Has the ‘Litigation Explosion’ Blasted Away Common Sense?
Are there too many lawyers? Do Americans sue too much? Are we too quick to blame others for our injuries, even when no one is at fault? Even when the fault is our own?
For many Americans, the answer to each of these questions is an emphatic “yes.” That view of the origins, extent and nature of what they regard as a nationwide “litigation explosion” fueled swift House passage earlier this month of a sweeping package of so-called tort reform bills. The proposed “reforms,” which now go before the Senate, would probably do more harm than good--serious harm to ordinary Americans injured by faulty products. That’s why a group of key senators from both parties, unhappy with the House package, are coalescing behind a much more limited--and reasonable--package of changes.
The House bills, which grow out of the GOP “contract with America,” would make it much harder for consumers to win personal injury or product liability suits. The changes--packaged as bills with such appealing, and disingenuous, titles as the Attorney Accountability Act and the Common Sense Product Liability and Legal Reform Act--read like a wish list for pharmaceutical and manufacturing lobbyists. The House bills would, for the first time, impose uniform federal standards for personal injury and liability lawsuits for defective products, cases typically resolved by state courts. They would limit the liability of individual corporations to no more than their share of any harm suffered. In the vast majority of lawsuits, punitive damage awards would be capped at $250,000 and the ability of injured plaintiffs to recover such awards aimed at punishing and deterring wrongdoing would be severely limited. In medical malpractice cases, awards for pain and suffering would also be capped at $250,000. (This is similar to California law.) The bills would also impose a version of the “English rule,” which allows judges to require the losers in product suits to pay the winners’ legal fees.
Some of the reform ideas do make sense. Under the House legislation, a product liability case could be dismissed if the plaintiff were under the influence of drugs and that condition were more than 50% responsible for his injuries. Senate tort reformers, including Sen. John D. (Jay) Rockefeller IV (D-W. Va.), would limit a defendant’s liability if a person misused or altered the product in a way unforeseen by the maker. But cases arising from these circumstances are relatively few.
What about the basis for the other, more sweeping changes? The number of tort cases--the nub of the so-called litigation explosion--has in fact stabilized in recent decades. Moreover, in some categories of tort cases, defendants--typically businesses or professionals--prevail in court most of the time. Many states have already passed laws intended to rein in consumer lawsuits, and the National Center for State Courts reports that parties now more often resolve their cases through mediation than through the courts.
But aren’t extreme punitive damage awards a good deal of the problem? There indeed are some excessive verdicts; the $2.7 million a New Mexico jury awarded a woman who was scalded when she spilled a cup of McDonald’s coffee on her legs is the most recent egregious example. But like a substantial percentage of all jury awards, this seemingly absurd award was reduced heavily after the verdict. In the McDonald’s case, the judge cut the punitive award to $480,000; jury awards in other cases are quite often reduced significantly after trial as a result of appellate court action or settlement. And given that McDonald’s own experts testified that the company had logged hundreds of similar burn complaints during the past decade resulting from the high temperature of its coffee, the suit begins to look less ridiculous.
But if there is no “explosion,” the problem with the tort liability system may be in how the courts are used. The McDonald’s case sticks in the craw because it exemplifies the concerns many have about the disparities they see. Some plaintiffs are overcompensated while others, particularly many victims of asbestos exposure or pharmaceutical injuries, are undercompensated or, tragically, never compensated at all. Punitive awards in some cases send the wrong signal in terms of deterrence: unreasonably stifling productive economic activity in one case but permitting dangerous business practices to continue in another. The House’s one-size-fits-all approach to tort excesses is unlikely to address these problems of degree and might well create other problems.
Instead of streamlining litigation, these measures promise more litigation and a widening financial disparity between individual plaintiffs and corporate defendants. The language in the bills would undoubtedly be the subject of litigation for years to come. Moreover, plaintiffs seeking full compensation for their injuries would have to pursue separate suits against multiple manufacturers through a longer and more onerous procedure. And without safeguards, the loser-pays rule could force middle-class Americans to risk their life savings on the outcome of a lawsuit, no matter how meritorious their claim. That offends the basic principle of equality before the law.
The claims that these changes are in the interest of ordinary Americans ring hollow. As the Common Sense Product Liability Reform Act and its companion bills move to the Senate, we hope common sense will prevail.
