The Arkansas Supreme Court found two provisions of a 2003 tort reform bill known as the Civil Justice Reform Act unconstitutional, according to a story on arkansasnews.com. In the case, Johnson v. Rockwell Automation Inc., a worker sustained severe injuries to his hand, when the safety switch on a starter bucket malfunctioned, and sued Rockwell, the designer of the bucket.
The two issues the court looked at were a provision that allowed jurors to assess fault to non-parties and a provision that abolished the collateral source rule. The Court found that the legislature went too far in the tort reform bill and that these provisions violated separation of powers provisions of the state constitution.
In the opinion, Justice Paul Danielson wrote the “(r)ules regarding pleading, practice and procedure are solely the responsibility of the court.” Because rules regarding pleading, practice and procedure are solely the province of the judiciary, the legislature cannot pass laws in this area, without running afoul of the constitution.
In this case, the defendant wanted to introduce evidence that a non-party shared blame for the defect that caused the injury, which was admissible evidence under the new statute. The court found that “(t)he nonparty-fault provision bypasses our ‘rules of pleading, practice and procedure’ by setting up a procedure to determine the fault of a nonparty and mandating the consideration of that nonparty’s fault in an effort to reduce a plaintiff’s recovery.” The Court found that “(b)ecause the nonparty provision is procedural, it offends the principle of separation of powers.”
The collateral source rule is a common law doctrine which dates back to the 1800’s. It says that evidence that a victim might be compensated for injuries from a source other than the defendant that caused the injury, is inadmissible. For example, a car wreck victim might have health insurance which pays for some of their doctor bills.
The reason the defendant cannot ask for a reduction in a case where health insurance pays a bill, is that the health insurer has a right to pay back from the plaintiff, for any money they pay out on the claim (subrogation right). That means if a jury reduces the amount of an award by the amount the health insurer pays, then the health insurer gets pay back from the plaintiff for what it paid out, the plaintiff ends up under compensated for their injuries.
The court stated “we have held that the rules of evidence are rules falling within this court’s domain.” The statute restricts what evidence may be admitted at trial. Because the statute creates a new rule regarding what evidence is admissible at trial, it violates the separation of powers provision of the state constitution.
Collateral source and joint liability are two common targets in tort reform attacks in state legislatures. Joint liability protects plaintiffs from being under compensated when there are multiple defendants and one of the defendants cannot pay their share. The collateral source rule prevents the at fault party from getting away with paying less than the full amount they owe and short changing the victim.