Monday, August 15, 2005

The Truth About Tort Reform

I started this post, quite sometime ago, on my personal blog. Unfortunately I never really finished the post, and now find the impetus in articles recently run in the The Los Angeles Times on the myth of tort reform. The first article ran in the 8/14/05 edition. The title speaks volumes: Legal Urban Legends Hold Sway.

It starts with the story of the Winnebago owner who puts his RV on cruise control, fixes himself some coffee, then sues and wins after he is injured:

Merv Grazinski set his Winnebago on cruise control, slid away from the wheel and went back to fix a cup of coffee.

You can guess what happened next: The rudderless, driverless Winnebago crashed.

Grazinski blamed the manufacturer for not warning against such a maneuver in the owner's manual. He sued and won $1.75 million.

His jackpot would seem to erase any doubt that the legal system has lost its mind. Indeed, the Grazinski case has been cited often as evidence of the need to limit lawsuits and jury awards.

There's just one problem: The story is a complete fabrication.
It doesn't matter to the insurance and drug industry, or the conservative movement that the story is false. It makes for good headlines, influences people, and furthers the cause of tort reform in the public eye. Compounding the problem is the fact that the newsmedia perpetrates these legends, and the people believe what they read in the newspapers and hear on television:

It is one of the more comical tales in an anthology of legal urban legends that have circulated widely on the Internet, regaling millions with examples of cluelessness and greed being richly rewarded by the courts. These fables have also been widely disseminated by columnists and pundits who, in their haste to expose the gullibility of juries, did not verify the stories and were taken in themselves.

Although the origins of the tales are unknown, some observers, including George Washington University law professor Jonathan Turley, say their wide acceptance has helped to rally public opinion behind business-led campaigns to overhaul the civil justice system by restricting some types of lawsuits and capping damage awards.

"I am astonished how successful these urban legends have been in influencing policy," Turley said. "The people that created these stories did so with remarkable skill."

The tales are making the rounds at a time when business lobbyists and conservative politicians seem to have gained the upper hand in their drive to rein in lawsuits — a campaign that they call tort reform but that trial lawyers and consumer groups say is an assault on the legal rights of ordinary people.
These tall tales are taking their toll on the constitutional rights of everyday citizens. The latest polling data clearly suggests that people believe lawsuits harm the economy:

According to the American Tort Reform Assn. — which is backed by insurance, drug, auto and other major industries — 49 states have enacted at least one measure on the group's wish list over the last two decades, including limits on punitive damages and caps on awards for pain and suffering in medical malpractice claims.

In February, President Bush signed a federal law that will make it harder to bring class-action suits in state courts.

And some polls suggest that there is public support for further change.

For example, a survey conducted for the American Tort Reform Assn. in 2003 found that by a ratio of 2 to 1, respondents believed that lawsuits were harming the economy and stifling job creation. In a survey released in June by Common Good, a conservative legal reform group, 83% of respondents said it was too easy to file invalid lawsuits, and 55% agreed with the statement that "many people use the justice system almost like a lottery — they start lawsuits to see if they can win millions."

The truth, however, is that the empirical data shows a decline in litigation:

Such fears, fanned by anecdotes like the Grazinski tale, have no empirical basis, said Joanne Doroshow, executive director of the Center for Justice and Democracy, a consumer group that opposes the agenda of the business groups. "The data tends not to support the allegation that there is an out-of-control crisis with the legal system," she said.

She and others point to surveys by the National Center for State Courts and the federal Bureau of Justice Statistics showing an apparent decline in personal injury suits and in the size of jury awards to successful plaintiffs.

Other fabricated legal legends include:

Besides the Grazinski saga, there's the mythical case of Amber Carson of Lancaster, Pa., who got into an argument with her boyfriend in a restaurant, threw a drink at him and then broke her tailbone when she slipped on the wet spot on the floor. Naturally, Carson sued — and won $113,500.

Then there's Kara Walton, a Delaware woman so eager to avoid a $3.50 cover charge that she tried sneaking into a nightclub through a bathroom window but fell and lost a couple of teeth. Walton sued and won $12,000 plus payment of dental bills.

A database search shows the Grazinski, Carson and Walton tales have been cited as true by a wide range of media outlets, including CNN; U.S. News & World Report; the American Spectator; the Oakland Tribune; the Ft. Worth Star-Telegram; the Deseret News of Salt Lake City; the Akron Beacon-Journal; the Greensboro, N.C., News & Record; and the Augusta, Ga., Chronicle.
The most cited case for needed tort reform is the infamous McDonald's hot coffee case. While this case is grounded in a real set of facts, it has nonetheless been distorted and abused by the tort reform crowd:

The cases are often listed together on Internet postings as winners of the "Stella Awards," — supposedly a dubious achievement list of the nation's most outrageous and ridiculous lawsuits. Although entirely fictitious, the Stellas take their name from the real-life case of 79-year-old Stella Liebeck, whose hot-coffee case against McDonald's became the poster child for frivolous claims.

According to popular accounts of the lawsuit, Liebeck coaxed nearly $3 million from an Albuquerque jury in 1994 after being scalded by McDonald's coffee she spilled on herself while riding in a car. These are the story's best-known elements, but filling in the missing facts puts the case in a different light.

Trial testimony showed that at 180 to 190 degrees, McDonald's coffee was much hotter than that served by other restaurants or by people in their homes. The fast-food chain had received at least 700 complaints about hot coffee in the previous decade and had paid more than half a million dollars in settlements, according to trial testimony cited by the Wall Street Journal.

Liebeck's injuries were hardly minor. She suffered third-degree burns on her thighs and groin area, was hospitalized for a week and had to undergo painful skin grafts. Before filing a lawsuit, she wrote McDonald's requesting that it lower the temperature of its coffee and cover her uninsured medical bills and incidental costs of about $20,000. McDonald's offered $800.

Later, as the case neared trial, a mediator recommended that McDonald's pay a settlement of $225,000. The company refused.

Jurors ultimately awarded Liebeck $160,000 in compensatory damages and about $2.7 million in punitive damages. "The facts were so overwhelmingly against the company," one of the jurors told the Journal. "Their callous disregard was very upsetting," another said.

Soon after the verdict, the trial judge slashed the punitive damages by more than 80% to $480,000. Then the case settled for an undisclosed amount.

"The irony about the McDonald's case is that it actually, in my view, was a meaningful and worthy lawsuit," George Washington University's Turley said. Yet advocates and pundits have "made it synonymous with court abuse."
Two other websites cited in this article worthy of mention attempt to debunk the Stella Awards are: http://www.snopes.com and http://www.stellaawards.com.

0 Comments:

Post a Comment

<< Home