NEW YORK (CNN/Money) -
As hundreds of lawyers pack their bags for Las Vegas to plot their legal assault on Merck, they might want to throw in some protective gear too.
A hailstorm is about to hit.
President Bush, fresh off his re-election and gains in Congress by his Republican allies, singled out medical malpractice reform as a top legislative priority. Proponents are trying to rein in multimillion jury awards that they say hurt businesses -- and shareholders.
But moves to cap penalties in medical lawsuits, such as the ones to be brought against Merck over its painkiller Vioxx, could be just the start. Emboldened business groups will likely push for broader tort reform, as well as other pro-business initiatives such as telecom reform and anti-piracy measures.
Meanwhile, Congress is likely to keep in place new rules on overtime pay enacted by the Bush administration in August that Democrats had pledged to repeal.
As far as tort reform goes, bills meant to curb class-action lawsuits, obesity claims against food makers, lawyers who file meaningless cases, and non-economic damages in medical injury cases have passed the House in the last two years. Senate Democrats, however, have so far blocked these proposals.
A separate bid to end costly asbestos lawsuits with a $140 billion victims fund also failed.
Now, with Republicans scoring gains in the House and Senate, tort reform proponents are jubilant about their prospects when the new Congress gets to work next year.
"We expect all of those bills to come back," said Gretchen Schaefer, a spokeswoman for the American Tort Reform Association, the leading group for businesses pressing for reform.
J. Michael Papantonio, a Florida lawyer who's coordinating next week's Las Vegas conference on Merck, acknowledged the outcome of this week's elections didn't help his cause.
The pharmaceutical industry, he noted, has been a big contributor to the Republican Party. Now, with the party at a clear advantage in Congress, "it's payback time," he said.
But tort reform isn't the only business initiative likely to take center stage when the 109th Congress convenes early next year.
Telecom reform
Congress overhauled telecom law eight years ago and, by most accounts, it's been a mess ever since. Instead of providing a roadmap, the 1996 Telecommunications Act turned out to be overly vague and left too much up to the courts and regulators to interpret.
Now the heat is on legislators to come up with a new law that can adapt to the rapid rate of innovation.
Simply put, said Fred McClure, a telecom lawyer who served in the Reagan and first Bush administrations, "the technology has outpaced what the 1996 act contemplated."
One major area crying out for legislative guidance is Internet-enabled phone service -- or, in industry parlance, voice-over-Internet protocol, or VoIP.
It's unclear right now what the rules of VoIP are and who gets to enforce them.
"If I am using a telephone line to hook up to the Internet and then once I get on the Internet I'm using voice to communicate with you, how do you characterize the transmission of that data? Is it packets of information and is it (just another phone call)?" said McClure, now a partner with Sonnenschein, Nath & Rosenthal, a national law firm.
"It's a gray area," he said.
Piracy
Forget about a cultural divide. There's a new corporate divide in America.
The battle over piracy and digital downloads playing out in the courts moved to Congress this summer. Orrin Hatch, the Utah Republican and outgoing chairman of the Senate Judiciary Committee, co-sponsored a bill that would potentially hold tech companies like Apple Computer liable for devices they make that are used by consumers to illegally swap movies and music online.
The "Induce Act," as the bill was dubbed, ignited a firestorm. It also exposed the massive rift between the entertainment and technology industries. Technology companies want the freedom to innovate. Music companies and Hollywood studios just don't want that to happen at their expense.
After countless closed-door meetings involving small armies of industry lawyers and lobbyists, piracy legislation stalled when Congress recessed in early October.
"These guys are clubbing each other over the head," said Adam Thierer, director of telecommunications studies at the Cato Institute. "It's been an entertaining battle to watch and I'm not sure who's going to win."
Now the entertainment and tech industries are in Cold War mode as the Supreme Court considers whether to take up the question of Internet piracy.
The Motion Picture Association of America (MPAA) and Recording Industry Association of America (RIAA) are hoping the high court will soon take up a case they brought to shut down Grokster and other file-sharing services. They lost that case before an appeals court this summer.
If the Supreme Court accepts the case and rules for the MPAA and RIAA, federal legislation becomes a moot issue. If the court turns down the case, expect another fire fight on Capitol Hill.
The Republican victory last week probably did not alter the outlook much for either side. "The giants in the industry are matched up against the giants in the telecom community," said Thierer. "It's a fair fight."
Overtime pay, Sarbanes-Oxley
But the Republican ascendancy changed the odds on some other controversial business laws. For one, new overtime pay rules are here to stay. Democrats had vowed to cancel new regs that went into effect in August. Labor groups claim that millions of workers will now lose their rights to time-and-a-half.
When the Democrats lost their bid for the White House and more Congressional seats, they lost their only real shot at repealing the new rules.
Another possibility: a loosening of the restrictions imposed by the sweeping, post-Enron corporate governance overhaul known as Sarbanes-Oxley. Companies have chafed under the law's strict mandates and severe penalties. Critics have argued the law is essentially a noose around corporate necks that has hindered economic growth.
McClure, the former Reagan and first Bush administration official, said it's possible that Sarbanes-Oxley rules will be eased. "They could go back," he said. "If (Republicans) do it, they'll do it under the rubric of continuing the economic recovery."
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