The Tortellini

Oklahoma court disses insurance industry

Belated link: Eric Turkewitz has a nice dissection of the recent Oklahoma supreme court decision striking down parts of the state's medical malpractice law as unconstitutional. The quotes from the decision bashing the insurance industry for using the tort reform law to create a windfall in profits are priceless...

Med mal caps coming home to roost

The wave of caps on medical malpractice damages passed in 2003 and 2004 are starting to have a dramatic impact on the ability of injured patients to find a lawyer in more states than just Texas. The Las Vegas Business Press reports that  experienced Nevada trial lawyers are abandoning medical malpractice litigation in droves thanks to changes in the state's law that cap lawyers' fees and make it harder to prosecute such cases.

Lawyers quoted also believe the battle over the med mal has poisoned the jury pool. So far this year in one judicial district, only 2 out of 18 med mal cases that went to trial have resulted in plaintiff verdicts. In 2001, before the ballot initiative, juries in the same county returned 8 of 14 trial verdicts in favor of plaintiffs.

The story also cites the case of a man whose wife was allegedly killed from malpractice who now owes $40K to the defense lawyers after losing at trial. I was a little perplexed by this. Does Nevada now have loser pays in med mal cases? I suspect the reporter got this wrong, but it's an interesting story about the trends nonetheless.

Another requiem for the trial bar

Business Week's cover for the new year joins the chorus of media voices declaring the trial lawyer dead and buried, blaming all the usual suspects: business lobbyists, tort reform, and the lawyers themselves. One additional factor many of these stories have overlooked: a fair number of high-power plaintiffs' lawyers are losing their shirts on Vioxx litigation....

Okie judges on med mal suits..

Amazingly, the Oklahoma state supreme court has struck down a piece of tort reform legislation requiring med mal plaintiffs to submit an expert affidavit before filing a case. I'd never have pegged the Okies to make such a bold move, but the judges were pretty much in agreement when 8 of the 9 justices found that the law created an unconstitutional financial barrier to the courts because of the high cost of retaining an expert, and that it discriminates against plaintiffs in medical negligence cases by requiring a different standard than for those in other cases.

I love it when courts in places like Utah, as in the State Farm decision, surprise people by sticking up for the little guy. I suspect that in this case, though, no good deed will go unpunished. As one blogger notes, though, expect to see the Oklahoma legislature pass a new bill requiring the expensive affidavits in all negligence cases..

The jury continues to vanish

Don't know how I missed this, but in October, the National Center for State Courts released its latest study of the nation's court system. (Thanks to Mary Whisner at Trial Ad Notes for the tip.) Buried in there in the rich data on the civil courts is the troubling fact that of all the civil cases filed in the states studied, only one-half of one percent were resolved by a jury.

Other interesting factoids from the NCSC study:

--the number of incoming civil filings has fallen

--tort cases accounted for only 5 percent of all incoming civil lawsuits (probate cases accounted for more court activity than torts!)

--of the tiny percentage of court dockets taken up by tort cases, medical malpractice and products liability cases accounted for even tinier fractions. In the states studied, med mal cases were 3 percent of all tort filings, and products liability cases between 3 and 4 percent. Car crashes, as always, made up most of the docket (64 percent).

I look at all these numbers, particularly the jury trial data, and wonder how a country can argue so much about something that really adds up to so little...

What Big Business gets for its campaign money.

Much of the media coverage of the nasty state judicial elections in recent years has focused on the millions of dollars in campaign contributions that have come from parties appearing before the courts. But reporters and watchdog groups, I think, are often asking the wrong questions about what the donors get for their money. While it's certainly unseemly when, as the New York Times' Adam Liptak reported (sub req), judges vote with their contributors in big cases, state supreme courts are also legal policy making bodies. Their decisions affect cases that never get heard in their chambers, as well as the fate of legislation, most notably, bills enacting tort reform. The fate of such laws can affect not just one defendant but entire industries.

So it's no surprise that the states with the most expensive judicial elections in recent years are those where the courts previously have struck down, or would likely strike down, tort reform laws, for violating constitutional protections guaranteeing equal treatment, access to the courts, and the right to a civil jury trial. (These include Illinois, Mississippi, West Virginia, Georgia and Ohio.)

Now that the U.S. Chamber of Commerce has succeeded in most of its attempts to stack state supreme courts with pro-tort reform judges, we're seeing the cynical results. Take the case of Ohio.

In 1996, the Ohio state legislature passed a law capping noneconomic damages in most tort cases at $500,000 per plaintiff. Three years later, the Ohio supreme court struck down the law as unconstitutional. The decision prompted national business groups to pour money into Ohio's judicial elections, using vicious attack ads to swing the court from more moderate to extremely conservative.

In 2004, knowing full well that it would be unconstitutional, the legislature nonetheless passed a bill that was virtually identical to the 1996 law, except it was more restrictive than the old one, with a $350,000 cap on noneconomic damages in most tort cases. But legislators seemed pretty confident that the new business-friendly Supreme Court would let it fly, even though doing so would overturn years of established precedent in the state. (The state supreme court had also struck down a cap on med-mal damages in 1991.)

Trial lawyers have challenged the new law in a lawsuit over injuries from Johnson & Johnson's Ortho Evra birth control patch. The plaintiff, Melisa Arbino, landed in the hospital in 2005 suffering with life-threatening blood clots in her brain and lungs. One of the clots remains lodged in her brain, with potentially life-threatening complications, just the kind of thing that noneconomic damages are supposed to compensate for. Arbino alleges that the patch, which had much higher levels of estrogen than regular birth control pills, caused her injuries. A federal court recently kicked the case back to the state, where the new pro-tort reform judges will get a shot at it.

This is a huge case, and practically every major industry group has filed briefs in the case. Poor Arbino is up against all of corporate America: big Pharma, the National Association of Manufacturers, the U.S. Chamber of Commerce, the American Chemistry Council, the American Tort Reform Association, the National Association of Independent Business, numerous insurance industry and hospital and medical groups, and a handful of other well-funded tort reform groups have all weighed in.

Coming to Arbino's aid, besides the Ohio Academy of Trial Lawyers, is the Ohio chapter of the National Organization of Women, the NAACP, and that big-money group, Mothers Against Drunk Driving.

What are the odds that the new court will stick by the old precedent and find the tort reform law unconstitutional? Not much, I'm afraid. According to Liptak, Ohio plaintiff's lawyers won only 17 percent of their cases after the conservative takeover, compared with 64 percent before 2003. If the new damage cap is allowed to stand, most of those cases probably won't even make it to the court to lose there. The chamber's money will certainly look like a wise investment indeed.

Tiny Tim and the "tort tax"

Well, I guess I didn't have to worry so much that the mid-term elections would dry up the well of material for this blog. The U.S. Chamber of Commerce sure hasn't missed a beat. Click here to listen to its latest radio clip on how "sue-happy plaintiff lawyers" are ruining Christmas...

The Beast That Refuses to Die

Last month's election may have signaled a hiatus in the tort wars for a while, but that doesn't mean we've seen the end of business attacks on the legal system. There are far too many lobbyists whose livelihoods depend on a constant stream of new initiatives (especially those that generate big fights but never pass).

A major target in the new year is likely to be the tattered shreds of state consumer protection laws. These are laws like deceptive trade practices acts that empower attorneys general to sue on behalf of regular folks who've been been ripped off by shady car dealers or subprime mortgage companies. The laws also allow private citizens to sue when they've been defrauded as well. They create incentives for this private enforcement by allowing plaintiffs to collect legal fees and often triple damages if they win, to make small cases viable enough for an attorney to prosecute. They also allow for the dreaded class action.

Big companies hate these laws because entrepreneurial plaintiff's lawyers have been trying, with limited but potential success, to use them against the booze industry, fast-food chains and the tobacco industry for such things as making the bogus claims that "light" cigarettes are better for you than regular ones.

Right now, the "free market" American Legislative Exchange Council and the American Tort Reform Association are pushing "model legislation" that will supposedly rein in "abusive" private consumer lawsuits. Among other things, the legislation would:

--require plaintiffs to prove that a defendant willfully deceived the public before winning treble damages (usually a nearly impossible standard)

--abolish punitive and exemplary damages in consumer protection actions, supposedly to avoid "double punishment" of a defendant.

--abolish "statutory" damages in class action, i.e., the guarantee of a minimum recovery even in cases with small financial losses

--abolish provisions that allow plaintiffs to recover legal fees except in those rare cases where they can prove that the defendant's conduct was "willful"

--impose a loser pays fee-shifting system

--bar consumer lawsuits over practices that are authorized or approved by government regulatory agencies, like smoking.

As with so many things that come off the desk of ATRA general counsel and longtime tobacco industry lawyer Victor Schwartz, the proposals sound sooo reasonable on their face. They're the sort of things that sensible people can all agree on, right? Of course, most of these proposals would all but eliminate most consumer protection lawsuits. Without the possibility of recovering legal costs or special damages, most consumer ripoffs are too small to ever be financially viable in the courthouse.

States in the cross-hairs for this new campaign include Massachusetts, Illinois, Maryland, Kansas, New Jersey, and right here in the nation's capital....

The Trial Lawyers' New Moniker

I don't really want to join the chorus of people ridiculing the nation's plaintiff lawyers for renaming their professional organization recently. But I do sort of wish that Association of Trial Lawyers of America had decided to remain ATLA, for perhaps no other reason than that the new choice, the American Association for Justice, sounds like a tort reform group. It's one of those fuzzy, inside-the-Beltway, Astroturf-lobbying-group sort of name choices that get so tedious after a while.

Besides, D.C. is already home to the Institute for Justice, which is not to be confused with the Alliance for Justice  or the American Center for Law and Justice. (Can you guess which is the liberal one? I thought not.) Elsewhere, you have groups like the Texas Civil Justice League, the Illinois Civil Justice League. Then there's Justice at Stake, the Committee for Justice for All, and the Center for Justice and Democracy. "Justice" has simply lost its punch.

The refreshing thing about "ATLA" was not only that it had a muscular Greek Titan sound to it, but also that it was just so straightforward (like the wonderful National Hot Dog and Sausage Council, or www.hot-dog.org.) I suspect that the people who care about such things will always know that the AAJ is a bunch of trial lawyers, and the people who don't care will just be confused.

Rather than waste any more money on image-spiffing, the trial lawyers would do well to read some of their own history. They've gone this route before. While researching my own book, I found the story in David vs. Goliath: ATLA and the Fight for Everyday Justice, which details the group's first foray into PR back in 1955, when ATLA was called the National Association of Claimants' Compensation Attorneys (NACCA).

After years of PR efforts to combat attacks on contingency-fee legal practice, ATLA's leaders eventually acknowledged that polls showed they weren't making a lot of headway. In 1969, the dean of the University of Arizona Law School wrote in the group's magazine, Trial, that PR was a lost cause. He summed it up nicely by saying:

"The relationship between the public and the legal profession has always been a strange, complex, and completely illogical phenomenon....on one hand, society loads lawyers with public and private responsibilities far beyond that of other citizens; on the other, it professes to be convinced that lawyers as a class are venal, self-seeking and pettifogging."

 

It's the injuries, stupid.

For the past few years, the insurance consulting firm Tillinghast has released an annual study purporting to tabulate the cost of the tort system to the American economy. The latest one came last week. I hate this study, and various people have taken whacks at it for its methodology, for different reasons. I won't rehash all that here (follow the links if you want more). What bugs me about this stupid study, besides that it's meaningless, is that it's never accompanied by any acknowledgment that there would be no tort costs if there weren't any accidents.

Even if you acknowledge, as I do, that the transaction costs of the tort system can be quite high (meaning that you have to spend a bundle to get any compensation you're owed), the real hit to the economy is not from the lawsuits but from the initial injuries. For instance, medical errors, most of which go entirely uncompensated, are supposed to cost the country $38 billion a year. Some 42,000 people a year are killed and nearly 3 million seriously injured in car accidents, at a cost of around $230 billion a year (a number suspiciously close to the Tillinghast tort costs!). That is a big drain on the economy.

The tort system is simply one way that many of these injured people are supposed to be made whole, either by claiming insurance coverage they're rightfully owed or by making the wrongdoers pick up the tab. Rather than always harping on the "tort costs," it seems to me that insurance companies, health care providers, and business groups ought to focus on the source of the problem, and figure out cost effective ways to reduce accidental injuries. Maybe this is too simplistic, but it seems to me that everyone would be better off this way.