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July 6, 2004
Business To Battle Kerry-Edwards Ticket

Even before John Kerry announced John Edwards as his running mate for this election, the Wall Street Journal reported that the US Chamber of Commerce will go on the partisan attack now that Edwards is on the ticket:

Tom Donohue, head of the U.S. Chamber of Commerce, has made a public vow: If John Edwards is chosen as John Kerry's running mate, the chamber will abandon its traditional stance of neutrality in the presidential race and work feverishly to defeat the Democratic ticket. "We'd get the best people and the greatest assets we can rally" to the cause, he says.

Other business leaders in Washington have been less public and less precise, but no less passionate. Reviewing the candidates in the Democratic primaries earlier this year, a Fortune 100 chief executive who is active in Washington told me that Mr. Edwards, the North Carolina senator, "is the one we fear the most" -- more than John Kerry, more than Dick Gephardt, more than Howard Dean. ...

Mr. Edwards is a trial lawyer. His campaign for the presidency was financed by trial lawyers. And there is nothing that makes America's CEOs see red these days like America's trial lawyers. "It's visceral," says one person who works with a group of chief executives. "You can feel it in a room." The nation's top executives view the plaintiff's bar as modern-day mobsters, shaking down corporations by bringing endless lawsuits that are too costly and too dangerous to litigate and that result in settlements costing billions to the corporate bottom line. The antipathy, while not new, has never been greater.

While it's probably not news to anyone who follows politics that business favors Republicans, although not to the extent that people assume, the USCC has usually been fairly discreet about its partisanship. Not so in this business cycle, as its members see red whenever the trial-lawyer lobby has gotten involved in any issue. Now that Edwards is on the ticket, primarily through their support, the USCC will view hard partisan campaigning as an investment against expanded plaintiff rights and the loss of any momentum towards tort reform.

The WSJ's Alan Murray notes that Democrats have had a tough time when CEOs organize against them:

To be successful, a Democratic presidential candidate doesn't need the active support of America's CEOs, but he does need to keep them on the sidelines. Jimmy Carter lost his bid for re-election at least in part because business was determined to dump him. Bill Clinton won election and re-election at least in part because the business community, while not strongly supportive, wasn't threatened by him.

Sen. Kerry has accepted this wisdom and has worked since the end of the primary season to moderate the way he's viewed by business. The harsh talk of "Benedict Arnold corporations and CEOs that send jobs and profits overseas" -- a standard line in his stump speech back in January and February -- is gone. Instead, he talks coolly of eliminating tax breaks that encourage companies to send jobs outside the U.S. With Mr. Rubin at his side, he met with the leaders of the Business Roundtable. While there were no apparent converts, he did put the group at ease.

A decision now by Sen. Kerry to make Sen. Edwards his running mate would end that ease, and Sen. Kerry's advisers know it.

Murray suggests that Edwards could take up the cause of tort reform, but with the trial lawyers' lobby pushing Edwards to the pinnacle of the election season, that's about as likely as John Kerry rolling out a proposal for a wide-ranging school voucher system. Nor would anyone believe Edwards if he tried. Kerry will have to rely on a small circle of independently wealthy backers for fundraisers, like George Soros and possibly Warren Buffet, while his VP selection will energize the vast majority of the remainder to throw in publicly for Bush.

Tort reform, as Murray points out, represents the primary concern for the business community, especially since predatory lawsuits seem to be gaining momentum. Fast-food providers look to be the next big target (pun intended) of lawyers looking to get rich like their brethren in the tobacco lawsuits did. While Bush has not had a lot of luck getting meaningful tort reform through Congress, with Kerry-Edwards the business community will lose four years and a lot of ground as their administration will not only not push but probably would actively block such legislation. Expect to see 527s formed in the business community on this issue in the next couple of weeks.

Addendum: For an example of the kind of effort that will disappear under a Kerry-Edwards administration, the Washington Post coincidentally runs an article today on Republican efforts for tort reform:

The bill that will come before the Senate when it returns today from its Fourth of July recess would shift many such suits to the federal judicial system, removing them from state courts that in some cases have become magnets for suits because of their history of big settlements.

In a confrontation of powerful political interests, the battle pits the business groups, which tend to support Republicans, against trial lawyers and consumer, civil rights and environmental groups that work more closely with Democrats. Business interests contribute heavily to Republican campaigns, while trial lawyers are a major source of campaign money for Democrats.

Trial lawyers desperately need to keep class-action suits in state courts, where evidentiary rules and venue shopping are much easier. Federal courts have traditionally been tougher on plaintiffs, especially in class-action suits, and only offer one opportunity to score on an issue. However, the nature of the defendants in these high-dollar class-action lawsuits should require the suits to be heard at the federal level, as the business actions involved cross state lines. Also, the cost of defending a company in fifty different courtrooms put far too much pressure to needlessly settle harassing legal actions.

With Edwards and his IOUs to the trial lawyers, these reforms won't see the light of day.

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Posted by Ed Morrissey at July 6, 2004 12:15 PM

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