Billion-dollar verdicts revive fairness debate

On a sultry July night, Ana Garcia and six of her friends broke into a New York City swimming pool. The dark water was only three feet deep, but Ms. Garcia had been drinking heavily. At some point that night, the woman slipped below the shimmering surface and drowned.

More than a year later, her family filed a wrongful-death suit.

Suppose, for a moment, that you've been selected to sit on the jury. How would you resolve this tragedy? Would you find that the city was negligent for not policing the pool and award damages to the Garcia family? Or would you find that Garcia's death was no fault of the city?

The case goes to the heart of an enduring, vociferous debate in American civil law: how to assign culpability when tragedy strikes - and, more urgent, how to attach a price tag to someone's suffering.

In an effort to resolve these issues, states have worked and reworked their civil justice systems over the past 20 years.

They've put limits on liability, capped damage awards, and made other tweaks to the system.

The reformers, which include much of the nation's manufacturing sector, say such changes encourage Americans to accept responsibility for self-inflicted injuries and to stop blaming others - preferably those with the ability to pay millions in damages - for their losses.

Others, notably trial lawyers, say such controls are neither necessary nor fair. Worse, they add, the changes can permit companies or governments to escape meaningful punishment for irresponsible behavior.

Now, the volume of the debate is rising again, as jury verdicts for the first time climb above the billion-dollar mark. Indeed, say some, the huge awards may create a new impetus for another round of tort reform.

The first award came in October, when a Houston jury ordered the business partners of a Rus-sian immigrant inventor to pay him $1.5 billion. They were found to have wrongfully forced him from his company, which uses his inventions to repair ship engines.

Then, in January, a jury in Milwaukee ordered a go-cart manufacturer to pay $1.2 billion to the family of a woman who died after a fiery crash on a go-cart track.

Lesser awards of hundreds of millions of dollars are also becoming more common. A jury in Alabama last month ordered a sales firm and a finance company to pay $581 million to a family that said the businesses had tried to defraud them out of $1,200 in the sale of two satellite TV dishes worth $398.

More recently, the Littleton, Colo., school shooting yielded its first civil-damages suit. The family of one of the slain students is suing the parents of the two student attackers for $250 million.

Rising jury verdicts

"You can't really say it's inflation," says Tom Harrison, publisher of Lawyers Weekly, who has been tracking large jury verdicts for the past decade. "But people feel that the amount of money you need to award against a company to get their attention has increased."

When Mr. Harrison first started tracking big jury awards, $75 million was about as high as it got. "This last year," he says, "$75 million wouldn't have even made it on the list [of top 10 jury awards]." On his 1998 list, eight of the top 10 verdicts were more than $100 million.

In fact, juries can and do award large amounts of money to punish companies they see as careless or indifferent. But the picture of a nation besieged by runaway juries doling out cash as if it were Monopoly money is not an accurate portrayal of the civil justice system.

Several studies show punitive damages are awarded in only 5 to 6 percent of all cases in which a verdict is returned in a civil case. And the median award of punitive damages, one study concluded, is $50,000 - a far cry from $1 billion, or even $1 million.

Moreover, say trial lawyers, multimillion-dollar damage awards are almost always reduced by a judge or an appeals court, or cases are settled for a lesser amount out of court.

That's what happened in the Garcia case. At the trial, lawyers for the Garcia family argued that New York knew people were breaking into the community pool after hours. They said the city had a duty to prevent such after-hours swimming or, failing that, to provide lifeguards.

The city countered that it should be entitled to set hours for city pools, and that it had repeatedly repaired a fence around the pool that was cut by trespassers. New York placed an unarmed watchman at the pool, city lawyers argued, but intruders had assaulted him when he tried to kick them out.

The jury in the case found New York negligent in Garcia's death for failing to provide proper supervision of the pool after hours. The jurors awarded the Garcias $2 million.

But the trial judge later reduced the award to $600,000, and that was later thrown out altogether by an appeals court. The Garcias got nothing. The unanimous appeals court said in part: "Although this was a tragic and unfortunate incident, Ms. Garcia ... must be charged with the responsibilities and consequences of her own imprudent conduct."

Juries vs. judges

To people who oppose tort reform, the outcome of the Garcia case demonstrates what is right with the US civil justice system. In the end, they say, the mechanism for determining who should be held responsible works.

"Part of what our courts do is sort out who really was at fault," Robert Peck of the Association of Trial Lawyers of America says. "If we have a fair justice system, it ought to be capable of doing that."

But reformers counter that, the Garcia case aside, judges often are reluctant to exercise their power to throw out meritless lawsuits. In fact, many judges prefer to give people their day in court - and then are hesitant to alter or wipe out a jury decision.

In addition, they say, trial lawyers are becoming more sophisticated and skilled in presenting their cases. In following that strategy, they must implicate as many other parties as possible and divert attention from their clients' own negligence.

"The trend is toward always looking through the civil justice system to put the responsibility on the other party," says Sherman Joyce, president of the American Tort Reform Association. The law "allows any defendant to be on the hook for the entire award. That clearly is an incentive to go out and search for as many potential targets as you can find."

Such incentives didn't always exist in the law. Until the late 1960s, tort law in the US required that if someone was at all responsible for his injuries - even only 1 percent - he was barred from recovering any damages.

States crack down

Many states have changed their laws to provide a more compassionate system of comparative negligence, in which a damages award is reduced by the percentage of the plaintiff's own fault as determined by the jury. Other states now bar people from recovering damages if they were more than 50 percent responsible for their injuries.

Maine is one such state. But that didn't stop Jeannine Pelletier from winning a $40,000 jury award against the Fort Kent Golf Club after she was struck by a golf ball while attempting to play the first hole.

What makes Ms. Pelletier's suit interesting is that she was struck by her own ball. Her third shot ricocheted off railroad tracks that crossed the fairway. The ball was - in the lingo of the post office - returned to sender.

The golf club fought the suit all the way to the Maine Supreme Court, but to no avail. The court ruled that the club had a duty to protect golfers from risks created by the railroad tracks.

The court did not reveal, however, how to protect golfers from their own bad shots.

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