More on liability reform in the House — and a federalism angle

I’ve got a post at Cato at Liberty catching up on House action on litigation reform bills — see last week — and comparing it in particular to the recommendations of the chapter on tort and class action law (of which I was one author) in the new 8th edition Cato Handbook for Policymakers. As I note, two measures (on sanctions and class actions) track recommendations Cato scholars have been making for years, while a third (on medical liability] has been scaled back in a way that at least nods to concerns I and others have expressed.

The last few paragraphs of the piece follow:

Finally, there has been a development worth noting on H.R. 1215, the Protecting Access To Care Act, which passed committee by an 18-17 vote on Feb. 28. I and others have repeatedly criticized federal medical liability bills on the grounds that they run into serious problems of federalism and enumerated powers, seeking to justify federal involvement by way of loose New Deal doctrines of impact on interstate commerce, and overriding the workings of state courts even as to the large mass of medical malpractice disputes in which both parties to the lawsuit are local to the state and the costs of error are apt to be local as well. As I argued in this space:

That doesn’t mean federal policymakers are to be left with no role at all. For example, if Washington is paying for a large share of hospital stays, it may make sense as a cost containment measure for it to steer beneficiaries into lower-cost ways of resolving disputes over care quality, or even to ask beneficiaries as a condition of treatment to agree not to file certain suits at all. But that would require stepping back toward a more careful—and more Constitutionally appropriate—view of the federal role.

This year, PACA includes a new limiting provision. To quote Rep. Bob Goodlatte, on the bill’s latest version:

Unlike past iterations, this bill only applies to claims concerning the provision of goods or services for which coverage is provided in whole or in part via a Federal program, subsidy, or tax benefit, giving it a clear federal nexus. Wherever federal policy affects the distribution of health care, there is a clear federal interest in reducing the costs of such federal policies.

Whether the provision in question is drafted in such a way as to pass federalist muster is a question for another day — but it does at least seem that someone on Capitol Hill may have been listening to our past critiques.


  • Much as I appreciate the Federalism argument, that ship sailed when the PPACA was embraced as an exercise of Congressional Authority under the Commerce Power. As well, “the provision of goods or services for which coverage is provided in whole or in part via a Federal program, subsidy, or tax benefit” covers the vast majority of transactions for health care in this country, since even the Dr. I pay cash to, with no insurance filings, provides a receipt I can use when itemizing taxes at the end of the year.

  • It seems that this would create a two-tiered system that would prove problematic politically, and there’s certainly an argument that it’s bad policy as well. While I appreciate the desire to “do something” while respecting federalism concerns, the result of this plan is to provide one set of legal remedies for those injured receiving, say, employer-sponsored health insurance, and more limited remedies for those injured receiving health care under Medicare or a subsidized ACA plan. It’s unclear to me why medical liability should be different for, say, seniors than for younger workers.

    Alternatively, perhaps one could interpret the tax-deductibility of employer-sponsored plans as a “tax benefit,” at which point this bill would essentially apply to all healthcare in this country anyway, and we’re right back where we started on federalism.