In states, a clash of titans over jury awards

Laws capping jury awards are the latest battleground for state

State lawmakers, trying to prevent juries from doling out multimillion-dollar awards, are up against their toughest adversaries yet - state supreme court justices.

The two have fought before, over school funding, prayer in schools, even the death penalty. This latest, little-known clash reaches far beyond the confines of the jury box, and once again raises fundamental questions about the balance of power between state legislatures and state supreme courts.

Supreme court justices in Illinois, Kentucky, and Ohio have struck down liability-reform laws in recent years, in part because they say such laws trample on the traditional authority of judges.

The action comes in response to a surge of tort-reform measures approved by increasingly conservative state legislatures. Unable to defeat the reform measures through lobbying and debate among state lawmakers, opponents are turning to state judges to strike down the reforms on grounds that they violate state constitutions.

The strategy has been highly successful. Since 1990, reform measures have been invalidated 46 times in 19 states.

It is a development that has tort-reform proponents alarmed.

"We are seeing a strategic effort to undo legislative enactments by undermining the constitutional authority of legislatures and governors to make liability law," says Sherman Joyce, American Tort Reform Association head. "It would surprise most people to know that ... in Illinois, Kentucky, and Ohio in recent decisions, those state supreme courts have concluded that the legislature has no authority to make law in this area."

Such claims are baseless, says Robert Peck, legal director at the Association of Trial Lawyers of America. "What these courts are saying is that these legislators have been overstepping their authority and attempting to act as a super judiciary because they simply don't like the way the courts have been deciding cases."

Because the activity is happening in state courts under state constitutional law, the decisions cannot be appealed to the US Supreme Court. That means state supreme courts are getting the last word on the issue, effectively trumping state legislators and governors on laws they adopted and signed.

"I regard this as one of the most successful hidden gimmicks in the history of tort reform," says Victor Schwartz, general counsel of the American Tort Reform Association. "The courts have taken a very activist role in the torts area, and marginalized what has been traditionally legislative power for over 40 years."

Not every court asked to examine liability reforms has struck them down. Since 1990, reforms have been upheld as constitutional 72 times in 38 states.

More legal challenges are on the way. A tort-reform package was signed last month in Florida and trial lawyers have vowed to challenge it in court. A similar effort is taking place in Alabama.

Liability reforms typically include caps on punitive and other damage awards, limits on the number of years manufacturers can be sued for product defects, and abolition of the system in which a defendant company responsible for only a small portion of an injury can be forced nonetheless to pay for all damages resulting from the injury.

Drawing comparisons

Because precise reforms and state constitutions differ from one state to another, it is difficult to draw direct comparisons between reforms that have been upheld or struck down.

"This is not a Democrat versus Republican issue. This is a separation-of-powers issue that goes beyond whether you like tort reform or not," says Mark Behrens, a Washington lawyer who represents businesses in tort cases.

The most significant victory for trial lawyers came in 1997, when the Illinois Supreme Court struck down in its entirety a comprehensive liability-reform package adopted two years earlier by the state legislature.

The court found that four specific provisions of the law, including a cap on damages, were unconstitutional. But it went on to conclude that the entire package should be struck down because eliminating the four provisions changed the nature of the law.

The lone dissent, Justice Benjamin Miller, saw the case in a different light. He wrote: "Today's decision represents a substantial departure from our precedent on the respective roles of the legislative and judicial branches in shaping the law of this state. Stripped to its essence, the majority's mode of analysis simply constitutes an attempt to overrule, by judicial fiat, the considered judgment of the legislature."

Mr. Peck says damage caps, like the provision struck down in Illinois, also violate the right to a trial by jury. "Any time damages are capped, that is arbitrary action because it takes away the discretion that a jury has," he says.

In January, the Virginia Supreme Court rejected a challenge to tort reform in that state. The case involved a cap on medical malpractice awards and raised many of the same kinds of state-constitution arguments raised by the Illinois high court.

In Virginia (a more conservative court), the justices upheld the cap law: "If it is permissible for a legislature to enact a statute of limitations completely barring recovery in a particular cause of action without impinging upon the right of trial by jury, it should be permissible for the legislature to impose a limitation upon the amount of recovery as well."

The Virginia court ruled that the cap on damages does not infringe on the right to a jury trial because the cap does nothing more than establish the outer limits of a remedy. Setting such limits is the work of lawmakers, the court said, while the work of juries is fact-finding.

Peck is unswayed by the loss in Virginia and vows to fight on. "We are lawyers who believe in the rule of law," he says. "That means that we will look to the courts to vindicate those constitutional rights and constitutional assignments of power that these state constitutions are all about."

*Part 1 ran yesterday.

(c) Copyright 1999. The Christian Science Publishing Society

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