Insurance Companies triumph over Consumers in Tennessee as Legal Funding Firms exit

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Monday July 07, 2014 · 7:07 AM PDT

2014/07/07 · 07:07

Last week, the largest national consumer legal funding company, Oasis Legal Finance, announced that it is leaving Tennessee in what is expected to be an exodus of all the national consumer legal funding companies after the insurance industry triumphed in pushing a bill through the Tennessee General Assembly that makes operating in Tennessee too risky and too expensive for legal funding companies.

In a bill that was short on consumer protections and long on protecting the insurance industry from another industry it did not like, the U.S. Chamber of Commerce pushed SB 1360 through the Tennessee House with only 2 votes to spare.

Consumer legal funding allows consumers that are battling with insurance companies (over claims they have for injuries suffered at the hands of defendants represented by these insurance companies) to sell a small fractional interest in the proceeds of their legal claim. These sales happen when consumers consult with their attorneys, and are advised that they should persevere in pursuing their claims versus taking low current settlement offers. Consumer legal funding companies provide these consumers with an alternative economic option to taking immediate settlements that their attorney advise are not in their interest.

Naturally, State Farm, Allstate, USAA and the P&C Insurance Industry in general (pile on industry trade groups NAMIC and PCIAA) are not fans of this product, and have mobilized their large entrenched lobbying force - including the resources of the U.S. Chamber of Commerce - to drive legal funding out of the states where they have clout. They have done this in Tennessee through the adoption of an onerous bill that has anti-business provisions that the U.S. Chamber of Commerce member companies would never want to be subject to themselves.

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Monday June 30, 2014 · 7:41 PM PDT

2014/06/30 · 19:41

As previously reported, the U.S. Chamber of Commerce and LABI (the Louisiana Association of Business and Industry) went to the well for big insurance and big business in Louisiana recently, attacking the Louisiana Attorney General's right to retain outside counsel to sue Big Business members of the U.S. Chamber of Commerce, limiting local government rights to sue polluters (including putting the kibosh on existing lawsuits to clean up the Bayou's coastline and marshlands), and thwarting a consumer protection bill, adding protections for consumer legal funding, that would have mainstreamed the ability of Louisiana citizens to sell off fractional interests in their personal injury claims against big insurance.

I wrote about these aggressive actions to tilt the playing field even more in the favor of these special interests in the recently concluded Louisiana General Assembly in my last diary, Louisiana Assembly caters to Big Business and Big Insurance over Louisiana Citizens

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Tuesday June 24, 2014 · 3:33 PM PDT

2014/06/24 · 15:33

Big Business and Big Insurance have not been shy about moving the ball in Louisiana to limit their exposure to litigation and claims for wrong doing in Louisiana. And making the right campaign contributions can certainly be cheaper than paying up for their liabilities if they do it right. They had an awfully aggressive session in this year’s Louisiana General Assembly, using the local state chamber, LABI (Louisiana Association of Business and Industry), and the U.S. Chamber of Commerce to front their special interests at the expense of Louisiana citizens.

During the recent legislative session, these insurance and business funded special interest advocacy groups used their lobbying clout to fight local Louisiana governmental bodies, Louisiana Attorney General Buddy Caldwell and consumers that use legal funding, all at the behalf of Big Business and Big Insurance.

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Saturday April 26, 2014 · 12:16 PM PDT

2014/04/26 · 12:16

Former Georgia Attorney General Thurbert Baker of McKenna Long and Aldridge is a well paid and articulate advocate for the U.S. Chamber of Commerce. So why does General Thurbert Baker neglect to disclose that he is a paid spokesman and lobbyist for the U.S. Chamber of Commerce and its Institute for Legal Reform (the U.S. Chamber of Commerce's Tort Reform arm) in their paid advocacy effort against consumer legal funding (or lawsuit lending as Thurbert Baker prefers to label it)? He recently penned an editorial for The Advertiser in Lafayette, Louisiana, (link provided below) where true to form he discloses his law firm and past as a former Georgia Attorney General and State Rep, but fails to mention his paid relationship with the U.S. Chamber of Commerce.

Perhaps Thurbert Baker has concerns that disclosure might diminish his messaging that he is looking out to protect consumers?
Perhaps disclosing the truth that Thurbert Baker works for the same insurance companies that are defending themselves in the consumers' lawsuits might diminish his credibility?
Perhaps Thurbert Baker assumes that the citizens of Louisiana and members of the Louisiana General Assembly already know about McKenna Long and Aldridge's billing rates and corporate clients?
Perhaps Thurbert Baker feels the name Institute for Legal Reform sounds too Orwellian?
Perhaps people should know of Thurbert Baker's affiliation already because he took a selfie with U.S. Chamber of Commerce CEO Tom Donahue that went viral?

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Thursday April 24, 2014 · 5:28 AM PDT

2014/04/24 · 05:28

A cornerstone of the U.S. Chamber's tort reform movement is to allow companies to force consumers into arbitration and waive their rights to a jury trial. This tort "remedy" apparently unclogs the court systems and lessens the burden of the court system on companies. So what does the U.S. Chamber of Commerce do when it meets an industry it does not like?

You guessed it. Push in a provision into the regulation of that industry that keeps the industry from requiring mandatory arbitration or jury trial waivers. The U.S. Chamber of Commerce just succeeded in installing this provision in its bill to remove the "thorn in its side", legal funding (or lawsuit lending as they like to call it) from Tennessee with the help of the Tennessee General Assembly in the U.S. Chamber of Commerce sponsored HB 1242 / SB 1360 (with helpful pushes from the Tennessee Chamber of Commerce, NFIB and the Institute for Legal Reform's hired spokesman, Former Georgia AG Thurbert Baker).

Forced arbitration is a bad deal for the consumer, which is why the U.S. Chamber of Commerce has fought so hard over the years - including at the Supreme Court level - to preserve it for its Big Business members. So while prohibiting it is an actual pro-consumer provision, it is hypocritical that its prohibition is being promoted by the U.S. Chamber of Commerce when it meets an industry that it perceives as threatening the business model of some of its Big Business members (primarily the 19 largest U.S. corporations).

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Thursday April 17, 2014 · 11:47 AM PDT

2014/04/17 · 11:47

CNBC just issued a report titled, "Data mining is now used to set insurance rates; critics cry foul". In the report, CNBC notes that you have to have insurance to buy a house or to drive a car. You might not like the price you pay for those products, but they are mandated by law. The insurance industry has now discovered how to use data mining software to set rates, a process they call "price optimization" and their critics, notably The Consumer Federation of America (the "CFA"), call an unfair and discriminatory way to overcharge policyholders.

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Sunday April 13, 2014 · 7:30 PM PDT

2014/04/13 · 19:30

We may never know what really happened in Lago Agrio, Ecuador more than 20 years ago, but we do know that Chevron has moved heaven and earth to deny relief for environmental damage to a group of Amazon tribesman. In the litigation, which has spanned two decades, the tribesmen say that the oil company knowingly dumped 18 billion gallons of toxic wastewater and spilled 17 million gallons of crude oil into the rainforest during its operations in Lago Agrio. They say the affected area covers 1,700 square miles and the tribesmen believe the pollution has led to health problems such as cancer and birth defects.

In the latest round of legal wrangling, Chevron succeeded in getting a judge of the U.S. District Court for the Southern District of New York to rule that the judgment against Chevron by an Ecuadoran Court is unenforceable. In this round, Chevron not only went after the tribesmen, it went after the tribesmen’s lawyers and then it went after the lawyers’ lawyers – all in the name of justice.

Chevron’s sense of justice has led it and its proxies at the U.S. Chamber of Commerce to try to outlaw legal funding in all forms. It is true that the impoverished tribesmen were helped by a several million dollar investment from a commercial legal funding company in pursuing their claims against the world’s 13th largest company. But, why are Chevron, with assets of more than $230 billion, and its allies at the U.S. Chamber of Commerce and its Institute for Legal Reform trying to eliminate a smaller sister industry in this country, consumer legal funding, that provides consumers with financial lifelines that can be as small as $500 per transaction?

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Thursday April 10, 2014 · 11:30 AM PDT

2014/04/10 · 11:30

The Insurance Industry has a friend in both Tennessee State Rep Curtis Johnson and Tennessee State Senator Jack Johnson. The Insurance Industry, and their front group led by the U.S. Chamber of Commerce and NFIB, whipped their friends out when they wanted to put a hit on an industry they found threatening. The Johnsons delivered for their friends and earned their scorecard points during the waning days of this legislative session for the Tennessee General Assembly. The insurance companies, which are the named defendants in the lawsuits of the consumers who will be impacted, got their bill to drive the legal funding industry out of Tennessee through both houses of the Tennessee General Assembly after 2 hours of heated debate in the House over a bill that used regulation to remove an economic option for Tennessee consumers that do not have the same financial stamina as the insurance companies they are litigating against.

Curtis Johnson is the House Speaker Pro Tempore, and a Republican from Clarksville Tennessee (District 68 in Montgomery County). Senator Jack Johnson is a Republican from Franklin (District 23 in Williamson County). Both rejected tea party principles of free markets and less government to favor one business over another.

The Johnsons decided to accept the Insurance Company premise (and bill language) that Tennessee should be the first state in the country to impose price caps on the legal funding industry, along with two other insurance company proposed poison pill provisions on the legal funding industry that appear to serve no consumer protection purposes.

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Saturday April 05, 2014 · 4:45 PM PDT

2014/04/05 · 16:45

The US Chamber of Commerce promotes on its website that its headquarters is built on land that had belonged to Daniel Webster.

According to the site, "The U.S. Chamber and the legacy of Daniel Webster share more than just the hallowed ground that is now 1615 H Street Northwest. This venerable institution and this statesman's spirit share an unwavering commitment to democracy, individual opportunity, and free enterprise."

At least two flaws of Daniel Webster's legacy make it appropriate the US Chamber of Commerce's foundation is built on his property. Daniel Webster, you see, spoke out against universal suffrage - for men. He felt that power naturally follows property, and that votes should be limited accordingly.

The US Chamber uses its money as its power source, and formidably out muscles smaller less financed opposition, as it recently did in the Tennessee General Assembly debate over the fate of the Legal Funding (aka Lawsuit Lending) industry. In that debate, the US Chamber conveniently bucked many of its lip service principles to put price caps and other poison pill provisions on an industry it did not like because it gives consumers a chance in their legal fights against the powerful insurance companies that support the US Chamber of Commerce and use it as a front. It also employed close to 50 lobbyists to put the screws to the members of the Tennessee General Assembly, and deny Tennessee consumers of access to money during their legal battle - courtesy of big insurance. Let's give a big Tennessee thank you to @Allstate and @Statefarm.

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Thursday April 03, 2014 · 11:52 AM PDT

2014/04/03 · 11:52

What are the consequences of removing political donation limits? The Insurance Company sponsored bill to run the legal funding industry out of Tennessee provides the perfect example. One industry with limitless resources outgunned another industry serving Tennessee consumers for years without incident. Did the legislation move through the Tennessee Senate and House with merit for its consumer protection provisions?

No, HB 1242 moved out of the Tennessee State House today because it had the US Chamber of Commerce behind it, HB 1242 gave the Insurance Industry the poison pill provisions it wanted to eliminate an industry it sees as a threat, and elections are coming up with candidates that owe their seats (and Republican majority control of the Tennessee General Assembly) and future prospects to the cash the US Chamber of Commerce has and can put behind their candidacies.

When looking Tennessee legislators in the face, the Legal Funding Industry has little in the way to offer to compete with these advantages other than providing consumers with economic choices when faced with financial pressures the Insurance Companies put on them. No way to make donations that could make an economic impact.

That and a buck fifty will get you a ride on the downtown train...

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Wednesday April 02, 2014 · 8:11 AM PDT

2014/04/02 · 08:11

The Insurance Industry's version of regulation on the Legal Funding industry is to put the industry out of business - with no negotiations. This "bill to kill" hit the House floor of the Tennessee General Assembly last week under the sponsorship of the Tennessee House's Speaker Pro Tem, and inspired an unusual hour long debate until it was rolled for another week.

The tort reform arm of the US Chamber of Commerce packed everything it could into this bill to make sure that the legal funding industry would not be able to walk after the bad bill passed so that an economic alternative to settling short with insurance companies would be denied to Tennessee consumers. The fact is that insurance companies (State Farm, Allstate, etc.) view the legal funding (aka lawsuit lending) industry as a thorn in their sides, and have been attempting to use the law making process to push the lawsuit lending industry out of Tennessee.

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Tuesday April 01, 2014 · 2:29 PM PDT

2014/04/01 · 14:29

Last week, House Bill 1242 went to the floor of the Tennessee General Assembly State House and inspired an hour long debate until the sponsor of the bill rolled the bill another week in the face of strong opposition.

One state representative realized that the real intent of this US Chamber of Commerce sponsored bill was to remove legal funding as an option for Tennessee consumers. The US Chamber of Commerce was pushing this bill with the help of the Tennessee House Speaker Pro Tem for the benefit of the insurance companies that oppose these Tennessee consumers in the litigation over the proper price to pay for their injury claim.

As Tennessee State Rep Lynn noted, Tennessee consumers have not expressed concerns over having this option available to them. The ones expressing concerns are the insurance companies that are adverse to them.

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