Trial lawyers armed with anti-corporate lawsuits are still a threat despite recent courtroom victories for business, writes a prominent legal commentator.

Recent courtroom results like the U.S. Supreme Court's decision to bounce a punitive-damages case against Philip Morris have spurred optimism in boardrooms and business schools. BusinessWeek recently celebrated with a "How business trounced the trial lawyers" cover.

Yet despite the hubris, class action lawsuits targeting business are still alive and kicking across the country, warned Walter Olson in an editorial in yesterday's Chicago Tribune.

Olson edits the legal blogs Overlawyered.com and PointOfLaw.com and is a senior fellow at the Manhattan Institute.

He points out that in Louisiana and Mississippi, damage caused by Hurricane Katrina has sparked a feeding frenzy amongst some citizens and their lawyers. The New Orleans municipal government alone recently claimed $77 billion in losses caused by levee breaks.

Nor can tobacco companies in some states afford to breathe easier, as it were. California and Massachusetts recently made it simpler to bring tobacco-addiction suits while Louisiana left part of a huge punitive damages award stand, Olson pointed out.

States like Texas and Alabama have recently seen a sharp decline in lawsuits, Olson conceded, particularly out-of-state asbestos filings. But the effect has been similar to squeezing a balloon - the suits have popped up again in unreformed states like Illinois.

He warns business that, despite contrary media reports, nightmare class action suits are still kicking. "To call this a high-water mark is going to require more evidence than we've seen so far," he concluded.

Those who follow Texas politics might call Houston homebuilder Bob Perry a modern day kingmaker. Although Perry skips pomp, circumstance and much of the flashy nonsense associated with kingmakers past and present, he is a formidable force in the Lone Star State and is fast becoming one in state across the union.

He tends to operate behind the scenes, but his money stands tall, front and center, usually showing up in what some call shadowy organizations that pay for negative political advertisements that attack candidates who don't share his staunchly conservative, and pro-business values.

The man who stepped onto the national political "back stage" by funding the Swift Boat Veteran for Truth ads questioning John Kerry's Vietnam War record, has over the years purchased a great deal of political influence in his home state, and there is suggestive evidence that Perry and the interests he supports, might like to export that Texas style influence to states across the nation.

Andrew Wheat is Research Director for the Austin Think Tank and watchdog organization, Texans for Public Justice. He says Bob Perry and President Bush come out of the Texas system of unlimited political donations and the sort of influence that can offer.

"Year after year, Bob Perry is Texas' single largest political donor," said Wheat.

And, at the height of this Congressional and Senate election cycle, Bob Perry has gone national yet again.

In fact, Bob Perry is the largest single political donor in the United States according to Federal Election Records. Perry has spent around $9 million this election cycle to fund electioneering communication groups called 527s, named after a provision in the tax code. Television ads have been paid for by Perry funded groups like Economic Freedom Fund, Americans for Honesty in Issues and in several states, phones have rung, and those on the receiving heard what is called a survey but actually a push poll recording, thousands made, paid for by Perry and carried out by a group called Freeeats.com.

Bob Perry supports President Bush's conservative agenda. This year, he also funded a group called The Free Enterprise Fund, a 527 that is seeking to counter the liberal messages of MoveOn.org.

When it comes to pocketbook issues, homebuilder Perry has strongly supported tort reform and legislation that is especially friendly to homebuilders in Texas. Through campaign donations and the funding of extensive lobbying efforts, the Houston homebuilder played a direct role in overhauling the Texas Civil Courts.

There are organizations and business groups that would like to see similar changes on a national scale. Many pro-business interests subscribe to the theory that the courts are biased and tend to rule in favor of the consumer, even when not warranted. Bob Perry was instrumental in reining in that behavior, what pro-business interests say was an out of control civil court system in Texas.

Now there is a great deal of speculation into why Perry has been so motivated to provide a generous flow of cash into campaigns in places like Iowa, Colorado, Indiana and Tennessee.

Tennessee's Democratic Party Chairman says he thinks that Bob Perry's funding of an especially negative ad attacking Democrat Harold Ford's Armani suits and expensive cigars was motivated purely by power.

"They (Republicans) need to control Congress to prevent investigations into Republican wrongdoing," said Bob Tuke, the state's Democratic Party Chair.

He called the Republican Opponent, Bob Corker, just one of theirs.

Coincidentally, Bob Corker, like Bob Perry, made a great deal of his fortune in the building and real estate industry. Many of Tennessee Republicans' biggest supporters are also from the real estate and building industry.

Like much of the national homebuilder community, Bob Perry may be interested in maintaining an atmosphere in Congress that will seek overhaul of the nation's civil court system and more "right to repair" legislation.

The National Association of Homebuilders said in a 2004 press release that reforming the civil justice system has become, and will continue to be a priority.

That release went on to say that trial lawyers, under the guise of consumer advocacy, are subjecting homebuilders to costly and unfair litigation fees.

Bob Perry's company is no stranger to lawsuits.

According to a 2003 Dallas Morning News article, Perry has been sued 20 times since 1985. The largest suit involved Perry and other developers and was known as the Brio case. The case involved 1,700 plaintiffs whose homes were built over a toxic waste dump outside Houston.

But, pro-business tort reform advocates cite an epidemic of frivolous lawsuits. The American Tort Reform Association calls the American Judicial system the most expensive in the industrialized world, costing $246 billion year.

Critics of the reforms say they could have a chilling effect on lawsuits that seek to bring to light corporate misconduct.

If Bob Perry's latest foray into national politics has roots in the desire for homebuilder friendly judicial overhauls, it may be worth noting what has happened in Texas.

Janet Ahmed recalls a day in 2003 when she and other homeowner activists were at the Texas legislature in Austin promoting a Home-Lemon Law-bill that would protect new homebuyers in much the same way lemon car laws protect new car buyers. Ahmed, the president of The Homeowners for Better Building organization couldn't help but notice the large number of women, mostly elderly, that were dutifully shuffling about the State House. When quizzed by Ahmed, a few of the women said they were in town to talk to legislators about all those "awful frivolous lawsuits" in Texas that were costing consumers so much money.

But Ahmed says she thinks the busloads of elderly lobbyist were in fact brought in, fed breakfast and along the way, educated by pro-business coaches about so-called frivolous lawsuits, in what Ahmed believes was smoke and mirrors politics move that was meant to promote tort reform specifically favorable to home builders and developers.

Ahmed says the Austin tort reform blitz was organized by the group Texas For Lawsuit Reform (TLR), run by Richard Weekly. Richard Weekly is the brother of homebuilder/developer David Weekly. She and others say that Tort reform efforts in Texas were bankrolled directly and through political donations by David Weekly and Houston developer and Republican money man, Bob Perry.

From 1997 through 2002, The Weekly family, the Perry Family and the TLR gave over $5 million to various state races, including judicial races across Texas.

Since the Brio case was resolved, after a $200 million settlement, Perry has made tort reform homebuilder friendly legislation his main focus according to most observers.

Back before George W. Bush became Governor of Texas, the homebuilder lobby won passage of the Residential Construction Liability Act. The RCLA gave builders the "right to repair" a construction defect, before the consumer could take the homebuilder to court.

But, according to a number consumers like Janet Ahmed, the right to repair soon became the right to delay leaving homebuyers at the mercy of the homebuilder. Later legislation made it even tougher for homebuyers to prove damage had been caused during the original construction. And, as reported in a 2004 Los Angeles Times article, the new laws limited how much money could be awarded to the homebuyer.

The Los Angeles Times article reported that at the same time builders were starting to add arbitration clauses to their contracts forcing unhappy homeowners to take complaints before private arbitrators, rather than a judge and jury. The Times said that in 2003, inspectors, chosen by a homebuilder industry dominated panel determined the facts on which the arbitration was decided.

In a nutshell, the binding arbitration clauses have the ability to drive homebuyers out of the public courts where judges, inspectors and lawyers are cheaper than arbitration services.

"Everybody has to go to binding arbitration, even if your roof is leaking or your wall cracking, and sometimes it takes months to resolve," noted Ahmed who said if the homebuyer fixes the problem because its impossible to live with, they then forfeit their warranty.

At Ahmed's organization's Web site HOBB.ORG, there are countless horror stories of the American Dream turned nightmare, stories where individuals and families discover toxic mold or shoddy construction threatening their most important material investment, only to find their legal recourse neutered.

Andrew Wheat has written that groups like Public Citizen, Consumers Union and Homeowners Against Deficient Dwellings say arbitration amounts to a Kangaroo court.

A few years ago, Wheat and members of Texans for Public Justice dug and found information that suggested former House Leader Tom Delay's Texans for a Republican Majority Political Action Committee might have been engaged in improper and illegal misuse of corporate campaign money. The work Wheat did, helped lead to Delay's eventual indictment on conspiracy and money laundering charges.

Bob Perry was the largest donor to DeLay's Republican PAC.

Wheat says his organization has followed Bob Perry's long money trail for years.

In Texas he's "motivated by a push to limit damages from homeowner lawsuits"

Regardless of his motives, his impact has been felt throughout Texas politics.

In a recent interview with West Virginia Public Radio, Jake Bernstein, editor of "The Texas Observer," said, "people don't pay enough attention to who's paying for campaigns."

He noted that in Texas, there hasn't been the sort of debate there should have been on the issue of campaign finance reform, especially since so many members of the Republican legislature, the governor and others have all benefited from people like Bob Perry.

Still, theories swirl across the political landscape as to why Bob Perry would spend so much money to effect Congressional and Senate elections across the country.

Janet Ahmed says that Bob Perry led an effort in Texas to regulate the home buying public by creating an agency that hinders homebuyers from getting warranty work done.

Ahmed says this is coming to the rest of the country.

"If the wealthy Texas based homebuilders are able to limit liability in Texas that they are also influencing the political arena in other states to do the same thing," she said.

The conservative widely known Tennessee columnist Frank Cagle wouldn't speculate on Bob Perry's intentions except to say "a Texas developer probably knows Karl Rove."

Colorado ranks second in the nation when it comes to tort liability practices, which bodes well for business, according to a report from Pacific Research Institute, a San Francisco-based free-market think tank.

Lawrence J. McQuillan, co-author of the U.S. Tort Liability Index, was in Denver on Thursday to discuss findings of the report, first published in May.

"It's a snapshot of what states have done today in actual costs and done to rein in costs for the future," said McQuillan, speaking at a panel discussion at The Denver Press Club in Denver.

The event was sponsored by the Independence Institute, the Golden-based free-market think tank.

Reforms in tort law adopted by the Colorado between 2000 and 2005 put the state in the No. 2 spot, ranking behind Texas. States in the Rocky Mountain region rated high overall, with Utah coming in sixth and Wyoming 13th.

"If not for the reforms, today Colorado would rank 34th," McQuillan said. "I think (Colorado) has positioned (itself) well for the future."

Tort reform is not only good for the civil justice system, but good for business, McQuillan said. States with high monetary damage limits and few reforms are at a competitive disadvantage to states such as Colorado with low monetary caps and several reforms.

"Competition is forcing changes and putting pressure on civil reform," he said.

Tort law refers to damages awarded as a result of wrongdoing to a person or group. In Colorado, that limit is $366,250 for nonpunitive damages.

In 2003, the state switched from a no-fault auto insurance - where injuries in car accidents were paid regardless of fault - to a tort liability system, where at-fault drivers are responsible for all the damages.

While the switch meant that drivers no longer had to carry medical insurance under their car insurance plans, there's debate over whether the switch has resulted in lower premiums.

Premiums haven't dropped due to reforms, said Ross Buchanan, a trial lawyer for the Denver firm of Buchanan, Jurdem & Cederberg, P.C., and a member of the panel. "Tort reform has never been shown to reduce premiums," he said. "Our tort system is reasonably effective, reasonably inexpensive and reliable."

The liability index ranks states based on 39 variables in 2004 and 2005, such as the number of civil cases filed, and whether the state provides civil-liability exemptions for junk-food or obesity lawsuits. Medical malpractice, workers' compensation and product liability were also variables factored into each state's ranking.

McQuillan said the institute's next tort liability index will be out in 2008

Only Eliot Spitzer, the prohibi tive favorite to be sworn in as New York's next governor on Jan. 1, knows the answer to that question.

But Albany is scarcely large enough to contain the two men: The chief impediment to the sweeping post-inaugural reforms being promised by Spitzer figures to be Silver - who has nothing to gain, and much to lose, from changes of any sort.

And just how tenaciously Silver will fight to maintain his advantage became clear last week when a negotiated municipal-worker-disability reform bill that would have saved New York City millions - at the expense of trial lawyers - was shot down by the speaker.

The details are unimportant - save for one: Silver is the trial bar's man in Albany.

He is "of counsel" to personal-injury giant Weitz & Luxenberg; he refuses to disclose his salary there, though it certainly dwarfs the $137,000 he "earns" as speaker.

The bill in question would have ended public employee "double- dipping" in disability cases.

As it stands, New York City gives a disability pension to any municipal employee disabled in a work-related incident. But the employee can also sue the city for life-long "future earnings" compensatory damages.

It's a crock, but it costs local taxpayers millions every year - and New York City and other municipalities have been trying to end the practice for years. They thought they'd finally succeeded.

Wrong.

New York City Corporation Counsel Michael Cardozo said, "All I know is, we had the votes [Monday] morning. Three people were added [by Silver] to the [Assembly Judiciary] committee, and we lost, 11 to 10."

Silver, of course, claims not to have known how his appointees would vote.

But nothing happens in the Assembly without Silver's approval. Especially regarding tort reform.

Earlier this year, Silver endorsed the lifting of the five-year statute of limitations for bringing rape charges. He appeared with Manhattan DA Bob Morgenthau to state that the Assembly was on board with the change.

The joke was on Morgenthau - who hadn't been informed that Silver's bill also removed the statute of limitations on civil suits. It was a gift to trial lawyers - meant to let them go trolling for clients with cases going back decades.

Of course, it's not only tort reform that Silver has blocked.

* He killed the West Side Stadium because it might have competed for development money with his Lower East Side district.

* He refuses to permit creation of a statewide DNA database.

* He resisted efforts to sharply toughen New York's gun-trafficking law - until this page shamed him into standing down.

* And he's almost as reliable a lapdog for the public-employee unions - especially the teachers union - as he is for the trial lawyers.

IF Sheldon Silver isn't the poster child for Albany's ills, he is darn close.

He's not alone in this regard. Senate Majority Leader Joe Bruno is, in his own way, equally guilty.

But Bruno's a Republican, and a reasonable negotiator. If the Senate remains in GOP hands this fall (no sure thing), he'll be poised to do business when Spitzer (presumably) is sworn in.

Not so, Silver.

Intra-party power in Albany is always something of a zero-sum game. If Eliot Spitzer is to become the Democrats' big dog, he'll necessarily do so at the expense of Sheldon Silver.

There is recent precedent here.

In 1994, George Pataki and his team early on sized up then-Senate Majority Leader Ralph Marino (R-North Shore).

Part of it was political, for sure.

Marino and Pataki had squabbled for years over Senate budgets (back when then-Sen. Pataki was posing as a fiscal conservative). Marino tried to prevent Pataki from getting the GOP gubernatorial nomination, and then gave him only a perfunctory endorsement.

But Marino sealed his own fate when, after the election, he refused to honor the governor-elect's request to scuttle two budget-busting bills (one of which was the favorite of labor). Staffers reportedly overheard Pataki say of Marino, "I can't work with this guy."

Within days, Pataki ally Bruno had the votes to become the new majority leader. And presently Pataki had a Senate that would to do his bidding.

Marino had resigned his seat and was out of public life.

If Eliot Spitzer is serious about his re form agenda, he'll need a Democrat running the Assembly that he can "work with."

What he most assuredly won't need is an Assembly speaker whose first loyalties are to the trial bar, the public-employee unions and all the other special interests that will be working so hard to scuttle meaningful reform.

The brazenness with which Silver shot down the double-dipping bill (and embarrassed Bob Morgenthau) is a fair measure of what New York's next governor's first fights are going to be about.

New Yorkers need to think about this as the fall campaigns proceed.

AUSTIN, Texas, May 15, 2006 Gov. Rick Perry hosted the authors of a national study that links the tort reforms passed under his leadership to the state's booming economy, job market and business growth.

"The success of tort reforms is proven not just by the national recognition Texas is receiving today, but in communities across the state where patients have improved access to health care, workers have greater job security and employers are free to grow with fewer fears of a frivolous lawsuit," Gov. Rick Perry said. "A major reason Texas has one of America's best job climates is because we have the best overall legal climate."

Texans for Lawsuit Reform President Dick Trabulsi called Governor Perry "the greatest tort reform governor in American history. On his watch, Texas has enacted the most comprehensive tort reform of any state, which is why we are now ranked number one."

The U.S. Tort Liability Index, published by the Pacific Research Institute of San Francisco, found that while Texas has some glaring civil justice problems, including the state's notorious "judicial hellholes," the 2003 and 2005 tort reforms have strengthened the state's economy and catapulted it to first place when compared to other states.

TLR Chairman and CEO Dick Weekley said: "The report provides a quantified assessment of the impact of tort reforms in Texas and clear direction for the steps the state still must take to fully restore balance to the civil justice system."

The landmark study weighs a range of economic indicators against 39 variables related to the civil justice systems in every state. Researchers Lawrence McQuillan and Hovannes Abramyan found a clear correlation between a fair and predictable legal system and the state's economic growth, including job creation and product innovation.

"The U.S. tort system is undermining America's economy," McQuillan said. "Using the President's Council of Economic Advisers' methodology, we determined excessive tort costs exceed $198 billion. This is equal to an additional yearly tax of $2,654 on a family of four. Some states, particularly Texas, have done more than others to rein in excessive costs through tort reform."

McQuillan said that Texas captured the top ranking in the study because recent tort reforms resulted in relatively low monetary tort losses and the state has enacted meaningful reforms in asbestos, junk food, the federal standards defense, and rules of evidence.

However Texas ranked last on several other areas of the study including a nationwide comparison of "judicial hellholes" -- those counties in the state that plaintiff attorneys target for trials because they are more likely to get an excessive verdict or settlement. The report specifically pointed to the Rio Grande Valley and the Gulf Coast of Texas.

Texas ranked last on several other factors measured in the study including:

    --  the state's failure to impose limits on attorneys'
        contingency fees
    --  the state's failure to allow jurors to be informed about
        payments made to the plaintiff from other sources, such as
        insurance companies
    --  The state's partisan election of judges.  PRI researchers
        found that litigation awards tend to be unjustifiably higher
        when the judiciary is elected.

Will Newton, Texas State Director of the National Federation of Independent Businesses agreed.

"For small business owners, even a single frivolous lawsuit can mean the heartbreaking end of a dream of business ownership. This report makes crystal clear that the state's lawsuit reforms are expanding the state's economic vitality and increasing opportunities at every level. Texas small business owners are sleeping a lot better now and this report shows why."

Nothing fosters the spirit of compromise like losing.

After doctors and lawyers bludgeoned each other in competing initiative campaigns last year, only to see voters reject them both, they announced Monday that they had negotiated a compromise in revising medical malpractice law.

The proposal, House Bill 2292, got a Senate committee hearing Monday afternoon and will likely breeze through the Legislature to Gov. Christine Gregoire's desk.

The bill would not cap pain and suffering damages. Nor would it automatically revoke the licenses of bad doctors. But it has several provisions that might settle cases before they go to trial.

Gregoire hailed the bill as a breakthrough.

"This agreement marks a very important step for Washington," Gregoire said. "There are strong issues that have kept these parties from coming together in the past, but I am very pleased that they were put aside in order to find a solution that will help the citizens of our state."

Insurance Commissioner Mike Kreidler said the measure would go a long way toward making Washington an attractive place to do business for insurance companies that offer medical-malpractice coverage.

He said the legislation would have been impossible without the momentum created by the heavily financed initiative campaigns last year.

"If you'd waited another year or two years, you'd have found it extremely difficult" to forge a compromise agreement, Kreidler said.

"But I can make a prediction that in another decade, we will face another crisis, but we are going to have better tools in the state of Washington for patient safety, for tort reform and for insurance reform ... that are going to help moderate what will happen."

Jack Connelly, president of the Washington State Trial Lawyers Association, said the bill will "help good doctors get insurance at a fair cost."

Last year, doctors and the trial lawyers spent a record $11 million in the battle over Initiative 330, which would have limited non-economic, or "pain-and-suffering," damages to between $350,000 and $1.05 million.

The trial lawyers backed Initiative 336, which they said would have made hospital safety records public, punished lawyers for frivolous lawsuits and revoked the licenses of doctors who had seriously injured or killed three or more patients.

Doctors maintained that jackpot jury awards were making it difficult, if not impossible, to practice in Washington -- especially in such high-risk specialties as obstetrics.

The trial lawyers said hospitals and HMOs were shielding themselves and bad doctors. Voters rejected both initiatives.

Though Gregoire and many of those in the negotiations said the parties involved didn't get everything they wanted, the trial lawyers got a big win at the start.

The doctors agreed not to ask for a cap on non-economic damages that patients could seek in court.

Asked why they agreed to withdraw their demand for limits on awards, Peter Dunbar, president of the Washington State Medical Association replied: "Pragmatism."

"We didn't win on 330 ... (this) is good legislation." he said. "It doesn't satisfy all our requirements for tort reform, but reforming the civil justice system is a continuous process. ... I don't expect it to stop this year."

The so-called three strikes, you're out rule for bad doctors also was left out of the new bill.

Lawmakers and others also agreed that one of the most significant changes provided in the legislation is a protection for doctors who want to apologize. The bill would make saying "I'm sorry" and other statements of regret, or even admitting fault, within the 30 days of discovery inadmissible in court.

Gregoire said that as attorney general, she had seen many cases in which this clause would have made a world of difference.

"In the most contentious of tort lawsuits, the lawyers would sit and talk to each other about settlement of a case when suddenly you have a family member who would speak up and say, 'All I want is for someone to say they're sorry,' " Gregoire said.

Sen. Karen Keiser, D-Des Moines, said that besides resolving a bitter dispute, the bill goes far toward restoring public trust.

"Last year, when we had initiatives on the ballot, many of us asked the voters to defer to the legislative process ... saying that yes-or-no, simple ballot-measure approach was not the way to deal with these incredibly complex issues of patient safety and tort reform," Keiser said.

"We have worked together in good faith, and we will bring forward reform that will answer concerns that have been long held and well held."

Randy Revelle, senior vice president of the Washington State Hospital Association, said that the bill is a good start but that much more needs to be done to reform the state's medical liability system.

He said the state must still develop a system that would reduce preventable injuries and protect patient safety; fairly compensate injured patients; and significantly reduce the legal and administrative cost of the system.

The bill acknowledges that thousands of patients are injured each year as a result of medical errors, many of which could have been avoided.

It would provide incentives to settle cases before resorting to court, and offer the option of a fairer, more efficient and streamlined alternative to trials for those for whom settlement negotiations do not work.

The parties agreed to establish a voluntary binding arbitration system; require lawyers to certify cases as non-frivolous, subject to fines; and leave the use of expert witnesses unlimited.