States Pursue Tort Reform to Boost Economy, Jobs

By March 24, 2011Briefly Legal, Economy

Legislatures across the country are working to enact civil justice reforms to improve their business climates, attract investment and encourage job creation. A round-up:


Gov. Bill Haslam of Tennessee included a package of reforms in his legislative recommendations, calling for a $750,000 cap on non-economic damages, such as pain and emotional suffering, and limiting punitive damages to $500,00. The bill also discourages venue shopping.

The bill (SB1522) was heard in committee on Wednesday, and the media predictably highlighted the comments of former Sen. Fred Thompson, hired by the trial lawyers to lobby against the bill. A new business group, Tennesseans for Economic Growth, has formed to promote the reforms. From its release:

“Our current civil justice system in Tennessee is seriously flawed because it threatens current business owners and jobs creators with unlimited exposure to litigation,” said Doug Buttrey, who has been named Executive Director of TEG. “This flaw in our civil justice system also puts Tennessee at a competitive disadvantage when it comes to attracting new businesses and jobs, especially since our state is one of the few in the Southeast which has yet to rein in lawsuit abuse through tort reform.”

“Tennesseans for Economic Growth believes it is critical that every citizen has access to the civil courts and that medical expenses be fully compensated. It is equally critical that damage awards do not spin out of control and become beyond reason,” Buttrey continued.

Doctors are also advocates for the reforms.


Wisconsin Gov. Scott Walker made tort reform the keystone of his early legislative efforts, winning passage of a package of civil justice improvements during the special session. (Shopfloor, Jan. 28, “Gov. Walker Signs Tort Reform Package in Wisconsin.” However, union groups have turned the April 5th Supreme Court race into a referendum on Gov. Walker’s collective bargaining reforms, and the trial lawyers are joining in the hopes their hand-picked candidate will overturn the tort reform law from the bench. (See our Point of Law post, “Wisconsin Supreme Court election: a referendum on tort reform, too.“)


In Oklahoma, long-frustrated reforms now appear headed for passage in the Legislature and signing into law by new Gov. Mary Fallin. Last week, the major measure, passed the House by a vote of 57-40, the State Chamber of Oklahoma reports:

House Bill 2128, by House Speaker Kris Steele, does not impact damages such as lost wages, medical expenses and future loss of expected wages. The bill also lays out exceptions to the cap cases of gross negligence, reckless disregard, intentional actions, or malicious conduct.This bill is one of several under current consideration in the Legislature that aim to reduce the number of frivolous lawsuits filed in Oklahoma, reduce medical costs and improve access to medical care, especially in rural Oklahoma.“This legislation will protect those with legitimate cases, all while bringing more cost-certainty to our state’s legal system for businesses and the medical community,” said State Chamber President Fred Morgan. “This meaningful legislation surpasses the lawsuit reforms passed in Texas.”


Prospects have also improved in Pennsylvania thanks to the election of Gov. Tom Corbett and pro-reform Republican majorities in the Legislature. Jeff Blumenthal  of The Philadelphia Business Journal reports the Senate Judiciary Committee is expected to deal with two bills on “joint and several liability” on April 11. From “Pennsylvania tort reform hearings next month”:

The bill most members of the business community seem to support is Senate Bill 2, which provides joint liability only when a defendant is found at fault for not less than 60 percent of the total liability apportioned to all parties. But longtime Judiciary Committee Chairman Stewart Greenleaf has offered his own bill, Senate Bill 500, which abolishes joint liability for any defendant whose percentage share of the total liability apportioned to all parties is less than the percentage share of fault attributed to the plaintiff.

SB2 and its companion bill, HB1, are known as the “Fair Share Act,” and are strongly supported by business groups. The Pennsylvania Chamber of Commerce and Industry has written this “Issue Brief” on joint and several liability and reports on the bill’s prospects here. Gov. Corbett endorsed the measure in his budget address of March 8.  See also Harrisburg Patriot-News editorial, “Certain tort reforms overdue in Pennsylvania.”


Legislators are also working hard in Illinois, which has one of the worst legal climates in the nation, but there the political forces are tougher to overcome. On March 17, the House Judiciary Civil Law Committee heard testimony on several liability reform measures, including HB1902, another “fair share” proposal to modify joint and several liability; HB17, which discourages venue shopping through stricter guidelines on where a lawsuit can be filed in Illinois, and HB305, establishing qualifications for expert witnesses.

The Chamber-supported Madison County (Il.) Record, March 17, “Legislators hear legal reform bills in committee” quoted Illinois Lawsuit Abuse Watch (I-LAW) executive director Travis Akin as hailing the hearing as a good first step: “The culture of lawsuit abuse in Illinois has created a situation where we are importing lawsuits and exporting jobs and opportunities.  If we are going to attract new jobs and opportunities to Illinois then we need to make reforming our legal system a priority.”

See also Record, March 11, “Kay promotes civil justice reform agenda.” Unfortunately, it’s hard to see Democratic Gov. Pat Quinn signing anything along these lines. No reformer, he.


Lest one think that civil justice reform is a just a Republican hobby horse, we point to Democratic Gov. Andrew Cuomo in New York who has bucked entrenched special interests to propose much-needed changes in medical liability. Francesca Sommer, executive director of the Lawsuit Reform Alliance of New York, described the welcome proposals in a New York Post column this week, “How NY pays twice for litigation lotto“:

Gov. Cuomo has proposed a package of tort-reform measures that will both help the state’s fiscal condition and make health care more accessible and affordable.

Just one of these common-sense proposals — putting a $250,000 cap on noneconomic damages in medical-malpractice cases — will save hospitals hundreds of millions a year. That would pay for more staff who care for patients and leave more physicians happy to keep practicing in New York. According to a 2009 Pacific Research Institute study, this reform alone would generate as many as 86,000 new jobs.

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