Historically, the authority to decide liability law rules
rested with state legislatures. When the colonies and territories became states, one of
the first acts of the new legislatures was to "receive" the Common Law of
England as of a certain date and use that law as a basis for the state’s tort law. At
the same time, lawmakers delegated to state courts the authority to develop that law
consistent with the public policy of the state. This was because the legislatures did not
have the time, or perhaps the interest, to develop an extensive tort code. They were
immersed instead in the more pressing details of developing the essentials for a "new
society," such as a criminal code. As some state legislatures — including
Florida’s — made clear, however, what the legislature delegated it could
retrieve at any time.
Legislatures are in the best position to develop sound and
balanced liability rules. Through public hearings and debate, legislators can gather
information from people with numerous and diverse perspectives. They can use this
information to develop carefully considered liability-law policies and embody those
principles in laws that give fair notice to all.
Ignoring the dictates of history and sound public policy,
however, plaintiff lawyers have begun arguing that civil-justice-reform legislation is
unconstitutional merely because they do not like it. Plaintiff lawyers throughout the
country have established a modus operandi: When they are unable to stop the will of the
people in the legislative and executive branches, they turn to the courts to try to
nullify the law.
They also try to game the legal system by utilizing provisions
in state constitutions to challenge tort reform legislation, instead of the
well-recognized provisions of the U.S. Constitution. Indeed, Mark Mandell, a former
president of the Association of Trial Lawyers of America (ATLA), recently bragged about a
brief written by ATLA and argued by Harvard law professor Laurence Tribe that helped
overturn an Indiana liability statute. According to Mandell, the brief relied on a state
constitutional provision "that was previously regarded as toothless."
By relying solely on state constitutions, plaintiff lawyers
are able to preclude any appeal of an adverse decision against the defendant to the U.S.
Supreme Court. In other words, plaintiff lawyers are cutting down on the number of courts
that can second-guess them.
Plaintiff lawyers also know that the U.S. Supreme Court, in
constitutional challenges under the Fourteenth Amendment’s due process and equal
protection clauses, has clearly distinguished situations in which a legislature violated a
person’s constitutional rights from those in which a legislature has made a public
policy decision that the U.S. justices might not have personally endorsed. Except in a
highly discredited period in the Supreme Court’s history known as "The Lochner Era," which occurred around the mid-1930s, the Court has shown appropriate deference
to legislative policy judgments. If the legislature had a rational basis for its action,
the law would be sustained.
Most state courts have followed the lead of the U.S. Supreme
Court by rejecting invitations to issue decisions that ignore the legislative role in
developing liability law. By almost a two-to-one margin, state supreme courts across the
country have sustained state legislative efforts to formulate state liability law. Some
state courts, however, have issued decisions that embrace the arguments of contingency-fee
trial lawyers. These decisions amount to little more than an assertion of raw power by the
courts to overturn the will of the people as it is expressed through the legislative and
executive branches of state government.
Other States’ Experiences
In December 1997 the Illinois Supreme Court overturned a
comprehensive 1995 Illinois tort reform statute in its entirety, holding that it violated
the state’s constitution. In Best v. Taylor Machine Works, the court held that
provisions of the statute limiting noneconomic damages and providing for access to a tort
claimant’s medical records were unconstitutional. The court also declared
unconstitutional a provision of the law that abolished the doctrine of joint-and-several
liability. This was the first time that any court had ever overturned a modification of
that doctrine.
The court then struck down the entire statute as
unconstitutional. In any constitutional challenge, the court begins with the presumption
that the statute is valid, a form of innocent-until-proven-guilty protection for
legislative acts. A court will typically address only the constitutional issues before it,
cutting out the troublesome portions of a law while allowing the rest of it to stand. The
Illinois Supreme Court, however, held that the pro-visions it was ruling on were so
inextricably linked to other, totally unrelated product liability reforms in the
legislation, that not one section in the multi-section statute could be severed and saved.
The decision completely ignored the fundamental principle that a court should only decide
an actual case or controversy presented to it.
The Illinois Supreme Court’s overreaching opinion in Best
also ignored the fundamental separation of powers principle upon which our system of
government is based. As Justice Benjamin Miller wrote in his dissent:
[T]he judicial role in assessing the constitutionality of legislation is quite limited,
and the majority’s result here cannot be defended under traditional standards of
review. Today’s decision represents a substantial departure from our precedent on
the respective roles of the legislative and judicial branches in shaping the law of this
state. Stripped to its essence, the majority’s mode of analysis simply constitutes an
attempt to overrule, by judicial fiat, the considered judgment of the legislature (emphasis added).
Another challenge to legislative attempts to reform the civil
justice system occurred in Kentucky. In the 1998 case of Williams v. Wilson, the
Kentucky Supreme Court struck down a 1988 punitive damages reform statute. That law simply
required plaintiffs to show that the defendant acted with "flagrant indifference to
the rights of the plaintiff and with a subjective awareness that such conduct [would]
result in human death or bodily harm" before punitive damages could be imposed. In
overturning the statute, the court relied on an obscure doctrine in Kentucky law, which
the court applied in a novel and expanded manner to hold that the Legislature could not
affect a jury’s right to decide an issue before it.
In July 1999, the Oregon Supreme Court struck down a law
allowing injured persons to receive up to $500,000 in pain and suffering damages. In Lakin
v. Senco Products, Inc., the court ruled that the Oregon Constitution prohibited the
Legislature from limiting excessive liability by "interfering with the full effect of
a jury’s assessment."
Most recently, in August of this year, in State ex rel.
Ohio Trial Lawyers v. Sheward, the Supreme Court of Ohio overturned that state’s
1996 civil justice reform statute in a particularly troubling decision. According to a
common- law principle dating back to Elizabethan England, a plaintiff must have standing
to file a lawsuit. This means that the plaintiff must show that he has a substantive,
legally protected interest that has been violated. In the Ohio case, however, because
there was no case or controversy before the court, the trial lawyers avoided the issue of
standing by asking the court to issue what was essentially an advisory opinion. The court
took the bait.
How did the majority get around a centuries-old common-law
doctrine? It invented a new judicial doctrine pursuant to which any public interest group
can challenge the constitutionality of virtually any legislation that might affect its
members at some point in the future. In Ohio there is no longer any need to let an issue
ripen by developing a record in a trial court proceeding that can then be reviewed by a
mid-level appellate court, and then by the highest court of the state. A public interest
group can skip the formalities and ask to have its argument heard right away at the
highest level. This aspect of the majority’s opinion was heavily criticized by the
dissenting members of the court, Chief Justice Thomas Moyer and Justices Deborah Cook and
Evelyn Lundberg Stratton.
The majority’s holdings with respect to the substance of
the civil-justice-reform legislation are equally shocking examples of judicial
overreaching run wild. The court upended the doctrine of separation of powers under the
Ohio Constitution and the notion of mutual respect between the Legislature and the courts.
Without so much as a passing reference to the need to preserve legislative independence in
liability-law policymaking, the court broadly declared tort law to be within the exclusive
domain of the judiciary.
The majority also held that the statute violated the
"one-subject rule" of the Ohio Constitution, which prohibits totally unrelated
subjects from being bundled in a single statute. Even though the statute was plainly
focused just on tort actions, that was not enough for the members of the court who were
bent on overturning it.
Never before have state constitutional provisions been used on
so grand a scale to overturn state legislative policy decisions. The Illinois, Kentucky,
Oregon, and Ohio decisions are wrong as a matter of history and sound public policy.
In Florida, however, there is hope that justice for the
state’s citizens will prevail.
Sunshine Courts
Florida courts have wisely chosen to give reasonable deference
to the Legislature, rather than subsequently second-guessing the Legislature’s
public-policy decisions and, based on past case law precedents, the new law’s outlook
for survival seems good. There is always a chance, however, that a newly constituted
court, with fresh precedents from other states, and under trial-lawyer pressure, could
nullify the will of the Legislature, the governor, and the people of Florida.
What can the Florida business community do to preserve the new
legal-reform law? First, it should identify state constitutional challenges to tort reform
statutes. Plaintiff lawyers may seek a direct appeal to the Supreme Court, as they did in
Ohio, but the challenge most likely will arise in the local trial courts. The business
community would best be served if it set up a clearinghouse to track any challenges and to
fund and coordinate the filing of ("friend of the court") briefs. These briefs
can signal to the court the importance of a particular case and draw the court’s
attention to broad public-policy issues that may not be covered by the attorneys
representing the private parties in the case.
Second, supporters of the new law should explain to the media
the issues involved. Efforts to protect the Legislature’s historical and proper
prerogatives will be effective only if the public cares. It is difficult to get the
public’s attention focused on topics as complex as the constitutionality of legal
reform, but if messages are framed in a fair, balanced, and thoughtful way, the public
— and the judges themselves — will appreciate that government functions best
when there is mutual respect among its co-equal branches. While debates can be held about
the wisdom of any civil-justice-reform provision, generally those exchanges belong in the
halls of the legislature and in the office of the governor. They should not be abruptly
terminated by judges who do not like the results of those debates.
Finally, supporters of the new law must get involved in
judicial selection and elections. Contingency-fee lawyer groups have long recognized that
judicial selection is an important factor in the overall legal-reform debate. While no one
should ever expect a particular outcome from a court, the public has a right to expect a
balanced judiciary that is appropriately deferential to the perspectives of other elected
leaders, including state legislators and governors.
Floridians have good reason to be pleased with their new
legal-reform bill. It is fair and balanced. It will improve the economic climate for
job-creators and revenue-raisers in the state. And it will offer savings to Florida
consumers by letting companies divert money now wasted on defending against frivolous
lawsuits back to the development of better products at lower prices.
Nevertheless, supporters of the new law must stand at watch
for possible constitutional challenges to the legislation. Victory can be achieved in the
courtrooms of Florida, just as it was in the Legislature — as long as supporters of
the law realize that their job is not over.
There is still another lap to be run before tort-reform
supporters can celebrate in the winner’s circle.
The authors are attorneys in the Washington, D.C., law firm of Crowell &
Moring LLP. Schwartz and Behrens both testified in support of the Florida legal reform
legislation in 1997, and also serve as counsel to the American Tort Reform Association in
Washington, D.C. (e-mail: vschwartz @cromor.com or mbehrens@cromor.com).
September/October 1999 -- Florida Business Insight, PO Box 784,
Tallahassee, Fla. 32302
(850)224-7173, insight@aif.com
