WHERE THE TORTS BLOSSOM

By Gregory Jaynes

THEY WERE ABOUT TO PICK A JURY to hear a civil suit in rural Alabama the other day, and the home-side lawyer for the plaintiffs assured the jury pool of farmers and sewing-machine operators, stock clerks and bookkeepers that he didn't want "to pry into your life," but said he wanted to know, "Is there anyone here who doesn't believe in filing a lawsuit for any reason? Is there anybody here who simply doesn't believe a jury should award punitive damages in any amount?" It was pretty quiet, and no wonder.

This was in Clayton, one of two seats (the other is Eufaula) of Barbour County, an ordinary little county that has become nationally recognized as tort hell. The lawyer was Jere Beasley, who was once the Clayton High School quarterback and twice the lieutenant governor. Now 59 but still thick as an antebellum column in the neck, Beasley has a reputation for taking the side of ordinary folk against big corporations and bringing them to their knees, lightening their pocketbooks by the millions. Now he smiled at the prospective jurors, 100 people or so; everybody knew of him.

Next it was the other attorney's turn, Bob Bradford from Montgomery, representing an insurance and finance company. Said Bradford: "I come from a small community. I am sure there are folks that, if I went to high school with and they were on my jury, they might lean a little my way. Would any one of you tend to lean a little bit toward Mr. Beasley?" The judge was William Robertson, 51, a former law partner of Beasley's, and a protege in Little League baseball ("He was a hero we looked up to," the judge says of Beasley). In less than 24 hours the defendants-accused of violating state laws by requiring borrowers to take out life insurance policies to cover the amounts of their loans-had folded and settled 45 cases out of court for $4.1 million. By Beasley standards they got off light: if it had gone to the Barbour County jury, God knows the size of the wheelbarrow they would have needed to haul away the verdict money.

Last week, as the House of Representatives voted for legal-reform measures as part of a Republican pledge to stanch the tide of frivolous lawsuits and to rein in society's litigious ways, the anecdotal evidence of the reformers' nightmares was nowhere stronger than in Barbour County. Last year juries in Alabama awarded $200 million in punitive damages, some of it in cases where actual loss was minuscule compared with the damages. "Alabama is off the charts," said George Priest, a Yale University professor of law and economics. "Lawsuits used to be about restitution. Now Jere Beasley goes into court and not only gets the money back; he gets $25 million in punitive damages. There is no other county in the U.S. like Barbour County."

To stay that kind of litigious stir, not just in Barbour County but also in the heart of the national citizenry, the House approved 1) a "losers pay" bill, which would require the party that had first rejected a settlement and then won a judgment for a lower amount to cover the opposing side's legal fees; 2) a bill tightening requirements for bringing securities-fraud lawsuits; and 3) a bill that would cap punitive damages in product-liability cases at $250,000 and allow judges to sanction parties that bring frivolous product-liability lawsuits. The bills were welcomed by Big Business and the insurance industry, which have sought such laws for more than a decade. Corporations, said Representative Henry Hyde of Illinois, provide employment for the country. Hyde, who is the chairman of the House Judiciary Committee, told the New York Times: "We shouldn't make an enemy or adversary of them just to satisfy some populist urge."

Opposing the legislation was the 60,000-member Association of Trial Lawyers of America, which characterized the reforms as "propped up by distortion and lies." In Alabama, Beasley said, with protection like this his vanquished foes "would have clicked their heels and chirped like larks." Ralph Nader was a particularly vociferous opponent. Nader said only $3 billion annually passes from losers to winners in insured payouts when companies are sued, pointing out that $3 billion is less than a year's profits for many large companies-Ford or GM, say. "Pick any company," said Nader. "There's more in profits for one company after taxes than all the quadriplegics and brain damaged get from product liability or civil settlements." Marc Galanter, director of the Institute for Legal Studies at the University of Wisconsin, called the bills "the triumph of folklore over research. There is no great rising tide of litigation in the U.S."

Oh, yes, there is, said the Republicans, whose debatable argument had 1 of every 5 American small businessmen canceling new products out of fear of product-liability lawsuits. According to Wyatt Co., a Washington consulting firm, the cost to companies of settling suits against corporate officers rose 39%, to an average $4.6 million, in the period from 1986 to 1994. Furthermore, the average cost to industries for hiring outside counsel was $967,000.

If that doesn't break your heart, why, the Girl Scouts of Washington have to sell 87,000 boxes of cookies a year just to pay their liability insurance. Leave us Girl Scouts out of this, the group said. All right, the reform lobbyists said, if not a Girl Scout, then we will give you a little girl in pigtails who would like to play Little League ball this year, if it weren't for all the lawsuits. The full-page advertisement in the Washington Post said DON'T LET HER SEASON END IN A LAWSUIT. But the horse the conservatives rode hardest was the case of the elderly woman who was awarded $2.9 million in a judgment against McDonald's after she burned herself with a McDonald's cup of coffee (the payoff was reduced on appeal to $480,000). As Suffolk Law School professor Michael Rustad told TIME, despite the perception out there of vast monies changing hands in these cases, only 10% of punitive-damages awards of more than $10 million are paid; 90% are reduced or reversed.

The Senate is expected to take a meaner look than the House did at all three measures, spending some months to make alterations. The White House opposed all the bills.

Meanwhile, here stands Alabama's My Cousin Vinny scenario, a deserving target for criticism from every corner. The median punitive-damage award in Alabama is $250,000, three times the national average. Median figures aren't available for Barbour County, but some individual ones are. For example, Willie Ed Johnson, a young nursing-home orderly, claimed that the Mercury Finance Co. of Northbrook, Illinois, inflated his used-car loan by $1,000, charging him 26% interest and taking advantage of him and thousands of others nationwide to make more than $1 billion in profits; last Aug. 4 a Barbour County jury awarded Johnson $90,000 in compensatory damages and $50 million in punitive damages. Beasley told the jury it was time to send a message. (The case was reportedly settled for less than $1 million.)

Beasley alone accounted for $110 million in punitive-damages awards last year (Barbour County is known as the "Beasley Triangle," the place where corporate America bleeds for the public good). He has won astronomical judgments again and again-against, among others, Prudential Insurance and GM--to the point where other plaintiffs' lawyers are carping privately about such success (the lawyer's take is usually about 30% or more). But backbiting doesn't faze him. "Being in politics sort of conditioned me to being called names," Beasley told TIME. "I wish if people didn't like me, they'd tell me to my face instead of spreading rumors about me. Maybe they're just scared of me."

"Beasley," says Birmingham defense lawyer Sam Franklin, who knows him well, "almost makes jurors think it is their civic duty to award millions to the plaintiff." For his part, Robertson, the only circuit judge in the county (he has seen 88 Beasley cases filed since 1993), seems to view the court as a way of policing consumer areas where the state lacks personnel. "The deterrence of fraudulent conduct is left, in Alabama, to the punitive-damage system," he noted in one ruling, asking that part of the judgment go to the state insurance department, which has a $2 million budget to monitor a $6 billion industry. Ten insurance companies last autumn announced plans to pull out of Alabama.

"The juries are telling these companies that we want you to come down here and do business with us," says Robertson, "but if you cheat us, we'll make you pay. That's what's been happening here. You better do what you say you're going to do. Where you find that people are less educated, less business-sophisticated, it is more likely they will be misled by agents. You're supposed to be able to trust your insurance agent, just like you would your lawyers, your preacher or your football coach."

As for accusations of partiality toward Beasley, the judge says, "The jury gives the verdict." And the plaintiff's lawyer says, "Every verdict I got, my client deserved--and could have been settled for less."

"We didn't have a chance," one shirtless (figuratively) insurance executive said after an Alabama jury shot his company down. Reformers in the state embraced last week's congressional action, saying somebody has to pour water on these juries before more concerns bolt and run. "Businesses here are honestly scared of what will happen to them if they are sued," said Sid McDonald, a businessman from Arab (pronounced A-rab) and chairman of Alabama Voters Against Lawsuit Abuse. "They do not believe they can get fair treatment in the Alabama court system, especially at the appellate level. Corporate America thinks Alabama's judiciary is on a witch-hunt for out-of-state targets. People are suing for millions over frivolous matters. The attitude is, Sue anybody for anything for any amount of money. What we've got in Alabama is a lawsuit lottery."

"If you're a company and you haven't done anything wrong, you don't have anything to worry about," Beasley was saying recently, "but if you did do something wrong, watch out." Not that Beasley needs the business. He has 500 cases pending. And if Congress wants to meddle in how he goes about representing his clients, well ... "I'll work with whatever system I have to work with. It won't affect me one iota."

--Reported by Nina Burleigh/ Washington, David Rynecki/Barbour County and Andrea Sachs/New York