This post at Ya'll Politics raises this Washington Times article about the $6.2 million budget shortfall for the American Association of Justice (AAJ), which is the organization of the plaintiffs bar. The article states:
The trial lawyers lobby has been awash in debt and bleeding members - just as it embarks on a national campaign to block any clampdown on medical malpractice lawsuits as part of President Obama's health care overhaul.......
The most striking evidence of its financial woes is a swift decline in income, which resulted in a more than $6.2 million deficit in its operating budget for the fiscal year ending July 31, 2008, the most recent year for which data are available.
The biggest hit to its books was in membership dues, which dropped from $28.6 million in 2005 to $19.2 million in 2008, according to the annual AAJ financial report for that fiscal year filed with the Internal Revenue Service.
The article also quotes former president of the Mississippi Association of Justice Joey Diaz:
"That is our number-one priority: to strengthen our membership," said Joey Diaz, a member of the AAJ executive committee, speaking by phone from his law office in Madison, Miss. "We have a number of people working on membership and we have reversed that [downward] trend and are starting to move forward again."
The fact that AAJ is hurting due to decreased memberships and donations is not surprising. Plaintiff lawyers are not making as much money as they were five to ten years ago. Some aren't making any money, at least not on contingency cases. A decade ago there were many mass tort-like cases where lawyers on both sides made a ton of money: asbestos, fen phen, tobacco, life insurance sales practice litigation, etc... Juries and appellate courts were also considered more plaintiff friendly. This meant that there were more plaintiff lawyers willing to file cases, including medical malpractice and products liability cases against auto manufacturers and other corporations. For whatever reason, cases during that era often settled for large amounts or were tried with a large jury verdict. Now, you hardly ever hear of a big settlement. And the big verdicts, at least in Mississippi, are in the seven figures rather than eight or nine. I suspect it's similar in most states.
With juries and judges becoming more conservative, many plaintiff lawyers have gone out of business or returned to their divorce or criminal defense practices. Those lawyers probably no longer feel that supporting AAJ matters to their practice. Most of the plaintiff lawyers who survived the downturn find themselves working harder, taking bigger risks and making less money. Some of these lawyers probably also no longer feel like supporting AAJ matters.
Ultimately though, a demise in the AAJ is bad for all Americans. The Chamber and other public relations and lobbying efforts funded by corporate America dwarf the efforts of the AAJ. Who do you think can spend more on lobbying: (1) "rich" plaintiff lawyers; or (2) GE, Citi, Exxon, Ford, Microsoft, etc? Look at what the executives of those corporations are making in compensation and ask yourself, are there any plaintiff lawyers making that kind of money? In fact, look at this link to the insider transactions at Exxon in just the last few months.
Just in a few month period Exxon executives were steadily selling millions in stock. Stock that they apparently were able to buy in the form of exercised stock options at $40 a share and immediately sell at $70 a share. I know, I know. They gotta pay to keep their talent. I'm sure highly paid corporate executives are just itching to start their own small business. So if the corporations can pay that kind of money to executives, imagine what they can pay to fund efforts to shut down lawsuits that cost money and interfere with the corporation's ability to pay executives, errr, reward shareholders. And I'm not picking on Exxon. Look at insider transactions of other big corporations and you will see the same thing as far as compensation and stock sales. While GE owned CNBC and other mass media talk Americans back into the stock market, corporate insiders are net sellers at unprecedented levels. But back to the AAJ.
The AAJ, despite being clearly over-matched, provides balance to the huge influence of big business. I believe that the vast majority of Americans want there to be balance. Except for the fringe nuts on both ends of the political spectrum, most Americans believe that opposition helps keep things honest. Or as Haley Barbour described in a recent speech, on the up and up. Hopefully, lawyers who are pulling out of AAJ will keep this in mind and contribute to the cause.
