Tort Reform

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Here's another interesting blog from The Incidental Economist.

"The constitutionality of tort reform

Posted: 03 Aug 2012 06:09 AM PDT

I’ve written many times about tort reform and how it’s not a means of cost control. It turns out that it’s also not constitutional in some states:

The Missouri Supreme Court yesterday struck down a state law that caps noneconomic damages in medical malpractice cases at $350,000. It declared that the law infringed on a person’s right to trial by jury, which includes the right to have a jury set damages.

The ruling, one of several recent setbacks for proponents of tough tort reform measures, illustrates the risk inherent in passing a federal law that would limit what a victorious plaintiff can receive in noneconomic (pain and suffering) damages. Such a law, supported by organized medicine and Congressional Republicans to curb supposedly frivolous suits and extravagant jury awards, theoretically could be overturned by the US Supreme Court.

The case in question involved a baby who evidently was delivered by cesarean section too late, resulting in significant damage. His mother was awarded about$3.4 million in medical damages and about$1.5 million in non-economic damages. The law reduced that latter amount to $350,000. She sued that this was a infringement on the right of juries to decide matters like these.  She won.

Moreover, Missouri isn’t alone:

Before yesterday’s ruling, Missouri was one of roughly 2 dozen states with laws that cap noneconomic damages in malpractice suits at various levels, according to a tally kept by the National Conference of State Legislatures. (A few other states limit punitive damages or total damages of any kind.) Some of these laws have survived constitutional challenges, as was the case in Maryland. In contrast, cap laws in Alabama, New Hampshire, Oregon, Washington, and, most recently, Illinois and Georgia have been tossed into the unconstitutional trash basket.

Not to beat a dead horse, but the law wasn’t so good at reducing malpractice premiums anyway, which is what tort reform is supposed to do. Missouri’s malpractice premiums went up faster than neighboring Iowa’s did after it passed the law. Iowa, of course, has no such cap."


al3's picture
DynoDon wrote:Not to beat a

DynoDon wrote:
Not to beat a dead horse, but the law wasn’t so good at reducing malpractice premiums anyway, which is what tort reform is supposed to do. Missouri’s malpractice premiums went up faster than neighboring Iowa’s did after it passed the law. Iowa, of course, has no such cap."

From what I've read, what happens is the malpractice premiums don't go down, but the risks do, and the insurance companies pocket the difference without sharing the savings.  Insurance companies sell it based on "soaring premiums," but really have no real concern about the premiums, it's the increased profit they want.

Surprise surprise.  Like the "overtaxed" airlines, who endlessly bellyached about "excessive taxation" costing consumers, then when the FAA surcharge on airline tickets temporarily expired last year, airlines kept ticket prices the same and pocketed the difference.

Corporate whores, gotta love'em.


Notice the righties didn't

Notice the righties didn't want to touch this.

douglaslee's picture
Tort law is the last vestige

Tort law is the last vestige of justice in the US. That's why republicans want to end it. The SCOTUS reduced the award for exxon valdeze as they were paid to do. It was an unconstitutional ruling but that's never a problem for the corrupt 5.

One of the key parts of jury awards that is always distorted is the part awarded under 'punitive' definition. The purpose of punitive is to prevent the negligence and willful disregard that caused the damage brought forth in the suit. Tortfeasers not punished are the cause of more tortfeasers.


Kerry's picture
Well, I wonder what you all

Well, I wonder what you all think about Texas' change in medical malpractice tort law.   Texas law made two changes that did affect medical malpractice litigation--and the incidences of such cases going to court--quite a bit.  One was in the definition of 'negligence' (the most common reason to bring up a medical malpractice lawsuit) from what a physician 'should have known' (and didn't do anything about) to what a physician 'did know' (and didn't do anything about).   Also, Texas law changed the definition of what a plaintiff's 'expert witness' could be.   It used to be that an 'expert witness' in a medical malpractice suit could be anyone with a medical degree of any type that claimed that they were 'an expert'--and, as long as they convinced a jury (of one's peers?) of that, that was enough.   Many 'expert witnesses' made their money being 'expert witnesses' without seeing one patient for themselves--and probably still advertize in lawyer's journals as 'expert witnesses' in other states.   Texas changed that to an 'expert witness' being one that made at least half their money practicing in the same manner as the physician being sued--which knocked out all 'hired guns' that saw no patients on their own at all as being 'expert witnesses'.   Those two changes in Texas law have made it where lawyers don't even advertize for medical malpractice lawsuits anymore....

If state tort reform is unconstitutional, what does that say about federal tort reform (which has been on the books much longer than Texas tort reform)?  Federal tort reform is the reason that military doctors seldom get sued--in fact, as I understand it, to get sued as a government physician under federal tort reform, the attorney general has to support the case--sort of like if you wanted to sue Wal-Mart, you'd first have to get a clearance from Wal-Mart's attorneys...It is well known that a physician in a federally subsidized position has always been harder to sue for medical malpractice than a private solo practitioner.   Even before Texas changed its tort laws on the matter, I remember one physician who was on the staff of a hospital subsidized by the government that said 'you basically had to intentionally kill somebody to be sued there'--has the constitutionality of that tort reform ever been challenged?  

Now, I will agree that all this tort reform has done little to reduce private solo practitioner malpractice insurance premiums--but, it may have reduced the costs of 'group rates' that corporations use in hiring their physicians nowadays.....even being able to use the new tort reform laws to show how much better the corporatization of medical practice does in administering medical care than the more time honored patient managing continuity of care (claiming that the care has obviously gotten better because there are less lawsuits against that care than when solo practitioners were the main way medical care was applied--without once explaining what has changed to make less lawsuits happen).   But, then, when it comes to suing doctors, it is harder to attack a pack of wolves in medical malpractice litigation than it is one lone wolf, anyway, isn't it?   Perhaps with your own pack of wolves....8^).....

douglaslee's picture
 I was mainly focusing on

 I was mainly focusing on corporate crime, of course some hospitals are corporate, as you mentioned. .


To compile The Top 100 Corporate Criminals of the 1990s, we used the most narrow and conservative of definitions -- corporations that have pled guilty or no contest to crimes and have been criminally fined.

The 100 corporate criminals fell into 14 categories of crime: Environmental (38), antitrust (20), fraud (13), campaign finance (7), food and drug (6), financial crimes (4), false statements (3), illegal exports (3), illegal boycott (1), worker death (1), bribery (1), obstruction of justice (1) public corruption (1), and tax evasion (1).

We did not try to assess and compare the damage committed by these corporate criminals or by other corporate wrongdoers.

There are millions of Americans who care about morality in the marketplace.

But few Americans realize that when they buy Exxon stock, or when they fill up at an Exxon gas station, they are in fact supporting a criminal recidivist corporation.

And few Americans realize that when the take a ride on a cruise ship owned by Royal Caribbean Cruise Lines, they are riding on a ship owned by a criminal recidivist corporation.

Six corporations that made the list of the Top 100 Corporate Criminals were criminal recidivist companies during the 1990s.

In addition to Exxon and Royal Caribbean, Rockwell International, Warner-Lambert, Teledyne, and United Technologies each pled guilty to more than one crime during the 1990s.


A few caveats about this report.

Caveat one: Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.

For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.

For every company convicted of polluting the nation's waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.

For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.

For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.

For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don't even get investigated for reckless homicide when a worker is killed on the job. Only a few district attorneys across the country (Michael McCann, the DA in Milwaukee County, Wisconsin, being one) regularly investigate workplace deaths as homicides.


Caveat two: Corporations define the laws under which they live.

For example, the automobile industry over the past 30 years has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws. Now, if an auto company is caught violating the law, and if the cops are not asleep at the wheel, only a civil fine is imposed.


Caveat three: Because of their immense political power, big corporations have the resources to defend themselves in courts of law and in the court of public opinion.

Few prosecutors are willing to subject themselves to the constant legal and public relations barrage that a corporation's well connected and high-priced legal talent can inflict.

Corleone capitalism is the norm. This report refers to both criminal and civil law.

Kerry's picture
Corporations are allowed to

Corporations are allowed to play a different game in courts thanks to limited liability.   As one lawyer explaned it to me, absent, perhaps, antitrust cases, no one in the corporation ever has their own assets and income at risk.   They can go to jail for it--but, that still doesn't have the Enron executives who caused the collapse of their employee's pension funds to have to use their own money to pay them back.   If they weren't incorporated, they would have to.....individuals, by law, are always more responsible for their actions than corporations.....with the only exception that I know being antitrust issues....

douglaslee's picture
I have looked at antitrust

I have looked at antitrust law and it's stable of attorneys. I made the mistake of seeking someone well aversed in the laws because I think they're never enforced. Recently a woman antitrust attorney was nominated within the ABA to highest level a woman has achieved, she was the first. However, the vast majority of antitrust law is for skirting the laws. I found virtually no attorneys in the practice seeking to challenge corporations and prosecute. Looking at the AGs and the deputy positions, not to mention the judges forced to run as well, is an avenue of electoral politcs untraveled, to significant consequences, imo.

The courts as now constructed were the hallmark achievement of the Powell memo.