Madison County is subject of White House conference

By Ann Knef | Dec 16, 2004

Home Depot CEO Bob Nardelli

Not only did the subject of tort reform play a substantive role in a two-day economic conference held at the White House Wednesday and Thursday (Dec. 15-16), Madison County, Ill. also achieved recognition as a "speed trap" for American civil litigation.

U.S. President George W. Bush, addressing a panel comprised of select business leaders from across the country, said that litigation costs make it harder for U.S. interests to compete internationally.

"The cost of litigation in America makes it more difficult for us to compete with nations in Europe," the president said.

President Bush told a businessman from Louisiana, who has been hit by more than 100 lawsuits, "A judicial system run amok is one that makes it really hard for small businesses to stay in business. And I appreciate you sharing your story with us. It's a -- frankly, a painful tale to listen to because -- what makes it even more painful, there's a lot of people like you.

"Most new jobs in America are created by small business owners. And when you hear a small business owner talking like that, and he says we got a problem we'd better address now before it's too late, thank you for sharing it with us."

At the conference, U.S. Secretary of Commerce Don Evans introduced various speakers, including Home Depot Chief Executive Officer Bob Nardelli.

Nardelli, who singled out Madison County, Ill. as a lawsuit magnet, pointed to a 5000 percent increase in class action lawsuits there since 1998.

The following are excerpts of Secretary Evans' introduction of Nardelli and remarks made about Madison County:

SECRETARY EVANS: "...Here's a man that's responsible for about 350,000 employees. And Bob Nardelli, of Home Depot, why don't you give everyone kind of your insight as to the lawsuit abuse, the impact on your employees, as well as on your company."

BOB NARDELLI: "...So what you have today is business on one side, and you've got the trial lawyers on the other side, and you have the worst combination of all: You've got deep pockets colliding with shallow principles. (Laughter and applause.)

"Let me make another point, if I can, on this magnet court system. There's a place like Madison County, Illinois, and I think a lot of us know of that. There's been a 5000 percent increase, 5000 percent increase in the number of class action filings since 1998.

"You know, the issue at hand, they had nothing to do with anybody in that county or that community, but the fact is, it hasn't stopped 49 other states from filing into that county.

"So we really have, you know, quite honestly, I like to use the term, it's a 'speed trap' for American civil litigation. I think that's kind of what we would classify it. So if we move, I think, as George (Priest...Yale professor and co-panelist) said, our class actions into the federal courts, with standard rules from coast to coast, we have a chance at getting things a little more fair, a little closer to fairness. And people who have been hurt will certainly have the ability to get damages and get recovery, but in a much more fair environment, less abusive environment.

"So if we continue to leave this issue, as I see it, of national importance to the whims of the greedy, Mr. President, instead of the needy, we're going to continue to have a huge price in this country to pay for abusive litigation.

"Let me kind of close out and make a few final comments. That's why I think that this Class Action Reform Act is so important to be passed. I think it's great that we've had a lot of bipartisan support. I think what we need is some bipartisan action, Mr. President, as you said in your opening comments.

"Also, I would take this asbestos litigation, and we would classify it as the gift that just keeps on giving to trial lawyers. Thirty years, and no end in sight. According to RAND Institute, $70 billion has been spent on asbestos litigation, 200,000 claims have been filed against 8,400 companies since 2002. So we see that continuing to grow.

"The asbestos war, if you will, seems to be waged on -- 67 American companies have been put into bankruptcy. Now, here's the way I kind of like to look at that, is, while the lawyers are attacking corporate America, it's corporate Americans that are suffering. That's the issue. And we've had 60,000 corporate American jobs eliminated as a result of that.

"So let me just conclude, Mr. President, I really think that something has to be done. There's no better person to do that than you, in this term, in your second term. And we're tickled to death that your exodus was postponed for four years, let me say that. (Laughter.) A great deal has been said about this issue, but I think the time is now. I think the emotion is high, and I'm here, Mr. President, to join you in leading the charge for relief from what I'll call, trial lawyer tax.

"Thank you for the opportunity."

THE PRESIDENT: "Good job."

SECRETARY EVANS: "Thank you, Bob. Bob, thank you very much. I think you're right. And when you talk about lawyers being on one side and business being on the other, and it's the families that are paying the price, the hardworking Americans. They're the ones caught in the middle. They don't always see it because they don't see the line-item -- maybe it's on a medical bill -- maybe it ought to be on a lawn mower someday, what's the additional cost of a lawn mower because of tort costs."

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