THE CALA FILES -
THE SECRET CAMPAIGN BY BIG TOBACCO AND OTHER MAJOR INDUSTRIES TO TAKE AWAY YOUR RIGHTS

By Carl Deal and Joanne Doroshow

Released by Center for Justice & Democracy and Public Citizen

EXECUTIVE SUMMARY

For the last 15 years, insurance companies, manufacturers of dangerous products and chemicals, the tobacco industry and other major industries have been engaged in a nationwide assault on the civil justice system. In nearly every state and in Congress, corporations and their insurers have waged a relentless campaign to change the laws that give sick and injured consumers the ability to hold their offenders responsible for the injuries they cause. And in the year 2000, the corporate assault on the civil justice system has emerged as a presidential campaign issue.

The goals of these attacks on the system are clear: to insulate corporations from lawsuits for their reckless behavior and to strip the rights of injured consumers who would be entitled to compensation. Threatened by the willingness of impartial juries to penalize them where it hurts most -- their bottom line -- corporations and their insurers are out to convince the public that the civil justice system is "out of control" and needs to be scaled back.

The business-led effort to take away consumers' legal rights (called "tort reform" by its corporate proponents; "tort deform" by its pro-consumer opponents) has had at its helm the American Tort Reform Association (ATRA) located in Washington, D.C. In turn, ATRA has contracted with APCO & Associates, one of the nation's leading "grassroots" lobbying/PR firms.

Among other things, APCO's job has been to build a network of local organizations that act as mouthpieces for anti-consumer tort law changes. They euphemistically call themselves any number of names, typically: Citizens Against Lawsuit Abuse (CALA), Lawsuit Abuse Watch, Stop Lawsuit Abuse, or People for a FAIR Legal System. In this report they are collectively referred to as "CALAs." While CALAs masquerade as grassroots citizens groups spontaneously manifesting citizen anger against so-called "lawsuit abuse" in their states, this report shows the CALAs to be part of a national corporate-backed network of front groups that receive substantial financial and strategic assistance from ATRA, APCO and some of America's biggest corporations.

For this report, the Center for Justice & Democracy (formerly Citizens for Corporate Accountability & Individual Rights) and Public Citizen studied CALA groups in 18 states. Drawing from the cache of tobacco industry papers released in connection with state lawsuits against the five major tobacco companies, other public documents and interviews with lobbyists, elected officials and paid consultants, this report shows how large corporations seeking to reduce their liability to consumers created and bankrolled the CALA campaign to manipulate the media, the legislative process, the electoral process, and the American public.

This report identifies many of the corporations, national lobbying groups and political consulting firms behind the state CALA groups, and exposes how the tobacco industry has concealed its leading role in order to preserve the CALAs' credibility in the public eye. Among the report's key findings are the following:

• Since 1991, "tort reform" advocates have set up dozens of tax-exempt groups in at least 18 states (currently there are 27 active groups) to plant their "lawsuit abuse" message in the media and the public consciousness, and to influence legislation, the judiciary and jurors. These groups claim to speak for average Americans and represent themselves as grassroots citizens groups determined to protect consumer interests. But their tax filings and funding sources indicate that they actually represent major corporations and industries seeking to escape liability for the harm they cause consumers -- whether it be from defective products, medical malpractice, securities scams, insurance fraud, employment discrimination or environmental pollution. These organizations hide their pro-business agenda behind consumer-friendly names like Citizens Against Lawsuit Abuse, Stop Lawsuit Abuse, Lawsuit Abuse Watch, and People for a FAIR Legal System.

• While CALA groups tell the media, as well as lawmakers, that they are sustained by small donations from ordinary citizens, the money trail from many of these groups leads directly to large corporate donors, including tobacco, insurance, oil and gas, chemical and pharmaceutical companies, medical associations, and auto manufacturers. They are also funded by ATRA, as well as professional associations, local businesses and industries that also wish to be shielded from consumer lawsuits.

• A huge cache of documents made public during the state attorneys general litigation against the tobacco industry in the late 1990s that was specially analyzed for this report reveals that Big Tobacco spent millions of dollars a year (and in at least one year $15 million) supporting ATRA, state CALAs, and other activities to weaken tort laws in many states. For instance, in 1995, Big Tobacco allocated $5.5 million for ATRA, more than half of ATRA's budget. In some cases, CALAs, such as the one in Louisiana, were virtually created by the tobacco industry. Tobacco money has gone directly to ATRA, APCO, and state organizations. It has also been indirectly funneled to the cause through law firms, such as the Washington, D.C. firm Covington & Burling, trade associations and lobbyists. The industry's Tobacco Institute also played an instrumental role through its State Activities Division. In the 1980s, Big Tobacco's efforts were instrumental in the passage of legislation immunizing the industry against products liability claims in New Jersey and California. Other states in which the industry secretly worked to undermine tort laws include Hawaii, Louisiana, Massachusetts, Mississippi, New York, Pennsylvania, and Texas.

• The CALA blueprint was honed in South Texas in the early 1990s where the first group to carry the "lawsuit abuse" message ran doom and gloom television and radio ads warning that the legal system was out of control, affecting the economy and the pocketbooks of average people. Creating a model that was duplicated nationwide, the Texas CALA groups developed a statewide support network that included the Texas Chamber of Commerce, the right-wing Texas Public Policy Foundation, and numerous corporations wishing to shield themselves from consumer lawsuits.

• George W. Bush, who raised more than $4 million in his gubernatorial races from corporate special interests who have benefited from his "tort reform" platform, has been one of Texas CALA's most prominent champions. One of his first acts as governor in 1995 was to meet with representatives of nine Texas CALAs after which he declared a legislative "emergency" on "frivolous lawsuits." Governor Bush subsequently signed into law a series of brutal "tort reform" measures.

• In 1991, then U.S. Solicitor General (and former tobacco lawyer) Ken Starr prepared an influential "Starr report" on behalf of the White House Council on Competitiveness, headed by Vice President Dan Quayle, making "tort reform" a priority issue for the George Bush administration. Quayle took the Starr report on the road in 1992, and helped encourage Texas CALA to go statewide, then nationwide.

• From its Washington, D.C. headquarters, ATRA helped take the CALA campaign statewide in Texas, then nationwide by making direct contributions to the groups, by providing them with material and by developing a series of cookie-cutter advertising campaigns. The CALAs' strategy and message has been coordinated by ATRA and its public relations consultant APCO & Associates, which supply the groups with strategic guidance, media training, and pre-produced radio, television, print advertising and billboards designed for maximum media exposure and legislative impact. Other regional and national political consultants and polling firms help tailor the CALA message to local concerns.

• Although CALAs are tax-exempt non-profit organizations prohibited from endorsing candidates or contributing to campaigns, they try to exercise considerable electoral influence, often in coordination with local business associations and Political Action Committees. A principal focus since the mid-1990s has been to ensure the election of pro-industry state judges and the defeat of judges who typically support plaintiffs' verdicts or have voted to strike down state tort law restrictions as unconstitutional. The tobacco industry has also been involved in such elections, for example, in Texas, Louisiana, Mississippi and Alabama. Such activities also became a significant focus for ATRA and APCO as well in the late 1990s as more and more state courts have struck down tort law restrictions. Their tactics have included running issue ads, distributing biased evaluations of judges records, and identifying trial lawyer contributions to judges. Some version of these activities designed to influence elections have occurred in Kansas, Michigan, Ohio, Oklahoma and West Virginia, in addition to the states identified above.

The CALA message is a sly deception designed to appeal broadly to patriotic, hard-working Americans, many of whom will ultimately serve on juries. At its core, the message equates "lawsuit abuse" with the efforts of injured consumers seeking to recover damages from those responsible. More broadly, the CALA message is based on the falsehoods that the legal system has spun out of control; that lawsuits tax the economy and consumers; that lawsuits create economic hardship for working people; that the tort law system is designed to line the pockets of trial lawyers; and that tort laws are anti-consumer. Unfortunately, many jurors around the country have been influenced by this erroneous message due to the marketing campaign of ATRA, APCO and the CALAs, and as a result, statistics reflect juries' increasingly antagonistic attitude toward injured plaintiffs.