trump himself has been sued for his for-profit university, he could have a personal vendetta against rules like this one.
Nursing Homes: Another effort against mandatory arbitration that’s well advanced is the regulation from Centers for Medicare & Medicaid Services (CMS) that limits their use in nursing home agreements. Like the Department of Education rule, this one has been finalized, and was even supposed to go into effect at the end of November. However, the courts have delayed its implementation until they determine whether the agency had the authority to make the rule. It’s unclear how much leeway a Trump administration would have in determining this rule’s future while it’s still in the hands of the courts.
Internet Providers: The Federal Communications Commission seems to be in fairly strong position going forward in addressing mandatory arbitration in internet service contracts. Unlike the CFPB, the Agency is independent, composed of three Democratic appointees and two Republican appointees who can’t be changed without cause. The FCC has announced that it will be looking into an arbitration ban in February.
Government Contracts: Obama limited mandatory arbitration in government contracts with an executive order in 2014. This could be reversed with another executive order.
Workers’ Rights: The National Labor Relations Board (NLRB) determined that mandatory arbitration agreements unlawfully interfere with employees’ rights to engage in concerted activity. Their ruling was challenged in court, with federal appeals court split on whether the NLRB has the power to interpret the law in this way. The decision is currently up for review with the U.S. Supreme Court.
While this rule is also well-advanced and in the hands of the court, Trump could appoint another member to the NLRB who would push to reverse its position on arbitration and file new briefs in the case. Even still, the Court could still find that the NLRB properly interpreted the statute in rejecting mandatory arbitration.
7. Limits on medical malpractice
What might happen to medical malpractice litigation under a Trump presidency? The answer doesn’t look good for future plaintiffs.
In Trump’s 2011 book Time to Get Tough: Making America #1 Again, he sets out his ideas on reducing health costs through free-market capitalism. He writes:
“The other way we can drive down costs is by recognizing that doctors today are practicing “defensive medicine.” In other words, doctors often order unnecessary tests and procedures to avoid being sued. Pricewaterhouse Coopers did a study to see how much defensive medicine adds to overall medical costs. They found that this phenomenon accounts for at least 10 percent of all medical costs. That’s huge.”
He then writes about the “disgraceful human being” John Edwards, who brought forward medical malpractice cases against physicians who allegedly caused infant cerebral palsy. Trump continues:
“‘The courts are clogged up with these cases,’ says Dr. Cecil Wilson of the American Medical Association. ‘Physicians are afraid of being hauled into court and as a result order tests they ordinarily would not order.’ With sleazy characters like Edwards lurking around every hospital corner, it’s no wonder doctors feel forced to add all those expensive tests to protect themselves. Doing so, however, jacks up our health-care costs by at least 10 percent. That’s why we need serious tort reform. Specifically, we need to cap damages for so-called ‘pain and suffering’ at $100,000. We also need ‘loser pays’ laws that will make the loser pay the legal bill of the winner if charges are deemed baseless — a system followed by almost all other western democracies. This will help cut down on frivolous suits that artificially raise health-care costs and clog up our courts. The state of Texas recently passed loser pays legislation. Other states should do the same.”
Now Trump has nominated Georgia Congressman Tom Price, M.D. to serve as Secretary of Health and Human Services. Price, an orthopedic surgeon from the Atlanta suburbs, is a vocal opponent to medical malpractice litigation. In 2011 he introduced the Health Care OverUse Reform Today Act (HealthCOURT Act), which would have put forward a list of guidelines for the treatment of medical conditions. If any physician followed these guidelines, victims of malpractice suing them couldn’t claim noneconomic damages. But these guidelines could only be used one way: they couldn’t be introduced as evidence “of negligence or deviation in the standard of care in any health care lawsuit unless they have previously been introduced by the defendant” and “[t]here shall be no presumption of negligence if a health care provider provides treatment in a manner inconsistent with such guidelines.”
The bill also provided money for states to set up administrative health care tribunals which would put in place more obstacles for medical malpractice victims from taking their cases to court.
In 2009, Price introduced another bill aimed at limiting damages to victims of medical malpractice, as well as attorney fees, asserting it “would solve the lawsuit abuse issue.”
To add to the growing push against medical malpractice, the 2016 Republican Platform, under the heading “Better Care and Lower Costs: Tort Reform,” stated:
“Medical malpractice lawsuits have ballooned the cost of healthcare for everyone by forcing physicians to practice defensive medicine through tests and treatments which otherwise might be optional. Rural America is especially affected as obstetricians, surgeons, and other providers move to urban settings or retire in the face of escalating insurance premiums. Many Republican Governors have advanced the legal reforms necessary to reverse that trend. We support state and federal legislation to cap non-economic damages in medical malpractice lawsuits, thereby relieving conscientious providers of burdens that are not rightly theirs and addressing a serious cause of higher medical bills.”
8. Limits on civil rights protections
Finally, the Trump administration could see a weakening of civil rights protections, which will have implications for practitioners of plaintiff-side law.
As civil rights scholar Michael Foreman notes, this administration could pull its support from enforcing certain civil rights statutes, such as the Equal Employment Opportunity Commission (EEOC). Foreman says “[t]hey could either trim the budget or pick leadership that is not interested in pursuing systemic types of relief.” If something like this happens, “It will fall back to the private counsel to pick up those cases that the EEOC doesn’t do.”
In fact, plaintiff-side attorneys predict that if Trump deprioritizes civil rights enforcement (and creates a Muslim registry, builds a way will Mexico, limits protestors’ rights, and bring back “law and order”), as he’s likely to do, civil rights class actions could multiply.
Jocelyn Larkin, executive director of the pro-plaintiff Impact Fund, told Bloomberg BNA that voids left within the administration’s civil right’s enforcement would be filled with the private class action bar. ”It’s always somewhat easier when you have the backing of the administration on enforcement, but when we don’t we’ve forged ahead,” she says.
Fighting abuses such as wage-and-hour violations and employment discrimination has always required players from the private bar. However, any attacks on the ability of these attorneys to litigate class action lawsuits could erode their ability to protect civil rights.
In case you’re feeling like donning a fur coat and stoically announcing that Winter is Coming, remember that some attorneys are facing the near future with a deepened sense of commitment to their work. As Jocelyn Larkin reminds us:
“This is what we do. This is the job we have and there’s nothing else we want to be doing.”