ALEC Targets Laws Holding Corporations Accountable

Although the American Legislative Exchange Council (ALEC) has been in the spotlight in recent weeks for promoting legislation similar to the Florida “Kill at Will” law at issue in the Trayvon Martin case, for decades the organization has been quietly "ghostwriting the law" to the benefit of its big business funders and the detriment of consumers, investors and victims of corporate wrongdoing. Increased attention on the shadowy organization is revealing that ALEC's now-notorious and since-disbanded foray into gun rights and voter suppression was a tangent from a massive, concerted campaign to set aside laws that hold corporations accountable when they pollute the environment, sell dangerous products or defraud consumers. All the more effective for its stealthy nature, ALEC's war on corporate accountability has received only a fraction of the scrutiny the media has focused on the Kill at Will controversy.

ALEC's Civil Justice Task Force drives this agenda under a banner of “tort reform.” A “tort” is a wrong that gives rise to a legal claim. Tort lawsuits seek to compensate victims for physical, economic and psychological harm and deter future negligence or intentional wrongdoing. Because most tort law is made at the state level and many cases are tried in state courts, ALEC's state-focused Civil Justice Task Force is a crucial element of a broader corporate-driven “tort reform” effort.

ALEC shapes state law by drafting and promoting “model legislation,” and the Civil Justice Task Force actively engages in this effort, as illustrated by two documents. The first, recently brought to light by the public interest organization Common Cause, is a spreadsheet titled “ALEC State Tracking: Good Legal Reform Bills.” The spreadsheet tracks 160 pieces of legislation relating to “tort reform” from 38 states in great detail. Among the categories of information collected in the spreadsheet are the sponsor of each bill, his or her political party; the title of the bill, the related ALEC model bill, any hearings held on the bill and its status. Thus, when the Civil Justice Task Force took this snapshot in 2011, 160 pieces of legislation, each of them inspired by an ALEC model bill, had been introduced in the state legislatures of 76 percent of the states. The “Good Legal Reform Bills” document is proof of the sweeping scope and sophisticated nature of ALEC's campaign to limit corporate accountability.

A second document gets at the equally ambitious substance of the campaign. Titled The State Legislator's Guide: Tort Reform Boot Camp, the 44-page document sets out 13 pieces of model legislation, along with “talking points” in support of each provision; tips on “gauging your opposition;” and “steps in the right direction” that a legislator might pursue if political or legal barriers prevent full adoption of the proposal. The document is “tort reform” in a box, equipping corporate-friendly legislators to introduce, promote and enact the Civil Justice Task Force's agenda. The effectiveness of ALEC's techniques, as represented by Tort Reform Boot Camp, is illustrated by the organization's claim that between 1999 and 2011 43 states “enacted legislation based on ALEC Civil Justice Task Force legislation.”

Much of the legislation outlined in Tort Reform Boot Camp deals with important but highly technical changes to the mechanics of the litigation process such as rules on where cases can be tried and how interest on judgments should be calculated. But one set of proposals gets at the heart of ALEC's campaign to limit corporate accountability for wrongdoing: caps on damages. Economic damages compensate for direct, measurable monetary loss (for example, doctors' bills resulting from a physical injury). Non-economic damages compensate for more subjective harms (for example, disfigurement or paralysis following an injury). ALEC's Non-Economic Damages Awards Act caps these damages at $250,000.

Damage caps are explicitly about limiting corporate accountability for wrongdoing. They have nothing to do with “frivolous lawsuits,” because they only apply in cases where a judge and jury have determined that a case has merit, and that the victim has suffered serious harm. By establishing a low, one-size-fits all limit on damages from even horrendous injuries including permanent disability, disfigurement, blindness, loss of a limb and paralysis, damage caps shift the consequences of wrongdoing from perpetrators to victims, helping “ALEC corporations escape responsibility for wrongdoing.”

In an email to Media Matters, Susan Saladoff, Producer and Director of the award-winning documentary Hot Coffee, sums up ALEC's “tort reform” agenda as follows:

What is so ironic is that groups like ALEC espouse the tea party agenda which is supposed to be about our constitutional rights. They seem to remember the 2nd amendment about guns but fail to remember the 7th amendment, which gives each American the right to a trial by jury. Having our cases decided by a jury of our peers is a fundamental right of our democracy, which is being taken away by these laws that restrict a jury to decide what a fair and adequate amount of damages should be in a tort case.

Another document recently unearthed by Common Cause includes a 1995 quote from ALEC's then-executive director boasting to corporate supporters that, “With our success rate at more than 20 percent, I would say that ALEC is a good investment. Nowhere else can you get a return that high.” Securing caps on damages is a big part of what drives the return on the “investments” of ALEC's corporate donors.

State-level media coverage that has ranged from sporadic to nonexistent has played a major role in the success of ALEC's campaign to limit corporate accountability. A Media Matters analysis has shown that ALEC-backed legislation to allow Crown Holdings to avoid accountability for injuries to workers caused by asbestos was successful when the media ignored the issue and failed when both the substance of the legislation and ALEC's role in promoting it received significant coverage. In Michigan, the state's two largest newspapers were “utterly silent” regarding an ALEC-backed asbestos bill from introduction to passage, even though Crown's general counsel testified that the bill was based on ALEC model legislation and Progress Michigan, a state-based progressive organization, highlighted the issue. In this vacuum of coverage, the Michigan bill was signed into law in April 2012.

In Minnesota, on the other hand, an effort by Crown to pass similar, ALEC-inspired legislation received significant coverage by the Minneapolis Star-Tribune. A front-page article detailed the substance of the bill, Crown's support for it and ALEC's role in developing similar legislation in other states. Governor Mark Dayton vetoed the legislation, noting that it would “limit exposure of asbestos manufacturers and to shift the costs of these injuries to taxpayers and others.”

ALEC's once murky agenda on corporate accountability and other economic issues has been exposed. It now falls to the media to cover these activities and prevent the organization from sinking back into the shadows, from which ALEC promoted this agenda so effectively for so long.