Civil Justice


The U.S. Chamber, primarily through its affiliate the Institute for Legal Reform (ILR), pushes to restrict consumers’ and workers’ right to seek compensation in court when harmed by corporate wrongdoing.

The U.S. Chamber, primarily through its affiliate the Institute for Legal Reform (ILR), pushes to restrict consumers’ and workers’ right to seek compensation in court when harmed by corporate wrongdoing.

  • Generally, plaintiffs’ attorneys represent consumers and workers to help them seek compensation in court for injuries caused by alleged corporate wrongdoing. In the late 1990s, the Chamber launched a well-financed campaign to malign plaintiffs’ attorneys as part of a wider crusade to implement national and international policies that shield corporations from lawsuits.

    In 1998, the Chamber founded the Institute for Legal Reform (ILR), now the largest sub-group within the Chamber. More than half of the $44 million the ILR raised in 2012 came from just 21 large donors, with an average donation of more than $450,000. The Chamber does its anti-consumer work through the ILR and through its Coalition to Preserve Arbitration, led by AT&T and comprising trade associations in finance, insurance, car sales and other industries where contracts are complicated and companies often have an advantage in information and expertise.

    One of the ILR’s apparent goals is to further entrench the use of pre-dispute binding arbitration clauses in corporate contracts with consumers and employees. The clauses deny individuals’ right their day in court and require them instead to resolve disputes with corporations in private arbitration proceedings. The ILR funds research that attempts to support the claim that consumers do better in arbitration than in the courts, but more credible research shows that consumers and employees are less successful in arbitration than in the courts. The Consumer Financial Protection Bureau has found that arbitration clauses are prevalent in financial services contracts and that very few consumers use arbitration to resolve financial disputes. Arbitration is an unpopular choice for consumers because it tends to create an unbalanced playing field that favors corporations.

    Arbitration clauses in consumer contracts frequently forbid consumers from participating in class actions against the company. As a result, consumer disputes with companies can be arbitrated only on an individual basis, a method that is often impractical because the individual amount at stake is often small, even where the corporation’s total benefit from the challenged conduct is significant. That means consumers are increasingly unable to challenge wrongful corporate conduct. And if consumers can’t seek redress, companies do not have to answer for predatory or illegal practices.

    The ILR also works to place articles on “cases and actions that portend to have an impact on business” in widely read publications through its media outfit, the Legal Newsline, founded in 2006.

    Further, 39 states elect their high court judges, and from 2001 to 2003, for example, the candidate backed by the Chamber won 21 of 24 judicial elections. In 2004, the Chamber-backed candidate won 12 of 13 state Supreme Court races.

    The Chamber gives financial support to the campaigns of state judges it views as aligned with its interests and attacks judges that it views as opposed to its priorities. Business groups spent about $26.2 million in races between 2000 and 2009, and the Chamber was a major player. In 2000, for example, the Mississippi chief justice, whom the Chamber supported but who was concerned about out-of-state influence on the state elections, asked the Chamber to stop running ads for her — but the Chamber ignored her request.

    Chamber-identified ads disappeared in the 2002 Mississippi election season, but similar ads were run by the Law Enforcement Alliance of America (LEAA). The LEAA’s donors are secret, but Mississippi Supreme Court Justice Oliver Diaz suspected the Chamber was still at work, saying, “The ads that the U.S. Chamber ran against me in 2000 were extremely similar [to the ones] that the LEAA ran against me in 2008.” The Chamber had run highly negative ads, including accusing Justice Diaz of “voting for drug dealers and baby killers.”

    “Judges who are running for reelection do keep in mind what the next 30-second ad is going to look like,” Justice Diaz said. A 2013 report by the Center for American Progress found that as campaign cash in judicial elections has increased, courts have begun to rule more often in favor of prosecutors and against criminal defendants.

    Fewer numbers are available now than when the wave of spending began around 2000. The Chamber’s state high court spending is becoming increasingly difficult to trace, as observers, including former state supreme court justices, believe it has turned increasingly to spending money through opaque third-party organizations like the LEAA. Additionally, as the Center for Public Integrity notes, “Tracking all outside spending is nearly impossible thanks to lax state disclosure rules, as well as a loophole in the federal tax code that allows politically active nonprofits to run attack ads without disclosing who funds them.”

    In a 2002 speech to the Illinois Chamber of Commerce, U.S. Chamber President Tom Donohue gave some insight into the rise of the Chamber’s involvement in judicial elections. Taking aim at trial lawyers who successfully litigated class action lawsuits for people harmed by asbestos and tobacco companies, he said, “Our approach is simple — implement a multi-front strategy of challenging these unscrupulous trial lawyers every time they poke their head out of the ground. … On the political front, we’re going to get involved in key state Supreme Court and attorney general races as part of our effort to elect pro-legal reform judicial candidates…. We’re clearly engaged in hand-to-hand combat, and we’ve got to step it up if we’re going to survive.”

  • The Chamber and ILR are involved in legal defense of corporations against consumers in myriad ways, including the following:

    • The ILR is seeking to weaken the False Claims Act, a longstanding law that prohibits fraud against the U.S. government, and to roll back the Foreign Corrupt Practices Act, a law that bars bribery of foreign officials by American companies.
    • The U.S. Chamber is also part of a coordinated effort to limit the liability of BP and its contractors for the Deepwater Horizon disaster. The U.S. Chamber lobbied heavily against the SPILL Act, which would have expanded compensation rights for victims of offshore accidents, and it derided compensation claims against BP as “legal shenanigans.” Additionally, shortly after the spill, the ILR helped defeat a Louisiana bill that would have enabled the state’s attorney general to sue BP for damages. While victims’ families were mourning, and people who relied on the health of the Gulf of Mexico were struggling to adapt, the U.S. Chamber was working to prevent the government and individuals from holding BP and its contractors accountable for their negligence and the destruction it caused.
    • The U.S. Chamber is an ardent foe of state tort law. It promotes litigation and legislation to pre-empt state tort law and shield corporations from liability for harm caused by their products.
    • Two of the top three and three of the top 10 bills the U.S. Chamber lobbied for in 2013 were in the field of civil justice. Its most lobbied bill, The Furthering Asbestos Claim Transparency (FACT) Act of 2013, would threaten the privacy of asbestos victims and make it harder for them to receive justice in court and compensation from corporations responsible for asbestos-related injury.
    • The Chamber and ILR work state-by-state to weaken consumers’ ability to challenge companies in the courts. In Tennessee, they successfully lobbied for the passage of a bill making it riskier and more expensive for litigation funders to help people finance lawsuits. Now the funding companies are leaving the state.

    The American public deserves a legal system that gives individuals a fair opportunity to seek just compensation for harm suffered at the hands of wrongdoers, including the U.S. Chamber’s corporate membership. The Chamber’s effort to block individuals’ access to the courts benefits powerful companies while hurting consumers.