Stateline Story

States Out In Front Politically on Tort Reform

  • June 15, 1999
  • By Blair S. Walker

WASHINGTON -- Reacting to Washington's reluctance to clamp down on sometimes stratospheric monetary awards in liability lawsuits, states are aggressively tackling tort reform on their own. More than 30 have addressed the issue.

The activism has been fueled largely by punitive multi-million dollar jury awards to people injured by defective products or other negligence. Critics call the huge financial judgements that juries render in civil suits these days "jackpot justice," but defenders categorize them as rightful damages for victims of corporate negligence.

States began acting on the issue in earnest four years ago, the same year President Clinton vetoed tort reform legislation that had been approved by Congress. This year, legislatures in Florida, Alabama and Texas passed tort-reform bills that place a ceiling on punitive damages, bringing the number of states with such statutes to more than 30, according to the American Tort Reform Association.

Louisiana, where Gov. Mike Foster is a tireless foe of trial attorneys, is presently weighing tort reform legislation to complement common-law restrictions on punitive damages that already exist.

Texas Gov. George W. Bush, currently the odds-on favorite to be the GOP's presidential candidate in 2000, made tort reform one of his five top priorities when he took office in 1995.

"The most important thing you and I can do to improve our economy and create jobs in Texas is to reform our civil justice system," Bush said during his 1995 State of the State address, the first year the Lone Star State passed significant tort-reform legislation, including caps on punitive damage awards.

That was also the year the bid to produce a federal law sputtered.

"Washington has tried, but tort reform -- like so many other issues -- has run aground on the rocks of partisanship," says Ken Hoagland, spokesman for Texans for Lawsuit Reform. His organization has 5,000 members, most with business links.

"We want to take the abuses out of the civil justice system and protect the consumers' right to sue," says Hoagland, who notes that Texas' punitive damage award has a number of exclusions that include cases related to drunk driving and fraud.

Some state-based tort reforms don't impact businesses that manufacture goods. But they do provide relief for insurance companies, whose deep pockets are often the source of jury awards.

West Virginia has a law limiting liability for physicians who volunteer for certain athletic events sponsored by a public or private elementary or secondary school.

Ohio has a statute preventing individuals convicted of a felony or violent misdemeanor from suing their victims for personal injury suffered in the course of committing the crime.

But most of the focus is on legislation like that Florida just passed, which among other things, caps the amount of punitive damages juries can pin on manufacturers between $500,000 and $2 million. Gov. Jeb Bush has already said "I'm pretty sure I'm going to sign" the legislation.

States are even passing forward-looking tort-reform legislation that shields businesses from Y2K liability claims.

With the exception of abortion, few issues inflame statehouse emotion like tort reform. That isn't surprising, given that billions of dollars are at stake in terms of lobbyists' salaries, awards to trial attorneys and plaintiffs and judgments doled out by businesses and their insurers.

Businesses and trial attorneys tend to be generous campaign contributors. So efforts to fine tune the tort system, in either direction, elicit vigorous opposition.

"A tort is a wrong that causes injury," says University of Virginia law professor Kenneth Abraham. "It comes to us from English common law -- it can be an accident or something intentional."

Businesses and trial attorneys have been sniping at each other for years, but lately the political pendulum has swung toward Corporate America.

"Tort law is state-based, so reform has to be done in state legislatures, state by state. I think that certain kinds of reforms make a lot of sense," says Abraham. "But the ones that are most often adopted, such as placing dollar ceilings on the amounts of damages one can recover are very unfair, because they penalize the most seriously injured people."

On the other hand, laws that keep plaintiffs from recovering from two sources for the same injury make sense, in Abraham's opinion.

"Tort reform is a misnomer," says Carlton Carl, with the Association of Trial Lawyers of America. "This has nothing to do with reform, this has to do with corporations spending billions of dollars to protect themselves and their profits from the people they hurt."

"Tort reform is corporate welfare," says Carl. "It is protecting a particular segment of society from responsibility for its actions."

He cited the old Ford Pinto, which had a gas tank that occasionally exploded during rear-end impacts, as an example of why juries need to have massive monetary awards at their disposal to punish those responsible for death and injury to innocent people.

Carl's ideological opponents point to an Alabama case earlier this month that was a tort reformer's dream. An Alabama family claiming it had been overcharged $1,200 for two satellite dishes walked out of a Birmingham courtroom with a $581 million jury award.

Of that, $975,000 was to compensate the family for mental anguish and $580 million was to punish Whirlpool Financial National Bank, which was a co-defendant with Gulf Coast Electronics.

"If ever there was a prime indication that Alabama needs to address the tort reform issue, this is it," said Ragan Ingram, spokesman for Lt. Gov. Steve Windom. "Alabama businesses can't survive in this kind of environment."

In at least one state, Illinois, the state supreme court has overturned a tort-reform law on grounds it was unconstitutional.

And a challenge to Ohio's tort reform law is pending.

Tags: Justice