American Tort Reform Foundation Releases Judicial Hellhole List

 The American Tort Reform Foundation recently published its report identifying the top "judicial Hellholes" for 2015-16.

The top (or bottom?)  jurisdictions are California, NY (asbestos), Florida, Missouri, Madison County, Ill., Louisiana, Hidalgo County, Texas, Newport News, Virginia. and the Eastern District of Texas.

The "watch list" includes West Virginia, Philadelphia (your humble blogger's home base), New Jersey, and Pottawatomie County, Oklahoma.

According to the ATRF, California is the epicenter for lawyers trolling to bring disability access lawsuits against small businesses and ridiculous class action lawsuits against food and beverage companies. Certain areas of the state are also a hotbed for asbestos litigation. Local district attorneys and government agencies have taken it upon themselves to partner with private contingency fee lawyers, leading them to bring novel claims against makers of paint and prescription drugs.

New York City is listed for its ongoing treatment of the asbestos mass tort.

Florida ranks next because, according the ATRF, the Florida Supreme Court issues liability-expanding rulings that are out of sync with courts in the rest of the country. Even when the state legislature, which is heavily influenced by trial lawyers, manages to enact reforms, the state’s high court "nullifies them in favor of boundless liability in the Sunshine State."

Our home base makes the watch list since the Philadelphia Court of Common Pleas hosts one of the largest mass tort dockets in the nation. The court effectively withdrew its open invitation to lawsuits from around the country with the adoption of some procedural reforms in 2012, but the jurisdiction is again experiencing a rise in out-of-state pharmaceutical claims, notes ATRF. Changes on the state high court that could favor plaintiffs, the state’s embattled attorney general’s alliance with private plaintiffs’ lawyers, and a doubling of disability access lawsuits are additional reasons for concern in the Keystone State, says ATRF.

This year's report also includes a discussion of the MDL process, noting the increase in the portion of the federal court docket that is in an MDL.  ATRF states that when the MDL discovery process is concluded, judges often follow a practice of selecting “bellwether” claimants for trial. The selection process can take many forms, including allowing each side to identify cases for trial. In some
instances, however, plaintiffs’ lawyers will simply dismiss the cases chosen by the defendant (or even cases selected by plaintiffs themselves) on the theory that they will be the weakest with respect to success on the merits. The plaintiffs’ lawyers try to select what they perceive to be their “best” cases as bellwethers, rather than representative cases, and when transferee judges have not performed any sort of gatekeeping function, neither the court nor the parties are in a position to know whether the bellwethers are in any way representative of many other claimants in the pool, argues ATRF.


Appeals Court Upholds Successor Liability Reform

A Pennsylvania appeals court issued has upheld an important statutory reform, a law limiting the liability of Pennsylvania-based businesses that have merged with companies facing a risk of asbestos liability. See James Markovsky, et al. v. Crown Cork & Seal Co., et al., No. 2755 EDA 2013 (Pa. Super. 12/22/14).

A 2001 law imposed a limitation on successor asbestos-related liabilities, such that the cumulative
successor asbestos-related liabilities of a domestic business corporation which was incorporated in the Commonwealth prior to May 1, 2001, shall be limited to the fair market value of the total assets of the transferor determined as of the time of the merger or consolidation, and such corporation shall have no responsibility for successor asbestos-related liabilities in excess of such limitation.

Defendant was alleged to be liable based on successor liability, and obtained summary judgment based on the statutory cap, and plaintiff appealed, arguing that the act was unconstitutional, inter alia, because the legislation containing the relevant Section 1929.1 supposedly violated Sections 1 (original purpose) and 3 (single subject) of the Pennsylvania Constitution. 

The court noted that It is well-settled that a statute may be deemed per se unconstitutional if, under the classification, the class consists of one member and is closed to future membership. See Pa. Tpk. Comm'n v. Commonwealth, 899 A.2d 1085, 1098 (Pa. 2006); accord Harrisburg Sch. Dist. v. Hickok, 761 A.2d 1132, 1136 (Pa. 2000) (“[A] classification is per se unconstitutional when the class consists of one member and it is impossible or highly unlikely that another can join the class.”). Here, Section 1929.1 was not per se constitutionally infirm because it does not contain an apparent class consisting of one member that is closed or substantially closed to future membership.  Moreover, based on the record, Appellant had not offered any relevant evidence suggesting that Section 1929.1 is limited to the defendant and that no other company could avail itself of the benefits of the law.  The Appellant carries a heavy burden of proof for purposes of challenging the constitutionality of the act. The statute’s legislative history reflected that its sponsors used the defendant as an example of the statute’s purpose, all the while emphasizing the potential benefit to other similarly situated corporations throughout the Commonwealth.  More importantly, Appellant did not show it is impossible or highly unlikely for other corporations to enjoy the statute’s protection.

The panel also rejected arguments that the law ran afoul of the equal protection provision of the U.S. Constitution by subjecting out-of-state corporations to disparate treatment.

Thus, the trial court did not err as a matter of law in granting the motion for summary judgment. 

A common sense decision, as the legislature clearly saw important policy benefits in terms of merger activity and protection of local employers.

Judicial Hellholes Report Released

The American Tort Reform Foundation issued its annual Judicial Hellholes® report this week, naming courts in New York City, California, West Virginia, Florida, Illinois, Missouri and Louisiana among the nation’s most unfair in their handling of civil litigation.

The hard-hitting 2014-15 report shines its brightest spotlight on seven courts or areas of the country that have developed reputations as "Judicial Hellholes". Several have become or continue to be hotbeds of asbestos litigation, even though the U.S. has long passed its epidemiological peak for mesothelioma, and even as civil courts and lawmakers in much of the rest of the country grow increasingly skeptical of a lawsuit industry that relentlessly generates new claims.   But asbestos litigation comprises only a fraction of this year’s report.  Courts willing to entertain preposterous consumer class actions also are highlighted. Also in focus, the dangerous trend of state attorneys general contracting with private-sector personal injury lawyers to pursue their self-interest instead of the public interest.  

New York makes the top of the list for its pro-plaintiff asbestos rules, including allowing plaintiffs’ lawyers to try multiple, dissimilar cases together. California remains on the list for the troubling use of “public nuisance” law and private sector contingency-fee lawyers by district attorneys seeking to "rifle the pockets" of corporate defendants, says the report. The report also examines personal injury lawyers’ exploitation of Prop 65 and California's consumer protection laws.

West Virginia, says the report, rarely misses an opportunity to abandon traditional tort law and adopt expansive theories of liability, and this year required certification of a class action of individuals united by the fact they suffered no injury, and permitted recovery of inflated damages for fictional medical costs.  Florida continues its reputation for an unfair civil justice system, according to the report, including through judicial nullification of valid legislative tort reform, such as a law intended to ensure access to healthcare in the state by limiting subjective damages for pain and suffering in medical liability lawsuits.  Missouri makes the report for outlier, liability-expanding rulings and for invalidating reasonable civil justice reforms.  

Of special interest to your humble blogger, hometown Philadelphia is on the "watch list" after seeing some decline in mass tort lawsuit filings but in light of impending retirement of key judges in the mass tort program.

This year’s report again emphasizes the good news from some jurisdictions across the country. Points of Light are examples of, among other things, fair and balanced judicial decisions that adhere to the rule of law and positive legislative reforms. For example, the Iowa Supreme Court, in contrast to the Alabama Supreme Court, rejected “innovator liability,” which allows plaintiffs to sue companies that developed a brand-name drug when they took the generic version.

Maryland Retains Contributory Negligence

In an interesting decision, the Maryland Court of Appeals decided to retain the traditional doctrine of contributory rather than comparative fault.  See Coleman v. Soccer Association of Columbia, No. 9-2012 (Md. July 9, 2013). 

Several decades ago, the court in Harrison v. Montgomery County Bd. of Educ., 295 Md. 442, 444, 456 A.2d 894 (1983), addressed whether the common law doctrine of contributory negligence should be judicially abrogated in Maryland and the doctrine of comparative negligence adopted in its place.  The court declined to abandon the doctrine of contributory negligence in favor of comparative negligence, pointing out that such change “involves fundamental and basic public policy considerations properly to be addressed by the legislature.”

In Coleman, the petitioner presented the same issue that was presented in Harrison, namely whether the court should change the common law and abrogate the defense of contributory negligence in certain types of tort actions. After reviewing the issue again, the court arrived at the same conclusion: that, although the court had the authority to change the common law rule of contributory negligence, it would decline to abrogate Maryland’s long-established common law principle of contributory negligence.

The opinion provides an interesting dialog as to which branch of government should decide such a substantial change to the tort law.  The majority and concurring opinions say that the issue of adoption of comparative fault is really one for the legislature to decide. Note my colleagues filed an amicus brief in the case on behalf of the American Tort Reform Association, Chamber of Commerce of the United States of America, and others, arguing for continued application of the contributory negligence doctrine.


State Committee Misses Opportunity for Class Action Reform

Readers of MassTortDefense recognize that one of the most challenging jurisdictions for potential class actions defendants is California, given the substantive law, some state courts' take on certification issues, and the aggressive plaintiffs' bar.  It is no surprise that advocates of a balanced and appropriate role for class actions have from time to time attempted legislative reform in this state.

One idea that has been proposed is a requirement that class action advertisements (and there are plenty) include appropriate disclosures that potential plaintiffs could be liable for attorneys’ fees if a defendant prevails.

Unfortunately, the state Assembly's Judiciary Committee last week rejected such a proposal in a vote along party lines.  Proposed A.B. 1954 would have required ads soliciting plaintiffs for a class action to disclose that they might be held responsible for part of a defendant's legal fees if the defendant prevails under certain conditions. The legislation also would have permitted the state's Department of Consumer Affairs to impose a fine of up to $2,000 for an ad that failed to include the notice provision.

Supporters of the bill expressed concern about what they see as a flood of class action solicitations, which are seen as a serious impediment to doing business in California.  The bill was supported by the Civil Justice Association of California and the California Building Industry Association, as well as the California Chamber of Commerce.  Our readers know that some potential plaintiffs see class actions like purchasing a lottery ticket - no risk, high reward.  Opponents argued that in the state, orders directing named plaintiffs of a class to pay for a prevailing defendant’s fees happens only in rare cases. But it can and does happen, and what's wrong with letting potential plaintiffs know this? Such a bill would increases transparency and thus protect consumers; it might cut down on the number of "shakedown" class actions that only disclose promises of huge settlements without the potential other side of the coin. 


U.S. Chamber Describes Tort Reform Goals for 2012

Here at MassTortDefense we try to keep at least one eye on important tort reform efforts, and how they may impact  the litigation that we blog about.

That is why we reviewed with great interest the tort reform agenda of the U.S. Chamber of Commerce for 2012, which happens to be the organization's 100th year representing the business community.

The head of the Chamber recently delivered the organization's annual State of American Business address to its members. In it, he noted the need for significant regulatory and legal reform:

The regulatory avalanche confronting our job creators is unprecedented. The Labor Department has 100 rule-makings in the pipeline. Dodd-Frank requires 447 rules, 63 reports, and 59 studies. The health care law established 159 new agencies, panels, commissions, and regulatory bodies. EPA has some 200 regulations in the works. The Chamber supports necessary, sensible, and forward-looking regulations -- but not proposals that fail to meet that test. The Chamber is also working to modernize the overall regulatory system—including legislation to reform the permitting process and update the Administrative Procedure Act for the first time since the Truman administration. 

The Chamber's Institute for Legal Reform will continue to fight the expansion of excessive litigation that is sucking the vitality out of American businesses.  America’s civil justice system is the world’s most expensive, with a direct cost in 2009 of $248.1 billion, or 1.74% of the U.S. GDP.
The tort cost per person was $808 in 2009, a sevenfold increase from 1950 even when adjusted for inflation. While small businesses are responsible for 64% of all new American jobs, lawsuits cost them $105.4 billion in 2008—money that could be invested in more jobs, higher wages, or better benefits. Two out of three senior executives and litigators at America’s largest employers believe that the litigation environment in a state is likely to impact important business decisions at their companies, including whether to grow jobs or do business in a state.

A key focus for 2012 will be the alarming rise of third-party litigation financing. That’s where outside investors fund lawsuits in exchange for a share of the award or settlement. This can encourage the filing of frivolous claims. It may invite testing questionable claims in court. It probably provides an incentive to unduly prolong cases. And it raises serious ethical questions. Who does the lawyer really represent—his client or the outside financial backers?


Bills Introduced to Halt New Federal Regulations

We from time to time have called our readers attention to developments in the important field of tort reform.  While often this takes the form of state legislation affecting substantive legal doctrine, there is another important branch, evidenced by recent proposals from Republican senators seeking passage this fall of legislation that would impose a moratorium on multiple Administration regulations now in the pipeline.

For example, Sen. Ron Johnson (R-Wis.), along with two dozen co-sponsors, has authored a bill that would bar all federal agencies from finalizing any pending rules or voluntary guidance documents that could significantly impact the economy. The moratorium would remain in place until unemployment returns to the level it was when the President took office (7.7%).

The Regulation Moratorium and Jobs Preservation Act of 2011 (S. 1438) would apply to any "significant regulatory action," meaning any regulatory action that is likely to result in a rule or guidance that may have an annual effect on the economy of $100,000,000 or more, or adversely affect in a material way the economy, or jobs, or materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or  raise novel legal or policy issues.

Congressman Reid Ribble (R. Wis.) has announced the introduction of a similar bill in the House,  H.R. 2898.

A sightly different approach was introduced by Sen. Susan Collins (R-Maine), calling for a one-year “time out” on significant new federal rules. The Regulatory Time-Out Act (S. 1538) is designed to provide job creators with a "breather" from these burdensome new regulations.

These broad measures follow the introduction of a variety of bills that would roll back specific regulations already on the books, and/or force agencies to periodically review existing rules.  House and Senate Republicans, as well as a few Democrats, have urged structural changes in the regulatory process to address what they see as burdensome regulations that negatively impact the economy. Such regulations have forced businesses, especially smaller firms, to freeze or cut back on hiring.  The United States Chamber of Commerce has argued that the legislation would place an important check on the relatively small number of economically significant regulations that impact the business community’s ability to compete.


Tort Reform Advances In Tennessee

Readers know that tort reform is an important issue we have posted on before, at the federal and state level.  Latest update: Tennessee recently enacted reform legislation that will, among other things, limit the amount of non-economic damages that plaintiffs can recover in civil lawsuits.

Specifically, the Tennessee Civil Justice Act of 2011 was signed into law by Gov. Bill Haslam earlier this month. 

The new law limits venue to the county where the events constituting the cause of action occurred, where the business has its principal office, or where its registered agent of record is located.

Prior law included punitive damages in calculating the bond amount, set a maximum appeal bond at $75 million, and did not address the possibility that obtaining the bond could render an appellant bankrupt or insolvent. The amended law facilitates the appeal of a trial court verdict by lowering the maximum amount of a bond from $75 million to the greater of (i) $25 million or (ii) 125% of the judgment amount. In determining the bond amount, the court will now not consider or include punitive damages, unless there is evidence of the appellee dissipating assets. The law also gives the court discretion to take other actions or set other terms, if obtaining the bond would render the appellant insolvent or bankrupt.

Prior state law had no cap on non-economic damages. The new law places a cap of $750,000 on the non-economic damages incurred by an injured plaintiff, damages like pain and suffering.  A few exceptions are provided, such as no cap in intentional torts, or when the defendant was under the influence of alcohol or illegal drugs and his or her judgment was substantially impaired, or when a defendant intentionally falsified, destroyed or concealed records to avoid liability.

Prior state law did not have caps on punitive damages. Under the new act, punitive damages must be proven by clear and convincing evidence and are capped at 2x compensatory damages or $500,000, whichever is greater. There are limited instances when the defendant's liability is not limited by the caps: (i) if the defendant intended to injure the plaintiff, (ii) if the defendant was under the influence of alcohol or illegal drugs and his or her judgment was substantially impaired, and (iii) if the defendant intentionally falsified, destroyed or concealed records to avoid liability.  Moreover, no punitive damages may be assessed against the manufacturer of a drug or device who was in compliance with applicable laws and regulations, unless the manufacturer withheld material information from regulators or misrepresented that information to the regulators.

The new law provides additional protections for non-manufacturer product sellers. No product liability action may be commenced or maintained against any seller, other than the manufacturer, unless the seller exercised substantial control over that aspect of the design, testing, manufacture, packaging or labeling of the product that caused the alleged harm for which recovery of damages is sought, or the seller altered or modified the product, and the alteration or modification was a substantial factor in causing the harm for which recovery of damages is sought; or the seller gave an express warranty which was breached.

Also, the seller of a product other than the manufacturer would not be liable for punitive damages, unless the seller exercised substantial control over that aspect of the design, testing, manufacture, packaging or labeling of the product that caused the harm for which recovery of damages is sought; the seller altered or modified the product and the alteration or modification was a substantial factor in causing the harm for which recovery of damages is sought; or the seller had actual knowledge of the defective condition of the product at the time he supplied the same.

Under the new Act, the state court of appeals would hear appeals from orders of trial courts granting or denying class action certification if a notice of appeal is filed within 10 days after entry of the order. All proceedings in the trial court would be automatically stayed pending the appeal of the class certification ruling.

Why We Can't Sue Our Way to Prosperity

The House Judiciary Committee's Subcommittee on the Constitution held a hearing earlier this week on "Can We Sue Our Way to Prosperity?: Litigation's Effect on America's Global  Competitiveness."

Speakers included a public policy expert from NERA; a law school professor; and my friend, esteemed litigator John Beisner.

Paul Hinton testified that the direct cost of the U.S. tort system is estimated to be approximately $250 billion in 2009 or about 2 percent of GDP.  The U.S. costs are the highest as a percent of GDP amongst those reported for other industrialized countries and more than double the estimates for countries such as the U.K, France, and Japan.  Small businesses bear a relatively larger share of tort costs than larger businesses.

Professor Silver from Texas tried to make the case that the civil justice systems contributes greatly to the prosperity of the U.S.  He seemed to think that litigation is the only thing that deters doctors from committing widespread medical malpractice.

John Beisner noted that given the lucrative potential of private lawsuits in the U.S., it is not surprising that fraud has crept into the system. One notable example is the fraud that may have  occurred with respect to asbestos bankruptcy trusts. In addition, some lawyers have engaged in questionable tactics to recruit clients – tactics that have encouraged the filing of frivolous or fraudulent claims. The most notorious of these efforts, he observed, have been the massive screening programs undertaken in the silica and welding-fume litigation, both of which resulted in the mass filing of meritless and even fraudulent claims – and forced defendants to spend huge sums of money defending themselves against groundless allegations. In addition, Beisner pointed out, more and more plaintiff lawyers are using the internet to troll for clients and sow dissatisfaction with products in advance, in the hopes of generating large bodies of claims against targeted defendants. "These efforts have contributed to the deluge of meritless lawsuits that clog the civil justice system."

Another troubling development he noted in the American civil justice system has been the rise in
foreign lawsuits with virtually no nexus to the United States. In addition to transnational tort cases, the American civil justice system has also seen an uptick in efforts to enforce foreign judgments in U.S. courts.

Although the enactment of the Class Action Fairness Act of 2005 dramatically reduced class-action abuse, several serious problems remain in the aggregate litigation arena, including (1) state attorney general actions; (2) the routine deprivation of due process in class actions that remain in state courts; and (3) mass joinder actions.

The hearing comes as the Judiciary Committee considers the Lawsuit Abuse Reduction
, which would call for greater sanctions for Rule 11 violations to deal with frivolous claims. 

Tort Reform Battle in PA

We have posted from time to time on the important issue of tort reform, and the need for it in many jurisdictions.

Now in our home state, the Pennsylvania’s General Assembly is currently considering tort reform of the joint and several liability rules.  The Pennsylvania Comparative Negligence Act, 42 Pa.C.S.A. § 7102, establishes that a civil litigant may recover damages provided his negligence is not greater than the negligence of the defendants. The Act permits the plaintiff to recover damages as long as the negligence of the plaintiff is not greater than the causal negligence of the defendants.Thus, Pennsylvania employs the 51% rule. With respect to the liability of defendants, the Act mandates a form of joint and several liability under which a plaintiff is allowed to recover damages from multiple defendants collectively or from each defendant individually. Currently, when the case involves more than one defendant, each defendant found to be at least 1% negligent is responsible for the entire verdict. The plaintiff can collect from one defendant and force that defendant to try to go against the others for recovery.

These kinds of rules obviously affect how lawsuits are defended, tried and settled. Plaintiffs have an incentive to name a defendant with minimal liability but sufficient assets in an attempt to essentially extort settlement proceeds under the 1% rule. The right of recovery against the co-defendant is often worthless, especially in settings like the asbestos mass tort. Of course the minimally liable defendant may incur large litigation costs before being able to settle the claim at that inflated amount.

The Pennsylvania House of Representatives passed HB 1 in April. The bill is similar to the "Fair Share" Law enacted in the state in 2004 but later found unconstitutional on narrow procedural grounds. It is also similar to fair share legislation passed in 2006 but vetoed by then-Governor Rendell.  HB 1 would replace joint and several liability with proportional liability. Each defendant who is less than 60% negligent would be responsible only for his share of a verdict resulting from his negligence, i.e., his “fair share”. Joint and several liability would continue to apply to any tortfeasor who is more than 60% liable.

After passage, HB 1 was sent to the Pennsylvania Senate for consideration as SB 2. It is now before the Senate Judiciary Committee for consideration. There is also consideration of a much watered-down version of “fair share” legislation that would apply proportional liability to a defendant only if the plaintiff’s negligence in causing his own injuries exceeds the liability of the defendant. Hearings on these bills were held by the Judiciary Committee earlier this month.

More info on this battle can be found at PDI, which supports the reform.  Not surprisingly, the Pennsylvania Association for Justice, formerly the Pennsylvania Trial lawyers Association, opposes SB 2.  

Several states have abolished  the rule of joint and several liability, and several others have have enacted reform efforts which contain a threshold of liability which a defendant must meet prior to the imposition of joint and several liability.

Bills to Curb Frivolous Suits Introduced in Congress

With the Republicans in control of the House, many were wondering about the prospects for tort reform at the federal level.  Indeed, President Barack Obama observed in his State of the Union address on January 25, 2011, “I am willing to look at . . . ideas to bring down costs including reform to rein in frivolous lawsuits.” 

House Judiciary Committee Chairman Lamar Smith (R-Texas) earlier this month introduced legislation to reduce frivolous lawsuits. Senate Judiciary Committee Ranking Member Chuck Grassley (R-Iowa) then introduced a companion bill in the Senate (S.533).

The Lawsuit Abuse Reduction Act (LARA), H.R. 966, would impose mandatory sanctions for plaintiff lawyers who file merit-less suits in federal court. 

Chairman Smith argued that lawsuit abuse has become too common in American society partly because the lawyers who bring these cases have everything to gain and nothing to lose. Plaintiffs' lawyers can file frivolous suits, no matter how absurd the claims, without any penalty. Meanwhile defendants are faced with the choice of years of litigation, high court costs and attorneys' fees or a settlement. Our legal system encourages frivolous lawsuits while defendants are left paying the price even when they are innocent. Many of these cases have cost innocent people and business owners their reputations and hundreds of thousands of dollars.

Ranking Member Grassley noted that without the serious threat of punishment for filing frivolous lawsuits, innocent individuals and companies will continue to face the harsh economic reality that simply paying off frivolous claimants through monetary settlements is often cheaper than litigating the case. "This perverse dynamic not only results in legalized extortion, it leads to businesses spending money to defend against baseless lawsuits rather than to create new jobs."

The Lawsuit Abuse Reduction Act would take three steps to help thwart frivolous lawsuits.

* Reinstates the requirement that if there is a violation of Rule 11, there will be sanctions.

* Requires that judges impose monetary sanctions against lawyers who file frivolous lawsuits.

* Reverses the 1993 amendments to Rule 11 that allow parties and their attorneys to avoid sanctions for making frivolous claims by withdrawing them within 21 days after a motion for sanctions has been served.

The House Judiciary Committee has already held a hearing on the House version, at which witnesses included Elizabeth A. Milito of the NFIB Small Business Legal Center, Professor Lonny Hoffman of the University of Houston Law Center, and Victor E. Schwartz, well known tort reform advocate.


New Report on Asbestos and Silica Litigation in Texas

The Texas Civil Justice League has released a new report, "A Texas Success Story: Asbestos and Silica Lawsuit Reform."

Established in 1986, the Texas Civil Justice League is a non-partisan, statewide business coalition committed to legal reform and public policy research. The League makes legislative recommendations in vital issue areas, such as administration of the courts, general business liability, mass torts, and products liability.

The purpose of this special report is to document the current state of asbestos and silica litigation in Texas state courts. Part one provides a brief history of asbestos and silica litigation in the United States and an overview of the legislative efforts in Texas to address abuses in asbestos and silica litigation.  The report then offers a description of asbestos and silica litigation in Texas’s two multidistrict litigation courts handling asbestos and silica cases, and the impact of reform legislation (S.B. 15) on the state MDLs.

The report then turns to recent issues in asbestos litigation, specifically to the science-based evidentiary standards required by the Texas Supreme Court’s decision in Borg-Warner Corp. v. Flores.

Next are the issues relating to asbestos claimant compensation, starting with the role of bankruptcy trusts in compensating asbestos claimants; the bankruptcy trust payment system can provide substantial compensation to asbestos victims, but is a “black box” system that remains hidden from public scrutiny.

Lots of good info, worth a read.

New Report on Asbestos and Silica Litigation in Texas

The Texas Civil Justice League has released a new report, "A Texas Success Story: Asbestos and Silica Lawsuit Reform."

Established in 1986, the Texas Civil Justice League is a non-partisan, statewide business coalition committed to legal reform and public policy research. The League makes legislative recommendations in vital issue areas, such as administration of the courts, general business liability, mass torts, and products liability.

The purpose of this special report is to document the current state of asbestos and silica litigation in Texas state courts. Part one provides a brief history of asbestos and silica litigation in the United States and an overview of the legislative efforts in Texas to address abuses in asbestos and silica litigation.  The report then offers a description of asbestos and silica litigation in Texas’s two multidistrict litigation courts handling asbestos and silica cases, and the impact of reform legislation (S.B. 15) on the state MDLs.

The report then turns to recent issues in asbestos litigation, specifically to the science-based evidentiary standards required by the Texas Supreme Court’s decision in Borg-Warner Corp. v. Flores.

Next are the issues relating to asbestos claimant compensation, starting with the role of bankruptcy trusts in compensating asbestos claimants; the bankruptcy trust payment system can provide substantial compensation to asbestos victims, but is a “black box” system that remains hidden from public scrutiny.

Lots of good info, worth a read.

Wisconsin Enacts Tort Reform

A Superbowl win. An upset of the previously undefeated No. 1 college basketball team.  Wisconsin is on a roll.  But of greatest interest to our readers is, late last month, Wisconsin's Governor Scott Walker (R) signed into law new tort reform legislation in that state.  The bill is regarded as the most extensive set of changes to Wisconsin's civil litigation system in decades.  Tort reform as a vehicle to improve Wisconsin's business climate was a campaign theme for the governor in the last election, and the reform bill was one of the first agenda items for the new legislature in January.  Republican majorities had been elected in both the state Senate and the Assembly last fall.

The Act contains several provisions that will affect plaintiffs and defendants in product liability  litigation.

  • Punitive damages received by the plaintiff may not exceed twice the amount of any compensatory damages recovered by the plaintiff or $200,000, whichever is greater.
  • The law establishes a higher legal standard for recovering punitive damages, as the plaintiff must prove that the defendant either acted with intent to cause injury to a particular person or persons or that the defendant knew that the action of the defendant that resulted in injury to one or more persons was practically certain to result in injury to one or more persons. 
  • The act adopts a Daubert-like standard for experts. The expert testimony must be based
    upon sufficient facts or data, the testimony must be the product of reliable principles and methods, and the witness must have applied the principles and methods reliably to the facts of the case.
  • With respect to strict liability claims, the bill borrows the definition of defect from the  Restatement (Third) of Torts.  A product is defective in design if the foreseeable risks of
    harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the manufacturer and the omission of the alternative
    design renders the product not reasonably safe.   
  • In an action for damages caused by a manufactured product based on a claim of strict liability, evidence of remedial measures taken subsequent to the sale of the product is not admissible for the purpose of showing a manufacturing defect in the product, a defect in the design of the product, or a need for a warning or instruction, but may be used to show a reasonable alternative design that existed at the time  the product was sold.
  • The law creates a rebuttable presumption that the product is not defective if it complied with relevant standards under federal or state law.
  • The act also modifies the market share or “risk contribution’’ theory that Wisconsin adopted in the lead paint litigation. The new law reaffirms the general rule that manufacturers, distributors, and sellers of a product may be held liable for damages only if the injured party proves that the specific product that caused the injury was manufactured, distributed, sold or promoted by the defendant.  The only exception is when a claimant can prove all of the following:
    1. That no other lawful process exists for the claimant to seek any redress from any other person for the injury or harm.
    2. That the claimant has suffered an injury or harm that can be caused only by a manufactured product chemically and physically identical to the specific product that
    allegedly caused the claimant’s injury or harm.
    3. That the manufacturer, distributor, seller, or promoter of a product manufactured, distributed, sold, or promoted a complete integrated product, in the form used by the claimant or to which the claimant was exposed, and that meets all of the following criteria:
            a. Is chemically and physically identical to the specific product that allegedly caused the claimant’s injury or harm.
            b. Was manufactured, distributed, sold, or promoted in the geographic market where the injury or harm is alleged to have occurred during the time period in which the specific product that allegedly caused the claimant’s injury or harm was manufactured, distributed, sold, or promoted.
          c. Was distributed or sold without labeling or any distinctive characteristic that identified the manufacturer, distributor, seller, or promoter.
          d.  The action names, as defendants, those manufacturers of a product who collectively manufactured at least 80 percent of all products sold in this state during the relevant
    production period.  


  • The law permits defendants to claim damages for frivolous claims,  that is, for actions undertaken solely for the purpose of harassing or maliciously injuring another.
  • Regarding comparative fault in an action by any person to recover damages for injuries caused by a defective product based on a claim of strict liability, if the injured party’s percentage of total causal responsibility for the injury is greater than the percentage resulting from the defective condition of the product, the injured party may not, based on the defect in the product, recover damages from the manufacturer, distributor, seller, or any other person responsible for placing the product in the stream of commerce.

A good model for other states considering tort reform.

More than any ad campaign, a civil justice system that is equitable and reliably predictable signals to employers that a state is truly open for business. Particularly in light of recent liability-expanding state court decisions, the new reform package enacted by Wisconsin will help convince employers that it’s a new day in the Badger State, according to the American Tort Reform Association


Think-Tank Report on Environmental Litigation Worth A Look

A new think-tank report discusses the evolution in environmental and toxic tort litigation. The Manhattan Institute Center for Legal Policy publishes reports and updates that shed light on the size, scope, and inner workings of what they call "America's lawsuit industry" at

The new report, "Un-natural Claims," discusses the trend to use litigation to supplant or supplement regulation and legislation of environmental and toxic hazards.  Because tort law is necessarily retrospective, not prospective (plaintiffs traditionally must show that they have actually been injured and that the party being sued caused the injury), and because it makes sense to prevent environmental injuries in advance, instead of addressing them after they occur, advanced economies have developed regulatory regimes that place boundaries around economic activities that risk generating environmental damage.

Nuisance suits, for example, do not manage environmental harms well. Injuries are sometimes too dispersed to be remedied by damage awards to individuals, and causation too speculative or remote to meet historical legal norms. Lay juries are generally ill-equipped to make scientific judgments on complex environmental questions, argues the report.  Yet, increasingly, plaintiffs and activists have sought to use tort law to supplant regulation, often by seeking broad injunctive relief. The report argues that such suits seek to circumvent statutory and regulatory schemes and turn the courts into alternative environmental regulators.

The report offers the recent global warming litigation as a dire example.  In such suits, activist groups—or state attorneys general seeking their support—are trying to make an end run around regulators or legislatures to achieve policy goals. The report warns that one should not assume that pecuniary motives are absent from such suits: in addition to earning themselves substantial publicity, the state AGs often receive the largesse of lawyers involved in the form of direct or in-kind campaign assistance; and trial lawyers get to enlist the state attorneys general to press for judicial rulings that would make future litigation more profitable. In some cases, they get hefty contingency fees for doing the states’ work.

Worth a look.



Tort Liability Annual Report Released by Think Tanks

The Pacific Research Institute (PRI), a free-market think tank based in San Francisco, and the Manufacturers Alliance/MAPI, a public policy and economic research organization based in Arlington, VA, announced last week the release of their 2010 U.S. Tort Liability Index, a measure of which states impose the highest and lowest tort costs and risks.

According to the report, Alaska, Hawaii, and North Carolina lead the pack with the best rankings, while New Jersey, New York and Florida bring up the rear. Again, the states with the worst performance had the highest monetary tort losses and tort litigation risks, meaning they had more costly and riskier business climates due to larger plaintiff awards, larger plaintiff settlements, more lawsuits, or some combination of the three.

Direct tort costs account for almost 2 percent of GDP in the United States, which is the highest in the world, not surprising to our readers. Such high costs cause businesses to divert revenue, that could hire workers, to fight lawsuits. But all our readers ultimately shoulder the burden through higher prices and insurance premiums, lower wages, restricted access to health care, less innovation, and higher taxes to pay for court costs.

The Best Tort climates, according to the report:

North Carolina
South Dakota
North Dakota

The Worst climates, according to the report:

New Jersey
New York

States were also ranked according to their tort rules and reforms to reduce lawsuit abuse and limit tort costs and risks, such as award caps, or venue reforms to stop “litigation tourism."  Oklahoma, Texas, Ohio, Colorado and Mississippi did well on the tort reform scale in this report. The states with the least favorable tort rules for defendants, according to the analysis, are Rhode Island, New York, Pennsylvania, Minnesota and Illinois. 

This report can also be contrasted with the Chamber of Commerce report ranking state liability systems, and the ATRA report of the "most unfair jurisdictions."

Chamber Releases State Liability Systems Ranking Study

The Institute for Legal Reform of the U.S. Chamber of Commerce has released its 2010 State Liability Systems Ranking Study.  The study was conducted for the U.S. Chamber to explore how reasonable and balanced the states’ tort liability systems are perceived to be by U.S. business. Participants in the survey were comprised of a sample of 1,500 in-house general counsel, senior litigators or attorneys, and other senior executives who indicated they are knowledgeable about litigation matters at companies with at least $100 million in annual revenues.

The 2010 ranking builds on seven previous surveys in which all 50 states were ranked by those familiar with the litigation environment in that state.  The State Liability Systems Ranking Study basically aims to quantify how corporate attorneys view the state systems.  Overall, more than two in five (44%) senior attorneys view the fairness and reasonableness of state court liability systems in America as excellent or pretty good, up slightly from the last survey in 2008 (41%).  A majority
(56%) view the systems as only fair or poor. Two-thirds (67%) report that the litigation environment in a state is likely to impact important business decisions at their companies, for instance, where to locate or do business, an increase from 63% in 2008 and 57% in 2007.

Respondents were asked to give jurisdictions a grade (A, B, C, D or F) in each of the following areas:

  • Having and enforcing meaningful venue requirements;
  • Overall treatment of tort and contract litigation;
  • Treatment of class action suits and mass consolidation suits;
  • Damages;
  • Timeliness of summary judgment or dismissal;
  • Discovery;
  • Scientific and technical evidence;
  • Judges’ impartiality;
  • Judges’ competence; and
  • Juries’ fairness.

These elements were then combined to create an overall ranking.

The worst jurisdiction in the survey was Chicago/Cook County, Illinois,  followed by Los Angeles,
California, the state of California in general, the state of  Texas in general, and Madison County, Illinois.  Your humble logger's home turf of Philadelphia was ranked 13th worst.

The best? Survey says:

1. Delaware
2. North Dakota
3. Utah
4. Nebraska
5. Iowa

American Tort Reform Association Releases Annual Analysis of Toughest Jurisidictions

The year end brings all manner of lists. The latest ranking of America's "most unfair jurisdictions" in which to be sued has been revealed in the American Tort Reform Foundation's Judicial Hellholes® 2009/2010 report.  South Florida is this year's top “judicial hellhole,” reclaiming a title that it lost in 2008 to West Virginia.  According to the American Tort Reform Association, "Judicial Hellholes" are places where judges systematically apply laws and court procedures in an inequitable manner, generally against defendants in civil lawsuits. In this eighth annual report, ATRF shines the spotlight on six areas of the country that it says have developed unenviable reputations. 

South Florida is listed for its medical malpractice claims, tobacco lawsuits, and large verdicts, according to ATRF. Florida is listed as one of the few states that allow those who drive under the influence of alcohol or drugs to sue the automobile manufacturer for failing to prevent their injuries by designing a safer car, while hiding from the jury the driver's responsibility for the crash.

West Virginia is listed due to the state's unique lack of appellate review; elected judges' hostility to out-of-state corporations; unusual trial practices; and the novel, liability-expanding decisions of its high court, according to the Association. 

Cook County is Illinois' center of litigation, hosting 65 percent of the state's lawsuits.  


Atlantic County has been identified as a Judicial Hellhole since 2007 in large part because it serves as a center for mass tort actions, often directed at one of the state's own economic generators, pharmaceutical manufacturers, says the Association. Ninety-three percent of plaintiffs in New Jersey's pharmaceutical mass torts come from outside the state.


Beyond the Judicial Hellholes, this report calls attention to several additional jurisdictions that ATRF says also bear watching, including California, Alabama, and Jefferson County, Mississippi.

The Report also highlights good news for defendants, including the recommendation of an independent commission established by West Virginia Gov. Manchin that the state establish an intermediate appellate court and provide litigants with a right to an appeal; the Maryland Court of Appeals decision limiting non-economic damages in all civil claims, preventing plaintiffs' lawyers from circumventing the law by characterizing personal-injury lawsuits as consumer protection actions;  Arizona's enactment of medical liability reform;  Oklahoma's passage of a comprehensive tort reform package; and the Texas legislature's resistance to trial lawyer efforts to roll back the substantial progress made in the state in recent years. 

State Supreme Court Postpones Third Restatement Issue

The Pennsylvania Supreme Court reversed field and recently dismissed the appeal of a closely watched failure-to-warn case alleging harmful asbestos exposure.  Bugosh v. I.U. North America, et al., No. 7 WAP 2008 (S.Ct. Pa. June 16, 2009).

One of the key issues presented by the case was whether Pennsylvania product liability law would change from its current unique form of somewhat extreme strict liability to the more mainstream Third Restatement approach to the issue of liability for  product sellers.

The divided ruling  by the Court involved the claim of a deceased mesothelioma patient, Edward Bugosh, whose widow had been awarded $1.4 million in damages by a jury in the trial court.  I.U.  North America was a non-manufacturer distributor named in the wrongful death suit, based solely on its predecessor’s sale of a small amount of asbestos-containing products.

Traditional products liability law in the state is based on Section 402A of the Restatement (Second) of Torts, and finds that every party in the distribution chain is strictly liable for any product defect in the product they sold. The Third Restatement treats intermediate sellers differently than manufacturers. Specifically, while under current law, liability can be imposed on manufacturers, retailers and distributors for injuries caused by products with manufacturing, design, or informational defects, regardless of whether a defendant acted reasonably in the preparation and sale of the product at issue, the appeal sought to persuade the state Supreme Court to adopt the approach of Section 2 of the new Restatement, which would require plaintiffs to prove that a defendant acted unreasonably. 

The dismissal order finds review was improvidently granted, but gives no further reason.  Speculation centers on this status of the defendant as an intermediate seller, rather than as an actual manufacturer.  The Court may have felt that this was not the best context to consider a major change in the law.

The case drew tremendous interest, with amici on the appellant’s side to include the Pennsylvania Defense Institute, the Product Liability Advisory Council, Inc., Pennsylvania Chamber of Business and Industry, Coalition for Litigation Justice, Inc., Chamber of Commerce of the United States of
America, National Association of Manufacturers, NFIB Small Business Legal Center, National Association of Wholesaler-Distributors, American Tort Reform Association, American Insurance Association, Property and Casualty Insurers Association of America, National Association of Mutual Insurance Companies, American Chemistry Council, and the Washington Legal Foundation.

This result arguably leaves Pennsylvania law very much muddled, as recently the Third Circuit predicted that Pennsylvania would adopt the Third Restatement. See Berrier v. Simplicity Manufacturing, Inc., 563 F.3d 38 (3d Cir. 2009).  In state court, the traditional Pennsylvania version (based on Azzarello v. Black Brothers Co., 391 A.2d 1020 (Pa. 1978)) of strict liability prevails, while the federal courts may be following Berrier to apply the Third Restatement in diversity cases based upon Pennsylvania law.

Plaintiff had argued that a return to a fault-based system would unfairly increase the plaintiffs’ burden of proof, and adoption of the Third Restatement would reduce the incentive to product manufacturers and suppliers to distribute safer products. 

In a sharply worded dissent to the dismissal, two justices called the current law severely
deficient, particularly when measured against developed understanding and experience, and argued that necessary adjustments are long overdue. The current distinctions that Pennsylvania law makes between negligence and strict liability have no place in any scheme purporting to recognize that manufacturers and distributors are not outright insurers for all harm involving their products.

Recent Paper: Does Tort Law Deter Innovation?

At MassTortDefense, we from time to time point out an interesting academic take on the issues we deal with in the litigation trenches. Readers may want to check out "Torts and Innovation," a thought provoking article by Gideon Parchomovsky, University of Pennsylvania Law School, and Alex Stein, Cardozo Law School.

The paper exposes and analyzes a perhaps sometimes overlooked cost of the current workings of U.S. tort law: its potential adverse effect on innovation. Academic discussions of innovation are typically confined to the domains of patent and trade secret law. But tort liability for negligence, defective products, and medical malpractice is determined in part by reference to custom (industry standards, reasonable prudent manufacturer, state of the art, etc.). The article explores the courts’ reliance on custom and conventional technologies as the benchmark of liability, and whether this chills innovation and distorts its path. Specifically, the recourse to custom may tax innovators and subsidizes replicators of conventional technologies.

The authors explore the causes and consequences of this phenomenon and propose two possible ways to modify tort law in order to make it possibly more welcoming to innovation. Specifically, policymakers can accomplish this result, argues the paper, either by eliminating courts’ reliance on custom in making liability determinations or by instructing courts to give innovations whose safety was verified by independent industry experts the same deference they give custom.  An interesting read.

U.S. Tort Costs Rise: No Surprise

The global consultants Towers Perrin have released their 2008 Update on U.S. Tort Cost Trends.  This represents the 12th study of  U.S. tort costs published by Towers Perrin. The first study was completed in 1985.

This study takes no position on whether tort costs are too high or too low. (MassTortDefense votes too high.) Its stated purpose is to attempt to quantify the costs. 

The study's definition of tort cost is largely governed by traditional liability insurance coverages. Thus, it understates the true cost of torts.  For example, it has excluded things like the tobacco settlements with the state AG's.  It also does not appear to cover punitive damages.  Certain indirect costs are also omitted, such as those associated with litigation avoidance. These costs range from potentially unnecessary and duplicative medical tests ordered by doctors as a defense against possible malpractice allegations, to the disappearance of certain products or whole industries from the marketplace because of high product liability cost.

Key results:

  • U.S. tort costs increased by 2.1% in 2007. 
  • This is the largest increase in personal tort costs since 2003.
  •  The increase in personal tort costs was at least partly the result of a rise in auto accident frequency, the first such rise since 1999.
  • The U.S. tort system cost $252 billion in 2007, which translates to $835 per person or $9 per person more than in 2006.
  • Since 1950, growth in tort costs has exceeded growth in GDP by an average of  approximately two percentage points.

Towers is forecasting growth in U.S. tort costs of 4.0% in 2008, with higher growth (5.0%) in 2009 and 2010. There are several issues that will impact the future trends in U.S. tort costs, including:
the change in administration as well as shifts in the U.S Congressional makeup.  This may well lead to modifications in the federal government’s behavior and attitudes toward litigation.

Other emerging issues noted by the report:  global warming and obesity continue to be potential areas for significant tort costs, they say, as well as claims related to data security breaches.

U.S. Tort System Deters Foreign Investment

A new report by the U.S. Department of Commerce, “The U.S. Litigation Environment And Foreign Direct Investment,” calls for supporting U.S. economic competitiveness by reducing legal costs and uncertainty in the tort system.

The report notes that foreign direct investment plays a major role as a key driver of the U.S. economy and as an important source of innovation, exports, and jobs. Because the U.S. share of global FDI inflows has declined since the late 1980s and the competition to attract FDI has grown more intense, the United States must strive to maintain its ability to attract FDI. Fear of litigation and potential liability under the U.S. legal system are among the more important concerns to those interested in investing in the United States.

There is an international perception that the pervasive nature of litigation in the United States and other related aspects of the legal system increase the costs of doing business and add uncertainty. The United States is increasingly seen from abroad as a nation where lawsuits are too commonplace.

Such perceptions are accurate, Between 1950 and 2006, total U.S. tort costs increased from $13 billion to $247 billion per year (in 2006 dollars), rising from 0.62 percent to 1.87 percent of U.S. GDP. And U.S. tort costs as a percentage of GDP are triple that of France and the United Kingdom and at least double that of Germany, Japan, and Switzerland. Such numbers make this issue an important U.S. competitiveness concern.

Fear of litigation is among the top issues listed by senior executives who manage internationally owned U.S. businesses. Significantly, U.S.–owned companies that operate in other advanced economies do not express a similar concern. Also, there is the perception that, at least in some contexts, other countries’ legal systems are more predictable and that the legal costs of doing business are substantially less.

Certain aspects of the U.S. legal system stand out to foreign investors, including punitive damages, class action litigation, high legal costs, joint and several liability, and contingency fee structures. One major source of consternation, perhaps because it is so unique to the U.S., is the problem with forum shopping. Most tort cases are brought in state courts, and there are specific courts within even well-regarded state legal systems that are seen as being overly favorable to plaintiffs. Such courts have sometimes been described as judicial hellholes or magic or jackpot jurisdictions.

The report calls for more economic research, and, appropriately, tort reform in these important areas.

State Supreme Court Upholds Asbestos Reform Statute

The Supreme Court of Ohio ruled last week that a 2004 state law imposing limits on asbestos litigation should be applied retroactively. Ackison v. Anchor Packing Co., et al., 2008 WL 4601676 (Ohio Oct. 15, 2008). The ruling could affect the 40,000 claims pending in that state, as well as provide a possible precedent for other states considering the same kind of tort reform.

The 2004 Ohio statute extensively revised state laws governing asbestos litigation and was in response to a legislative finding that the current asbestos personal injury litigation system is unfair and inefficient, imposing a severe burden on litigants and taxpayers alike. The bill established certain threshold requirements, including that no person shall bring or maintain certain kinds of asbestos claims (including claims alleging a nonmalignant condition) without filing with the court certain qualifying medical evidence of physical impairment; further, such evidence must be supported by the written opinion of a competent medical authority stating that the claimant's exposure to asbestos was a substantial contributing factor to his medical condition. The claim of any plaintiff who does not file the required preliminary medical evidence and physician's statement is to be administratively dismissed “without prejudice” with the court retaining jurisdiction, meaning that a plaintiff would not be barred from reinstating the claim in the future when and if the plaintiff could meet the threshold evidentiary requirements.

The court of appeals found the statute could not constitutionally be applied to any suit that had been filed prior to the effective date of the statutory changes, as such plaintiffs had a vested substantive right to pursue recovery for injury under the statutes that were in effect at the time their complaint was filed.

The supreme court disagreed. In this case, the Ohio General Assembly expressly directed that the prima facie filing requirements at issue apply to cases pending on -and thus filed before- the effective date of the legislation. Because the General Assembly so specified, the issue becomes “whether the statute is substantive, rendering it unconstitutionally retroactive, as opposed to merely remedial.” Under Ohio law, and this is fairly  typical, a statute is substantive if it impairs or takes away vested rights, affects an accrued substantive right, imposes new or additional burdens, duties, obligations, or liabilities as to a past transaction, or creates a new right. Conversely, remedial laws are those affecting only the remedy provided, and include laws that merely substitute a new or more appropriate remedy for the enforcement of an existing right.

The court found that the new law is remedial and procedural in nature and, therefore, not unconstitutionally retroactive. The reform established “a procedural prioritization” of asbestos-related cases, a procedure to prioritize the administration and resolution of a cause of action that already exists. No new substantive burdens are placed on claimants.

Clearly, the types of asbestos claims most impacted by the reform statute are the non-malignant claims, short of true asbestosis which is rare anymore, where some radiographic minor finding is alleged to be an injury. While some lower courts in Ohio had stated that pleural plaque or pleural thickening meets the definition of bodily harm which is a subspecies of physical harm and thus satisfies the injury requirements of Sections 388 and 402A of the Restatement of the Law 2d, Torts. E.g., Verbryke v. Owens-Corning Fiberglas Corp., 84 Ohio App.3d 388, 616 N.E.2d 1162 (1992). The supreme court determined that the Maryland court's approach is the better reasoned one: in Owens-Illinois, Inc. v. Armstrong, 87 Md.App. 699, 591 A.2d 544 (Md.App.1991), reversed in part on other grounds 326 Md. 107, 604 A.2d 47 (1992), the Court of Special Appeals of Maryland held that the Restatement did not support the conclusion that pleural plaques and pleural thickening alone were sufficient to constitute harm.

Plaintiffs also attacked the statute’s definition of “competent medical authority” which previously had not been defined by either statute or Ohio case law. By choosing to define that term, said the court, the legislature did not take away Ackison's right to pursue a claim. Nor did the definition alter the quantum of proof necessary for a plaintiff to prevail in an asbestos-related claim. Rather, it merely defined the procedural framework by which trial courts are to adjudicate such claims. The definition of competent medical authority pertains to the witness's competency to testify and is, in essence, more akin to a rule of evidence. As such, it is procedural in nature.

Florida Appeals Court Rejects Retroactive Application of Asbestos and Silica Compensation Fairness Act

The Florida court of appeals earlier today rejected retroactive application of the state’s Asbestos and Silica Compensation Fairness Act, finding that the many claimants who filed claims prior to the statute’s enactment need not plead or prove that they developed a malignancy or impairment as a result of their exposure. Williams, et al. v. American Optical Corp., et al., No. 4D07-143 (Fla. Ct. App., 4th DCA, May 28, 2008). 

The decision conflicts with the opinion of another Florida court a few months ago, DaimlerChrysler Corp. v. Hurst, 949 So.2d 279 (Fla. 3d DCA 2007), and is of potential significance because of the wave of reform statutes passed in various states recently in an attempt to bring some fairness and justice to the grandfather of all mass torts, asbestos, and its lurking dust cousin, silica. E.g., Ohio Rev. Code Ann. §§ 2307.71-80; 2307.84-90; 2307.901 (including a requirement that claimants meet certain medical criteria establishing impairment before proceeding with their claims); Kansas (Silica & Asbestos Claims Act, S.B. 512); South Carolina (Asbestos & Silica Claim Procedures Act, S.C. Code Ann. § 44-135-10 et seq.); Tennessee (Silica Compensation Fairness Act, Tenn. Code Ann. § 29-34-301 et seq.).

In the spring of 2005, the Florida Legislature passed the Asbestos and Silica Compensation Fairness Act, which not only requires plaintiffs to show they meet certain medical criteria before proceeding with their claims but also requires that plaintiffs be Florida residents before filing claims in Florida courts. See Fla. Stat. Ann. § 774.201-774.209. The Fourth DCA consolidated several appeals from plaintiffs whose claims were dismissed for not complying with the Act. The issue was stated: Can the Florida Asbestos and Silica Compensation Fairness Act be retroactively applied to prejudice or defeat causes of action already accrued and in litigation? And the court held that the Act cannot constitutionally be so applied.

Asbestos Reform

The long and persistent asbestos litigation led the Florida Legislature to enact the Florida Asbestos and Silica Compensation Fairness Act, which became effective in 2005. The Legislature found that the number of asbestos-related claims has increased significantly in recent years. The true victims of asbestos, the truly injured, were in danger of not receiving compensation, as those who were exposed and could point to some minimal indication of impact without any impairment or disability, soaked up all the resources. The Act made significant changes to the cause of action for damages resulting from an exposure to asbestos. Before the Act was adopted, it was not necessary for any plaintiff to establish that any malignancy or physical impairment had resulted from their exposure and their “asbestosis.” Under the Act, however, a claimant bringing an action for damages from exposure to asbestos must now, as an indispensable element, plead and prove an existing malignancy or actual physical impairment for which asbestos exposure was a substantial contributing factor. Plaintiffs’ asbestosis claims were dismissed for failing to meet these requirements.

Retroactive Analysis

Under Florida’s Constitution, one form of intangible property is a cause of action. This is a right grounded in tort, property or contract law to recover a judgment for money or property from another person whose conduct or activity is deemed by applicable law to have caused the claimant to suffer damage or a loss. Retroactive provisions of a legislative act are invalid when they destroy vested rights. When a cause of action accrues it becomes a substantive vested right. In contrast, said the court, when a right to sue is inchoate, a mere prospect, it is merely an expectation that if another person does someday engage in specific conduct or activity causing some injury, and a specific cause of action has then accrued, the person so aggrieved may then be able to bring an action in court to vindicate the claim in money damages. It is well established that the right to sue on an inchoate cause of action — one that has not yet accrued — is not a vested right because no one has a vested right in the common law.

The question therefore became whether before the statute was enacted Florida law recognized a cause of action for damages arising from the disease of “asbestosis” without any permanent impairment or the presence of cancer. The 4th DCA thought the answer was yes, citing Eagle-Picher Industries Inc. v. Cox, 481 So.2d 517 (Fla. 3d DCA 1985), although that was really a negligent infliction of emotional distress case, and Zell v. Meek, 665 So.2d 1048 (Fla. 1995), although in that case the allegation was of serious lung damage, and Willis v. Gami Golden Glades LLC, 967 So.2d 846 (Fla. 2007), which again seemed to focus on alleged emotional effects from exposures.

The appeals court disagreed, implicitly, with the Legislature’s statement that the Act was intended to simply change the form of asbestos claimants' remedies without impairing their substantive rights. And rejected defendants’ argument that plaintiffs can have no vested right in their claimed cause of action because, in the absence of a true injury in the form of malignancy or impairment, it is a mere expectancy. The right to pursue a cause of action is generally considered to have become vested when the cause of action has accrued. A cause of action accrues when “the last element constituting the cause of action occurs.” § 95.031(1), Fla. Stat. (2007). Constitutionally, a new statute becoming effective after a cause of action has already accrued may not be applied to eliminate or curtail the cause of action. In the appealed cases, plaintiffs alleged a previous exposure to asbestos resulting in what they called the disease of asbestosis, which in turn had manifested itself in some way. Thus, for each, the cause of action had passed from an expectation to the accrual of the right to sue for damages.

Conflict With the 3rd DCA

The opinion attempts to distinguish the decision of the Third District in DaimlerChrysler Corporation v. Hurst, 949 So.2d 279 (Fla. 3d DCA 2007), on the grounds that even under the law existing before the Act the result in Hurst might have been sustained because of the lack of any proof that asbestos was a proximate or even concurring cause of lung cancer. However, the court recognized that in the trial courts in the state, Hurst is being applied to dismiss asbestosis cases like the ones on appeal in which there is no cancer injury or any failure to link asbestos to the injury. Accordingly, the 4th DCA certified that a circuit conflict exists with Hurst to the extent that it does stand for a holding that the Act may be validly applied to asbestosis claimants with accrued causes of action for damages but without permanent impairments or any malignancy.

The 4th DCA did not address in any real depth the reasoning of the 3rd DCA, which noted that the legislature in enacting the Act claimed that the Act does not impair vested rights because the Act expressly preserves the right of all injured persons to recover full compensatory damages for their loss. When the plaintiffs filed their asbestos claims, they were pursuing a common law tort theory. A person has no property, no vested interest, in any rule of the common law. Prior to the enactment of the Act, the plaintiffs had, at most, a “mere expectation” that the common law would not be altered by legislation. See generally Wilson v. AC&S, Inc., 169 Ohio App.3d 720, 864 N.E.2d 682 (Ohio App. 12 Dist. 2006)(retroactive application of Ohio reform statute).

This circuit split means the issue will likely wind up before the Florida Supreme Court at some time.


Finally, the court noted that after giving the entire text of the Act — especially its preamble of purpose — a careful reading in light of these considerations, it is not intellectually possible to disconnect the several provisions of the Act. Thus, the Act, in its entirety, may not constitutionally be applied to deprive asbestos claimants of an accrued cause of action for damages resulting from exposure to asbestos. Tellingly, the language used by the opinion to describe the legislative purpose betrays the court’s view of the legislation: “whose singular purpose is to end litigation by claimants who have been damaged by asbestos exposure without resulting malignancy or physical impairment.”

What the legislature actually said, was that it wanted to give priority to true victims of asbestos and silica, claimants who can demonstrate actual physical impairment caused by exposure to asbestos or silica, while fully preserving the rights of claimants who were merely exposed to asbestos or silica to pursue compensation if they become impaired in the future as a result of the exposure. The Act would also enhance the ability of the judicial system to supervise and control asbestos and silica litigation; and conserve the scarce resources of the defendants to permit compensation to cancer victims and others who are physically impaired by exposure to asbestos or silica while securing the right to similar compensation for those who may suffer physical impairment in the future.

Nevertheless, the court ruled that plaintiff need only show that they suffered an injury from an asbestos-related, non-malignant disease. The trial court decisions to the contrary were reversed.

ATRA Report Details Current Tort Reform Battles

In recent years, tort reform efforts have achieved some measure of success, particularly in limiting compensatory and punitive damages, in restricting joint and several liability, regulating class actions, and in reforming venue rules which had concentrated mass tort cases in certain "judicial hellholes" or "magic" jurisdictions.

Where are today's tort reform battlegrounds?  The American Tort Reform Association has issued a report detailing the plaintiff bar's attempts to roll back tort reform successes, and to expand civil liability.  The report is entitled, "Defrocking Tort Deform: Stopping Personal Injury Lawyers From Repealing Existing Tort Reforms And Expanding Rights To Sue In State Legislatures."

The report notes key current issues including:

  • Explicitly Authorizing New Types Of Lawsuits
  • Setting The Stage For Implied Causes Of Action
  • Deputizing/Hiring Private Lawyers To Sue On Behalf Of The State
  • Inflating Limitations On Damage Awards
  • Broadening The Scope Of Consumer Laws
  • Extending Statutes of Limitations/Repose

The report warns that, "Plaintiffs’ lawyers are not only threatening to undo recent progress towards a more stable and predictable civil justice system, but also to expand liability in a drastic
and unprecedented manner. The personal injury bar and its allies are well organized, well funded, and have teamed up with their members and supporters in state legislatures. Rather than play defense, as they have over the past two decades by seeking to overturn rational tort reform measures in the courts, they are now on the offensive with a massive legislative and public relations campaign."