Tomorrow, the House Judiciary Committee will debate and vote on H.R. 5, the “HEALTH” Act, which would institute federal controls for the first time on lawsuits filed for health care injuries and deaths. In this post I want to focus on one aspect of the bill: a federally imposed limit on certain wages earned by lawyers. to be enforced by federal judges. To my knowledge, nothing like this has ever been imposed by Congress on the legal profession. It’s also an indirect way of silencing the 7th Amendment right to a civil jury trial through a defunding mechanism.
Section 5 of the bill imposes the following limits – this would be FEDERAL LAW – on the contingent fees that a lawyer can charge his client for services in connection with a health care lawsuit:
(1) 40% of the first $50,000 recovered in the lawsuit;
(2) 1/3 of the next $50,000 recovered;
(3) 25% of the next $500,000 recovered; and
(4) 15% of the amount of the recovery in excess of $600,000.
And the bill authorizes federal judges to reduce the contingent fees by fiat: “In any health care law suit, the court shall supervise the arrangements for payment of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants… (T)he court shall have the power to restrict the payment of a claimant’s damage recovery to such attorney, and to redirect such damages to the claimant based upon the interests of justice and principles of equity.”
So the bill imposes federal wage controls on just one industry, lawyers who charge contingent fees, regardless of the amounts normally charged by an attorney in the normal course of his business. And the bill – a bill pushed by REPUBLICANS – lets federal judges cut the contingent fees to be paid for any reason, with no real limit on a judge’s authority.
This bill establishes federal wage controls on the legal profession, pure and simple. It’s an extraordinary abuse of the Commerce Clause in the Constitution (from the same people who rightfully complain about ObamaCare’s abuse of the same clause). It provides sweeping new powers to the federal judiciary. NONE of these impacts are “conservative” or “Republican.” If those provisions in Section 5 are enacted, it will open the door to other federal wage controls on all legal services, and then on all services for which a commission is paid, such as by real estate agents. WHY would Republicans in Congress even consider federal wage controls on lawyers, after resisting them so strenuously on corporate executives during debate of the Dodd-Frank bill? WHY would Republicans in Congress want to give federal judges MORE power?
By the way, the bill will force federal judges to define and interpret the meaning of the phrase “health care lawsuit” and other new terms in the bill. What’s “Republican” or “conservative” about that?
Two weeks ago, I discussed eight reasons why Tea Partiers and conservatives should reject this bill. Here is a ninth: Interference by the federal government with the wages to be paid under contractual arrangement to attorneys who represent victims.
P.S. I campaigned and worked for Ronald Reagan. Ronald Reagan would never have proposed wage controls on any sector of the American economy, and he would have vetoed this bill.