Texas has been the epicenter of so-called tort “reform” for decades, a land where an aggressive campaign on behalf of a corporate lobby bent on immunity from acts that cheat, maim, or kill has radically reshaped and deformed its civil justice system. The framers of the United States and Texas constitutions, who enshrined trial by jury as a fundamental right and believed in checks and balances, would not recognize the current Texas legal system, which perverts the rule of law into an instrument for the moneyed and powerful, as well as divorces it from any concept of justice.

The report says those who have seen their rights dangerously restricted include “patients, families, workers, homeowners, senior citizens, policyholders, and small business owners,” and says Perry’s reforms “have closed the courthouse door on many Texas families.”

The attacks on Texans’ rights began in 2003 with the implementation of a cap on compensation for non-economic damages caused by medical negligence, including such things as loss of mobility, loss of fertility, and loss of a parent or spouse. The fixed $250,000 cap is identical to what California has under its 1975 Medical Injury Compensation and Reform Act (or MICRA). The Texas Watch explanation of the impact of that cap fits California as well:

The noneconomic damages cap, which is not indexed to inflation and thus worth less each year, hits those without wages and economic damages particularly hard, making even the most clear-cut malpractice cases on behalf of the elderly, the young, the disabled, and stay-at-home parents financially impossible to pursue for many given the high cost of retaining medical experts, which comprise the bulk of litigation expenses. The merits of one’s case are far outweighed by their socioeconomic status. Under Texas law, the value of one’s life is essentially reduced to the value of their paycheck. You are what you make.

The report also details the consequences of the “loser pays” law the Texas legislature passed earlier this year, in which even Texans who have been harmed and win their cases could wind up paying:

…in the twisted reality of Texas jurisprudence, winners may actually be forced to pay under the arcane offer of settlement statute, which was bolstered in HB 274 to further tilt the scales against victims by potentially wiping out the entirety of a judgment awarded by a jury. In other words, a plaintiff could bring a valid claim, have a jury rule in their favor and award damages – only to be forced to pay the wrongdoer’s legal costs in the end, erasing their entire judgment in the process.

This is a tilted, one-way process where the defendant has the sole option of triggering this provision. It is intended to create even more risk for plaintiffs by forcing them to make a decision in the dark – before the extent of the defendant’s wrongdoing has been uncovered, a jury has been impaneled, or evidence has been presented. This introduces the prospect of additional financial harm if they refuse to accept hush money from the defendant in the form of a settlement offer. As a result, wrongdoers are able to forcibly purchase the silence of their victims, defeating public accountability and endangering other families in the process.

This type of fee-shifting is anathema to the open courts envisioned originally by our Founders and violates some of the deepest traditions in American law.

The report characterizes the “tort reform” efforts as offering “a false choice between jobs and justice” that has made the state “more dangerous for Texas families.”

–J.G. Preston

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The campaign money—$2.03 million—flowed into Schwarzenegger’s reelection and ballot measure accounts between 2004 and 2008, with the bulk of it going to the propositions he offered and that voters rejected in the failed 2005 special election.

The California governor’s haul represents 14% of $14.8 million in donations from subprime donors including Ameriquest, Countrywide and others that the National Institute on Money in State Politics identified as having flowed to state campaigns across the country during the years leading up to and including the mortgage crisis.

ACC Capital and its subsidiary Ameriquest Mortgage Co. was by far Schwarzenegger’s largest donor, giving him and his ballot measure committees $1.1 million. Once a leading subprime lender, Ameriquest since has gone out of business, and Citigroup bought what was left.

Other corporations involved in subprime mortgage lending that made five and six-figure donations to Schwarzenegger’s ballot measure committees include American International Group, Bank of America and Citigroup, or their subsidiaries. AIG, Bank of America and Citigroup each since received billions in federal bail-out.

A separate review by ProtectConsumerJustice.org of California campaign finance reports shows that Schwarzenegger collected $2.9 from banks and others involved in the subprime industry. The review includes Schwarzenegger early campaigns, including a 2002 initiative he sponsored, the 2003 recall campaign he waged to capture the governor’s office, and donations he collected earlier in 2009.

The industry contributed most of the money to his ballot measure campaigns, but also kicked in $308,000 to his election and reelection efforts, ProtectConsumerJustice.org found.

By comparison, former New York Gov. George Pataki collected $164,000 from subprime lenders, and Texas Gov. Rick Perry collected $159,500 between 2004 and 2008, according to the National Institute on Money in State Politics, a nonprofit corporation in Helena, Mont.

Schwarzenegger spokesman Aaron McLear cited numerous bills that the governor has signed to try to curb abuses, and efforts by the California Department of Corporations to help homeowners modify their loans.

“The governor led the effort to get lenders to agree to loan modifications and has signed dozens of bills to help with the state’s foreclosure crisis,” McLear said in a statement. “The governor always makes decisions based on what’s best for Californians.”

For more on banking and subprime industries efforts in California, please see our Special Report.

–Dan Morain

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