Courts Are Bouncing Tort Reform

Over the past 20 years or so, many state legislatures have passed “tort reform” laws. “Tort” is lawyer talk for “personal injury,” and it refers to the process by which people sue for damages when they’ve been injured. “Tort reform” usually means passing laws that make it more difficult to file lawsuits and limit the amount of damages that can be awarded.

However, in recent years the supreme courts of about two dozen states have declared all or part of their tort reform laws to be unconstitutional. The most recent example is Oklahoma. In June the Oklahoma Supreme Court struck down a 2009 tort reform law for violating the state constitution. Oklahoma Governor Mary Fallin has called a special legislative session, which will begin on September 3, to work on new tort reform law.

This begs two questions — one, why are so many states so eager to “reform” their tort laws? And two, why are such reforms being found to be unconstitutional?

To answer the first question, we have to go back to the 1990s. Many industries, including the tobacco and asbestos industries, were being sued by cancer victims. And, unlike in the past, lung cancer and mesothelioma victims were winning their cases. Courts determined it was long past time for cigarette companies and asbestos manufacturers to plead ignorance and claim they just didn’t know their products, or their workplaces, were killing people.

Facing big losses in courts, industrial interests got together and decided on a new strategy — they would get tort laws rewritten to make it harder for people to collect money from them. And the “tort reform” movement was born.

According to Sourcewatch, tort reform began as an internal project of the Philip Morris tobacco company around 1992. Soon the project was joined by other interests — pharmaceutical companies, insurance companies, asbestos manufacturers, automobile manufacturers, medical associations, and more — to fund a massive public relations campaign to persuade the public that personal injury litigation was out of control and hurting the economy.

The next step was to approach state lawmakers and sell them on the merits of tort reform. Industry-directed organizations such as the American Tort Reform Association (ATRA) and the American Legislative Exchange Council (ALEC) are key players in this effort. Lawmakers are told that civil courts are in crisis because of greedy litigants suing for millions over spilled coffee. They are told that tort reform will lure jobs to their states. They are told doctor shortages will be relieved and soaring medical costs will be brought under control.

They are told all sorts of things that don’t happen, in spite of many press releases claiming that they have. For example, the widely believed claim that tort reform will lower medical costs has no basis in fact, as explained by economist Aaron Carroll. Claims of an influx of doctors and jobs also don’t stand up to scrutiny. But the interests backing the tort reform movement feel they are getting their money’s worth as they gain more and more protection from liability for their actions.

Now on to the second question — why are tort reform laws being struck down in court? To this question, there isn’t any one answer. But several courts have found that limits on damages interfere with the right to trial by jury.

For example, in Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, et al., No. S09A1432 (Ga. March 22, 2010), the Georgia Supreme Court decided that a cap on noneconomic damages “violates the right to a jury trial as guaranteed under the Georgia Constitution.” The right of a jury trial, the decision said, includes allowing the jury to determine the amount of the award.

In Watts, et al.v. Lester E. Cox Medical Centers, et al., No. SC91867 (Mo. July 31, 2012), the Missouri Supreme Court also decided that damage caps amount to an unconstitutional restriction on juries. The majority opinion noted that in 1820, when the state constitution was adopted, common law said that juries were to determine how much damages an injured plaintiff might receive. “The right to trial by jury ‘heretofore enjoyed’ was not subject to legislative limits on damages,” the majority opinion said.

The recent Oklahoma decision — Douglas v. Cox Retirement Properties, Inc., 2013 OK 37, Case No. 110270 (O.K. June 4, 2013) — was based more on a technicality. The Oklahoma constitution provides that laws must cover only one subject, and the court felt the Oklahoma tort reform law covered multiple subjects. So the Oklahoma legislature will devote a special session to crafting something to replace it — something that will provide no tangible benefit to the people of Oklahoma.