Gov. Mary Fallin of Oklahoma has signed three major pieces of tort reform legislation to law, discouraging abusive and frivolous lawsuits and improving the state’s business climate. From her April 5 statement:

For too long, inflated legal fees have been an unnecessary cost-driver in the private sector and a burden on the medical community. As a result, we’ve seen businesses and doctors choose to locate in other states, depriving our citizens of good jobs, reducing access to medical care and driving up the costs for medical treatment.

I’m thrilled to be able to sign into law measures which will directly address skyrocketing legal fees, protect our doctors, and help to bring more jobs and businesses into Oklahoma while still protecting the rights of plaintiffs and those who have suffered injuries. This is a great day for anyone who is committed to building a more prosperous state and a stronger economy.

The three bills she signed: (continue reading…)

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:

TENNESSEE

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

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.“)

OKLAHOMA

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: (continue reading…)

A “Insight Column” from James S. Haney as Wisconsin’s legislature prepares to debate Gov. Jim Doyle’s budget, Assembly Bill 75. He writes, persuasively, that the debate is indeed a, “Defining Moment in Wisconsin State Government.”

Leaders of Wisconsin State Government are rapidly approaching a generational defining moment when the full Legislature takes up the State Budget Bill, Assembly Bill 75. In addition to a myriad of tax Increases and earmarked pet projects sprinkled through key legislative districts, the budget continues to contain major policy changes, including a fundamental rewriting of Wisconsin’s negligence law.

If the Legislature votes to keep these negligence law changes in the budget, Wisconsin will have the most extreme liability laws in the United States. The damage this will wreak on Wisconsin’s economy is unfathomable, because there is no other liability system to compare to it. Businesses, their workers, and consumers through insurance costs, will pay a hefty price if these changes are approved.

At issue is “joint and several liability,” that is, the apportioning of culpability in liability lawsuits. Under current Wisconsin law passed in 1995, a plaintiff can collect all of the damages from a defendant only if the defendant is 51 percent or more responsible for the harm.

Gov. Doyle’s budget — and why is a tort issue even part of a budget bill? — guts this standard and instead encourages the hunt for “deep pocket” defendants to pay all the damages, even if their responsibility is just 1 percent. As Haney explains:

A budget priority for the Wisconsin Governor, during a time of the greatest economic turmoil in generations, was to return Wisconsin to a comparative negligence system where a defendant one percent at fault for an injury could be held jointly and severally liable for all of the other defendants’ liability in a claim. However, it gets worse, Wisconsin’s Chief Executive proposed changing the negligence rules further by creating a “combined fault” provision in the law under which a plaintiff could be at greater fault for his own injury than each defendant in a claim. But, so long as the combined liability of multiple defendants was greater than that of the plaintiff, the plaintiff could recover from each defendant to the degree of their fault, Thus, a plaintiff could be 40 percent at fault for their own injury, but could still recover individually from three defendants who were each 20 percent at fault.

Not to be harsh, but not only is this debate a “defining moment” for legislators and government, passage of the bill would be a defining idiocy for any state seeking to maintain a competitive business environment.

It’s difficult to see how this could be a priority for any politician who wasn’t beholden to campaign contributors in the plaintiff’s bar.

• Text of Assembly 75, Joint Finance Committee substitute
• “Business Community United: WMC Delivers Over 2,100 Petitions Against Budget,” Wisconsin Manufactures and Commerce.
• Herald Times, “Wisconsin budget debate may start Thursday”
• Kenosha News, “Sparks fly over liability shift,”
• Chippewa Herald, “AP NewsBreak: Speaker says no major budget changes

UPDATE (4:05 p.m.): The Assembly Democrats, meeting in closed caucus, have voted to remove the provision from the budget. The Senate Democrats will probably resist the effort, our sources tell us.

We’ ve paid little attention to the political goings on in Wisconsin since 2007, when Gov. Jim Doyle tried to pass a tax on oil company revenues, prohibiting them from passing the tax onto consumers. The tax grab eventually died for many reasons, including its obvious violation of the Commerce Clause.

The governor is once again sending business a message: Stay away! Attempting to undo the civil justice reform measures of the 1990s, Gov. Doyle included a major expansion of business and individual liability in his budget (Assembly Bill 75). According to Wisconsin Manufacturers and Commerce’s fact sheet:

It eliminates current joint and several liability rules that compare a plaintiff’s liability to each person who negligently caused the plaintiff’s injury.  Under the budget bill provisions a plaintiff could collect damages even when he or she is more at fault for the injury than any individual defendants, as long as the plaintiff’s liability is not greater than the combined negligence of all the persons against whom recovery is sought.

Further, it repeals current law where the liability of a person who is less than 51 percent negligent for an injury is limited to that person’s percentage of the total negligence.  Finally, it repeals current law that limits joint and several liability to a person whose negligence for the injury is 51 percent or more of the total liability.  Assembly Bill 75 provides that any person whose negligence is equal to or greater than the negligence of the person seeking recovery is jointly and severally liable for all the damages award to the person seeking recovery.

Inclusion of policy provisions in fiscal bills is generally frowned upon, but it’s not clear whether the Legislature will remove the language as in years past. Democrats took control of the Assembly in the 2008 elections and expanded their control of the Senate, so trial lawyers are seeing an opportunity for major policy gains. See also:

• Wisconsin Civil Justice Council Fact Sheet
• Wisconsin Civil Justice Council Memo to Legislature
• Wisconsin Law Journal, “Lawyers divided over proposal”
• Legislative Analysis, via Hamilton Consulting Group.

Unfortunately, Wisconsin is just one state of many where the trial lawyers are trying to expand the opportunities to cash in on the litigation lottery. Sherman “Tiger” Joyce of the American Tort Reform Association summarizes the activity in the state legislature in the April issue of Metropolitan Corporate Counsel, “Rampant “Litigation Legislation” (Except Southeast) Threatens Recovery.”

UPDATE (1:05 p.m.): The Capital Times of Madison reports today, “Legislature set to change limits in personal injury cases.” Cutting to the chase…

“This is simply about the trial lawyers seeking out those who have the deepest pockets,” said Bob Fassbender of the Wisconsin Civil Justice Council Inc., a coalition representing Wisconsin employers that was formed earlier this year to fight such legislation. “But it’s going to have a chilling effect on the state’s business climate at exactly the wrong time.”