January 2012 Archives

There's a great article in The Washingtonian magazine today titled, "Minor Mistakes, Deadly Results," about the thousands of deadly medical errors occurring annually and the measures taken by Washington-are hospitals to prevent them. Here's the beginning of the article, with a story that illustrates the cases and should break your heart:

When Frances Barnes had a stroke in August 2008, she was taken by ambulance to Howard University Hospital. The 80-year-old grandmother was there for about two weeks when she began complaining about pain in her legs. Her daughter Althea Hart pulled back her mother's blankets and noticed a strange odor. Hart thought the smell was coming from the compression stockings wrapped around Barnes's legs to help with circulation, so she took them off. She found that her mother's left foot had turned black.

Hospital staff had failed to follow physician orders, which required taking off the compression stockings after each shift for at least 30 minutes, according to a DC Department of Health investigation.

"We called a nurse right away, and they tried to heal her infection," says Patricia Moss, another of Barnes's daughters. "But they couldn't."

Barnes's family moved her to Providence Hospital in Northeast DC, where she had to have her lower leg amputated. Barnes moved to a nursing home, where she continued to get infections; she died at Providence in February 2009, five months after her foot turned black. Barnes left behind eight children, 15 grandchildren, and 16 great-grandchildren.

The facts are startling. Medical malpractice appears to be worsening. "In 2010, the federal government estimated that faulty medical care contributed to the death of about 15,000 Medicare patients per month. By these measures, faulty hospital care is one of the leading causes of death, behind heart disease and cancer." And surgery on the wrong location in body happens "as often as 40 times a week in US hospitals and clinics," according to the Joint Commission, which accredits American hospitals. All this despite the use of a universal protocol in accredited hospitals as a way to eliminate wrong-site surgeries.

On March 23 of last year, I wrote about surveys of operating room and critical care nurses that revealed shocking instances of medical malpractice. For instance, 85% of 2,383 nurses surveyed said they'd been in a situation where measures such as checklists and protocols warned them of a problem that would have otherwise harmed a patient. But 58% of the nurses said they'd been in situations where it was either unsafe to speak up or they were unable to get others to listen.

Tort reformers screaming for an unconstitutional federal takeover of state courtrooms and tort law should think a little more logically. The most important and successful way to institute valuable reforms in the medmal area is to institute cost-effective prevention mechanisms. State legislatures and Medicare should concentrate on requiring such protocols, not trying to limit the damage on the back end through limits on medical malpractice lawsuits. As the libertarian Cato Institute demonstrated last year, caps on medmal awards only hurt consumers, they don't reduce deadly medical errors.

Fix the problem at its source and you'll see real reductions in the number of medical malpractice lawsuits.

The Seventh Amendment provides that " [i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved... Accordingly, we must conclude that the Seventh Amendment provides a right to a jury trial where the copyright owner elects to recover statutory damages... The right to a jury trial includes the right to have a jury determine the amount of statutory damages, if any, awarded to the copyright owner. It has long been recognized that "by the law the jury are judges of the damages.'' Lord Townshend v. Hughes, 2 Mod. 150, 151, 86 Eng. Rep. 994, 994-995 (C.P. 1677). Thus in Dimick v. Schiedt, 293 U.S. 474, 55 S.Ct. 296, 79 L.Ed. 603 (1935), the Court stated that "the common law rule as it existed at the time of the adoption of the Constitution'' was that "in cases where the amount of damages was uncertain[,] their assessment was a matter so peculiarly within the province of the jury that the Court should not alter it.''

So wrote Justice Clarence Thomas in his opinion for a unanimous Supreme Court, when it ruled in a 1998 copyright infringement case that the Seventh Amendment requires the right to a jury trial where the copyright owner elects to recover statutory damages. In Feltner v. Columbia Pictures Television, Inc., the Court overruled the Ninth Circuit Court of Appeals, which had affirmed a district court's ruling denying Feltner's motion for a jury trial. Justice Thomas' opinion included a discussion of the applicability of the Seventh Amendment to copyright infringement cases and, in effect, a terrific defense of the right to a civil jury trial and the role of local juries. Justice Thomas noted that even before adoption of the Constitution, in England and in the American colonies, "copyright suits for monetary damages were tried in courts of law, and thus before juries." And he wrote that the Copyright Act of 1790 didn't change that practice.

Ironically, the attorney asserting Mr. Feltner's Seventh Amendment rights was John Roberts, now the Chief Justice of the Supreme Court, and during oral argument before the Court, he eloquently noted the historical role and significance of civil jury rights enumerated under the Seventh Amendment:

In light of clear historical practice on both sides of the Atlantic prior to 1971, Feltner had a right under the Seventh Amendment to have a jury make that finding and others on which the award was based and determine the amount of damages to be imposed within the statutory limits.

The idea that... when Congress fixes the amount of the penalty it can therefore delegate that task to judges ignores the whole purpose of the Seventh Amendment.

The Seventh Amendment is to protect against judicial bias and corruption and overreaching and, while that's not implicated when Congress fixes the amount because Congress is doing that, the judge is just applying it, when you give that task to the judge the whole reason for having the Seventh Amendment comes into play...

As someone who has criticized the Roberts Court for decisions denying civil jury trials in a number of preemption and arbitration cases, I was surprised to learn of this defense of the Seventh Amendment by Justice Thomas. My thanks to Bob Peck of the Center for Constitutional Litigation in Washington for pointing it out. Now if only the Roberts Court would only take a realistic view of the practical and harmful impacts of federal preemption and forced arbitration clauses on our right to a civil jury trial.

The chairman of the top health subcommittee in the House, Rep. Joe Pitts, announced this week that the House GOP would offer a "replace Obamacare" bill that be a "free-market alternative." But he added that the proposal would mandate a federal cap on awards in medical malpractice lawsuits filed anywhere in the U.S. There's nothing "free-market" about using federal law to give orders to juries and judges sitting in state courtrooms. The Founding Fathers trusted local juries to make the decisions on claims before them, including the level of damages. That's why so many Republican Members of Congress, conservative legal scholars, and states' rights advocates have criticized legislative proposals to federally mandate awards in medmal lawsuits, tell local judges which cases they can and cannot handle, and impose federal wage controls on attorneys. Did Rep. Pitts pay any attention when Ken Cuccinelli, Attorney General of Virginia, promised that he would sue to stop such a law more quickly than he sued to stop Obamacare? Or when Randy Barnett, co-counsel for the NFIB in the lawsuit to kill Obamacare, wrote that tort law belongs exclusively to the states and called out Republicans like Pitts as "fair-weather federalists?" Or when his fellow Republicans in Congress such as Senators Tom Coburn and Mike Lee, and Reps. Lee Terry, Morgan Griffith, Ted Poe and Louis Gohmert stood up for the Founding Fathers' vision of liberty, trusted local juries and opposed federal medmal limits? Or when Rob Natelson of the conservative Independence Institute documented the writings of the Founding Fathers, in which they clearly insisted on protecting the right to a civil jury trial in state courts from federal interference? Or when the Cato Institute reported that medmal caps hurt consumers, or when the non-partisan National Conference of State Legislators objected to federal medmal limits in a letter to Congress? What do the 7th Amendment and 10th Amendment mean to Rep. Pitts?

Why doesn't he realize that his beloved federal cap on medmal lawsuit awards shares the same basis in constitutional theory as the Obamacare he wishes so hard to replace? Both are fundamentally based on the expansion of the Commerce Clause initiated after the Supreme Court's decision in Wickard v. Filburn. The Obama Justice Department cited that case in its briefs in Obamacare cases (page 18), and the American Tort Reform Association cited it in a paper supporting federal medmal limits (page 2). Or does Rep. Pitts recognize only those limits on federal power with which he agrees?

And why - WHY - does Rep. Pitts want to reward the pro-Obamacare and pro-abortion AMA and their buddies among medical groups, who shoved the individual mandate down our throats? Why does he want to give them partial civil immunity from deadly medical errors when they're pursuing the federal takeover of all health care?

Maybe most importantly, is Rep. Pitts speaking just for himself or for most or all of the House GOP? If he took off on his own to propose an unconstitutional and hypocritical bill, then it's easy to predict the bill won't enjoy even the support of too many Republicans. Let's hope so.

In various posts since the inception of this website, I've addressed the relevance of the right to have a civil suit heard before a jury in the context of individual issues of importance to Tea Partiers, Constitutional conservatives, and Republicans. This centuries-old right, recognized since the Magna Carta in 1215, has been under attack for decades and is now, I assert, the least known and most endangered of the ten Constitutional amendments in the Bill of Rights. Here's a simple summary of reasons why those groups, my ideological brethren (and in the case of Republicans, my sometime employer), should back an unhindered right to a jury trial for civil suits:

1. CIVIL SUITS CAN KILL OBAMACARE: The Republicans and Tea Partiers are rightly cheering on those state Attorneys General who have sued in federal court to declare ObamaCare unconstitutional. But it's rather disingenous to trash trial lawyers and then turn around and enthusiatically back the anti-ObamaCare lawsuits filed by a state's top official trial lawyer. At least it guarantees that we won't hear anyone of either party refer to the state AG suits as "junk lawsuits" and trash the AGs as "power-greedy trial lawyers."

2. CIVIL SUITS PROTECT THE UNBORN & WOMENS' HEALTH: I posted in August 2010 that trial lawyers have assisted the pro-life and womens' health causes for decades, by pursuing dangerous abortifacients, and unsafe drugs, and defective medical devices, all approved by a FDA asleep at the switch. And civil suits will be the last line of defense for champions of the unborn against the next wave of abortifacient techonology.

3. CIVIL SUITS PROTECT RELIGIOUS LIBERTY, GUN RIGHTS & PROPERTY OWNERS: "The 7th Amendment is the "sword and shield" enabling us to defend our religious liberty against government interference and intolerant institutions, e.g., pompous and overbearing university administrators. The Alliance Defense Fund successfully reversed attempts at university firings in the Howell and Sheldon cases by first suing the respective universities, and ADF prevents many other illegal actions just by threatening a suit. I didn't see anyone cracking on them as "sharks" and decrying their filings as "junk lawsuits." And of course, it took two civil lawsuits, filed by Americans exercising their 7th Amendment rights, to finally ensure that the correct, Constitutionally conservative view of the Second Amendment is the law of the land. Meanwhile, local governments try to use eminent domain often to take over private property - what would happen if their actions were impervious to legal challenge?

4. CIVIL SUITS PUNISH TERRORIST FINANCIERS: As I posted in June 2010, the 7th Amendment has been an important tool for the pursuit of terrorist financing, and civil lawsuits have resulted in some important judgments. The family of David Boim, an American killed by Hamas terrorists in Israel, successfully won a $156 million judgment against the Dallas-based Holy Land Foundation for its role as the biggest Hamas fundraiser in the U.S. And terrorism victims' attorneys from the Motley Rice law firm (one of my consulting clients), who are pursuing the Arab Bank in a civil suit for its alleged role as a conduit for terrorist funds, were able to access information gathered by Israeli intelligence for presentation when the case comes before a jury, hopefully soon. A former official of the NSC under Presidents Clinton and Bush testifed to Congress that, "civil litigation can substantially enhance the financial consequences that such entities face" (referring specifically to terrorist financiers).

5. THE 7TH AMENDMENT REPRESENTS A MAJOR DIFFERENCE BETWEEN CONSTITUTIONAL LAW AND ISLAMIC SHARIAH LAW: As I posted in August 2010, there are never any juries under Islamic shariah law for any case, civil or criminal - 800 years of American constitutional and Western jurisprudence go down the tubes, and a local imam picks the winner. The results are not just primitive, but barbarous, especially for women.

6. LIMITING CIVIL JUSTICE EMPOWERS JUDGES, BUREAUCRATS & "RULING CLASS," AND DEGRADES LOCAL CONTROL: We already see a chasm between the ruling class and the rest of the country along numerous political and social fault lines. Federally imposed limits on the civil justice process, such as the preemption of state statutory and common law for certain claims or restrictions in federal civil pleading standards, only cede more power to the judiciary and federal bureaucrats. Putting complete control over certain products or services (e.g., implantable medical devices or financial services) in the hands of federal bureaucrats (the FDA or Treasury, respectively), with total immunity for the companies involved, is simply not the system of justice that the Founding Fathers intended to build. To reiterate what another conservative said, "The tort system promotes local control. Through the jury system, people at the local level decide what is reasonable behavior within their own communities. Ordinary citizens, applying a common sense standard of reasonable care, making decisions about acceptable and unacceptable conduct within their community - that is the essence of local government. And, as a result of those decisions, suppliers of goods and services within the marketplace will often modify their own behaviors... without the necessity of yet another costly and intrusive governmental bureaucracy..."

7. MOST IMPORTANTLY: BECAUSE THE FOUNDING FATHERS SAID IT'S A PRIORITY FOR ALL AMERICANS: There is no question that the Founding Fathers - from Jefferson and Madison and Hamilton, to John Adams, to George Mason, all explicitly said that citizens have the right to have their claims against their neighbors heard by a jury of their peers. It's mentioned in the Declaration of Indepedence and was protected in the first Virginia Declaration of Rights.

Promoting the 7th Amendment is the "right" thing to do to avoid being a political hypocrite of the type that Tea Partiers want to remove from power. Republicans and Tea Partiers uphold the 1st Amendment in the face of a biased and inaccurate media elite, and we defend the 2d Amendment in the face of serial shooters. We should protect and promote the 7th Amendment at all times as we do all other Amendments in the Bill of Rights.

Lawmakers who voted last year for an unconstitutional bill to crush states' and individual rights, by sharply limiting medical malpractice lawsuits, did a 180-degree turn on Tuesday, approving a federal bill to enable lawsuits against abusive eminent domain actions by local governments.

The House Judiciary Committee voted to approve H.R. 1433, titled The Private Property Rights Protection Act. Co-sponsored by a bipartisan group of Representatives including many Republicans the bill is aimed at stopping municipalities from condemning private property for private land development. The bill was inspired in part by the case of a group of homeowners in Long Beach, New Jersey, who successfully fought the city's efforts to take their homes and allow developers to make millions building upscale condos. Section 4 of the bill creates a private right of action to fight local eminent domain actions.

It's too bad the committee Republicans aren't as committed to protecing our lives from the impact of deadly medical errors by negligent health care personnel. Many of the Republicans voting for H.R. 1433 also voted last year to crush most medical malpractice lawsuits, as provided for in H.R. 5. That bill imposes caps on noneconomic damages, which would eliminate an incentive for lawsuits filed by the elderly and infirm. That bill would tell states how to manage their courtrooms and mandate a wage scale for the attoneys filing the cases, the only federally imposed wage scale approved by any set of Republicans.

It's ridiculously inconsistent for the Republican co-sponsors of H.R. 1433 to also co-sponsor H.R. 5. The two bills couldn't be more contradictory in intent, spirit, and basis in American Constitutional law. House Judciary Republicans should think twice before placing a higher value on property rights than on human life.

I posted the following eleven months ago to prove that Ronald Reagan never believed that the federal government should run state civil justice systems through federal tort reform or caps on damages awarded in state courts. With President Obama poised to deliver another State of the Union and the Republican Presidential race raging at full tilt, I thought it would be instructive to repost what I wrote in February 2011.
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During the recent 100th anniversary of the birth of Ronald Reagan, we read many tributes to him and re-read many of his greatest speeches. I worked for the 1980 Reagan campaign during law school, was a political appointee in the Commerce Department during the Reagan Administration, and my wife worked for the President in the West Wing, so I joined in all the attention paid to my favorite President.

I thought it was time to go back and research President Reagan's personal stance on federal tort reform. I knew a number of senior officials in the Reagan Administration who were for some federal interference with the right to a jury trial for civil suits and states' rights, notably then-Commerce Secretary Malcolm Baldrige, for whom it became a personal crusade. But when reviewing President Reagan's major speeches, from before the 1980 election to the end of his Presidency in 1989, I found the following:

1. Ronald Reagan never proposed any tort reform measure during any of his eight State of the Union speeches, and never criticized trial lawyers in them either. I've searched every word of his SOTUs. It's a strange fact that President Obama proposed more tort reform in this year's SOTU than Ronald Reagan did in eight SOTUs (I wonder if Republicans are comfortable with that).

2. Reagan didn't criticize trial lawyers or propose tort reform in his major address to Congress on April 28, 1981, in which he proposed his economic plan. This was his first speech since the assassination attempt on his life, and it set up the entire Reagan Revolution.

3. Reagan didn't criticize trial lawyers or propose tort reform in either of his Inaugural Addresses in 1981 and 1985. Neither did he in either of his speeches accepting the Republican nomination for President in 1980 and 1984.

4. I can find no mention of this topic in any of his major speeches prior to his election: not in his famous "Time For Choosing" speech in 1964; not in his speech to the first CPAC conference in 1974; not in a speech at Hillsdale College in 1977 titled, "Whatever Happened to Free Enterprise" - none of them. It's obvious that Ronald Reagan wasn't interested in limiting civil suits.

In 1986, President Reagan gave a speech at the Chamber of Commerce, in which he backed the findings of a "Tort Reform Working Group" (TRWG) inside the Administration. To backtrack: The Reagan White House created a number of "Working Groups" to address a variety of topics. For instance, I worked on a "Consulting Services Working Group" that changed the procurement of outside consultants and saved the Commerce Department several million dollars. The TRWG proposed a group of sweeping tort reform proposals, many of which are also included in H.R. 5, the bill reported last week by the House Judiciary Committee to impose federal limits on health care lawsuits.

Here's what Reagan said about the TRWG proposals in his 1986 speech, and note the emphasis on protecting states' rights:

Earlier this year I endorsed the report of my Domestic Policy Council's Tort Policy Working Group. This report contains a number of recommendations, recommendations that include fixed-dollar limitations for certain kinds of awards and the establishment of assurances that liability judgments go to those actually wronged or injured and not to the lining of their attorney's pockets. Now, one of the report's most important recommendations urged our administration to submit reform legislation to the Congress.

This legislation, carefully drafted, has now been introduced in the Congress by Senator Robert Kasten and Congressman Hamilton Fish. It restores the fault standard, which requires that actual fault or wrongdoing must be established in most cases before liability can be assessed. It limits pain-and-suffering and punitive damage awards, awards the amount contingency-fee lawyers could earn, and restricts the joint and several liability doctrine that can force a single defendant to pay all damages even if he is only partly to blame. To be sure, much tort law would remain to be reformed by the 50 States, not the Federal Government. And in our Federal system of government this is only right. Many of the Tort Policy Working Group recommendations, for example, would have to be implemented at the State level to be fully effective. This administration's bill represents a much-needed overhaul of Federal laws governing interstate commerce -- one of the fields of authority the Federal Government is specifically granted by the Constitution -- and sets an example of common sense for the rest of the Nation to follow.

To my knowledge, and with the limitations that come with Internet research, this is the only speech in Ronald Reagan's long political career that comes close to proposing specific federal tort reform measures. And he recognized that states are the proper venue for the debate over tort reform, under "our Federal system of government," not the federal government. And he said it ONCE. He didn't follow up that speech with any other, not at the 1987 CPAC conference, not at the 1988 Republican convention, nowhere. You can do your own research and try to prove me wrong (I suggest you start at this website and at this website, where I found links to every speech cited in this post).

Anyone asserting that "Ronald Reagan was for tort reform" is mistating the Reagan record. It wasn't a priority for him, he didn't see civil litigation as a major problem, and it appears that he gave only one speech on it. That's certainly no basis for sweeping away states' rights in a new federal tort reform law.

On Thursday, the Arkansas Supreme Court voiced its support for the unalienable right to a civil jury trial by striking down a section of the state tort reform law. In the medical malpractice case of Teresa Broussard v. St. Edward Mercy Medical Center, the court ruled that sections of the law establishing standards for medical witness testimony were an unconstitutional infringement on the court's authority to decide witness qualifications. Chief Justice Jim Hanna upheld the court's right to determine the constitutionality of a state medical malpractice law and protected the court's sole authority to determine witness qualifications. He also reiterated a section of Arkansas law stipulating that the trial court "always has the inherent authority to secure the fair trial rights of litigants before it."

It wasn't the first time the court voided part of the state "Civil Justice Reform Act of 2003" and protected the rights of plaintiffs. Late last year, the court ruled that the section of that law capping punitive damages was unconstitutional, and in 2009, ruled that sections of the law limiting evidence of medical costs and allowing defendants to reduce their liability by naming "non-parties at fault" were unconstitutional for the same reason.

Let's hope other state supreme courts follow the Arkansas court's lead in protecting the right to a civil jury trial, and then take it a step further by striking down all onerous limitations on the right to a jury trial for civil suits.

In August, I asked here whether we would see Presidential candidate Rick Perry as the hardcore states' rights advocate, or Rick Perry the hardcore advocate of limiting the 7th Amendment right to a civil jury trial through limitations on plaintiffs' rights. He couldn't logically be both, since federal tort reform is completely incompatible with the concept of states' rights under the Constitution and Tenth Amendment. But Perry tried to be both, with no success. Perry suffered from the same malady as Michelle Bachmann, who falsely promoted herself as a "Constitutional conservative" while proposing federal medical malpractice laws (which would benefit the medical device industry located in her district). Republican primary voters were smart enough to see the blatant inconsistencies of the Perry and Bachmann campaigns, simultaneously calling to protect states' rights while they urge closing state courtroom doors under federal law. To his credit, Gov. Perry seemed to back off of federal tort reform in the fall and winter; it wasn't included in his "Cut, Balance and Grow" economic plan, and he stopped mentioning it in debates.

Gov. Perry ended his campaign today by endorsing Newt Gingrich. It's time to ask the same question about Newt Gingrich, still one of the frontrunners for the GOP nomination. Will we see a states' rights champion or an advocate for closing courtrooms and crushing constitutional rights?

I see Gingrich as evolving in his position during the past year or two. The "Old Newt" was a hardcore tort reformer with no respect for the right to a civil jury trial or states' rights. "Old Newt" developed a "Contract With America" in 1994 which propelled Republicans into a House majority and Gingrich into the Speaker's chair. It was blatantly pro-federal tort reform and didn't protect state authority for any purpose whatsoever. And an early version of a new "Contract," posted in early 2010 on the conservative Newsmax website, included a call for "Litigation Reform." But Gingrich has championed his support for states' rights in recent years, most notably in the books such as "Fed Up" (ironically co-authored with Rick Perry). As his Presidential campaign revived, he proposed enforcing the 10th Amendment "to return power back home" to the states, as part of the new "Contract With America."

So, you might ask, where is Newt now on this issue? Interestingly, Gingrich hasn't mentioned federal tort reform at all in the Presidential debates. When Virginia Attorney General Ken Cuccinelli called out Bachmann over her disrespect for state civil justice systems, Gingrich didn't respond either way. Although his campaign website proposes in one sentence to "Stop junk lawsuits that drive up the cost of medicine with medical malpractice reform," I'm not aware of any forum in which he's proposed it. When Rick Santorum, an unrepentant non-states'-righter, slammed Ron Paul over Paul's principled criticism of a national tort law, once again Gingrich didn't take the bait and didn't jump in on either side. It's fair to say that with the exception of that one sentence, Gingrich can claim that he's not for federal tort reform. Does he stand by that sentence or was it just an addition by a campaign staffer to make some contributors happy? If reports on the Internet about Gingrich and Perry building a pro-10th Amendment platform are true, we'll have a real means of judging Gingrich's fidelity to constitutional principle.

Will he recognize that the Founding Fathers unreservedly left authority over tort law out of the hands of the national government when they drafted the Constitution and Bill of Rights? Does he agree with conservatives such as VA AG Ken Cuccinelli, Sens. Tom Coburn and Mike Lee, Tea Party Nation founder Judson Phillips, Tea Party Patriots leader Mark Meckler, and top anti-Obamacare legal experts such as Randy Barnett and Walter Olson, all of whom said last year that federal tort reform is an unconstitutional abridgment of states' rights and that tort law isn't an enumerated power for Uncle Sam under the Constitution? Will he see the folly of rewarding the AMA and their associated medical groups, who want to use an unlimited Commerce Clause to justify national healthcare as well as special immunity from liability for harmful medical errors? Does he now realize that trial lawyers and civil suits had nothing to do with the Wall Street crash, the housing bubble and its collapse, the BP oilspill, and that those actors in those types of scandals need to be held accountable before local juries as the Founders intended?

Let's hope we see the "New Newt" standing for open courtrooms and state sovereignty, not the "Old Newt" who sought unconstitutional legal protection for selected sections of American business.

That was how GOP Presidential candidate Ron Paul described the impact of federal tort reform law, in the face of the Founding Fathers' clear mandate to protect each state's authority over its civil justice system. He was discussing the need to protect states' rights in all circumstances during the Fox News/WSJ Presidential debate in South Carolina. Rick Santorum defended his support for a nationwide ban on lawsuits against gun manfacturers, and attacked Ron Paul's vote against that ban. Ron Paul stood on the high ground of the Constitution and the Tenth Amendment and never relinquished it. Here is the full exchange, copied from the Fox News Insider website:

SANTORUM: I've been a strong -- again, lifetime A-plus record with the NRA, worked with them. They came to me repeatedly when I was in the Senate to help them and -- and -- and sponsor legislation and work toward making sure in ensuring gun rights. Contrast that with Congressman Paul. And one of the most important things that we did in -- in -- in protecting the Second Amendment -- and I provided a leadership role on it -- was the gun manufacturers' liability bill. There were a lot of lawyers out there who were trying to sue gun manufacturers and hold them liable for anybody who was harmed as a result of the gun properly functioning. And we -- we went forward and passed, with the NRA's backing, a bill that put a ban on those types of lawsuits. If that ban had not been passed, if that gun manufacturer's liability bill, removing them from liability from that, had that not been passed, there would have been no gun industry in this country and there would have de facto been no Second Amendment right. Congressman Paul voted against that bill. And -- and that's a very big difference between someone who actually works with the gun -- Second Amendment groups for -- for legislation that can protect that right and someone who says they're for Second Amendment, has attacked me on my Second Amendment issues, which you just referred to, and here's a man that would have wiped out the Second Amendment by -- if his vote would have been -- carried the day.

BAIER: Congressman Paul?

PAUL: Hardly would that wipe out the Second Amendment. But the jurisdiction is obviously with the state. Even when tort law is involved with medical malpractice, which is a real problem, now, our governor worked on and our state has done a little bit on medical liability. I think that's the way it should be handled. You don't have -- you don't have national tort law. That's not part of the process. That should be at the state level. So to argue the case that that does away with the Second Amendment, when I'm the one that offers all -- all the legislation to repeal the gun bans that have been going on (inaudible) everything else. (APPLAUSE) I mean, I've introduced legislation like that. So that's a bit -- a bit of an overstretch to -- to say that I've done away with the Second Amendment.

SANTORUM: No, I need to respond to that, because the fact is, if we did not have a national liability bill, then people would have been able to go to states like, say, Massachusetts or New York and sue gun manufacturers where they would not pass a gun liability bill. So unless you have a national standard to protect guns --manufacturers of guns, you would create the opportunity for the elimination of guns being manufactured in this country and de facto elimination of the right to bear arms. (APPLAUSE)

PAUL: Well, this is the way -- this is the way our Constitution disappears. It's nibbled away. You say, well, I can give up on this, and therefore, I'll give that, and so eventually there's nothing left. But, no, tort law should be a state function, not a federal function.

What would you think if the owner of a grocery store chain took aim at the private financing of chicken farms, and demanded that the federal government ban partners from investing in the farms in exchange for a share of the gross revenues? Wouldn't you think that critic shouldn't butt his nose into someone else's business arrangements, and that Uncle Sam should stay out of the business of chicken farming?

And let's say that critic also charged that private farm financing encourages the farm operators to test questionable chicken-raising methods and produce substandard chickens. And that third-party financing raises a serious ethical question whether the farmer is more interested in the quality of his chickens or the outside financial backers. Wouldn't you think that the critic is also illogical in his thinking about the farmer's motivation and methods to produce good chickens? Isn't it more logical to believe that a chicken farmer would protect his partners (and his own position) by trying to raise the best chickens, using the best methods?

Yet that is the unique logic behind what the President & CEO of the U.S. Chamber of Commerce said in his annual "State of American Business" address. Thomas Donohue said the following:

We're also aiming to stop the alarming rise of third-party litigation financing. That's where outside investors fund lawsuits in exchange for a share of the award or settlement. This encourages the filing of frivolous claims. It invites testing questionable claims in court. It provides an incentive to prolong cases. And it raises serious ethical questions. Who does the lawyer really represent--his client or the outside financial backers? In our business, we hear dumb ideas every day of the week. But this one takes the cake!

Really? Let's walk through that statement.

First, the financing arrangements of any legally operated private law firm and its lawsuits are nobody else's business, and there's nothing in the U.S. Constitution that makes it Uncle Sam's or any state government's business. I don't care if you hate trial lawyers more than any profession in America, it's their business and their client's decision to file a particular lawsuit. And if the lawyers are running the firm and filing lawsuits legally, it's nobody's business how they get financed and paid (assuming, of course, they're not publicly selling stock in their firm). No privately held member of the U.S. Chamber wants Uncle Sam overseeing its financing arrangements. Isn't that why the Chamber fought the Dodd-Frank bill and actually sues to prevent excessive regulation of American business? What makes privately owned law firms so unique that the federal government should regulate their financial deals? And what would the Chamber say if Uncle Sam pried into its dues structure and contributors' list? Law firms are already subject to the the same government oversight regulations and mechanisms as any other privately held business.

Second, how does using third-party financing in any business invite poor decision-making with substandard inputs and a deterioration in quality? Why would a lawyer want to look like an idiot to his investors by filing crummy lawsuits with no chance of victory? Where in American business, or in any business in the world for that matter, does that happen? What made Mr. Donohue ascribe that type of illogical behavior to trial lawyers? Does he believe that third-party financing of any service industry results in poorer quality?

And if third-party financing of lawsuits is such a "dumb idea," as Mr. Donohue put it, why does it happen at all? Doesn't he trust "destructive capitalism" to put an end to any business practice that doesn't work?

Third, the statement is evidence of the Chamber's distrustful attitude towards local juries. Don't they think that a group of average Americans is smart enough to smell a truly frivolous claim from a mile away and deny the claim? The Founding Fathers trusted local juries and millions of Americans still do - apparently including the Chamber, whose member companies bring lawsuits to court all the time?

Nothing in that statement makes any sense to me, except that it's another way for the Chamber to infringe on our 7th Amendment right to a civil jury trial, and to cap the revenues earned by trial lawyers in their business. The business community fights against federal laws which would cap compensation for Wall Street executives, oil company executives, and any other business owner in America, and I agree with that position. But when it comes to contingent fee trial lawyers, the business community does a 180 and hypocritically wants Uncle Sam to tell the lawyer how much he can make and NO MORE.

The "cake" in this discussion belong to the Chamber for proposing such a dumb, unconstitutional and un-American idea.

Unfortunately, the Supreme Court has taken another opportunity to expand the use of forced arbitration clauses in consumer contracts, denying us the right to negotiate such clauses out and take our claims to a jury. On the heels of the landmark ATT Mobility v. Concepcion decision, the Court held in CompuCredit v. Greenwood, that companies that promise to repair an individual's credit can force customers into arbitration, instead of to a judge or jury trial, under the Federal Arbitration Act (FAA), even though the 1996 the Credit Repair Organizations Act gives consumers "the right to sue," because the latter act doesn't explicitly overrule the FAA. The impact of this decision extends the scope of the FAA and represents another in a string of decisions approving of forced arbitration clauses in consumer contracts.

A 1965 Supreme Court decision included a powerful summary of the detriments of arbitration: "Arbitration differs from judicial proceedings in many ways: arbitration carries no right to a jury trial as guaranteed by the Seventh Amendment; arbitrators need not be instructed in the law; they are not bound by rules of evidence; they need not give reasons for their awards; witnesses need not be sworn; the record of proceedings need not be complete; and judicial review, it has been held, is extremely limited."

Forced arbitration clauses are never negotiable by the consumer, and the proceedings are heavily biased towards the business. The FAA might now be the most powerful anti-jury trial federal law on the books, with consumers trapped.

On September 23, I posted about H.R. 1063, a bill introduced in the House titled the Strengthening Medicare And Repaying Taxpayers Act of 2011, or "SMART Act." This bill helps to replenish the Medicare Trust Fund, make Medicare work for seniors instead of the other way around, and reduces paperwork burdens for businesses. To reiterate: Under federal law, Medicare pays the medical bills while a recipient is injured and sues the other party, acting as the "secondary payer" for the bills pending the outcome of any legal action. Federal law requires the injured person's attorney to repay Medicare upon a judgment or settlement, before any funds are given to the injured senior. But the federal agency running Medicare hinders the repayment process, so it can take years to finally pay off even the smallest claim, and the senior doesn't see a dime of the settlement until that payoff. Moreover, the feds impose ridiculous reporting burdens and penalties on businesses under the same secondary payer law. The SMART Act streamlines the process, establishes real deadlines for the federal agency, and enables businesses to meet CMS reporting requirements while maintaining data security.

The leading sponsor in the House is Rep. Tim Murphy, a Republican representing the 18th District in Pennsylvania. Rep. Murphy serves on the key Energy & Commerce Committee in the House. I first met and worked with him while he was on the House Financial Services Committee, where I was the senior Republican oversight counsel from 2001 through 2003. He's a career psychologist, which can come in pretty handy when dealing with House Members and staff of both parties. I've seen that Rep. Murphy strives to work with Members on both sides of the aisle, while maintaining core conservative principles of limiting the size and scope of the federal government. So it's no surprise to me to see him leading the most bipartisan Medicare bill in Congress, with co-sponsors from Reps. Ron Paul and Allen West on the right to Reps. Diana DeGette and Tammy Baldwin on the left.

Rep. Murphy discussed H.R. 1063 and other issues on January 10 in an interview on the nationally syndicated What's Up radio program, hosted by Terry Lowry. In part 2 of the interview (download here), he noted, "Now it's interesting: defense lawyers, plaintiffs' lawyers,, retailers, stores, restaurants, everybody wants to fix this problem, except Medicare. And so there are hundreds of millions of dollars that sit out there that take forever for the bureaucracy to try and claim, and some of the sad news about this is that sometimes what Medicare does, they will sue some elderly person or ask for the money to come back from the elderly person, and say that if you don't pay us back, we're going to take it out of your Social Security... So we're trying to correct this..."

As Terry Lowry noted, Rep. Murphy has "a boatload of common sense," especially on this issue. This bill corrects the inefficiencies of a huge government bureaucracy affecting millions of Americans and the business community. The SMART Act and Rep. Murphy deserve strong support from all 7th Amendment advocates.