Jury's Vioxx award: not so Texas-sized after all

After Texas jurors found that Merck had intentionally withheld the risks associated with its heart drug, Vioxx, they awarded Carol Ernst a whopping $229 million in punitive damages.

The size of the award sent shudders through the drug industry, because Merck faces more than 4,200 other Vioxx-related lawsuits in the United States alone. But under a Texas law that caps punitive damages, Ms. Ernst, the winning plaintiff, will see no more than $1.65 million - less than 1 percent of the original award.

The Vioxx case, which drew national attention for its implications for drugmakers, is also an early and visible example of what happens when states limit the amounts juries award. Ever since it enacted tort reform two years ago, Texas has initiated the latest push in a controversial movement that is gathering steam around the country.

"There has been a tremendous amount of momentum at the state level ever since the enactment of Texas' statute, which was the biggest and most comprehensive legal reform bill in recent time," says Lisa Rickard, president of the US Chamber Institute for Legal Reform in Washington.

Mississippi and Ohio passed comprehensive tort reform bills similar to Texas in 2004, as did Georgia, Missouri, and South Carolina in 2005.

Also this year, Florida tackled questionable asbestos and silica lawsuits by passing standards on what constituted injury. West Virginia passed incremental insurance reforms.

This Friday, Illinois's new caps on damages in medical malpractice lawsuits take effect. The new law also increases oversight of the insurance industry.

In Texas, the legislation dramatically changed the litigation landscape for class-action suits and product-liability and medical malpractice cases.

For instance, the number of medical malpractice suits filed here has plummeted, leading to a significant reduction in insurance rates for most doctors, tort reform advocates say. Doctors insured with Texas Mutual Liability Trust, the state's largest medical liability carrier, have seen a 17 percent reduction in their premiums in the past two years.

"In general, the hope is that these reforms will bring predictability and stability to the legal system," says Gretchen Schaefer, a spokeswoman for the American Tort Reform Association in Washington. "And specifically in Texas, these reforms have had a positive impact on the state's economy and job growth, the cost of medical liability and access to healthcare. We should expect to see similar results in other states that have enacted similar reforms."

But plaintiffs' lawyers say there is plenty of evidence that those most in need of help - children, stay-at-home parents, and the elderly - are being punished by these tort reforms.

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