tort reform


According to Forbes. the Supreme Court of Oklahoma struck down a tort reform package the Oklahoma legislature passed in 2009.  The single law included numerous tort reform provisions, including a cap on non-economic damages and the requirement that an expert affidavit be filed with the petition in certain negligence cases.

The Supreme Court ruled that the law violated a constitutional requirement that a bill deal with a single subject.  The purpose of the law is to prevent a lawmaker from adding provisions to a bill that a lawmaker would feel log-rolled into agreeing with, in order to pass the provisions of the bill the lawmaker agrees with.

This news comes just days after a report out of Tulsa, by KJRH, that two more of Dr. Scott Harrington’s patients have tested positive for hepatitis.  If you have not previously seen the reports, Dr. Harrington is a dentist in Oklahoma who infected 80 patients with HIV and hepatitis, by using unsanitary conditions, including the use of dirty needles on patients.  The doctor is protected by damage caps the Oklahoma legislature put on these types of negligence cases.  The nearly 7,000 patients the doctor treated and the untold number of people infected by his horrible practices (negligent acts), are not able to obtain full redress for their injuries because of what the Oklahoma legislature has done.

The action of the Oklahoma Supreme Court, in striking down this onerous law, is a positive step in the right direction for the people of Oklahoma.

According to a story on the Legalnewsline.com, two congressmen have introduced a new tort reform bill in Washington.  Representative Lamar Smith, R-Texas and Senator Chuck Grassley, R-Iowa, have introduced the so-called “Lawsuit Abuse Reduction Act of 2011”.  As reported in the previous article, there are no studies showing that there is a lawsuit abuse (ie. frivolous lawsuit) problem, but that has not stopped these two Congressmen from charging forward with their bill.

Smith was quoted as saying, “(l)awsuit abuse has become too common in American society, partly because the lawyers who bring these cases have everything to gain and nothing to lose”.  That statement is wrong, lawyers fund lawsuits for plaintiffs and do not fund lawsuits that are frivolous, because they will not get their money back.  Smith goes on to say that, “(p)laintiffs lawyers can file frivolous suits, no matter how absurd the claims, without any penalty”.  As I said, the penalty is the lawyer loses the money he put into the lawsuit.  Getting a lawsuit off the ground can be a substantial endevor, and taking a case to trial costs serious money.  If lawyers take frivolous cases they will go broke.  Smith continues, “(m)eanwhile, defendants are faced with the choice of years of litigation, high court costs and attorneys fees or a settlement. Our legal system encourages frivolous lawsuits while defendants are left paying the price even when they are innocent”.  

The bill would require mandatory sanctions, under the Federal Rules, for lawyers who file lawsuits with no basis in Federal Court.  According to the article, the proposal “reinstates mandatory sanctions for attorneys who file meritless suits and forces them to pay the defendant’s attorneys fees and court costs. It also reverses a 1993 amendment that allowed parties and their attorneys to avoid sanctions for making frivolous claims by withdrawing them within 21 days after a motion for sanctions has been served”.  Similar to the bill in Texas, reported below, the measure does not require sanctions for defendants who pursue meritless defenses.  The bill appears to be another solution to a non-problem.

According to a story in the Houston Chronical (also reported on in the New York Times), Texas tort reformers are at it again.  On the horizon in the Texas Legislature this year are several bad and unneeded “reforms”.  One law being proposed is called “loser pays”.  It is an old idea with a deceiving moniker.  The law, as proposed in a draft by Governor Perry, would make the person who brings the lawsuit pay for the expenses and attorney fees of the other party if they ultimately lose their lawsuit.  That might sound fair to some, but the law is one-sided.  The only time the loser pays is when the loser is the plaintiff.  If the loser is the defendant, which is the case in a majority of lawsuits filed, the defendant is not required to pay expenses and not required to pay the winner’s attorney fees.  Not anyone’s idea of fair.  But fairness is not the point.   

The law is being proposed as a measure to stop frivolous lawsuits.  In the Times article, a professor at the UT School of Law said no serious studies on frivolous lawsuits have found that frivolous lawsuits are a real problem.  If the law is a solution to a non-existent problem, why are taxpayer dollars being wasted on this issue.  It is time for the politicians to get back to work and quit raising the lawsuit boogeyman promoted by insurance and business interest.  These special interest groups raise this issue every couple of years to promote their goal of limiting their personal liability and ultimately to shirk their personal responsibility to average citizens.

“Loser pays” is a measure designed to put fear in the heart of the average person who wants to assert their right to seek justice and make a claim.  Any attorney the claimant consults with will be required to tell the claimant that if there is an unjust outcome and they lose the case, they will owe the defendant their attorneys fees.  Even when someone feels they are right, they will be reluctant to bring a suit, out of fear that an already bad situation could possibly be made worse.  This is the response business and insurance lobbyists are looking for in this measure.  But business and insurance interests will never have that same fear, because the proposal does not ask them to pay costs if the person who brings the suit is successful.

Texas is also looking at regulating attorney fees.  We all know that big businesses and insurance companies can hire any lawyer they want.  In fact many insurance companies have lawyers on their payroll.  A regular person sometimes can’t afford to hire an attorney.  Contingency fees make it possible for the little guy to get legal representation on par with what big businesses can afford. 

Texas legislators want to cap contingency fees at a low-level.  Free enterprise is the cry of every legislator who would push this kind of bill and no one is suggesting a cap on what insurers and big businesses pay their lawyers.  But it is ok to limit what kind of representation the little guy can receive, while encouraging the deep pockets that would obstruct access to the system.  Think what would happen if the NBA decreed that half of the teams can pay as much as they want for their players and put a cap on what the other teams could pay.  Not a fair system.  But fairness (justice) is not the goal.

John Stossel, gnat-like reporter for Fox News has published a column titled “Parasitic Tort Lawyers” and also aired a program on Fox with the same message.  He leads off the story with the sentence, “Tort lawyers lie.”   His story goes on, “as one of America’s first consumer reporters, I’d avenge harmed consumers by bringing cameras to the offending business and confronting the crooks. My work warned others about the dangers in the marketplace but didn’t do much for the victims.”  I’ll get to the video of him “confronting the crooks” in a minute. 

Stossel quit consumer advocacy reporting years ago and was quoted as saying, “I got sick of it (consumer advocacy reporting)…  I also now make so much money I just lost interest in saving a buck on a can of peas. Twenty years was enough. But mainly, I came to realize that the government was doing far more harm to people than business and I ought to be reporting on that. Nobody else was”.  He has also claimed attorneys do more harm to people.  Stossel has denied making the comment, but a tape of him making the comment has surfaced, and his actions certainly lend credibility to the people who have used this quote.  Even if he has grown weary of helping average people, they still need help.  Every day.  Average people still get injured, whether Stossel cares or not.

The lie that tort lawyers tell, according to Stossel, is that lawsuits make society better.  That is not the purpose of lawsuits and Stossel knows this.  Some may claim this as a by-product.  But the purpose of a lawsuit is to compensate the injured individual.  The compensation comes from the person who caused the harm.  The person who caused the harm is held accountable for their mistake or intentional wrong doing.  The reason Stossel knows this is that he has personally participated in lawsuits.

This is a video of one of Stossel’s confrontations.  He confronted a “crook wrestler”, and asked him to admit to the world that wrestling is a fake sport.  When the wrestler took offense to Stossel’s questioning, the wrestler hit Stossel up-side the head, to prove that wrestling is not fake.  What did Stossel do to right this wrong.  Did he whip up on the guy who beat him.  No he ran.  To the nearest lawyer. 

Stossel sued, and according to several sources, settled for more than $400,000.  This confrontation with the wrestler did not leave him bloody, Stossel walked (well ran) away from the confrontation, nothing was broken.  He sued and got over $400,000. 

Stossel’s column goes on to say that after he began to report on bad companies, that he “started referring hurt consumers to lawyers.  Imagine my shock when consumers called to say their lawyers took most of the money.”  Stossel does not say in the story how much he got from the wrestler payout or how much his attorney got.  Stossel continues, “even when the lawyers do help their clients, they hurt everyone else because fear of their lawsuits takes away many good things.” 

When lawyers help their clients, they help everyone else, because they force the person who is responsible for causing the damage to pay the victim and the victim does not end up relying on the state (me and you) to take care of them.  So no John Stossel, lawsuits do not hurt everyone else.  You cannot be against government sponsored programs and against lawsuits.  If it were not for lawsuits, victims of other’s negligence would be on the dole.  That is a fact.

Thanks to PopTort for his great coverage of the gnat.

According to the AJC.com website, the Georgia Supreme Court handed down a case striking down the $350,000 cap on non-economic damages enacted by a tort reform law passed in 2005.  The ruling upheld the jury’s award to a woman who was injured by a doctor who performed a bad facelift operation on her.  The victim’s face was covered in gaping wounds, and required extensive painful treatments to prevent the wounds from becoming infected.  The wounds left the victim permanently disfigured.

 The Supreme Court ruling was based on basic guarantees provided to the citizens of Georgia through their constitution.  The Georgia constitution guarantees the right to a jury trial to every citizen.  The cap on damages nullifies the jury’s findings of fact regarding damages and undermines the jury’s basic function.  The court states “the very existence of the caps, in any amount, is violative of the right to trial by jury.”    

This ruling follows a ruling in Illinois last month where the Illinois Supreme Court declared a medical malpractice cap in that state unconstitutional.  That bill, passed in 2005 and signed into law by former Gov. Rod Blagojevich, created a $500,000 cap in medical malpractice cases against doctors and a $1 million cap in cases against hospitals.

An editorial in the Oklahoman talks about a tort reform bill passed last year in Oklahoma.  The bill is of the sort contemplated by the article I talked about yesterday.  The 2009 reform bill passed in Oklahoma put a cap of $400,000 on non-economic damages, and was supposed to create a taxpayer financed indemnity fund so that the state could pay the amounts above the cap when the cap is waived. 

Like the article yesterday stated, reformers are looking to shift their burden, the burden of personal responsibility to the state and thus to the taxpayers.  The editorial states that if the taxpayers of Oklahoma don’t have $20 million to seed the fund with, then the law will not go into effect.  Big business must have some good lobbyists up in Joklahoma, becuase I can’t imagine how a legislator is going to explain this one to his constituents.

There is an article in the Detroit Free Press by Jim Marcinkowski titled “Tort Reform Made Simple” that does a good job of breaking down the workings of the legal system and what it is that tort reform seeks to do.

Marcinkowski explains the concept of tort law and the reform movement as follows: 1. Accident happens; 2. Injury does not go away; 3. The injury costs money (medical, lost wage, etc.); 4. Compensation – either the responsible party pays or the government pays; 5. Tort reform seeks to lower the costs of doing business by shifting the burden of these costs on to the public.  He summarizes the analysis by making the statement, “Tort reform is.. just another mechanism to increase private profit by socializing any cost or loss.”

Marcinkowski goes on to examine certain tort reform myths.  The article is well thought out and certainly worth a read.

Everyone’s favorite movie star/governor, the aptly titled “Governator”, has become the “Tort Reforminator” this week.  According to an article on Law.com, Governor Schwarzenegger signed a bill into law this week that prevents a victim  of negligence from suing someone who stops to help them at the scene of an accident, unless the tortfeasor’s actions at the scene rise to the level of gross negligence or recklessness.  The bill was pushed by the Civil Justice Association of California, a tort reform group whose members include Allstate, AIG, and State Farm (obviously a group that looks out for everyday people).

A member of one of the groups sponsoring the bill, Christine Spagnoli was quoted as saying: “The bar has been set higher…  People who do something and unintentionally cause additional harm aren’t going to be faced with having to be potentially sued.”  Christine then gives the following example to illustrate how the new bill works: if a drunk driver stops at an accident scene, puts a victim in his car and wrecks it, his actions could rise to gross negligence – he could be sued.  If a sober driver rescues someone from an accident scene and crashes into someone while racing to the hospital, they might not be liable under this new law.

The bill provides protection to insurance companies.  If the sober driver in scenario number two is driving like a maniac and hurts someone, the fact that he just rescued someone at another accident scene should not shield his insurance company from paying for his negligence.  This bill does not protect good samaritans, it protects the good samaritan’s insurance company and prevents the injured party from recovering from the insurance company to pay for their medical expenses.   Good job protecting “helpless” insurance companies like AIG, Herr Governator!

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.

There is a new story on dallasnews.com which discusses new evidence that malpractice damage caps are not a fix for high health care costs.  The argument advanced by tort reformers in the halls of Congress, as well as the halls of state legislatures all over the country, is that 1) doctors pay high premiums to insurance companies to protect themselves against malpractice suits, and 2) the cost of these premiums are passed on to consumers, which makes health care more expensive. 

Texas passed a medical malpractice lawsuit cap in 2003, limiting the amount of general damages (non-economic damages such as pain and suffering, loss of enjoyment of life, and mental anguish) to $250,000, no matter how egregious the harm done to the patient.  According to the article, the law produced a 30 percent drop in doctors’ mapractice insurance premiums.

 However that has not translated into lower medical costs for consumers.  The cost of medical insurance premiums rose faster than earnings in Texas.  According to Families USA, health care premiums in Texas rose a whopping 86.8 percent betweem 2000 and 2007.  Medicare spending in Texas increased 24 percent in the three years after the cap was passed. 

A study published in December 2008 in the journal Health Sciences Review, found that “(t)ort reforms have not led to health care cost savings for consumers.”  The study asks the question “(a)re there other benefits (from tort reform) to consumers? If these cannot be identified, it is difficult to see a justification for the loss of legal rights.”

The benefits acrue to the insurance companies who do not have to pay for the damages covered under their policies.  Those hurt are not people who have small injuries and heal up from the malpractice done to them.  Those who are damaged by the cap are the severally injured, who then become a burden on society, because the person who caused their injury is not having to pay for the damage they have done.

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