State-Level Tort Reform May Yield Best Results
A panel of the nation’s top tort experts offered no easy answers on how to solve the nation’s longstanding love-hate relationship with torts, but suggested that reforms at the state level may best discourage frivolous lawsuits. Moderated by law professor Robert Sayler, and featuring law professor Jeffrey O’Connell, the “father of no-fault insurance”; Sam Witt ’64, former General Counsel of R.J. Reynolds Tobacco and Special Counsel to RJR Nabisco for product liability legislative efforts; former Louisiana state Rep. Chuck McMains ’73, author of the state’s tort reform package; and Richard Glasser ’68, an expert on asbestos personal-injury law, the Sept. 9 panel was part of the Law School Foundation’s Business Advisory Council and Volunteers Weekend.
“Everybody up here has been worried about tort reform since 1985,” Sayler said, outlining several issues for the panel to weigh. “Is there something amiss about the law of torts? Should we be changing the law with federal legislation or more intensive state legislation?...Do we have the right people applying that law?...Can juries handle the most complicated cases?...How comfortable are we as a matter of political science and theory with letting judges do more? How do you feel about judges taking over more of these cases in elected-judge states where 98 percent of the campaign contributions are coming from political parties?”
Glasser, who litigates for asbestos plaintiffs, said he did not want national legislation to interfere with individual states’ laws. “I really don’t think that the national problem is a Virginia problem,” he said. “I think there are societal problems, but I have great confidence in the system….Be cautious about throwing out the baby with the water.”
The nation’s insurance and health industries have been affected in recent years by the increasing cost of malpractice insurance—an increase some insurers claim is due to large pain and suffering awards to lawsuit plaintiffs. Sayler recalled a story his physician recently told him about a young doctor who had shown some simple back exercises to a man at a dinner party who had complained of back pains; four years later the doctor had trouble getting practice insurance, since the man had claimed he was under the doctor’s care when his back went out. The doctor, he said, should have known how to prevent his injury, which was caused by a violent sneeze a month after the dinner party.
“The principal problem is that we have what insurance people call an ‘insured event’ in tort law that is wildly complicated, and that’s not true of most insurance,” O’Connell said, pointing out that in home, health, or life insurance, award amounts are usually pre-determined or calculated, and the insured do not get compensated for pain and suffering due to death or home loss, for example. “These are simple insured events, relatively speaking,” he said.
“Trying to determine who’s at fault and trying to determine pain and suffering makes for a nightmare,” O’Connell continued. “As long as we’re litigating fault and litigating for pain and suffering, we are going to have an unmanageable system.”
McMains noted that some lawsuits are immensely complicated, and questioned whether juries should handle them. “There are just some cases that the judicial system is frankly not equipped to handle very well,” he said. McMains cited past lawsuits concerning the safety of breast implants; class action suits bankrupted a number of companies, he said, yet 60 studies on the effects of implants never proved they caused a disease.
“Not a single one of these studies found any link,” McMains said. “That’s where I think we begin to get into some kind of problem with the system.” He added that Louisiana has no right-to-jury law, and a lawsuit must claim damages of $50,000 or more before a defendant can request a jury trial.
Sayler said fear of “goofy” decisions by juries—as in the McDonald’s spilled coffee case, which awarded millions in punitive damages, but was later reduced by a judge—has many “running away from the American jury.”
O’Connell responded that “who hears these cases [is] a red herring.” He pointed out that we couldn’t have built World War II ships without asbestos, and trying to determine if asbestos was defective when it was used, and whether companies knew it was defective would be a “nightmare.”
“They’re not going to know what the hell is the solution,” he said.
Glasser said jury trials never end up being a sure thing, despite a few notorious jury decisions. “I have never gone into jury and told my client, ‘it’s in the bag,’” he said. “Don’t run from the jury—the jury really is the one thing that distinguishes us now.”
He said few of his cases even went to trial, because of the jury system. “We have been able to resolve a number of cases because we don’t know what that jury is going to do.” Glasser said. “The issue is, you don’t treat a thing systematically when it is a local problem.”
O’Connell pointed out the contradiction that jury decisions are uncertain, but whatever the jury decides must be right. This leads to “untoward, unpredictable results.”
Panelists pointed out that it’s often the case that juries in one state decide the fate of defendants and plaintiffs from another. Polk County, Mississippi has more plaintiffs than residents, Witt said. “There is a perception that the plaintiff is going to fare better in certain jurisdictions,” hence plaintiffs’ lawyers file suit in those areas.
McMains said Louisiana was able to reduce the number of lawsuits filed in the state by cleaning up state class-action laws; they began the process in 1996 and now have a miniscule number of such cases. He pointed out that Alabama has seen a similar turnaround because of the election of some new judges, and because the business community became more politically involved in judges’ campaigns. “Where they do get engaged, you can see significant changes,” he said.
Witt added that there is legislation in Congress that would increase or loosen up diversity rules so actions that might now go into state courts may move to federal courts. Such legislation may be more likely to pass if it is narrowly tailored and doesn’t interfere with states rights, he said.
Congress may also consider whether the asbestos lawsuits are so damaging to companies that federal laws should cap damages. Glasser opposed federal legislation to solve the asbestos tort problems. “It’s drastic,” he said, predicting that such laws could halt current suits and delay payments in cases that have already been decided. If your client is dying, he said, a years-long delay could mean no settlement for him at all. “I think a drastic measure of changing the whole system is just a footnote,” he said. “There’s no reason to change the backbone of law.”
“And yet there’s substantial evidence that we may run out of money,” Witt answered. “Every day we read about companies either going into bankruptcy or running out of money” due to damage from asbestos lawsuits.
He instead cast the idea of realistic tort reform as “one of constant and fair attention to bringing the system into balance.” He wants to see continued influence from businesses to achieve that balance, as companies have already realized that liability is not just confined to tobacco.
Glasser pointed out that despite the public’s perceptions, punitive damages are generally not as large as other awarded damages in decisions. He added that punitive-damage reform should be a separate issue from changing the foundation of America’s courts. “Please, please don’t tamper with the jury system,” he said.
O'Connell offered a solution to what he observed
as a problem for both sides in managing medical claims. The present
system, O'Connell observed, is unfair to both claimants and defendants.
Too often, he said, reforms proposed by the defense community
make it harder for claimants to recover or provide less compensation
when they do recover. But reform—as is the case with workers'
compensation—should be fair to both sides by paying promptly
for economic losses, like medical expenses and lost wages, but
not for non-economic losses, like pain and suffering.
• Reported by M. Wood