Echoing ALEC's Playbook, the Real Story of Walker's Tort "Reform"

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On New Year's weekend in 2011, many Wisconsinites were focused on the Badgers' return to the Rose Bowl or whether the Green Bay Packers would beat the Detroit Lions and get another shot to win the Super Bowl, but the incoming administration of Governor Scott Walker had other, bigger contests on its agenda. In mid-winter, while many in the state were worried about who would win or lose the big games, Walker's team was preparing to change state law in numerous ways, including making it easier for corporations to win big cases and limit the damages paid if their products or practices kill or injure people in Wisconsin.

Walker, who had suddenly dropped out of college in his senior year at Marquette University, didn't think up these changes to Wisconsin personal injury law all by himself. Key provisions of his "tort reform" package were previously drafted by lawyers or lobbyists for the global corporations that are part of the American Legislative Exchange Council (ALEC).

(Editor's note: This article was first published by the Wisconsin Association of Justice in The Verdict and a full set of cites is available there by subscription. It has been updated and modified for publication in PRWatch.)

As the Center for Media and Democracy has documented, ALEC is no ordinary corporate front group. It is a "corporate lobby masquerading as a charity," and over 98% of its revenue comes from corporations and sources other than legislative dues, even though it has called itself the largest independent group of state legislators in the country. Dues are tax-deductible, as a 501(c)(3) charity, and ALEC has routinely told the IRS and the press that it does no lobbying, while boasting to its members that it gets nearly 1,000 state bills introduced and hundreds passed each year. Through ALEC, corporate lobbyists vote as equals with legislators on "model" bills behind closed doors; and state elected officials who are leaders of ALEC have a "duty," under its published bylaws, to get its model bills introduced and made into law -- changing the rules for injured Americans, changing the rights of workers and students, and altering laws on voting, prisons, health care, environmental protections, and other vital issues.

Walker is an alumni of ALEC from his Assembly days, before his job as Milwaukee County Executive or governor.

When asked last year if Governor Walker's proposed changes to the rules for Wisconsinites injured by corporations relied on ALEC "model" legislation, his 28-year old spokesman Cullen Werwie told the press and the public, "absolutely not."

Despite such public denials, CMD discovered through open records requests that ALEC staffers urged state lawmakers to vote for Walker's tort reform bill because it "includes numerous provisions that reflect ALEC's civil justice reform policy and model legislation." (This email is available for downloading at the bottom of this article.)

January 2011, the Launch of the Walker/ALEC Agenda for the State

On Monday, January 3, 2011, the Chief Justice of the Wisconsin Supreme Court, Shirley Abrahamson, administered the oath of office to Walker, and he gave his first speech as governor. He emphasized that the Wisconsin Constitution recognizes that the "blessings of a free government can only be maintained by a firm adherence to justice, moderation, temperance, frugality, and virtue." Walker highlighted the values of "frugality and moderation," as he announced his call for the legislature to enact his jobs plan, which he said "provides relief from taxation, regulation, and litigation costs for employers."

Within hours of Walker declaring Wisconsin "open for business," Assembly Speaker Jeff Fitzgerald -- who was sworn-in by Justice David Prosser, a controversial judge and former legislator seeking re-election -- told the Assembly to prepare for a "wild two-year ride," which could be the most difficult but most rewarding session of their legislative careers. Rep. Fitzgerald is a member of ALEC, like his brother state Senator Scott Fitzgerald.

At the time, Walker had been secretly preparing for his efforts to "divide and conquer" Wisconsin workers by crippling collective bargaining and advancing part of ALEC's agenda against unions. These moves would lead Democratic senators to break the senate's quorum by leaving the state; it spurred over a hundred thousand Wisconsinites to protest at the Capitol -- which helped ignite protests in Ohio that ultimately blocked a similar law enacted by Governor John Kasich, an ALEC alum -- and helped launch Occupy Wall Street.

It would also lead to close to a million signatures to recall Walker (an election test he survived by raising millions from out of state donors and dramatically outspending his opponent, Tom Barrett, who was also outspent by special interest groups, such as PACs and billionaire David Koch's Americans for Prosperity). It would also lead to the successful recall of three state senators, the most ever recalled in a single twelve-month period in U.S. history, which flipped the majority in the state's senate.

But, back on inauguration day in 2011, Walker would issue his first Executive Order, invoking a "special session" under Articles IV and V of the state Constitution. That executive order referenced seven legislative agenda items, at least three of which tracked key provisions in the ALEC agenda. These include the Super-Majority Act, the Economic Impact Statement Act, and Walker's omnibus bill on tort reform.

That Executive Order held back Walker's plans to bust public employee unions in the state until after the Super Bowl when, in Walker's own words to his political allies, he would drop "the bomb" foretold in his secretive divide-and-conquer comments to a billionaire eager for Wisconsin to become a totally "red" state, politically. Notably, Walker would later say Indiana Governor Mitch Daniels was his hero because he had the power to change public workers' rights through executive order rather than through the legislative process.

One of Walker's other major acts on inauguration day was to authorize Attorney General J.B. Van Hollen to file a brief in a suit challenging the constitutionality of the federal Affordable Care Act (ACA). ALEC, too, has made fighting the ACA a top priority -- legislatively and in the courts -- and its brief to the U.S. Supreme Court and the one joined by Van Hollen are strikingly similar.

Tort Reform à la Walker/ALEC: Days to Pass but Years in the Making

Walker's first executive order on January 3rd, specified several legal changes as his top priorities for his soon-to-be introduced "omnibus" tort bill that echoed ALEC models:

• Limiting damages for pain and suffering -- beyond lost wages or out-of-pocket expenses -- that can be awarded when elderly nursing home patients die from neglect, even though older Wisconsinites cannot easily show economic damages such as lost income (extending ideas in ALEC's "Non-Economic Damages Act")
• Limiting the liability of companies that make products with common ingredients where the brand may be difficult to ascertain over time -- as with brain damage-causing lead paint -- by preventing courts from relying on "risk-contribution" (see ALEC's "Product Liability Act")
• Limiting punitive damages when a jury finds intentional corporate misconduct or gross negligence (similar to ALEC's "Punitive Damages Act")
• Limiting who can testify as an expert in ways preferred by corporate defendants (similar to ALEC's "Expert Testimony Standards Act")

By Tuesday, January 4, 2011, Walker's 31-page tort bill was circulating. It was the very first bill introduced in the Senate, and it was also the first bill in the Assembly.

ALEC Members, ALEC Scholarships, and ALEC's Agenda

Special Session SB 1's lead sponsor from day one was state Senator Rich Zipperer. As of at least 2011, according to a list of members of ALEC's "Civil Justice Task Force," Zipperer had a seat on that task force, which over time had approved the model bills noted above. By the Wednesday after Walker's inauguration, six other state senators joined Sen. Zipperer in being listed as "coauthors" of the bill, all of whom were members of ALEC or its task forces, and two more senators would soon join the bill, ALEC members as well. (Zipperer would also later attempt to change Wisconsin law to bar suit for Wisconsin residents injured or killed by FDA-approved prescription drugs, another ALEC model.)

As CMD discovered, Zipperer and numerous other Wisconsin legislators had previously received "scholarship" funds for travel to meet with corporate lobbyists and legislative members of ALEC. CMD has since filed a complaint with the Government Accountability Board arguing that such gifts violate Wisconsin's clean government rules.

Through open records requests, CMD discovered which corporations had secretly donated to such scholarship funds, and the list includes global companies seeking to limit their legal liability for products that harm or kill people, such as Pfizer, Wyeth, Altria, SC Johnson & Sons, Inc., Eli Lilly, and PhRMA. CMD also obtained information that revealed which legislators, like Sen. Zipperer, had received valuable reimbursement for hotel and airfare, worth $1000 or so.

That's a lot of money in a state where corporate lobbyists typically are barred from buying lawmakers even a cup of coffee.

ALEC's Wisconsin Legislators and Corporate Lobbyists

As CMD has documented, Senator Scott Fitzgerald and Rep. Mike Huebsch were ALEC's state co-chairs when Walker was elected. Under ALEC's public bylaws, they were charged with a duty to get ALEC bills introduced and to help raise money for ALEC "scholarships" and help distribute them to legislators. By early 2011, with Huebsch becoming Walker's right-hand man at the Department of Administration and with Sen. Fitzgerald spearheading Walker's legislative agenda, Rep. Robin Vos became ALEC's state co-chair. He was tasked with working with ALEC co-chairs Rep. Scott Suder and lobbyists Amy Boyer and Byron Wornson, who have represented ALEC members Koch Industries and Pfizer, respectively, in addition to other ALEC companies.

The public interest group Common Cause also discovered task force rosters indicating that other Wisconsin legislators had a seat on the Civil Justice Task Force in 2011: Rep. Andre Jacque, Rep. Chris Kapenga, Rep. Mike Endsley, and Rep. Mike Kuglitsch. That roster lists the following corporate members of the task force: Koch Industries (with four representatives, three from Koch Companies Public Sector and one for Georgia Pacific), Altria (two reps), PhRMA (two reps), GlaxoSmithKline (two), Johnson & Johnson, Pfizer, Merck, Bayer Health Care, Roche Diagnostics, Crown, Cork & Seal (two), ExxonMobil, Honeywell International, Inc. (two), State Farm Insurance (two), Farmers Insurance Group (two), TASER International, and others.

These are not all of the "private sector" members of this ALEC task force. The corporate defense firm of Shook, Hardy & Bacon, LLP, had four reps listed -- Victor Schwartz, Mark Behrens, Phil Goldberg, and Cary Silverman. Other trade groups Schwartz has worked closely with were also represented: the U.S. Chamber Institute for Legal Reform (four reps), the American Tort Reform Association (ATRA) (two reps), the Federal Society (two reps), Lawyers for Civil Justice, the National Federation of Independent Businesses (NFIB), the Pacific Research Institute, and PriceWaterhouseCooper's Civil Justice Reform Group (two reps).

At ALEC Task Force meetings, the private sector has an equal vote with the public sector members; no bill can become an ALEC "model" without the support of the corporations, which often initiate bills and present them for a vote by their fellow task force members. For years, Schwartz has co-chaired this task force alongside Ohio state Senator Bill Seitz.

At the ALEC spring task force meeting in 2011, one of the agenda items was "Tort Reform in the States" with a presentation on "Wisconsin Straight out of the Gates." Andy Cook of the Wisconsin Civil Justice Council was listed as the presenter.

(Notably, Johnson & Johnson was a long-standing member of this ALEC task force, but it has since resigned. Its departure from ALEC came in the wake of increased attention by the civil rights group Color of Change, after CMD connected the dots between the Florida "Stand Your Ground"/"Castle Doctrine" law and ALEC's model bill, as well as ALEC's legislation to make it more difficult for American citizens to vote through restrictive Voter ID laws modeled on ALEC's template. At least 38 corporations, 4 non-profit organizations, and 70 legislators have left ALEC since CMD's ALECexposed investigation was launched last year (updated).)

Moving Fast, with a Secret Endorsement from ALEC

The week after inauguration, on January 11, ALEC sent an "urgent" alert to ALEC legislators in Wisconsin, noting that it "supports" the bill. The email, which was not publicly known at the time, was sent from "ALEC's Civil Justice Task Force," and it took credit for key components of the bill advanced by Governor Walker, as follows:

• "Many of the reforms encompassed by [the bill] have foundation in ALEC model legislation."
• The bill "contains numerous provisions that reflect ALEC's civil justice reform policy and model legislation."

It also referenced a number of ALEC bills with provisions in common with the bill introduced in Wisconsin. The email also asserted, without any evidence, that passing the bill would "restore confidence for businesses as the economy struggles to recover [and] pave the way for job creation in Wisconsin." This email was sent to "Wisconsin members," and it was also specifically flagged for Sen. Fitzgerald, who then flagged this for his staffers. As of the last count, 49 of the state's 132 legislators were not just ALEC members but were leaders with a seat on ALEC's various task forces. The full list of ALEC members in the state Capitol is not public.

That ALEC email was sent in preparation for the hearing quickly scheduled on the bill, the only hearing that would be held on the bill's far-reaching changes. In all, twenty-two people entered an appearance in support of the bill, including two private sector members of ALEC, Carey Silverman of ATRA and NFIB, represented by its state director, Bill Smith. (There is no indication that they told the public that their groups were members of ALEC, let alone how the bill echoed ALEC's model bills in key provisions.) The Wisconsin Defense Counsel (WDC) and Wisconsin Manufacturers and Commerce (WMC) also supported Special Session SB 1/AB 1, along with representatives from the medical and hospital industries, in addition to others who registered their support for the bill.

Which influential group was not on the public list of supporters? ALEC. Even though ALEC had privately advocated for the bill in its secret broadcast to legislators, it was not listed in public as registering support at the hearing or through public records maintained by the Government Accountability Board.

Of the organizations that disclosed their time in lobbying for the bill -- unlike ALEC -- the top ten groups that spent the most time lobbying all supported the bill. These include the Wisconsin Civil Justice Council, which spent 125 hours lobbying for the bill, followed by WDC, the Wisconsin Hospital Association, NL Industries (which makes titanium paint pigments), the Sherwin Williams Company, Xcel Energy, NFIB, the Wisconsin Restaurant Association, BP (through the Atlantic Richfield Company), and Aurora Health Care, Inc.

There is no estimate of how much time ALEC spent on lobbying because it does not register in Wisconsin as a lobbyist, and it has claimed to the IRS and the press that it does no lobbying whatsoever.

Meanwhile, Concerns about the Bill Were Ignored

Thirty-one opponents of the bill appeared at the hearing, including Nancy Rottier, the Director of State Courts, several representatives of the Wisconsin Association of Justice, the AFL-CIO, and Disability Rights Wisconsin. Other opponents included representatives of elderly Wisconsin residents who would be affected by the bill's limits on liability for nursing home residents killed or injured in skilled nursing facilities in the state.

In addition, the Wisconsin Farmers Union opposed the bill, noting how the bill would limit the remedies and procedural rights of farmers injured by defective equipment or stray voltage.

Numerous opposing witnesses expressed deep concerns about the impact of the bill on the families of Wisconsin, including in particular the state's vulnerable senior citizens.

But the concerns of ordinary Wisconsin residents were ignored. Key parts of the bill had already been pre-approved by special interests like the ALEC corporate lobbyists who had already voted on the model bills it was based on with legislators behind closed doors.

After permitting this perfunctory one-day hearing on the bill, ALEC members helped speed it toward adoption as law.

As Sen. Fred Risser later complained, the Republican leadership held only one 30-minute executive session before rushing the bill to a final vote.

As with the hearing, as a procedural matter, the legislature entertained possible amendments to the bill.

But, every amendment to change or ameliorate the bill offered by Democratic Senators was defeated or tabled. Minor Republican changes to the bill passed, with votes almost entirely along party lines -- with the Republicans in the majority in both houses of the state legislature.

With ALEC Legislators in Charge, Bill Speeds into Law

On January 18, the Senate passed the bill on a party-line vote, 19-14.

Then-Senate Minority Leader Mark Miller issued a statement objecting to the bill and observing that, "Under the guise of 'jobs' and 'business climate' the Senate Republicans voted to approve changes to state law that create no jobs but could result in great harm to our seniors, families and the ability of law enforcement to keep our streets safe. By voting to defeat amendments to specifically fix these flaws, we can only conclude that's what they want to do."

Two days later, the Assembly passed the bill, 57-36, with Rep. Fitzgerald claiming the bill was "about getting people back to work," and Democratic Minority Leader Peter Barca responding, "Nobody is going to go to work tomorrow because this bill passes...."

Governor Walker's statement that night said the bill would help "the private sector to create jobs." He also asserted that the legal changes would refute supposed claims that Wisconsin was the "'Alabama of the North.'"

The final bill limited punitive damages to $200,000 or twice any compensatory damages, whichever is greater.

Notably, when Walker ran for office, one of his talking points was about ending "frivolous lawsuits" saying "we need to do more to block frivolous lawsuits, and we need true tort reform to help lower health care costs." But, punitive damages have nothing to do with "frivolous" suits. Such damages only apply after a jury finds deliberate misconduct or gross negligence. Walker's bill puts a very low limit on such damages, no matter how egregious the corporation's conduct or how enormous the company is and whether that amount of damages would act as any kind of deterrent.

For example, Koch Industries makes over $200,000 in revenue in a matter of hours. How much would a punitive damages verdict of that size deter a global company with that kind of revenue? Probably not much.

Walker Signs the Law; ALEC Applauds -- Where Are the Promised Jobs?

On January 27, ALEC issued a press release commending Walker and the legislature on passing the bill. Notably absent from the praise was any mention of how the bill was based on ALEC's model legislation, which the organization had extolled to Wisconsin legislators in its secretive communications.

Again, ALEC claimed, without any evidence, that the bill would have a significant impact on Wisconsin's "economic viability" "reigniting the state's sluggish economy," paving "the way the for job creation...."

ALEC has subsequently removed that press release from its website, but it is on file with CMD.

Walker campaigned for office on claims he would create at least 250,000 jobs in the state by the end of his term, but the first act introduced and passed in his administration was not actually a bill to bring or increase jobs in the state. Instead, it limits the legal liability of corporations located anywhere in the world whose products harm Wisconsin residents. The bill's changes to the law benefit corporations regardless of whether the company employs anyone in the state or just sells harmful goods here.

As the president of the Wisconsin Association for Justice, Mike End, noted: "Let's face it, every company looking to cut corners in order to make a bigger buck can come to Wisconsin without worry that they will be held accountable for seriously injuring or killing you or a member of your family."

The former Democratic governor, Jim Doyle, had previously vetoed components of this long-sought ALEC tort reform agenda, noting how the provisions would take away incentives for industries to produce and market safer products and how such changes to the law would make it harder for juries to assess potential experts, particularly in criminal cases.

Although the Walker administration asserted that passing the bill would not cost taxpayers anything of consequence, it did not take into account the impact on Wisconsin families and the Wisconsin economy of family members who are injured or killed and cannot recover damages from the corporations that should be held responsible for negligence or deliberate indifference to the consequences of their actions.

None of the fiscal estimates accounted for the full extent of possible losses of a family's breadwinner under the bill's legal changes. Nor did those estimates calculate the potential costs for families unable to recover the full damages a jury might have awarded prior to this law who might need state assistance to cover a lifetime of medical expenses or living expenses, as a result of corporations responsible for such injuries not being held fully accountable for the harm their products or decisions cause.

Meanwhile, Walker claimed his "tort reform" agenda would bring jobs to the state. However, a WMC survey from before Walker took office about changes that might "improve Wisconsin's business climate" found that tort reform ranked dead last, tenth of ten.

In Walker's first year, Wisconsin frequently ranked last or near the bottom in job creation out of all 50 states in monthly jobs figures.

But the fact that changing the rights of citizens injured by corporations has not been shown to create jobs anywhere in the U.S. did not stop Walker and his allies from making such claims. Nor did it deter ALEC from putting out such spin in order to advance the desires of its corporate members to limit their legal liability even when they harm people -- here in Wisconsin and in other states across the country -- through one-size-fits-all legislation from the ALEC corporate bill mill.

Lisa Graves is the Executive Director for the Center for Media and Democracy (CMD), a national non-profit investigative research and reporting group headquartered in Wisconsin. She previously served as Deputy Assistant Attorney General in the Office of Legal Policy at the U.S. Department of Justice, Chief Counsel for Nominations for the U.S. Senate Judiciary Committee, Deputy Chief of the Article III Judges Division of the U.S. Courts, as the Senior Legislative Strategist for the American Civil Liberties Union, and as the Deputy Director of the Center for National Security Studies. She is an honors graduate of Cornell Law School and the University of Wisconsin at La Crosse. She clerked for a federal judge and at the law firms of Crowell & Moring, Kirkland & Ellis, Johns & Flaherty, and Bosshard & Associates, and as an intern at the La Crosse County District Attorney's Office.