Is This Man Out To Get You? EVERYBODY KNOWS THAT BIGTIME TRIAL LAWYERS LIKE JAMES E. BUTLER JR. ARE THE SWORN ENEMIES OF BUSINESS. BUT HE'S ON YOUR SIDE-REALLY.
(FORTUNE Small Business) – Without a tie, wearing black jeans and brown tasseled hunting boots with brass eyelets. (Later, before lunch at the country club, he'll ask if he can borrow a pair of my socks.) "The reason I'm late is we had a chance to take some folks bird hunting yesterday down at the farm," he explains. "They were slow getting up this morning." Butler has a gray-speckled mop with a side part, and a little rabbit nose that's about two sizes too small for the rest of his face. He has lived in Columbus, Ga., the seat of rural Muscogee County, since he graduated from law school 26 years ago. He shoots quail and hooks bass; keeps pointers, setters, and Brittany spaniels; grows cotton, peanuts, and corn; and drives a Dodge pickup--in all ways demonstrating humility, a quality he clearly tries to exude. Ask him about the portraits of Abraham Lincoln and Robert E. Lee that hang side by side in his office. Both, he replies, represent "a strange combination of humility and self-confidence."
Put Butler, 52, on that list too. But that strange combination is his business: Butler is one of the top plaintiffs lawyers in the country. He's won scores of big verdicts against the likes of General Motors, Toyota, Suzuki, National Healthcare Inc., and Time Warner (now AOL Time Warner, parent of FSB's publisher). Add up all the damage awards he has coaxed from juries down through the years, and the total approaches $1 billion. "I call him 'Green Bay Packers Sweep Right,' " says Atlanta defense lawyer Thomas Carlock. "He says, 'Here's the evidence. Stop me if you can.' And by God, he's powerful!"
It's exactly that kind of power--broadly wielded by the plaintiffs bar--that President Bush, a committed majority in the U.S. House of Representatives, the insurance lobby, the American Medical Association, the National Federation of Independent Business, the American Tort Reform Association, and indeed, 72% of the American public (according to a recent Gallup poll) would throttle if they could. The latest attempt to transform that desire into law--HR 5, the so-called HEALTH Act, which would put a three-year statute of limitations on most medical malpractice cases and cap noneconomic awards at $250,000--was narrowly approved by the House in March and awaits action in the Senate. "This is a good environment for tort reform," says Sherman Joyce, president of the American Tort Reform Association. "The major difference right now is that we have a President who will sign these bills into law." (For more on the case for tort reform, see "How Much Does Butler Have to Fear?" on page 52.)
Butler's view of the HEALTH Act, predictably, is that it would be a disaster, and not just for lawyers. He sees it as the first step toward a blanket assault on personal-injury, product-liability, and business torts that threatens to undermine "the functioning of democracy and the peace, liberty, and happiness of the people" and believes it pits "small business men who are lawyers against small business men who are not."
That last may be hard to swallow, accustomed as we are to viewing plaintiffs lawyers as the natural enemies of business, including small business. But plaintiffs lawyers are small business people too. You don't have to agree with Butler's views on tort reform or esteem his profession or even like him as a person to see the possible parallels between his entrepreneurial adventure and your own. Here's a guy who entered law school already $250,000 in debt ("I lost my ass building houses"), was never comfortable with the idea of working for somebody else, spent years hustling clients and building a reputation, routinely makes huge upfront investments with no guarantee of any return, regularly finds himself on the short side of mismatched battles with mighty defendants (read "competitors"), has won enough of those battles to become rich, worries that government regulations could put him out of business, and can't begin to think about the work he does without dwelling on why he does it and what it all means.
Jim Butler didn't go to law school to become a trial lawyer. He thought he was laying the groundwork for a political career. Two-thirds of the way through, however, while clerking for the summer at a fancy white-shoe firm in Atlanta, Butler had what he calls his "road to Damascus experience." He was working in a borrowed office much like the one he knew he could aspire to if he joined the firm after graduation. "Mahogany walls," he remembers, "big desk, all that. And I had this big memo I was doing. I took a break. Lit my pipe. Stood up at the window looking out over Atlanta. Way up in the air. And two thoughts went through my head, one after the other. The first one was 'Boy, you're in high cotton now.' And the second was 'Granddaddy would be rolling over in his grave if he could see me here.' "
Butler's roots on his father's side go two centuries deep in Newton County, Ga. "They were farmers," he says about his ancestors. "Supposedly not slave owners, just poor farmers." Butler grew up listening wide-eyed to Civil War stories that his grandmother (she'll be 102 in June) had heard from her own grandfather, who lost his right arm in Gordon's charge at Spotsylvania. After law school, where Butler excelled in moot court competitions, he had job offers in Atlanta, Augusta, and Cumming, Ga., where he grew up, from a firm that had promised him a named partnership as soon as he passed the bar. But the dean "played on my ego," says Butler, "and told me I was a born trial lawyer and I needed to go to Columbus, where they try cases all the time." Butler pauses for a beat. "I think he was just trying to help out his buddy down here who needed a young associate."
Butler worked seven-day weeks. He tried every case he could get his hands on, somehow found time to fall in love with a local girl, decided Columbus wouldn't be a bad place to raise a family, and after two years in town opened his own office, sharing a secretary and a copy machine with another lawyer. During that first year as a solo practitioner Butler says he started 16 jury trials and completed 12. Most of the cases he got were castoffs from more established lawyers. His biggest verdict was $66,000.
Among those early cases, however, was a referral from his old high school physics teacher. The case, involving a doctor's failure to diagnose a spinal injury, resulting in quadriplegia, introduced Butler to medical malpractice. The defense offered $600,000 to settle before the trial began. Butler turned it down. It offered $2 million after it heard his closing argument. Again Butler refused. And a good thing too, because the jury came back in the fall of 1982 with a whopping $4.7 million verdict. A couple of months later Butler helped try a malicious-prosecution case (trumped-up charges against a labor leader) and won $4.2 million. Just like that, the two biggest verdicts ever awarded by Georgia juries had Butler's name on them. He was 31 years old.
Butler's jaw-dropping verdicts increased his workload, erased the debt he'd been carrying since college, and put him on firm financial footing for the first time in his life. "The wolf was not at the door anymore," he says, "and as long as I kept working and was successful, the wolf would never get close to the door again." In the years that followed, Butler and the partners he gathered around him kept raising the stakes, winning ever more astonishing verdicts in all kinds of cases (see box below). In Moseley v. General Motors (1993), involving the infamous "side-saddle" gas tanks, the jury rendered a $105 million verdict in a case that generated gavel-to-gavel coverage on Court TV and a front-page headline in the New York Times. Now Butler was in a different kind of high cotton, the land of nine-figure verdicts. His record so far: $454 million in 1998 in a complex business tort brought by the local operators of the Six Flags Over Georgia amusement park against the operators' general partner, Time Warner. During that trial he had occasion to cross-examine Ted Turner, and Butler did okay; he'll admit that much if pressed. But he's sure he was just lucky: "I deliberately kept it as short as possible because he's a lot smarter than I am. If Ted Turner had enough time, he'd beat me like a drum."
Along the way, Butler developed a signature courtroom demeanor, marked by a charming humility--witness his studied bashfulness when describing the Turner episode--and tightly reasoned appeals devoid of histrionics. "He doesn't scream and holler at the jury," says former Georgia governor Roy Barnes, also a lawyer. "He just says to them, 'Let's discuss this. You do what's right.' It's a very disarming approach." Butler also relies on an economy of words, carefully chosen and strategically applied. "I've watched him from both sides," says Terry Sullivan, Butler's friend since college and a former defense attorney who switched sides four years ago to join Butler's firm, "and it just amazes me how he can stick someone with a needle and they'll jump out of their seat and respond."
Then there's the limp. Butler was in a bad accident the summer after high school. He was driving to town in a Corvair to cash a check when he nodded off (he blames carbon monoxide leaking into the passenger compartment), hit a pole, and tore up his face and shattered his left hip. Now he wears a half-inch lift in his shoe and walks, listing slightly, with a cane. The accident ended Butler's faint hopes of a football career. However, it may have helped his legal one. Even if you don't buy the speculation that the injury fuels his outrage against the car companies, it's hard to overlook the endearing effect that limp has on juries. Defense lawyer Carlock (a close friend) does not: "I'm not so sure, between you, me, and the fence post, that that's not a little show." ("He can go to hell," snaps Butler.)
It's harder than it should be to get a handle on the scope of Butler's enterprise or the wealth it has brought him. Butler doesn't really want to get into it. He works, as plaintiffs lawyers typically do, on contingency--nothing if he loses, 20% to 40% of the ultimate award (often reduced after appeals) if he wins, the variables being "expense, time, labor, and risk," he says. His costs are daunting. When Butler talks about keeping the wolf away, he means "not only in the sense of being able to feed my family but also to keep plugging along with the law practice." He's referring to fixed expenses like maintaining Butler Wooten Fryhofer Daughtery & Sullivan's two offices (headquarters in Columbus, a satellite in Atlanta), its six partners and seven associates, myriad paralegals and investigators, and what the firm's website refers to as a "flight department with three aircraft." Plus he has to hire expert witnesses and, in some cases, stage full-scale independent crash tests. Rodriguez v. Suzuki, which was tried twice before the parties settled, cost the firm $1.6 million.
Butler also writes a lot of checks to candidates for public office, partly to express his moderately left-of-center political views (the fact that "most of my friends are Republicans" notwithstanding) and partly, let's face it, to fend off tort reform. A quick search of public records covering the seven federal election cycles since 1990 turns up more than $125,000 in personal donations to a long list of national candidates, mainly Democrats (Bill Clinton, Bill Bradley, John Edwards), plus a single check for $100,000 in September 2000 to the Democratic National Committee.
This whole issue of tort reform is not something you want to raise with Butler unless you're up for his best shot. The way he sees it, the Republican Party (with Karl Rove whispering in President Bush's ear about "frivolous lawsuits" and "lottery" verdicts) is out to strip him of his livelihood while promoting the "continuing concentration of wealth and power in the hands of the few." He is baffled by the complicity of his hunting buddies (they're all doctors) in this misguided cause. "They're being used as pawns," he says. And he wonders how his friends who own small businesses could be so blind to the most serious threat confronting them: "It sure isn't trial lawyers, tree huggers, or welfare queens. It's outfits like Wal-Mart that are trying to put them out of business."
Butler says that people should focus on the public service plaintiffs lawyers provide, not on how much money they're making. "How do you regulate antisocial behavior at the margins of our society?" he asks, as if before a jury. "There's only three ways I know of. One is churches and religion. That stops it before it happens. The only other ways are government regulations and lawsuits. Now, government regulation is a blunderbuss. It has to apply to all, the good and the wrongdoer. The tort system, by contrast, is a rifle shot. Plaintiffs lawyers single out one outlier and take him out. And that serves as an example to the rest what'll happen to you."
Butler is okay with the concept of reform--he really is. He could accept, for example, a reasonable reduction in fees, "because a lot of lawyers charge too damn much." But a $250,000 cap on noneconomic damages, as the HEALTH Act calls for? "Here's what that means," says Butler. "My wife is not employed outside the home, so [in the eyes of the law] she has no economic value. If she gets killed in a medical malpractice, her case is worth $250,000. I go to my buddy who's a lawyer. 'I want you to take Susan's case. This hospital killed her.' It's going to cost him $100,000 to handle, and the most he can recover is $250,000. He can't take it. There's no recourse." Or another standard clause, a 25% limit on contingency fees? "That probably cuts the universe of auto-products cases that we're willing to take in half," he says, "like a giant scythe just ran through the caseloads." Butler's conclusion: "Tort reformers are not interested in reform. That's the last thing they want. They want to kill it. And the way to kill it is to make it impossible for plaintiffs lawyers to take the case."
Is this guy for real? You'd be forgiven for wondering. But there's one bit of evidence he doesn't share that could at least give his detractors pause--and it goes against what you might think fuels a fellow like him. He has reason to believe that what he's doing is about more than just money. He tells a story to illustrate this, but he doesn't volunteer it. "Did he tell you what happened to his wife and daughters?" was the question I got later from Governor Barnes. So I called Butler back.
Aug. 13, 2002: Butler spent the day in Atlanta. That afternoon he caught a ride to the airport so that he could meet his college-age son returning from a vacation in Africa. Susan Butler, meanwhile, was driving up from Columbus in the family SUV with their two daughters. They were all going to ride home together. "I was standing there where you meet people, when my daughter Emily called from the car," says Butler. "She was fairly hysterical."
Witnesses said later it was a truck slanting suddenly for the exit that forced Emily to lose control. The SUV left the road and rolled three or four times. "It's a feeling of abject terror," Butler says now. "I had a hurt wife and two hysterical daughters and a son coming back for his reunion. I was on the cellphone talking to the EMT while they were putting Susan in the ambulance as my son came up the escalator."
But happily, this story, unlike so many others in which Butler has taken a professional interest over the years, does not end with a horrible injury or death. The roof did not cave in. The doors did not pop open. The seat backs did not collapse. The seatbelts did not unspool. SUVs are safer than they used to be--that's just a fact. Which is why Susan broke her ankle and her arm--that's all--and the girls were both fine.
Two more of Butler's heroes are Ralph Nader and Abraham Ribicoff. Nader's testimony at hearings conducted by Senator Ribicoff in 1965 led to the creation of the National Highway Traffic Safety Administration. Butler believes that without their efforts, as many as 100,000 more people would be dying each year on the nation's roads. Tougher drinking-and-driving laws played a part too, and lower speed limits. "But it started with Nader and Ribicoff," says Butler. "How would you like your epitaph to read that you were substantially responsible for saving 100,000 lives a year?"
What Butler doesn't say, even now, is that the plaintiffs lawyers deserve a piece of that credit, and Butler himself as much as anyone. All those lives, and three most dear. But after all, that's his business.