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 Oklahoma City, OK -
In the 2004 election, Republicans captured a majority in the
Oklahoma House for the first time in its history. Todd
Hiett, right, the newly elected Speaker, wasted no time
authoring HB
2047, the Justice & Common Sense Bill of 2005, which provided
for sweeping legal reform. The bill was passed by the
House on March 9th by a margin of 62 to 38.
HB 2047
included much-needed reforms such as a limit on attorneys fees,
a hard cap of $300,000 on non-economic damages (e.g., pain and
suffering), protections for educators from frivolous lawsuits,
and the elimination of “joint and several” liability making
people liable for damages only to the extent at which they are
at fault.
“Working Oklahomans
lose when jackpot justice and junk lawsuits clog our courts,”
said Speaker Hiett (R-Kellyville). “Though some good lawyers are
trying to do what’s right, too many trial lawyers have become
the new robber barons of the 21st century. They’re willing to
abuse our legal system to line their own pockets. We’re going to
put a stop that.”
However, on April 5, Senate Democrats "gutted" HB 2047 and for
the third year in a row, Governor Brad Henry and Senate
Democrats blocked legal reform by watering down legal reform
bills in the Senate Judiciary Committee.
 “This
action by the Judiciary Committee shows that Senate Democrats
aren’t serious about real lawsuit reform," said Minority Leader
Glenn Coffee. "I have serious doubts whether Senate
Democrats will allow meaningful lawsuit reform to pass in 2005,
which means we’ll have to be right back here next year talking
about this issue again,” he continued. “It’s becoming
obvious that Gov. Henry and Senate Democrats want to make this a
campaign issue for 2006."
 Mary
Fallin (left), the state's three-term Republican Lt. Governor,
fired back at the Democrats' action to de-rail legal reform.
“Last year we were promised comprehensive tort reform and got
very little", said Fallin. "This year the Governor and
Senate Democrats couldn’t even muster the votes to advance their
weak and watered down bill, so they have now hijacked an
excellent state-of-the-art reform bill passed with bipartisan
votes in the House. This simply cannot be allowed to stand.
Oklahoma is now in danger of falling even farther behind in the
national tort reform effort."
Senate Democrats,
according to local political observers, are increasingly
determined to hang on to the campaign support they receive from
the trial bar. Whereas in the past, they could rely on
campaign funding from unions and teachers among other
constituencies, these groups have less ability to raise money
for candidates. This leaves the Democrats with fewer
options and makes the trial bar a more important source of
campaign support.
The Oklahoma trial
bar, alarmed at the success of the Republicans in winning the
House, is worried that the Senate will go the same way in the
next election, given that the Democrats hold only a slim
majority, 26 to 22. One member of the House Republican
Leadership told us that the trial bar contributed about $100,000
in the last election in an attempt to defeat him. The
typical Oklahoma Senate campaign costs about $200,000 and
Republicans are confident they will have the public support to
win the Senate in the next election. One Senator told us,
"The tide of public opinion is with us and we will make legal
reform a major issue in the next campaign."
While House
Republicans are adding legal reform measures to other bills
likely to pass the House in a last-ditch effort to force the Senate
Democrats to reconsider legal reform this year, they recognize that time
may run out in this session before this tactic can succeed.
It is highly likely that Oklahomans must wait another year for
legal reform.
Small Business Day At
the Capitol
Against this
backdrop, Lt. Governor Fallin decided to focus this year's Small
Business Day on legal reform. "Oklahoma is in danger of
looking like a backwater of obstructionism and a place where the
narrow interests of the trial lawyers rule in the Senate and the
Governor’s Office," said Fallin. "Every day we go without
addressing this problem, our state will continue to lose doctors
and lose businesses. Oklahomans demand real, comprehensive
lawsuit reforms, but they were betrayed by a small group of
lawmakers and a Governor who remain a wholly owned subsidiary of
the trial lawyers.”
Sponsored by the
Oklahoma State Chamber of Commerce and other state business
organizations, Small Business Day on April 25th brought several
hundred local business leaders to the Capitol for a round of
briefings followed by visits to legislators to urge them to keep
legal reform at the top of their agenda.
 Keynote
speakers included
National
Association of Manufacturers (NAM)
President
and former Governor of Michigan
John Engler,
Devon Energy CEO
Larry Nichols,
and American Justice Partnership (AJP) Chairman
Steve
Hantler, who told state leaders that the
time has come for legal reform in Oklahoma for businesses and
consumers.
“Lt. Governor Fallin should be
commended for her efforts,” said Engler (left). “For everyone who has a
payroll and cashes a payroll check, it is essential that we
accomplish legal reform at the state level to create a
predictable business environment that will enable us to compete
successfully at home and against our competitors around the
globe. The U.S. tort system costs more than $246
billion per year, which translates to $3,380 per family of
four,” noted Engler. “These costs translate into higher
insurance prices, higher local taxes and higher prices for every
consumer product. There is no doubt that everyone will
benefit when legal reform is passed in Oklahoma.”
 Devon
Energy Chairman and CEO Larry Nichols (right) summed up the
determination of the business community to achieve legal reform
by saying, "We will watch how members of the legislature vote on
legal reform and then in the next election, it will be our turn
to vote."
 “Oklahoma is at a crossroads and the economic well-being of the
Oklahoma families, communities and businesses hang in the
balance,” said Hantler (right). “Their well-being depends on state
leaders making a commitment to the goal of restoring fairness
and predictability to the legal system.
Some leaders in
the Senate are telling us which road they are taking by turning
aside a good legal reform bill. But, the fairness of the civil
justice system should not be a partisan issue. Fair and
balanced civil justice reform should not pit one party against
another. All of us, Democrats, Republicans and Independents
alike have too much at stake for this to be addressed along
party lines."
“Small business is at the heart of our economic growth engine,”
said Lt. Governor Mary Fallin. “More than half
of all Oklahomans work for companies with fewer than 500
people. Unfortunately, small businesses are burdened by the
legal system, and many have left the state taking countless jobs
and resources with them. Without legal reform everyone—business,
families, schools, employees, and consumers—is penalized. Other states, as well as the federal government are proceeding
with lawsuit reform, leaving Oklahoma in the dust,” continued
Fallin. “Every day we go without addressing this
issue, Oklahoma will continue to lose businesses to states that
have already adopted reform.”
The unfair legal environment in Oklahoma courts is particularly
challenging for small businesses, many of which do not have the
resources to defend against litigation. According to NERA
Economics, small businesses with less than $5 million in sales
pay almost $76 billion in lawsuit and liability insurance. And
what’s worse – 44% of that burden is paid directly by the
companies and is not covered by insurance. According to the
National Federation of Independent Business’ 2002 National
Small Business Poll, more than one in five small business
owners have to spend more time on liability problems and
protecting themselves from liability rather than improving
business operations.
 “Oklahoma needs to pass lawsuit
reform to compete in the global marketplace,” said
Richard P.
Rush, (left), President and CEO of
The Oklahoma State Chamber.
“Our businesses cannot compete if they have bulls-eyes painted
on their backs by aggressive trial lawyers. Other states have
already passed significant reforms and are attracting businesses
and jobs. Oklahoma must do the same.”
Based on discussions with local CEOs, it is clear that the
business community is solidly behind the Oklahoma State Chamber
and the Senate and House leaders who are campaigning for legal
reforms. One pointed to the recent actions by other states
to pass legal reform and said that no one in Oklahoma who is
serious about keeping jobs in the state can afford to be happy
when other states are moving so quickly to attract the companies
and jobs away from Oklahoma.
Although Senate
Democrats succeeded this year in putting legal reform on hold,
their ability to continue to do so is seriously in doubt.
With Republicans vowing to make this a major election issue, and
with state business leaders and national partners, including the
American Justice Partnership, committed to keeping legal reform
on the front burner with the electorate, the odds of achieving
legal reform are considerably better than in the past. No
one believes that the trial bar will fail to make Oklahoma a
battleground state, and as a result, the importance of Oklahoma
for both sides will remain very high through the election
in 2006.
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