TLR denounces trial lawyer resolution to GOP platform (TX)

As many Texas counties will be holding Republican county conventions this upcoming weekend, thought we’d share this:

Democrat trial lawyer’s proposal would be huge step backward for Texas

(Austin, TX) Texans for Lawsuit reform today denounced a proposed platform resolution circulated to Republican county convention delegates over the weekend that would be a boon for Texas’s trial lawyers and a disaster for Texas’s job creators.

Entitled the “Fraud Against Texas Taxpayers” Resolution, the proposal for so-called “whistle-blower” lawsuits is actually a “fraud against Republican leaders” perpetrated by Mark McCaig, a trial lawyer associate of Houston hurricane lawyer, Steve Mostyn, the largest contributor to Democrats in the state and an avowed enemy of lawsuit reform.  Mostyn contributed $10 million to Democrats in the last election cycle in an effort to defeat Republican candidates.

“TLR has been fighting this job killing legislation for years. In every jurisdiction in which these so-called “whistle-blower” lawsuits exists, it is a nightmare for employers and a bonanza for trial lawyers,” said TLR Founder and CEO, Richard W. Weekley.

Weekley added that this kind of legislation allows a private party to bring lawsuits on behalf of the government with the force and effect of the government, giving a plaintiff overwhelming leverage in litigation against private-sector defendants.

“One key to Texas’s economic success over the past 20 years is that we have come a long way in creating a predictable and fair civil justice system. Texas Republicans have long included tort reform as a basic plank in their state platform.  The proposed legislation would be a huge step backward for Texas.  We are confident Republican leaders will soundly reject it,” Weekley said.

Texans for Lawsuit Reform, the state’s largest civil justice reform organization, is a bipartisan, volunteer-led coalition with more than 17,000 supporters residing in more than 869 Texas communities and representing 1,253 different businesses, professions and trades. For more information, visit www.tortreform.com.

Attribution:

TLR Denounces Trial Lawyer Resolution to GOP Platform
Sherry Sylvester
April 16, 2012
Texans for Lawsuit Reform
http://www.tortreform.com/content/tlr-denounces-trial-lawyer-resolution-gop-platform?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TexansForLawsuitReform+%28Texans+for+Lawsuit+Reform%29

Weekley has also submitted a letter to Republican Party of Texas Chairman Steve Munisteri making the following points:

As the proposed resolution notes, Texas has a strong Medicaid qui tam statute that General Abbott has been using for the State’s benefit. The proposed resolution, however, omits important facts:

First: Texas’s current Medicaid qui tam statute was forced upon us by the federal government, which required Texas to enact the law in order to continue to receive the fullest possible reimbursement for our Medicaid expenditures.

Second: Texas also already has a common-sense statute allowing a whistleblower to report fraud to the State Comptroller related to any State expenditure. If the Comptroller believes the claim has merit, the Comptroller then refers the matter to the Attorney General. If the Attorney General pursues the case and prevails, the person originally providing the information receives a percentage of the State’s recovery.

The existing law makes sense because it provides checks and balances and puts the ultimate decision-making power in the hands of statewide elected officials who are charged with acting in the State’s best interest. The proposed resolution, on the other hand, envisions a law under which an individual can pursue litigation in the State’s name, even when the Comptroller and Attorney General decide the case is meritless and decline to pursue it.

Third: Versions of this bill introduced in the Legislature in the past have provided that a defendant would be liable for actual damages, plus two-times actual damages, plus a $5,000-$15,000 penalty per violation, plus interest, plus attorney fees-even if the defendant’s actions were inadvertent. These kinds of provisions are not just about allowing citizens to help fight fraud; they create substantial new liability for Texas’s employers.

Fourth: Because qui tam plaintiffs are paid a percentage of the recovery, they have an economic incentive to delay reporting fraud in order to allow the claim to increase in value, which benefits the plaintiff and his lawyer, but not the State of Texas.

Fifth: Qui tam litigation is costly and often unsuccessful for the government. Historically, the U.S. Department of Justice has pursued only about 20% of the qui tam cases presented to it under the federal qui tam statute. But, in many of the cases it does not pursue, the plaintiff lawyers pursue the lawsuits anyway. These cases almost always fail, but they cost job-creators millions of dollars in attorney fees and countless hours of unproductive time. One study found that the defendants’ average expenditure for legal fees in cases the government did not pursue was $1,431,660, while the average recovery was only $97,223. These defendants paid 15 times more to lawyers than they did to the government.

Weekley concludes with:

I urge the Republican Party to soundly defeat any effort to adopt a resolution calling for the Texas Legislature to pass “a broad whistleblower law similar to the Federal False Claims Act that would apply to allegations of fraud against any state agency or program” or anything like it.

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