Wisconsin Gov. Scott Walker, who took office just this month, has an early victory in his effort to improve the state’s business climate, the major tort reform package introduced in the special session of the Legislature he called to pass jobs and economic growth bills. He signed the bill, SB1, in the governor’s conference room on Thursday.

From The Milwaukee Journal-Sentinel story, “Walker signs bill limiting court awards in injury cases“:

“This is a balance we are trying to create, to make sure certainly those who do damage and do harm are rightfully going to be penalized, even when this act becomes law,” Walker said. “But for those who have been . . .  threatened with frivolous lawsuits, particularly for small business, they’re going to receive relief today because . . .  we move forward in cutting back on frivolous lawsuits and out-of-control lawsuit abuse in the state of Wisconsin.”

Credit also goes to the state Senate and Assembly, which passed the legislation.

Wisconsin Manufacturers and Commerce, an effective and energetic supporter of the legislation hailed the bill’s signing. “These reforms will add certainty, fairness and predictability to our legal system,” said James A. Buchen, WMC vice president of government relations. The key provisions, according to WMC: (continue reading…)

President Obama spoke a sentence in general, theoretical support of medical liability reform in his State of the Union address Tuesday, saying, “Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year — medical malpractice reform to rein in frivolous lawsuits.”

Since you’re in Wisconsin today, Mr. President, we respectfully suggest you look at Senate Bill 1 of the special session of the Legislature. It’s a comprehensive liability reform bill that includes provisions to discourage frivolous lawsuits and punitive damages in malpractice suits. The bill has passed both houses of the Legislature and is on Gov. Scott Walker’s desk for his signature.

From  a statement on the bill by Wisconsin Manufacturers and Commerce, the state manufacturing association.

 “The swift, decisive action on common sense legal reforms is sending a message from Platteville to Wall Street that Wisconsin is open for business,” said James A. Buchen, WMC vice president of government relations. “With other states raising taxes, and passing other anti-business legislation, Wisconsin can stand apart and encourage businesses to create jobs.

From Wisconsin Manufacturers and Commerce, “WMC Hails Legislature for Passage of Common Sense Legal Reforms“:

MADISON– Wisconsin’s largest business group Friday hailed the Wisconsin Legislature for swift final passage of common sense legal reforms that will improve the state’s business climate. We look forward to Governor Scott Walker signing his reforms into law.

“The swift, decisive action on common sense legal reforms is sending a message from Platteville to Wall Street that Wisconsin is open for business,” said James A. Buchen, WMC vice president of government relations. “With other states raising taxes, and passing other anti-business legislation, Wisconsin can stand apart and encourage businesses to create jobs.

The Assembly vote Thursday was 57-36 along party lines to approve without amendment the Senate’s version of the bill . The Senate passed the bill on Tuesday,19-14, also with Republican in support and Democrats opposed.

The WMC identified the most important legal reforms for manufacturers.

• Adoption of various changes to product liability law to bring Wisconsin in line with other states and assist Wisconsin manufacturers and small businesses.
• Requiring expert witnesses to base their opinions on sound science and well-established theories.
• Elimination of the “risk contribution” theory in manufacturing lawsuits. The Wisconsin Supreme Court created the standard allowing plaintiffs to sue any lead paint manufacturer that sold paint in the state without proving which product caused the harm.
• A cap on punitive damage awards. [Twice economic damages or $200,000, whichever is larger.]

The State Bar of Wisconsin, which opposes several major provisions, has done a credible job reporting on the legislation’s passage. See “Assembly sends omnibus tort reform bill to governor.”

The civil justice reform package was one of five jobs-oriented bills new Gov. Scott Walker introduced upon taking office and for which he called a special session of the Legislature to act upon. See the Jan. 4 news release, “Governor Walker Releases Five Pieces of Legislation to Get Wisconsin Working.”

More coverage …

• Wisconsin Ag Connection,  “Amendment to Exempt Farm Equipment from Protection Fails“
• Courthouse News Service, “Wisconsin Erects High Hurdles to Punitive Damages in Civil Cases“
• Milwaukee Journal-Sentinel, “Walker scores victories on tort reform, HSAs“

The Wisconsin Senate on Tuesday passed SBJR1, Gov. Scott Walker’s tort reform package, by a vote of 19-14. Republicans voted for the bill, Democrats against it.

In a news release, Sen. Scott Fitzgerald (R-Juneau) cited major provisions of importance to manufacturers:

• Manufacturer protection: forcing lawsuits for legal damages to prove that the defendant actually manufactured the product that caused the damage;
• Punitive damage reform: Sets a cap on punitive, noneconomic damages, which are currently unlimited. Recovering for actual economic damages is still allowed and uncapped;
• Frivolous lawsuit reform: punish and ultimately prevent lawsuits with malicious intent or the sole intent of harassing a defendant.

This bill sets specific standards for improving the state’s tort climate, giving business greater confidence that they can thrive in Wisconsin instead of worrying about frivolous lawsuits and trial attorneys chasing the deepest pockets.

Wisconsin Manufacturers and Commerce issued a news release before the vote, urging passage. More from WisPolitics.com.

Upon taking office, Wisconsin Gov. Scott Walker quickly called the Legislature into special session to pass jobs-related legislation, including a major tort reform package. As we report at Point of Law, the Senate is expected to debate the bill on the floor today, the House could act on Thursday, and the legislation could go to the governof for his signature by the end of the week.

Wisconsin Manufacturers and Commerce, representing the people who create jobs, is proving an effective advocate for the reforms, testifying last week before the Senate Judiciary Committee. From WCM, “Lawsuit Reforms Needed to Help Job Creation”

MADISON– Lawsuit reforms proposed by Governor Scott Walker and lawmakers will send a signal to employers that Wisconsin is open for business and is a great place to create jobs, WMC said Tuesday.

“Wisconsin businesses need to know that our legal system is fair and predictable,” said James A. Buchen, vice president of government relations for Wisconsin Manufacturers & Commerce. “Governor Walker has put forward a common sense set of legal reforms that send a message to employers that our state is serious about improving our business climate.”

After being amended by the Senate committee, the bill would impose a cap of punitive damages of twice compensatory damages or $200,000, whichever is greater. State standards of proof would now reflect the Daubert standard, discouraging suits based on “junk science,” and the law’s provisions would be applied prospectively only. The bill would eliminate “risk contribution” theory in manufacturing lawsuits. The Wisconsin Supreme Court created the standard allowing plaintiffs to sue any lead paint manufacturer that sold paint in the state without proving which product caused the harm.

In Texas, similar issues — and the results of the 2010 gubernatorial and legislative elections — are encouraging passage of tort reform, as well. From the Office of Gov. Rick Perry, news release, Jan. 13, “Gov. Perry Calls for Expanded Lawsuit Reform in Texas”: (continue reading…)

John Engler, president of the National Association of Manufacturers, was a guest on the Hugh Hewitt Show last night to discuss what steps new governors can take to improve their states’ business climates.

Hewitt booked Engler, a former Republican governor of Michigan, as a follow-up to Hewitt’s column, “Where The Action Ought To Be: A Once in a Generation Chance for the Midwest,” which proposed a course of action for new governors in Pennsylvania, Ohio, Wisconsin and Michigan: reforms to business taxes, education and the state legal systems.

Here’s a transcript of a portion of the conversation on tort reform, slightly cleaned up for clarity.

Hugh Hewitt: If you’re talking to Kasich or Walker or Corbett, any of these new governors, what ought they to focus on when it comes to asking their legislatures to give them some tort reform?

John Engler: There have been a number of state-level reforms that have worked that need to be replicated everywhere. They’re sort of nitty-gritty, getting down in to how we run the legal system, but clearly, some of the venue issues, so they can keep these cases from being shopped into the more favorable venues. That’s part of it.

Cleaning up the expert witness mess that sometimes exists, where you have people showing up purporting to be an expert who really have no credentials and no special expertise, but yet they’re on the circuit.

I think there’s also a case to be made in certain areas for absolute caps on damages on the non-economic loss.

And you have to get into workers comp laws. That’s a specialty area, but there are many abuses that were there in states, and some I’m sure still remain, where injuries way outside the course of employment are being compensated in that system, driving up costs.

So, each state has peculiarities and subtleties in their system, but in almost all cases there are groups, there are centers for legal reform in the nation, that are helping out at the state level. ALEC [American Legislative Exchange Council] has some recommendations. The American Justice Partnership has recommendations. There are people willing to help when we’ve got leaders who are willing to step up on those issues.

The payoff doesn’t come immediately, but it’s important. … (continue reading…)

The trial lawyer lobby occasionally tries to sell the argument that business owners are not that troubled by the burdens and costs of being sued. We’ll concede that there may be a difference in attitude between employers who have been sued versus those who have not been…yet. Small businesses are keenly aware of the consequences of being sued.

Indeed, the New Jersey Lawsuit Reform Alliance last week released results of a survey of small business owners on the state’s legal climate. Monmouth University Polling Institute interviewed owners and senior operators of small businesses (2 – 50 employees) in July 2010. Results were released at a news conference with NJLRA’s executive director,  Marcus Rayner, and Assemblywoman Amy Handlin (R-Monmouth). Highlights:

• Most (70%) of New Jersey’s small business owners agree that the state’s liability laws make it less attractive than other states for business.
• Nearly two-thirds (64%) say that lawsuits are a problem for New Jersey’s overall business climate.
• One-in-five small businesses have had a lawsuit filed against them by a client or customer in the past five years.  One-in-three think it is more likely than not that they will be sued in the next five years.
• The majority of New Jersey’s small business owners (55%) say that reforming our liability laws would improve our business climate. 
• Among the small business owners who were sued in the past five years, many were forced to make changes to their business.
• Liability insurance, which is necessary for most businesses, increased for at least 55% of New Jerseyís small businesses in the past five years.

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NJLRA’s news release is available here, and you can download the full report here. NJBiz covered the release, “Study: Small business wants tort reform.”

Reform-minded Gov. Chris Christie has devoted most of his energies to solving the state’s budget crisis, obviously a priority. But he included tort reform as a plank for economic growth in his 2009 campaign platform, and he’s willing to shake up the state’s legal system. Fix the budget, then fix New Jersey’s legal system, governor!

At the Manhattan Institute’s Point of Law blog, we have two reports on the 111th Congress, the absence of tort reform and the general failure of bills to expand liability and litigation. It was pretty quiet in the world of civil justice reform.

• Oct. 6, 2010, “Things Congress did and didn’t do before leaving, Part II“
• Oct. 1, 2010, “Things Congress did and didn’t do before leaving“

Also at Point of Law, we  noted the claims of the American Association for Justice, the trial lawyer lobby, that it had achieved some notable successes during the session. Notice AAJ’s emphasis on preemption.

• Oct. 1, 2010, “As Congress leaves, litigation lobby claims partial victory“

Congress returns for its lame-duck session on Nov. 15, and it would be a good thing for Congress not to push for action on civil justice or liability-related legislation. There is one priority, and one priority only for the lame duck: Taxes.

Glenn Lammi of the Washington Legal Foundation does a roundup post at WLF’s Legal Pulse blog on the business cases the U.S. Supreme Court agreed to hear yesterday, “Supreme Court Cert Grants: FOIA, False Claims, Civil Procedure and the Return of Anna Nicole Smith“:

Emerging from its summer recess and Monday’s “Long Conference,” the U.S. Supreme Court granted review to 14 cases this morning.  Eight of them involve business litigants or implicate issues that affect our free enterprise system.  The Court accepted cases featuring one law on which it has ruled very frequently of late — the False Claims Act – and another law — the Freedom of Information Act — on which it rarely comments.  One case explores a first-year law school civil procedure issue, while another gets deeply into the weeds of bankruptcy jurisprudence, thanks to a three-decade estate battle involving the late Anna Nicole Smith.

David Freddoso of The Washington Examiner tracks the activities of the litigation lobby and finds them still grasping, “Trial lawyers will still have their best friend after November.” Freddoso is referring to President Obama, whom he warns might allow the federal government to again farm out its lawsuits to private law firms.

President George W. Bush signed Executive Order 13433, which bars federal agencies from hiring trial lawyers to pursue lucrative contingency cases on behalf of the government.

Such hired-gun lawyers have become overnight millionaires working for various state attorneys general — most notably in the 1998 tobacco settlement. As of Nov. 3, there will be nothing to stop Obama from rescinding the executive order and effectively handing new legal patronage to his donors.

The Cato Institute’s Daniel Griswold and Sallie James write on H.R. 4678, the Foreign Manufacturers Liability Act, warning “‘Consumer Safety’ Bill Could Boomerang against U.S. Manufacturers“: (continue reading…)

Lawrence McQuillan, who with Hovannes Abramyan  researched and wrote the Pacific Research Institute’s recent report, “U.S. Tort Liability Index: 2010 Report,” has been writing localized op-eds promoting tort reform as a jobs creator.

• Great Falls Tribune, “Tort reform would bring much-needed jobs to state”
• Pottstown Mercury, “Tort reform would bring jobs to Pennsylvania”
• Los Angeles Daily News, “State could jump-start its economy with tort reform”

Even California? Yes, even California.  From “How Lawsuit Reform Could Help California Recover“:

Asbestos awards in California’s more plaintiff-friendly counties such as Alameda and San Francisco average $3 million more than in other counties, according to an article in the American Bar Association Journal. Every business day, on average, personal injury lawyers also file nearly five class-action lawsuits in the Golden State. That destroys jobs in California.

 Entrepreneurs prefer to start, expand, or relocate businesses in states with balanced tort systems that discourage excessive litigation. These decisions matter a great deal. In 2006, job growth was 57 percent greater in the 10 states with the best tort climates than in the 10 worst states.

Business leaders remain leery of California because of its sky-high tort costs and skewed courtrooms, where business defendants lose at trial 65 percent of the time. The fear of lawsuits also causes companies to withdraw or withhold beneficial products.