Hot Coffee and Tort Reform

Over the weekend, I hosted a movie night for a group I belong to. Usually our movie nights are casual, frivolous affairs. We watch a comedy or something. Monty Python and Kevin Smith are perennial favorites. Not this time, though. On occasion, our movie nights are used to educate ourselves. Our group is composed of politically-minded, intellectual, highly intelligent people, most of whom have humanist tendencies, and all of whom have strong opinions.

Last year at the Sundance Film Festival, Hot Coffee, a documentary about tort reform and its effects on ordinary people premiered to very positive reviews. I decided to show it to my politically-minded friends. The rhetoric spewing from the tort reformers, whose voices seem to be the only ones I ever hear, doesn’t even begin to treat the problem with any sense of even-handedness.

Because of the way it’s being pushed on an unsuspecting public, tort reform makes my heart pound. Its wrongness takes my breath away. The idea of capping the amount someone can recover for wrongs done to them simply cannot be set at an arbitrary amount. An amount of damages that is fair in one case is not fair in another. Putting an arbitrary amount on how much someone should be compensated for serious injuries flies in the face of the very purpose of our civil justice system. The way the current reform movement wants to change how people are compensated makes no sense at all.

Each state’s tort reform law is different, but the idea behind them tend to be the same. Most famously, these reform laws want to limit punitive damages. They also want to put limits on who can file suit, and when.

I should make a disclosure here. I am a lawyer. I’ve had a civil practice for 24 years. I am not now, nor have I ever been, a tort lawyer. Oh, sure, I’ve handled a minor car accident here and there over the years, but never when much money was involved and never when I thought the case would not settle.

 

What about all those frivolous lawsuits?

No one likes the notion that there are people out there working “the system” and being rewarded financially for filing frivolous lawsuits. The truth is, though, that frivolous lawsuits rarely get off the ground. There are several reasons why.

One reason is that tort lawyers tend to finance tort claims. Unless there is a very good chance of a pay day at the end of the line, no lawyer is going to invest his own money into someone else’s case. That’s just simply a bad business decision. The discovery process, through which the lawyer prepares for trial, costs thousands of dollars. Expert witnesses cost thousands of dollars. Court reporters cost hundreds, if not thousands, depending on how many depositions are taken. Unless the case has a good chance of being won, no lawyer is going to accept it. Furthermore, the case has to be worth enough money that the settlement or judgment will cover the plaintiff’s actual damages, the costs of litigation, and an attorney’s fee. If it won’t compensate the lawyer for his time and expenses, the lawyer won’t take the case.

Another reason is that sanctions against an attorney who files frivolous suits are harsh. Fines, disciplinary actions, public censure by the courts, and damage to the lawyer’s reputation deter frivolous filings. I have heard the objections to this line of reasoning. Within the last month a young lawyer reported to me that he was told that the way to earn good money was to file frivolous suits and settle for “nuisance money,” or any amount of money that the insurance company will pay just to make the case go away. While I was appalled at the thought that there are people in my profession who operate this way as a matter of course, I won’t say that suits are never resolved this way. At times, they are. But if they are completely frivolous, I’ve never known an insurance company yet that would pay a single dime to a litigant.  Defense attorneys do not hesitate to file motions for sanctions when they believe sanctions are warranted.

 

What is a tort, anyway?

Many Americans do not even know what a tort is.

My torts professor in law school told us that a tort is a civil wrong. Very simply put, people commit torts when they injure someone else. Automobile accidents and medical malpractice are the  torts that most quickly come to mind. We suffer torts when the neighbor’s dog bites us or when the guy at the bar takes a drunken swing at us. The defamatory conduct that makes up libel and slander is tortious. Poorly designed products that hurt us are the subject of tort actions, including drugs, toys, tires, and automobiles.  Interfering with someone’s business is a tort.

Many crimes are also torts. While the state has an interest in prosecuting someone who physically injures another person, the injured person gets nothing from the criminal prosecution. To redress the wrong done to him, the injured person sues the perpetrator in a court of law. There, the court can award damages to compensate the injured person for his injuries.

 

What is the point of a jury?

 

The very same people who say they are behind tort reform make up the juries that award damages to injured people. They are the same people who, when they have been grievously injured, demand the right to sue so that the person responsible pays for the harm. And then they are shocked when they can’t be compensated fully, because, after all, theirs was not one of the “frivolous” lawsuits that caps on damages was supposed to guard against.

Why are there large awards? Because in a court of law, with both sides being represented by able counsel, the jury decides that proof demands such an award. That is the amount it takes to make someone whole after a grievous harm.

When we allow our legislatures to put arbitrary caps on damages, we are giving up a constitutionally-guaranteed right to be made whole. Furthermore, we are tying the hands of the jury system.

 

But what about those multimillion dollar awards?

Most people object to large awards of punitive damages. Punitive damages are meant to punish especially egregious conduct. They are not awarded in every tort case; they are the exceptions that make the headlines. Punitive damages don’t beggar the perpetrators of torts. They are, however, intended to be felt. Remember the “excessive” punitive damages award in the McDonald’s coffee case? McDonald’s offered the victim, who had undergone months of skin grafts because of the extent of her burns, $800 – not even a drop in the bucket toward her medical bills. The punitive damages award represented two days of McDonald’s coffee sales. Just two days of profits. Just on coffee.

 

So, what should we do?

It is shocking that we should be talking about depriving people of just compensation. If we don’t like that punitive damages “enrich” victims of torts, then the conversation should be about what else to do with the money – because especially egregious conduct deserves to be punished.

One suggestion: How about a fund to improve access to justice for people who can’t afford lawyers? Currently in Arkansas, our legal services agencies are spread so thin that poor people can only get divorce lawyers if they are also physically abused.

 

 

 

Last Updated on July 29, 2012 by