ustxtxb_obs_1979_04_13_50_00005-00000_000.pdf

and Casualty Insurance has claimed products liability losses in Texas two to three times as great as its earned premiums. In 1977 it reported losses three and a half times as great as its earned premium. For the same year, companies in Aetna’s premium range reported losses of only one-fourth to one-third of their premiums earned. Aetna’s losses in Texas on a recent insurance survey were so high for the last six years that they upped the industry average by several hundred thousand dollars. Yet Mike Gallagher of the Texas Trial Lawyers Association points out that Aetna reported record-high profits in 1977, as did many other companies that claimed heavy losses in products liability insurance. \(Indeed, Aetna enjoyed a 99 percent increase in profits in ’77 and recorded a bullish 23 percent return on investment, making it one of the 25 most profitable comAnd the Texas House interim committee on products liability concluded that “products liability is a profitable line for the major insurance carriers. With few exceptions. major carriers reported significant profits during the last several years on their products liability lines.” Even Business Week, in a February cover story on products liability laws, pointed out that “despite the insurance industry’s claim that premium boosts were economically necessary, no sound actuarial data exist to prove it.” . Little meetings Austin ness concerns and corporations under the TAB umbrella. It’s A glimpse of what’s happening this session on the products his task to see that corporations such as Ford Motor Company, liability issue reveals that the smoke-filled room rather than any Nabisco, Inc., Sears and Firestone get every possible break public forum has become more than ever the place for key when it comes to workers’ compensation, unemployment incur ducts liability and ro t e legislative deliberations. Trying to discover what kind of a deal ante an P y l g islation consumers can expect from bills setting limits on their remedies But talking to the press is evidently not part of his job de against manufacturers of harmful products isn’t easy, because scription. One Observer reporter made nine unsuccessful tries few of the closed-door bargainers are talking. The only cer to get. Adams on the phone. Once, Adams’ secretary made the tainty seems to be that these non-elected negotiators will pre mistake of saying he was in his office before she thought to ask sent a products liability package to the Legislature as a fait who was calling. The reporter was then put on hold. A few accompli. minutes later the secretary was back on the line with a revised Though products liability bills now await formal action on the report: “I must have lied to you! He just stepped out to the Senate floor and in a House subcommittee, the real job is being Xerox machine.” \(She made it clear he’d be gone for quite a done in private conference rooms, where the bills are being Observer reporter finally got through to pulled apart and put back together by corporate lobbyists, rep Adams, who had never returned our calls, he brusquely an resentatives of the state’s trial lawyers, a sprinkling of legis flounced that he just didn’t “have time” for a discussion about lators, and an even scarcer number of consumer advocates. All the closed meetings or about the products liability coalition. have met for some weeksat House Speaker Bill Clayton’s Says one senator of Adams’ tight-lipped pose: “That’s funny, instigationto hammer out a compromise on the issues brought because he’s so eager to sell his programs to us. He’s been into focus by the bills. \(Clayton has prescribed the same proce working real hard at it.” dure for House consideration of other controversial measures’, Others haven’t had any better luck at extracting a comment from Adamsor from his client members of the TAB. Winston The principal spokesmen for manufacturers are Don Adams, Bode, producer and moderator of “Capital Eye,” a public af i lobbyist for the Texas Association of Business and for its fairs interview program broadcast around the state, invited offshoot, the Coalition for Product Liability Reform, and Jim Adams, a Trial Lawyers spokesman and others to discuss prod Sales of the Texas Association of Defense Counsel. They face ucts liability issues on the air, but nothing doing. The TTLA Mike Gallagher, board president of the Texas Trial Lawyers stalled, wavered for a week, then backed out =Adams never Association, whose position is shored up by other TTLA returned Bode’s phone calls, so the producer tried to schedule a lawyers and an unaffiliated plaintiffs’ attorney or two TAB official or another lobbyist for groups campaigning to Legislators appear to be bit players in the drama. Rep. Bob change the law. “I urged the Texas Retailers Association and McFarland, chairman of the House state affairs subcommittee the Texas Auto Dealers Association to help us find a guest to which is considering the bills, describes the legislators as “ob replace Adams. I never heard another word.” servers,” not participants, in the private negotiating sessionsa The only snippets of information being passed around have distinction McFarland stresses to allay any suspicions that come from the TTLA’s Gallagher, who told the Houston legislators are violating the state’s open meetings law. Chronicle A public airing of the issues, McFarland believes, is unwise the manufacturer should be liable if a product defect was a because they’re “too complicated” for the public to understand: to settle the products liability question on the House or Senate conformity to the “state of the art” in an industry should be a floor would be “too slow,” he says. “The point of negotiating is that a group may have to give a little here, a little there, in order product should be presumed to have no defect if no accident to come up with a solution. It would take away their negotiating occurs within five years from the time the manufacturer sells it ability if their members knew everything that was going on,” It looks as if that’s all the public or even most legislators will McFarland says. find out about the deal being made on products liability until it There are few clues to what’s been happening in the private emerges from the back rooms for the formality of a public vote. sessions. On the business coalition side a determined silence No one is naive enough to think that deal-making has no place has fallen. Lobbyist Adams flatly refuses to discuss either the in the give-and-take of legislating, but in the 66th Legislature, on bargaining sessions or the goals of his clients. Adams, a former this and other issues of public importance, the secret meeting state senator from Jasper, served as chief legal counsel to Gov. increasingly is the legislative process, and special-interest lob Dolph Briscoe. Late last year, Briscoe appointed him to a six byists like Don Adams, not elected representatives, are cutting year term on the Texas Industrial Commission. But Adams’ real the deals and calling the shots. Vicki Vaughan business is lobbying, handling affairs for a wide variety of busi and Tina Lam THE TEXAS OBSERVER 5