Tort reform advocates see next Congress as starting block, look to 2012 for more federal changes

Matthew Boyle Investigative Reporter
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Incoming House Judiciary Committee Chairman Lamar Smith, Texas Republican, is likely to push in the next Congress for tort reform, or a crackdown on civil lawyers’ abuse of the legal system for their own financial gain.

Smith will start the 112th Congress with hearings on issues including tort reform and medical malpractice reform, both of which have been primary focuses of his time in Congress.

American Tort Reform Association (ATRA) spokesman Darren McKinney said he doubts House Republicans will be able to pass any sweeping reform of the legal system in the next two years, though. McKinney told The Daily Caller he expects more action on tort reform to take place at the state level in the near future, though he believes the GOP will be pushing it as a topic of debate on the national level.

“Barring some unforeseen particular alignment of stars, I don’t think there’s a lot of smart money being bet on a wave of tort reform in the 112th Congress,” McKinney said. “I’m not doubting there will be sound tort reform bills making it through the House, but the Senate and the president can still stop it. The House Republicans can set the national debate for the 2012 election.”

In the ATRA’s “Judicial Hellholes” report for 2010 and 2011, which documents “various abuses within the civil justice system, focusing primarily on jurisdictions where courts have been radically out of balance,” ATRA lists the top courts around the country that are prone to corruption and tort abuse.

U.S. Chamber of Commerce Institute for Legal Reform President Lisa Rickard agrees with McKinney’s assessment that the GOP won’t be able to pass any overhaul of the tort system in the next Congress, but also thinks there is a lot Smith and California Rep. Darrell Issa, the incoming chairman on the House Committee on Oversight and Government Reform, can do to rock the boat.

Rickard said it’s likely that Issa and Smith will call hearings and launch investigations into law firms and politicians that are abusing the tort system. She said the Chamber of Commerce is pleased Smith will be chairing the House Judiciary Committee, calling him a “very ardent supporter of legal reform.”

Smith has said the House Judiciary Committee should specifically take on medical malpractice reform next year.

“Congress can help millions of Americans who are struggling to afford health care by enacting lawsuit-abuse reform. According to the Harvard School of Public Health, 40% of medical malpractice suits filed in the U.S. are ‘without merit,’” Smith said in a statement. “I continue to support such lawsuit-abuse reform, modeled after the successful practices of several states, including Texas, which could save over $54 billion in unnecessary health care costs. This would help American families struggling with health care costs and protect medical personnel who are overburdened by the high cost of malpractice insurance.”

The huge Republican pickups in state legislatures and governorships around the country during the midterm elections, McKinney said, allow for some form of state-level tort reform. He said tort reform could come from any branch of government and in different forms, such as judicial precedent, new legislation, executive orders and even protections written by agencies into regulations.

For instance, McKinney said the Food and Drug Administration could write pre-emptive language into a bill about a product it regulates that would prevent a state-level court from hearing a case.

In the next Congress, however, McKinney said “little clauses that expand liability will not happen,” which means he expects the Republican-led House to fight slipping tort-expanding language snippets into legislation.

Rickard agrees that the states are the key to tort reform in the near future, adding that states to look to for comprehensive tort reform initiatives over the next couple of years include Pennsylvania, Wisconsin, South Carolina, Ohio, Michigan and Florida.

“I think there will be a number of states that build on what they’ve got, and other will head down that road for the first time,” Rickard told TheDC.

McKinney said the main tort reform targets include non-economic damages, forum shopping and large-scope liability.

Non-economic damages are those plaintiffs are awarded for “pain and suffering” and aren’t accounted for by loss of a job or another traceable cost.

Forum shopping is when trial lawyers for plaintiffs will take a case to a different court, sometimes a state court over a federal court and other times a court in a different jurisdiction, looking for a more favorable judge or jury.

Large-scope liability is when parties not directly involved in the “civil crime,” or wrongdoing, can be considered at fault, especially when the directly at-fault party doesn’t have a lot of money.

Rickard told TheDC that civil lawyers will regularly go after a company that’s only 2 or 3 percent at fault for a tort, and, if that company has more money than the others involved, it could get stuck with 100 percent of the liability. That problem, Rickard said, might lead lawmakers to create some kind of “proportional liability” system to ensure the right companies are punished and the wrong ones aren’t.

McKinney said companies regularly face lawsuits for problems or issues they’re not responsible for at all because their products just happened to be involved in an accident in some way.

“If a drunken university student hits another student over the head with a hammer, you can rest assured that a tort lawyer will file a lawsuit against the manufacturer of that hammer,” McKinney said. “We spend more money on torts as a nation than any other country. We’ve got to pay for the courts as taxpayers and pay for the losses as consumers. Some lucky plaintiff hits the jackpot for multiple millions of dollars, where does that leave the rest of us?”

Rickard said another major problem of the civil lawsuit system is when lawyers shop for a venue that’s more favorable to them, often looking for “jackpot jurisdictions” that are friendlier to civil plaintiffs.

“In Madison County, Illinois, you’ve got a lot of out-of-state plaintiffs,” Rickard said. “They don’t really belong in that state because neither the plaintiff or defendant has a connection, but they find a way in.”

McKinney told TheDC that civil trial lawyers generally keep about 33 percent of the winnings from a tort case, which he said leads them to take advantage of the loopholes in the system. On the other hand, opponents of tort reform, like Martha Burk, a co-founder of the Center for Advancement of Public Policy, argues that the current system keeps consumers safe by holding big companies accountable.

“Scuttling the possibility of lawsuits for corporate misbehavior means eliminating punishment for little indiscretions like putting drugs that kill people on the market , selling hamburger meat and peanut butter with e-coli, pouring toxic waste into ground water, and hiding automotive defects that cause fatal accidents,” Burk wrote in a column on The Huffington Post.

McKinney agrees with Burk that the U.S. civil trial system is better than others worldwide, saying it’s the “envy of the world,” but he said there are still loopholes in it allowing lawyers to make loads of money off the system.

“Like any system, the justice system can be abused,” McKinney said in a phone interview. “These folks, the Ms. Burks and Huffington Posts of the world, are arguing that there aren’t enough lawsuits so the trial lawyers can make more money.”

For example, McKinney said, in the ongoing Vioxx cases in New Jersey, where it was discovered the anti-arthritis drug might cause heart problems, trial lawyers rounded up anyone and everyone they could find who took the drug to file the case.

“The overwhelming majority of individuals as plaintiffs suffered no harm and are seeking millions of dollars, most of which is going to go to the trial lawyers,” McKinney said. “Most of the individuals suffered no ill side effects, but they claim that it puts them more at risk.”

Burk told TheDC that she believes tort reform is “pro-corporate” and in the interest of big business, adding that those people who didn’t suffer negative side effects in that Vioxx class action suit won’t get more than a hundred dollars in their settlement.

As for the claim that doctors would do better medical work if they didn’t have to worry about getting sued, Burk said that’s a myth. But, she did agree with McKinney and Rickard in that she thinks House Republicans will make tort reform a priority in the 112th Congress. She doesn’t, however, think the GOP will be able to accomplish much.

“Harry Reid still controls what gets to the floor of the Senate,” Burk said in a phone interview, adding that any House GOP tort reform efforts will be largely “symbolic.”