Posts Tagged ‘tort reform’

Texas: serious litigation reform, serious results

“How tort reform helped ignite the Texas boom”:

Over the last two decades, Texas engaged in a conversation as to the purpose and role of its civil courts. When that conversation began, the state’s courts had become virtual fiefdoms of trial lawyers. Texas recognized few limits on damages claims and imposed minimal accountability on plaintiffs. The state’s litigation environment was, unsurprisingly, toxic for business. The pushback came in the early 1980s. Lawmakers started to ask whether the Texas constitution’s commitment, spelled out in Article 1, Section 13, that “all courts shall be open, and every person for an injury done him . . . shall have remedy by due course of law” precludes putting reasonable limits on liability. The state legislature’s decision to strike a balance and roll back tort excesses marked a turning point in the state’s economic rise. Together with competitive tax and regulatory policies, tort reform sowed the field so that Texas’s pro-growth policies could take root.

Comprehensive backgrounder covers such topics as the putting up of justice for sale at the pre-reform version of the elected Texas Supreme Court (the anecdote from businessman Henry J.N. Taub is especially alarming), the Texaco-Pennzoil case and the generosity to judges of the late Joe Jamail, America’s richest lawyer; early statutory enactments, struck down by the state’s high court; the turning point that came when “the general electorate finally began taking an interest in judicial elections”; the Rio Grande Valley doctor’s revolt; comprehensive reforms beginning under then-Governor George W. Bush and continuing under his successors including Rick Perry; elements of loser-pays; and the general success of tort reform, both in economic climate generally and specifically in the encouraging climate for the state’s medical sector, which includes many nationally prominent institutions. [Kathleen Hunker, City Journal]

Fear of Thiel and the case for litigation reform

“Angry about Peter Thiel’s pursuit of Gawker? Tort reform is the best solution.” Sonny Bunch of the Free Beacon is kind enough to quote me at length (and quote my debut book, The Litigation Explosion, at length too) in this Washington Post opinion piece.

…members of the media are finally starting to realize something that conservatives have been arguing for quite some time with regard to our litigious culture, namely that the process itself is the punishment….

One of the causes that Olson argued most strenuously for in his book [The Litigation Explosion] was a more aggressive regime of fee shifting — that is, crafting and enforcing “loser-pays” laws common in other countries. Given that he literally wrote the book on the topic, I emailed him and asked how news outlets could work to avoid ruin at the hands of the vengeful wealthy….

If you wonder how loser-pays might have helped Gawker even though Hulk Hogan’s case was a winner, you need to read the link. More: Andrew Kloster and Jessica Higa, Daily Signal.

Class action roundup

Liability roundup

Liability roundup

  • Home lab butane cannabis fatality: “The Hash Oil contributory negligence lawsuit you’ve all been waiting for” [Elie Mystal, Above the Law]
  • With Sheldon Silver out of the speaker’s chair, New York has better chance at reducing sky-high litigation costs [Manhattan Institute, earlier on scaffold law]
  • Per Norton Rose Fulbright annual business survey, responding companies more than twice as likely to be facing five or more lawsuits if based in U.S. than if based elsewhere [Norton Rose Fulbright, Bob Dorigo Jones]
  • “Hearing: H.R. 1927, the “Fairness in Class Action Litigation Act of 2015” [April House Judiciary Committee with John Beisner, Mark Behrens, Alexandra Lahav, Andrew Trask]
  • Legal outlook for Illinois defendants deteriorates as Madison County sees resurgence in suits and Cook County remains itself [ICJL]
  • Brown v. Nucor Corp.: did Fourth Circuit just try to gut Wal-Mart v. Dukes rules against combining bias plaintiffs in dissimilar situations into class action? [Hans Bader/Examiner, Derek Stikeleather/Maryland Appellate Blog]
  • No wonder New York City consolidation trials are so popular with asbestos lawyers if they yield average of $24 million per plaintiff [Chamber-backed Legal NewsLine] Information in eye-opening Garlock asbestos bankruptcy (allegations of perjury, witness-coaching, etc.) now unsealed and online [same, earlier]

U.S. Chamber’s “Ten Most Ridiculous Lawsuits”

The Chamber of Commerce is calling attention to its ten favorites for the year [via Bainbridge, list can be found there]. Eight of the ten may ring a bell with those who have followed our coverage (goblin-toppler, helmet toss, undecillion dollars, man saved from drowning sues rescuers, California ADA serial filer, falls after seeing “Dexter” ad on subway, caught sleeping on camera at Yankees game, claims “Frozen” based on own life story), while two are new to us:

8. Minimum Wage for Court-Ordered Community Service? (New York)
9. Jimmy John’s Lawsuit “Sprouts” Hefty Payday for Lawyers – Vouchers for Victims (California)

For real liability reform, try freedom of contract

Six months ago the Delaware Supreme Court upheld the right of an enterprise to include a loser-pays provision in its bylaws, specifying that losing shareholder-litigants would have to contribute reasonable legal fees to compensate what would otherwise be loss to other owners. Since then there’s been a concerted campaign to overturn the ruling, either in the Delaware legislature or if necessary elsewhere. But as I argue in a new Cato post, allowing scope for freedom of contract of this sort is one of the best and most promising ways to avert an ever-rising toll of litigation. Contractually specified alternatives to courtroom wrangling have played a vital role, and are under attack for that very reason, in curbing litigation areas like workplace and consumer arbitration, shrinkwrap and click-through disclaimers of liability, and risk disclaimers at ballparks and elsewhere. (& Stephen Bainbridge).

To the extent America has made progress in recent years in rolling back the extreme litigiousness of earlier years, one main reason has been the courts’ increased willingness to respect the libertarian and classical liberal principle of freedom of contract. Most legal disputes arise between parties with prior dealings, and if they have been left free in those dealings to specify who bears the risks when things go wrong, the result will often be to cut off the need for expensive and open-ended litigation afterward.

More on the Delaware bylaw controversy: D & O Diary (scroll), Andrew Trask on state of the merger class action, WSJ Law Blog first and second, Daniel Fisher, and ABA Journal in June, Alison Frankel/Reuters (forum selection bylaws).