Tuesday, August 17, 1999
Ohio tort reform struck down
Ruling voids dollar limits on jury awards
BY MICHAEL HAWTHORNE
Enquirer Columbus Bureau
COLUMBUS — Ohioans have a right to settle civil disputes in court without limits on how much they can collect, the Ohio Supreme Court ruled Monday.
The bipartisan, 4-3 ruling was another setback for majority Republicans in the General Assembly, who pushed hard to limit product liability and medical malpractice lawsuits after taking control of the legislative agenda in 1994.
Courts in Kentucky, Indiana and five other states have struck down all or parts of similar liability laws during the past three years, thwarting well-funded campaigns by business and insurance interests seeking curbs on big jury awards.
Writing for the majority in the Ohio case, Justice Alice Robie Resnick said state lawmakers overstepped their authority three years ago by approving a sweeping “tort reform” law similar to a measure the court had struck down a decade earlier.
“The General Assembly has circumvented our mandates, while attempting to establish itself as the final arbiter of the validity of its own legislation,” she wrote. “It has boldly seized the power of constitutional adju dication, appropriated the authority to establish rules of court and overrule judicial dec larations of unconstitutionality.”
The law also violated a pro vision of the Ohio Constitution that prohibits lawmakers from rolling unrelated ideas into a single piece of legislation, Justice Resnick wrote.
A “tort” is a wrongful act, injury or damage for which a lawsuit can be brought. It's unclear what effect the court decision will have on complaints filed since the reform law took effect in 1997.
Trial lawyers and labor unions that challenged the law hailed the decision as a victory for citizens injured by products or medical procedures.
“It's an elementary right to have a fair hearing when people are harmed,” said William Burga, president of the Ohio AFL-CIO. “The court made it clear they can't take that right away.”
The measure's authors — business groups, insurance companies and Republican leaders — vowed to try again. They also plan to use the court decision as a campaign issue against Justice Resnick when she runs for re-election next year.
“We continue to believe that tort reform remains in the best interest of all Ohioans in order to curtail the filing of frivolous lawsuits,” Senate President Richard Finan, R-Evendale, and House Speaker Jo Ann Davidson, R-Reynoldsburg, said in a joint statement.
Doctors, hospitals, businesses and insurance companies argued the law would give them more predictable costs, cut insurance premiums and result in less expensive products for consumers. They noted injured Ohioans still would be able to recover the costs of medical care and lost wages.
Among other changes, the law capped most noneconomic damages at $500,000 and punitive damages at $250,000 or three times compensatory damages, whichever was greater. Punitive damages are intended to punish a defendant's misconduct.
The law also put a 15-year limit on the filing of most lawsuits, and a six-year limit for medical and professional malpractice claims.
“These were reasonable limits to end lawsuit abuse in Ohio,” said Linda Woggon, vice president of governmental affairs for the Ohio Chamber of Commerce. “The court, though, has set itself up as a superlegislature and turned its back on Ohioans. Our only answer is to get a new supreme court.”
While the law was on the books, it appeared to have little effect on the number of lawsuits filed in Ohio.
Ohioans filed 27,000 tort cases last year, according to Ohio Supreme Court records. The same number of cases was recorded in 1994, when there were no limits on damages or the types of lawsuits that could be filed.
Likewise, there is evidence that contradicts the accounts of bizarre jury verdicts and huge damage awards cited by proponents to bolster their case for lawsuit reform.
Some legal scholars say highly publicized stories — such as the $2.9 million judgment awarded to a McDonalds customer who spilled coffee on herself — have created a distorted view of the civil justice system.
Most of the nation's newspapers, for instance, gave the coffee verdict front-page coverage in 1994. But only about half of those newspapers carried stories when the judge later reduced the punitive damages and the woman settled for about $600,000, according to a study by Michael McCann of the University of Washington and William Haltom of the University of Puget Sound.
Business leaders say the fear of being sued or being forced into an expensive out-of-court settlement hurts their ability to create jobs and keeps potentially useful products off the market. Trial lawyers, though, say the threat of lawsuits improves safety.
“A quick look at the economy and stock market shows businesses aren't hurting,” said Stanley Chesley of Amberley Village, a leading personal injury attorney.
“The threat of sizable damage awards ensures their products are safe.”
Justice Resnick, a Democrat, was joined in the majority decision by Democrat Francis Sweeney and Republicans Paul Pfeifer and Andrew Douglas. Dissenters included Chief Justice Thomas Moyer and Justices Evelyn Stratton and Deborah Cook, all Republicans.
The court split the same way in 1997 when it struck down the way Ohio pays for public schools. Earlier this spring, the court overturned another program that uses public funds to send Cleveland children to private schools, saying it violated the Ohio Constitution's single-subject rule. (GOP lawmakers later restored the program.)
Justice Moyer focused his latest dissent on the method by which the court decided the tort reform case.
Unlike rulings in Indiana and Kentucky, the Ohio decision did not involve a dispute over a specific case that had wound its way through the judicial system. Instead, the court chose to directly hear an appeal from trial lawyers and labor unions.
“This court completely disemboweled the fundamental principles of constitutional law,” said Victor Schwartz, general counsel for the Washington, D.C.-based American Tort Reform Association and one of the key strategists for business groups on liability issues.
“No other court has gone this far,” said Mr. Schwartz, former acting law school dean at the University of Cincinnati. “Their decision opens up every other law to challenge even if nobody has been harmed.”
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