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3 States Where Tort Reform Battles Are Heating Up
By Y. Peter Kang
Here, Law360 looks at three states where tort reform efforts are likely to heat up.
Three new justices appointed to the Florida Supreme Court in January have solidified a conservativeleaning high court bench, setting the stage for lawmakers to pass tort reform legislation that is less likely to be challenged on constitutional grounds than in years past, experts said.
Florida legislators were able to push through a few pieces of tort reform legislation in the 2019 session, and have their sights on passing another batch of tort reform bills in the 2020 session, according to Matt Fullenbaum, director of legislation for the American Tort Reform Association.
"We expect the Legislature to get back at it again next year," Fullenbaum told Law360.
Fullenbaum said one important issue Florida lawmakers left on the table for 2020 deals with "phantom damages," when a jury only hears about the billed price of medical expenses incurred by a plaintiff, which is often not the actual amount paid by an insurance company that already negotiated discount prices with health care providers.
"That's a windfall to the plaintiff and the plaintiff's lawyer and it's a priority for the legal community," he said.
William Large, president of the Florida Justice Reform Institute, said evidence of the actual amounts paid for a plaintiff's medical care should be deemed admissible in court, while evidence of the "sticker price" should be excluded.
"Consideration of such inflated amounts may mislead juries into awarding excessive amounts for unpaid bills, future damages for anticipated medical expenses, and pain and suffering," he said.
For its part, the plaintiffs bar argues that such legislation would hinder an injured person's ability to fairly establish damages.
"It makes no sense to force them to reduce the actual cost of the medical treatment through discounts, price reductions or the preferred rate enjoyed by others," the Florida Justice Association said in a statement. "The policy proposal would punish people who responsibly carry health insurance."
Large noted that the new makeup of the Florida Supreme Court bodes well for ongoing tort reform efforts in the state, as it appears the high court will be deferential to the Legislature's policymaking role.
"Far too often over the last 20 years, a lot of public policy bills were declared unconstitutional for a variety of reasons," he said. "Tort reformers are looking forward to judicial deference from our courts, with the proper policymaking role that the Legislature has. In turn, this should embolden legislators to engage on policymaking issues, including tort reform."
One recent example of judicial deference was the Florida Supreme Court’s surprising adoption of the stricter Daubert standard for expert witness testimony, an about-face from the predecessor court's refusal to overturn the longstanding Frye standard. The Daubert standard requires a judge to assess whether expert testimony is based on reliable scientific principles and methodology, while the Frye standard allows expert testimony if it adheres to generally accepted principles in the expert’s field.
The state high court's May ruling ratified a 2013 Florida law requiring the Daubert standard and was issued less than a year after the court rejected it over concerns it would undermine the right to a jury trial and inhibit access to the courts.
"It seems that the new Florida Supreme Court is going to be deferential to the Legislature's policymaking role in our government," Large said.
His group is also making efforts to reinstate a cap on noneconomic damages, such as pain and suffering, in medical malpractice cases.
The state high court ruled in a 2017 case called Kalitan that a 2003 state law that imposed a $500,000 cap, or $1 million cap for the most egregious cases, violated the equal protection clause of the Florida Constitution because it arbitrarily reduced damages awards for patients with the most serious injuries.
The Kalitan court's rationale echoed the high court's reasoning in its 2014 ruling in McCall v. U.S. , which struck down caps in wrongful death cases.
Tort reform supporters in the Peach State have high hopes for pushing through legislation that would pave the way for juries to hear whether vehicle occupants were wearing a seat belt prior to a collision, experts said.
In Georgia, all front-seat occupants and rear-seat passengers under the age of 18 are required to wear seat belts, but a state statute expressly prohibits a jury from hearing that anyone in a car, regardless of position, was not wearing a seat belt, according to Kade Cullefer, an attorney and lobbyist with Smith Gambrell & Russell LLP in Atlanta.
This effectively bars a jury from hearing evidence regarding a vehicle occupant's possible contributory negligence and can lead to outsize injury awards, Cullefer said.
"Because passengers aren't wearing their seat belts, the degree of harm is enhanced," he said. "If you have a passenger and driver in an accident and the driver is strapped in and bumps his head but the passenger flies through the windshield, the damages are obviously much, much higher at this point."
For businesses, particularly those that involve transportation, the seat belt legislation was the "preeminent issue" in Georgia's 2019 session before it was put on hold to be reheard in the 2020 session, according to Cullefer.
"From a business community standpoint, our position is that if we trust juries to make good decisions, why would we want to withhold a key piece of evidence that will help them make the correct decision?" he said.
Like Florida, the Georgia Legislature is also expected to tackle the issue of phantom damages, Cullefer said.
"From a business standpoint, we're not trying to pull any tricks, we just want the playing field to be level and completely transparent," he said. "By submitting the amount actually paid to treat an injury to the jury, jurors will have a better basis to issue equitable awards. Recovery based on the actual cost of the harm is fundamentally fair."
A representative for the Georgia Trial Lawyers Association, an advocacy group for plaintiffs attorneys, did not respond to a request for comment.
Cullefer said it's a toss-up as to whether a phantom damages bill will become law.
"It's going to be an interesting battle," he said. "I would say it has a fair shot of passage, but ultimately it will be left to the will of the Legislature."
The Show Me State has tort reform supporters encouraged after its Legislature passed a sweeping venue and joinder reform bill in the 2019 session that aims to cut down on forum shopping for mass tort cases, such as suits over the harmful effects of talc-containing products and Roundup weedkiller.
In July, Gov. Michael Parson signed S.B. 7 into law, putting limits on how plaintiffs can join together in certain civil cases and where they can file them. This means dozens of plaintiffs who don't live in plaintiff-friendly St. Louis can no longer join up with just one of that city's residents to file a mass tort suit.
Looking ahead, the Missouri Chamber of Commerce and Industry said it will back legislation in the 2020 session that seeks to create greater transparency for asbestos litigation, establish a statute of repose and reinstate a cap on punitive damages in tort cases. The group said the unpredictable nature of punitive damages awards prevents businesses from growing.
"Employers cannot grow and expand operations in Missouri with the uncertainty and potential for outlandish punitive damage awards in the existing Missouri judicial climate," it said.
The group is also pushing for legislation that would impose consumer protection regulations on litigation finance companies who give up-front money to injured plaintiffs in exchange for a cut of any future awards.
"Litigation lending companies prey on Missouri's most vulnerable residents by promising immediate money in exchange for an interest in any future recovery," the group said. "This practice inevitably increases the duration and expense of lawsuits and often leaves plaintiffs in worse financial shape than when they started."
A representative for the Missouri Association of Trial Attorneys, which represents plaintiffs attorneys, did not respond to a request for comment.
ATRA's Fullenbaum said given the recent flurry of tort reform activity, the state's prospects are bright in the upcoming session.
"We're bullish on Missouri. You have a governor who is supportive of business and a fair and balanced legal environment in a state that has a lot of mass torts that are heard in St. Louis," he said.
--Editing by Kelly Duncan and Michael Watanabe.
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