Corp Reform - Not Tort Reform

Trial Article

Once again, I am both proud and humbled that TRIAL magazine chose to publish the following article in their July 2006 Issue.  This is the original version which is just a tad more biting than the version in print. 

Trial lawyers are always telling stories about victims.  They tell stories of grieving parents forced to stand over the graves of children who were killed by defective products.  They tell stories of once-strong men and women who can no longer support their families because of on-the-job accidents.  They even tell the stories of infants whose futures were stolen during their birth by negligent doctors.  But for all their story-telling, they’ve forgotten an entirely different group of victims: the victims of our justice system. 

Men like Maurice “Hank” Greenberg, the former chairman of AIG.  It took Hank nearly thirty years to build a multibillion-dollar fortune.  Throughout those years, Hank was constantly being victimized.  He was victimized by a civil justice system that forced his company to pay for the medical bills of individuals injured by his insured.  As if that wasn’t enough, he was most recently victimized by Eliot Spitzer, the New York Attorney General who has alleged that Hank made his billions through illegal business practices.  Thanks to Mr. Spitzer, Hank was kicked out of the company he built, and he was even forced to transfer over $1 billion in assets into his wife’s name.  Is it any wonder that Hank accused trial lawyers of being “terrorists” that must be stopped at any cost?

Or Bernie Marcus, the self-made billionaire who founded Home Depot.  In 2004, he wrote an op-ed in which he accused trial lawyers of slowing the economy and scaring people away from helping charities.  That same year, Home Depot boasted of “record profits” of over $1.5 billion dollars, and the next year, Mr. Marcus personally gave over $200 million dollars to various charities.  It’s easy to see how trial lawyers hurt Home Depot and Bernie Marcus.

And let us not forget courageous Texas Attorney General Greg Abbott, who was confined to a wheelchair after a tree fell on him while he was jogging.  Despite his horrific injuries, Mr. Abbott rode his wheelchair to victory in his campaign for Attorney General against a well-funded candidate whom he described as a “liberal plaintiff personal injury trial lawyer who’s made millions suing doctors, hospitals, businessmen and women.”  It shocks the conscience that during Mr. Abbott’s campaign, the scoundrels of the Texas Trial Lawyers Association made scurrilous accusations about Mr. Abbott’s character, and even accused him of being a hypocrite!  What supposed act of hypocrisy did he commit?  Merely advocating a $250,000.00 cap on noneconomic damages shortly after receiving millions of dollars in noneconomic damages from his accident.  Thank goodness Mr. Abbott has been able to fight for the rights of Texas citizens in spite of the best efforts of trial lawyers.

Wait a minute!  Greenberg, Marcus, and Abbott aren’t victims of the justice system! They’re rich, powerful, and (until recently in Greenberg’s case) admired men who have benefited from America’s robust justice system.  Their wealth and station in life leaves them wanting for little.  So how have they managed to persuade the American public that they deserve to be helped, and that average citizens who were injured through no fault of their own deserve to be scorned?  By tugging at purse strings and not heartstrings. 

While trial lawyers valiantly crusade against so-called tort reform because it will endanger the public, tort reformers promise that tort reform will enrich the public.  Call it greed, call it selfishness, or call it self-interest, but most Americans today care more about protecting their pocketbooks than protecting society.  Plus, let’s be realistic – the average American doesn’t believe that trial lawyers really care about safety, society, or their clients.  Thanks to a multiple-decade onslaught of propaganda, most Americans believe trial lawyers have a “Show me the money!” mentality that would embarrass even Donald Trump, who recently filed a lawsuit asking for $2.5 billion in punitive damages against the author and publisher of a book that questioned whether Trump is really a billionaire.

The way to beat the tort reformers in winning the hearts and minds of the American public is to beat them at their own game – make economic arguments in favor of preserving the justice system.  This tactic is effective for two reasons.  First, our culture is far more individualistic than collectivist; we’re raised to look out for ourselves, not for others.  Arguments about preserving the legal system to protect the public often fall on deaf ears because Americans neither see themselves as victims, nor tend to be overly concerned with victims.  (Until they or someone they care about becomes a victim, in which case they feel they’re entitled to unlimited punitive damages.)  Second, public safety arguments at least in part ask people to believe something they don’t want to believe: That big corporations knowingly develop and market dangerously defective products.  No one wants to believe that corporate America is full of psychopaths who will let consumers die just to make a buck.  It’s exceedingly difficult to get people to believe something they don’t want to, even if the facts are on your side.  One example of this is that depending upon which survey you believe, between 10% and 25% of Americans believe we really did find weapons of mass destruction in Iraq. 

While Americans generally feel invincible and unlikely to be the victim of an accident or a defective product, there is one thing they are afraid of: Being ripped off.  From shady car dealers to price-gouging oil companies, most Americans feel that someone or something lurks around every corner just waiting to steal their money.  So appeal to that fear by revealing what tort reform really is – an enormous scam that will increase the cost of health insurance, reduce access to medical care, and may have to be paid for by tax increases or cuts in entitlement benefits.  How best to persuade the public of this?

By destroying the most duplicitous argument tort reformers offer – that tort reform won’t prevent the truly injured from receiving compensation for their injuries, and that it won’t in any way place limits upon economic damages.  To sell that lie, tort reformers use words like “fair,” “just,” “reasonable,” and “common-sense.”  Trial lawyers know that most, if not all members of the American Tort Reform Association would like nothing more than to make sure their corporate masters never have to pay a dime to an injured consumer ever again, a result that is hardly “fair” or “just.”   The “Holy Grail” of the ATRA and its many members is national legislation that bars product liability lawsuits over any product approved by a Federal regulatory agency such as the National Highway Traffic Safety administration or the Food and Drug Administration.   

A strong proponent of this exemption is Daimler Chrysler Associate General Counsel Steven Hantler, a failed personal injury lawyer who retreated to the steady paychecks of corporate America when he found himself unable to succeed in the pay-for-performance world of personal injury litigation.  If Hantler’s name sounds familiar to you it might be because under his direction, Chrysler spent over $250,000.00 to defend an $8,700 case… and then claimed that its Constitutional right to due process was violated because it had to pay almost $150,000.00 in attorney’s fees to the prevailing party.  (I suppose the “loser pays” rule is only fair if you’re the winner, right Steve?)  Hantler has also been known to sue plaintiffs’ attorneys for a myriad of reasons, including fraud.  As Hantler says, “We want to make plaintiffs lawyers think twice before bringing a meritless case against us.”

In Hantler’s view, any product liability case is meritless if the product in question was approved by a Federal regulatory agency.  Since all of Daimler Chrysler’s products are approved by the NHTSA, the legislation Hantler fights for would insure his company is never again sued for manufacturing a defective automobile.  Hantler and others who support such legislation hope to persuade the public that king’s-ransom salaries “earned” by corporate executives aren’t passed on to consumers in the form of higher prices, but that the costs of the tort system are.  While they rarely say it directly, tort reformers strongly imply that passing tort reform will save the public money.

Their economic argument can be easily refuted by a very basic economic principle: “There’s no such thing as a free lunch.”  That well-worn maxim dictates that all costs are paid for by someone.  A relevant example is what’s happening today in the State of Michigan. Prior to leaving office, former Governor John Engler signed a bill that prevents injured Michigan citizens from suing pharmaceutical companies over injuries caused by any drug that was approved by the FDA.  That means that the thousands of Michigan citizens injured or killed by Vioxx, Zyprexa, or any other FDA-approved drug can’t even sue to recover their medical bills.  (So much for the “we don’t want to cap economic damages” lie the tort reformers espouse.) 

While Engler made the rights of injured consumers disappear, neither he nor anyone else can make the costs incurred by injured consumers disappear.  So who pays for those costs, if not the manufacturers who caused them?  If the injured consumer has medical insurance, his or her insurer pays those costs… and without the right of subrogation, insurers are forced to raise health insurance premiums to make up the difference.  If the injured party doesn’t have insurance and can’t afford to pay the bills, then the doctors and hospitals that treated the person have to eat the cost… which forces them to raise their prices to make up the difference.  And if the injured consumer is on Medicaid, Michigan taxpayers pay those costs.  Engler’s legislation has been so deleterious to the health of Michigan’s economy that several staunchly conservative Republican state legislators are breaking rank and joining with Democratic legislators to try and repeal this probably-unconstitutional law.

Just like the losses from shoplifting forces retailers to raise prices, exempting government-approved products from product liability lawsuits forces health insurers and health care providers to raise their prices.  Worse still, such an exemption will place an additional burden upon public assistance programs such as the already-overburdened Medicaid and Medicare which will in turn force our legislators to either raise taxes, reduce services… or both. 

If Hantler and his cronies in the ATRA have their way, corporate executives in every federally-regulated industry will receive a “free” steak-and-martini lunch to be paid for by every taxpayer in America.  As if it isn’t bad enough that the pharmaceutical industry and the manufacturing industry (the National Association of Manufacturers is now run by John Engler.) is pushing for this legislation, the great-granddaddy of all special interest groups will soon join them: Big tobacco.

Altria, the parent company of Philip Morris desperately wants cigarettes to be regulated by the Food and Drug Administration.  In their own words, “Altria and Philip Morris USA (PM USA) strongly support the passage of legislation that would give the U.S. Food and Drug Administration (FDA) meaningful and effective authority to regulate tobacco products.”  While the merits of such legislation are debatable, one thing isn’t.  If that legislation passes, the tobacco industry will spend whatever it takes to pass the government-approved product exemption lobbied for by the ATRA.  Together, those two pieces of legislation will insure that the tobacco industry will never have to defend another product-liability lawsuit, and will never be forced to reimburse taxpayers for the billions of dollars in medical bills caused by their products.  Clearly, something must be done to prevent the charlatans behind the tort reform movement from passing national legislation. 

Thanks to the cheats, liars, and crooks at companies like Enron, Worldcom, and Arthur Andersen, Americans are even more distrustful than ever of big business and corporate executives.  Capitalize on that distrust by attacking the cheats, liars, and crooks who tell Americans that tort reform is good for them.  When some corporate sock puppet like Sherman Joyce of the American Tort Reform Association claims that lawsuits are slowing the economy, point out that last year, the 500 CEO’s of the Fortune 500 took home over $5.1 billion dollars, up over 30% from 2004.  If the economy was really being hurt by lawsuits, corporations couldn’t afford such a generous pay raise to their CEO’s, could they? 

Or when a politician in the pocket of the insurance industry accuses trial lawyers of creating a poor business climate in your state, respond by accusing him or her of irresponsible fear mongering that scares off new businesses and discourages existing businesses from expanding.  Then go so far as to accuse those politicians of using trial lawyers as an easy target, rather than tackling the real problems facing businesses in your state, like an unfair tax climate, or oppressive insurance rates, or any other issue your state’s Chamber of Commerce is concerned about.  Think of how much fun it will be forcing the Chamber of Commerce to decide how to deal with pro-business trial lawyers. 

And the next time some schmuck brings up Stella Liebeck and the McDonald’s coffee case, ask why a $2 million dollar lawsuit over third-degree burns to a woman’s genitals is frivolous, but a $5 billion lawsuit over Donald Trump’s ego isn’t.  When he or she agrees with you that Trump’s suit is the epitome of a frivolous lawsuit, go on to explain that tort reform won’t prevent him from collecting $2.5 billion in punitive damages because tort reform never focuses on capping damages in financial injury cases, which are generally filed by the rich and the powerful.  Instead, tort reform only applies to personal injury cases, which are generally filed against the rich and the powerful.  By using clear and concise economic arguments, we can convince the public that if tort reform is anything, it’s a series of un-American changes to tort law to protect the rich and punish the poor. 

People often ask me why I spend my time and money running Corpreform.com when I’m neither a lawyer nor on the payroll of a lawyer.  I tell them it’s because the thing I hate the most in the world is hypocrisy, and no special interest group has more hypocrites in it than the American Tort Reform Association.  I truly believe that the only way to expose these hypocrites and win this war for our justice system is to ruthlessly and relentlessly attack them on every issue and in every forum.   The brave men and women who fight for consumer rights have no choice if they want to take our court system back – you don’t win wars by defending.  If there’s anything I can do to help win this war, don’t hesitate to contact me at Justinian@corpreform.com. 

More About McDonalds

It turns out that the most popular way people find this site is searching for something about Stella Liebeck and her McDonald's coffee case. Here is the last article I wrote about Stella. Since then, I've written a little more about her case for a newsletter I'm putting together for Students Against Tort reform. What follows is the article from the newsletter:

The poster-child of tort reformers is the famed “McDonald’s Coffee Case” - the case where a woman obtained a multimillion-dollar jury verdict for spilling hot coffee on herself. Most people think that a careless woman spilled some hot coffee on herself while driving, received minor burns, and then filed a lawsuit. That’s not what happened. Here's what did happen:

Stella Liebeck, a 79-year-old grandmother, was the passenger in her grandson’s vehicle and ordered a cup of McDonald’s coffee. McDonald’s served the coffee at approximately 190 degrees. McDonald’s admitted coffee at that temperature is “unfit for human consumption”; 190 degree liquid causes third-degree burns within 2 to 7 seconds of contact with skin.

Stella spilled the coffee on the crotch of her cotton jogging pants, and the coffee immediately soaked through her pants and caused third-degree burns to her legs, thighs, and genitals. The burns were so severe she needed skin grafts to heal the damage. It took many months for her to recover from the severe burns.

Stella offered to settle the case with McDonald’s if they would just pay her medical bills, which were into the many thousands of dollars. McDonalds refused, and Stella filed a lawsuit. During the trial, it was discovered that in the ten years prior to Stella’s accident, over 700 men, women, and children had been burned by the unsafe McDonald’s coffee.

For years, McDonald’s sold coffee that was “unfit for human consumption”, and made $1.3 million dollars a day in profit doing so. Information such as this wasn’t really reported by the media. What was reported was the $2.6 million dollar jury verdict.

The jury arrived at that figure by calculating the profit of two-days worth of coffee sales, and “fining” McDonald’s that amount to get their attention and make them fix the problem.

It worked. The day after the verdict, McDonald’s lowered the coffee temperature to a safe-but-hot 158 degrees. This is still hot enough to cause third-degree burns, but it takes closer to sixty seconds worth of exposure to do so.

Many believe that $2.6 million dollars was too much money. The judge in the case did, and he reduced the verdict to less than $500,000. Stella actually settled with McDonald’s for even less money. It took a multimillion dollar jury verdict to get McDonald’s to fix a dangerous problem they knew about for ten years; doesn’t that prove the system works?

The Truth About the McDonalds Coffee Case

Perhaps the most well-known "frivolous lawsuit" is the story of Stella Liebeck - the woman who was burned by hot coffee from McDonalds. Here are the facts about the McDonald's lawsuit; decide for yourself if the suit was frivolous:

1: Stella Liebeck was a 79-year-old grandmother who was the passenger in her grandson's car.

2: McDonalds served the coffee at roughly 190 degrees. 190 Degree liquid will cause third-degree burns within 2-7 seconds of contact with the skin.

3: Stella was wearing cotton jogging pants, and the 190 degree liquid soaked into the pants. She received third-degree burns to her thighs and genitals. This is what a third-degree burn looks like:

4: McDonalds admitted that the coffee was not fit for human consumption at the temperature they served it.

5: Over 700 men, women, and children had been burned prior to Stella's lawsuit.

6: Stella offered to settle with McDonalds just for her medical bills. They refused.

Here is a PDF file that explains the suit in better detail. It's authored by the attorney who won the case. I tried to get permission from him to post this, but he never responded to my e-mails. This didn't surprise me: No one I've ever contacted about tort reform has bothered to respond to my e-mails.

Hopefully, this clears up some of the misconceptions that Stella was a careless woman who spilled some hot coffee on herself and just needed some aloe vera.

The question I have is why didn't the media report about how badly burned and disabled she was? I wonder if it has anything to do with the tens of millions of dollars McDonalds spends on advertising?

What Is Tort Reform - And Why Is It Bad For The Public?

There’s an interesting dichotomy regarding the public’s perception of lawsuits in America. On one hand, we love the little guys, Erin Brockovich, and the myriad crusaders for justice in John Grisham’s novels. We hate “big tobacco”, and cheer multibillion dollar settlements in the tobacco litigation. Americans, as a general rule, are distrustful of big corporations. The accounting scandals on Wall Street have left the public with the perception that the bigger the company, the deeper the corruption – remember Enron, Tyco, and Worldcom?

We’re enraged when we hear about companies that put the bottom line ahead of the safety of their customers. Yet, despite our predilection to root for the underdog, many Americans support tort reform.

What is a tort, and what is a tort reform? The classic legal textbook about Torts is called Prosser and Keeton on Torts. In that book, one definition offered of a tort is a “civil crime”; an act that is illegal, but is not criminal. Perhaps the most common type of a tort is an auto accident. Medical malpractice suits are also torts. Tort reform is the effort to “reform” lawsuits so as to prevent “runaway verdicts” that range into the millions of dollars.

Often, tort reform, or “tort deform” as its detractors call it, revolves around setting limits of awards for “noneconomic damages”. Noneconomic damages include things like pain & suffering, mental anguish, and in general, anything you don’t have a fixed bill for. To better illustrate, let’s say you’re in a car wreck and your car receives $5,000.00 in damage, and you need $5,000.00 in medical treatment. You would have $10,000.00 in economic damages. If you were to receive another $7,000.00 for pain & suffering that $7,000.00 would be noneconomic damages.

When you hear about multimillion dollar jury verdicts, they usually involve a form of noneconomic damages that are called either punitive or exemplary damages. Let’s take a look at what punitive/exemplary (P&E) damages are, and are not.

First, punitive damages are not intended to compensate or reward the individual who was wronged. The Merriam-Webster definition of punitive is “inflicting or aiming at punishment”, and the definition of exemplary, in this context anyway, is “to serve as a warning. That means that P&E damages are to punish a party who did something that the jury wants to make sure never happens again, such as knowingly selling a dangerous product, or hiring a bus driver that failed his drug test. Over time, it has been found that the most effective way to deter a company from engaging in unethical or illegal behavior is to punish them financially for their misdeeds. Juries do this by awarding punitive damages, and those awards could be considered a fine. Of course, rather than the state collecting a fine, the punitive damages go to the plaintiff of the lawsuit. From time to time, juries are outraged by a defendant’s behavior and award punitive damages that are far in excess of any suffering the plaintiff endured. These verdicts are what are reported to the public, and these verdicts create the perception of greedy plaintiffs and money-grubbing trial lawyers. However, what is rarely reported are the circumstances that caused a jury to award the large verdict.

Let’s take a burn case for an example. What if a company was making $1.3 million dollars a day selling a product that they admittedly knew routinely caused second and third degree burns to their customers? What if during the ten years they offered this product, over 700 people had been badly burned – some permanently disfigured – by this product? What if this product was sold as something harmless, even common, but this product would cause third-degree burns to the skin within two seconds of contact if it were accidentally dropped? Finally, what if that company called those 700+ burn victims “statistically trivial” and refused to fix the product, even though doing so would cost next to nothing?

What would a fair award be for the callous indifference of a multibillion dollar corporation that made $1,300,000.00 per day - $474,500,000.00 per year - by selling a product that burned over 700 men, women, and even infants?

This isn’t a fictitious case. This is the famed “McDonalds coffee case”, and in that case, six men and six women found that an appropriate punishment for McDonalds was to “fine” them the profit from just two days of nationwide coffee sales.

McDonalds sold their coffee at 180-190 degrees, a temperature that they admitted no human could drink, as it would cause third-degree burns within 2-7 seconds of contact with skin. Over 700 people had been burned within the ten years prior to the McDonald’s coffee case, yet McDonalds wouldn’t lower the temperature of their coffee.

Stella Liebeck was the woman who was burned. She was a 79 year old grandmother who received third-degree burns to her legs, thighs, and genitals when the cup accidentally spilled in her lap. The 190-degree coffee immediately soaked into her jogging pants, and she was unable to do anything to prevent her burns. She had to go through painful debridements (scrubbing with wire brushes), skin grafts, and her treatment lasted two years. Of course, at the end of the treatment, she was left with permanent scars. She offered to settle with McDonalds for the amount of her medical bills, and they refused. After that, she hired an attorney, and the rest became a media circus.

One fact that wasn’t reported very heavily was that the judge reduced the $2,700,000 award to $480,000.00 and Stella settled for an undisclosed figure less than that amount instead of going through a lengthy appeals process. This demonstrates the safety valve inherent in the systems of many states: A judge can often reduce a verdict he or she finds excessive.

Perhaps the most important fact of the case is that the day after the verdict, McDonalds lowered the temperature of their coffee to 158 degrees, a temperature that takes about a minute to cause severe burns; the justice system worked, and it worked because of a large jury verdict.

But America now ridicules a grandmother who received third-degree burns to her genitals: Ever receive a piece of e-mail called “The Stella Awards”? The “Stella Awards” are supposed jury verdicts that purportedly showcase how “broken” the justice system is. None of those verdicts are real; some are laughable. But every laugh at the “Stella Awards” is a laugh at a permanently disfigured grandmother. More importantly, every recipient of the “Stella Awards” is someone receiving misinformation that may influence them to support tort reform.

The real point of tort reform isn’t to prevent multimillion-dollar jury verdicts; most of those awards are reversed or overturned, and even if they weren’t, a $1 million dollar verdict isn’t much deterrent to a company that makes ten billion dollars a year. So what is the point of tort reform? It’s to keep the misdeeds of corporate America out of the public eye. After all, if a plaintiff’s “best day in court” is arbitrarily set at $250,000.00, there’s no incentive to go through a lengthy and expensive trial if the plaintiff is offered $250,000.00 by a company that sells a defective product. Such a settlement would almost certainly be confidential, and the company could continue selling their defective product and killing or maiming consumers without anyone knowing of the dangers of the product. Confidential settlements kept the problems with Firestone tires a secret for years before the recent lawsuits. To put a finer point on it, confidential settlements killed Firestone consumers; it wasn’t until public litigation began that Firestone recalled tires that they had for years known were defective.

The real effect of tort reform will be to ensure that corporations can keep their dirty laundry private, and to place the financial well-being of a corporation above the physical well-being of their consumers. It’s a sad commentary on our society’s values that corporations will pay more money for defrauding investors out of money than for knowingly selling products that kill their consumers.

The Myth of the Frivolous Lawsuit

Download this article in PDF format

INTRODUCTION:

One of the catch phrases of tort reformers is “frivolous lawsuits” – a lawsuit that has no legal basis, or is so petty that the suit isn’t justified. Often, tort reformers cite high profile cases, such as the McDonalds coffee case to try and show that the court system is “broken” and “runaway juries” routinely award ridiculous verdicts in frivolous cases.

Tort reformers promise that the legislation they propose will put an end to frivolous lawsuits by putting up various barriers that will prevent frivolous lawsuits from being filed in the first place.

What tort reformers don’t tell you is that the legal system already has three safety mechanisms in place to prevent, dismiss, and correct frivolous lawsuits. The first mechanism, the contingent-fee agreement prevents frivolous lawsuits from being filed in the first place.

THE CONTINGENT-FEE AGREEMENT:

Have you ever seen or heard an ad for an attorney who promises something like, “No cost to you unless we collect!”? Nearly every attorney that brings a lawsuit for a personal injury case does so under a contingent-fee agreement. While most people understand how the contingent-fee arrangement works, I’ll explain it in detail for those who do not.

Let’s say you’ve had an auto accident and decide to hire an attorney. If you shop around, you’ll find that contingent-fee agreements vary from attorney to attorney. Generally, they will range from anywhere from 25% to 50% of the total settlement or judgment you receive. For simplicity, we’ll say you hire an attorney on a 40% contingent-fee agreement. If you were to receive $10,000.00, the attorney would get $4,000.00 in that case as his fee, in addition to being reimbursed for any expenses he or she incurred in building your case. These expenses include obvious things like court filing fees and office expenses, but there some expenses in many cases that the general public doesn’t know about: expert witness fees.

What is an expert witness fee? Well, in most complicated cases – and virtually all medical malpractice cases – the plaintiff needs to hire expert witnesses to help prove his or her case.

In some states, you’re not even allowed to file a medical malpractice case without first having a report from an expert witness that says, in essence, the doctor in question committed malpractice.

All cases are gambles, no matter how strong the facts may be. When you hire an attorney on a contingent-fee basis, he’s gambling with his time and money. While attorneys are willing to gamble as to when, if, and how much they’ll get paid, expert witnesses generally are not.
Expert witnesses won’t wait until your case is over to get paid – they want to be paid up front, and it’s the attorney who has to pay them out of his or her pocket. As you might surmise, expert witnesses aren’t cheap: they’re highly qualified professionals who generally have high hourly fees.

What kind of expert witnesses might be needed in a given case? Let’s take some real-life examples of experts and what they charge:

Professional Engineers: If you’re suing a manufacturer because you got hurt by a product that you think was poorly designed, you’ll need a professional engineer. One engineer in Garland, Texas charges $225.00 per hour, with a 50% premium for deposition and court time. So, if that engineer spent ten hours reviewing a design, and five hours in court, that would cost your attorney almost $4,000.00. In a complicated design case, it’s not uncommon for several engineers to spend fifty or more hours evaluating the product.

Doctors: If you have a medical malpractice case, or any case where the extent of your injuries is called into question, you’ll need to hire a doctor as an expert witness. Doctors, as you might guess, are expensive. Plan on having your attorney spend around $250.00 per hour, possibly twice that much for a well-regarded specialist. In a complicated medical case, you may need three or more doctors, each of whom may have to spend ten to twenty hours – an out-of-pocket cost to your lawyer of $10,000.00 or more.

Nurses: You’ll probably need a nurse in any case where you need a doctor. While they’re not as expensive as doctors, they’ll still be around $75.00 an hour. Just like doctors, they’ll also probably have to spend ten to twenty hours on a case - $750.00 or more from your lawyer’s checking account.

Surprisingly, finding expert witnesses isn’t easy. Often, a lawyer will have to “shop around” for experts. That means your lawyer will spend time finding experts with the right qualifications for your case. Then, he or she would gather all the pertinent materials and send them to an expert for review. Sometimes, the expert will review the records and say that they’re not interested in the case. Or perhaps they’ll review the records and not find anything helpful to your case. Either way, the expert will still have to be paid, and it’s your lawyer who will have to pay them. It’s not uncommon to go through two or three experts, and several thousand dollars, before the “right” expert is found. Of course, it’s also not uncommon for a lawyer to think his or her client has a great case, only to be told by several experts that the case has little or no merit. In such an instance, that lawyer will be out-of-pocket thousands of dollars, and the client will owe nothing to the attorney – thanks to the contingent-fee agreement.

Now, if you were a lawyer with a contingent-fee agreement, would you be willing to spend thousands of your own dollars and hundreds of hours on a case you’re not confident you can win? If your answer is “no” to that question, then you’ve just seen how contingent-fee agreements prevent frivolous lawsuits from being filed.

While contingent-fee agreements prevent frivolous lawsuits, they also do something even more important: They provide access to the courts to everyone. In general, a lawyer’s hourly fee will be anywhere from $100 to $300 an hour. Not many people can afford to pay that kind of money to an attorney for more than a few hours. If you were to have to pay an hourly fee to an attorney to bring a complicated injury case to trial, you might have to spend $50,000 on the attorney. If contingent-fee agreements were abolished, two things would happen: Only the rich would be able to file lawsuits, and attorneys would be far more willing to file a lawsuit that doesn’t have merit; when you’re paid by the hour, it doesn’t matter if you win or lose.

No case is “easy”, and in general, the more complicated the case, the harder it is to win. Contingent-fee agreements are what attract lawyers to the complicated cases. Contingent-fee agreements are what drive lawyers to take those cases to trial, instead of settling for a fraction of what the case is really worth. Contingent-fee agreements are what allow the poorest of the poor to hold corporate juggernauts accountable for their actions in court of law.

Is it any surprise then that some special interest groups are attacking the contingent-fee agreement? They argue that it’s not fair for attorneys to take such a “large percentage” of any recovery of their clients. Their arguments have worked: Some states have put limits on the percentage an attorney can take.

Damage caps and attorney-fee caps work together to make the complicated cases less enticing for lawyers, and the consequence is that those who traditionally receive large jury verdicts – the catastrophically injured, or the families of those who are killed – won’t be able to find attorneys to bring their case to court. The corporate entities that support tort reform won’t be held accountable when they act irresponsibly or unethically, and will instead enter into confidential settlement agreements with those who are harmed by their products.

The irony is that as those corporate entities take away the individual’s right to a jury trial, they’re doing it under the guise of protecting the public from “greedy lawyers.”

So, what happens if an inept lawyer decides to file a frivolous lawsuit? The second safety mechanism, the Summary Judgment, would be used to dismiss the suit.

THE SUMMARY JUDGMENT:

Tort reformers say that the courts are overwhelmed with “frivolous lawsuits” – lawsuits that have no legal basis, or are so petty as to not be worth the time of the court system. They say that to protect the justice system, we need to make it harder for individuals to file lawsuits.

But what if instead of putting barriers up that could prevent legitimate lawsuits from being filed, there was a tool that could quickly and easily dismiss frivolous lawsuits? What if this tool not only dismissed frivolous lawsuits, but could also be used to force the plaintiffs in frivolous lawsuits to pay the attorney fees of the defendant? This tool not only exists, but has been in use in America since 1937 ; it’s called the Summary Judgment.

The purpose of the summary judgment is to determine whether there is a genuine need for trial. When a party files a motion for summary judgment, they’re telling the court that there is no need for trial because the facts and law applicable to the case would prevent the other side from winning.

We’ll use a fictitious car wreck as an example of how a summary judgment would dispose of a frivolous lawsuit:

Mr. Smith runs a red light and slams into Mr. Jones. Mr. Smith claims the light was green, but two witnesses say the light was red. Mr. Smith is given a citation from a police officer for running a red light. Mr. Smith decides to sue Mr. Jones for mental anguish.

Mr. Jones hires a lawyer. Mr. Jones’ lawyer spends a few hours drafting a motion for summary judgment. At the end of the motion, Mr. Jones’ lawyer requests he be awarded attorney’s fees from Mr. Smith because the lawsuit is frivolous.

The lawyer for Mr. Jones files his motion for summary judgment, and includes with it pictures of the accident scene, affidavits from the witnesses, an affidavit from the police officer, an affidavit from Mr. Jones, and a copy of the police report. All of the affidavits and the police report say that Mr. Smith ran a red light.

In such a case, the judge would most likely grant the summary judgment, and Mr. Smith’s lawsuit would be dismissed. The judge could also decide to order Mr. Smith to pay for Mr. Jones’ attorney’s fees. In the end, Mr. Jones wouldn’t be out any money, and Mr. Smith would have had his day in court.

The requirements for summary judgment vary from state to state, but in general, you need to show the court two things:

1: That the facts clearly support your side. In Texas, for example, you have to show that “reasonable and fair minded people” cannot possibly come to different conclusions about what the evidence shows. If reasonable and fair minded people could come to different conclusions about the facts of the case, then summary judgment shouldn’t be granted.

2: That the law is clearly on your side. A common use of the summary judgment is to dispose of lawsuits where the statute of limitations has passed. Many states have a four-year statute of limitations for breach of contract. So, if you bought a car in 1995 and tried to sue the dealer for breach of contract in 2000, you wouldn’t legally be able to win – the statute of limitations would bar you from recovery – and the judge would grant the car dealer’s motion for summary judgment. In medical malpractice lawsuits, there is a two-year statute of limitations.

Summary judgments have disposed of frivolous lawsuits for decades. They allow a defendant in a frivolous lawsuit to get out of the case quickly and without the expense of a full-fledged trial. Often, the defendants are even awarded their attorney’s fees for preparation of the motion for summary judgment.

The bottom line is that because of the summary judgment, very few “frivolous lawsuits” ever make it to trial. It could even be argued that any case that makes it past summary judgment can’t be a frivolous lawsuit because a judge – not a “runaway jury” – decided that the case had enough merit to present to a jury.

Tort reformers want to make it hard for you to file a lawsuit, harder for you to win a lawsuit, and impossible for you to collect a meaningful amount of money in a case involving serious or permanent injury. To accomplish these goals, they claim that frivolous lawsuits and runaway juries are destroying the justice system. However, tort reformers don’t talk about how summary judgments have been effectively used for over 100 years to dispose of untold thousands of lawsuits.

The next time someone tries to persuade you that we need more barriers to filing lawsuits, ask them why they don’t think the summary judgment is getting the job done.

Let’s assume that a frivolous lawsuit makes it past summary judgment and a “runaway jury” awards more money then they should. Several judicial remedies exist to correct these verdicts.

DIRECTED VERDICTS:

Most people think that a jury can make whatever decision they want. This isn’t the case at all. A judge can issue a directed verdict, which tells the jury that they must make a certain decision. Usually, a directed verdict is used when something comes out at trial that prevents the other side from winning as a matter of law. For example, it could come out that a key event happened so long ago that the statute of limitations prevents the plaintiff from winning. In such a case, there would most likely be a directed verdict for the defendant.

Less often, the evidence in a case is so strong that the judge feels that there can be only one verdict, and he or she would order the jury to return that verdict. One example would be a case where someone caught the auto accident in question on videotape, and the tape clearly shows that one of the parties to the lawsuit ran a red light, and is therefore at fault. In such a case, the judge may direct the jury to find in favor of the person who did not run the red light.
Directed verdicts are more common in criminal cases than in civil cases, because the summary judgment would typically be used to dispose of a civil case before a jury trial. However, directed verdicts can and do dispose of civil lawsuits without merit.

JUDGMENT NOT WITHSTANDING THE VERDICT (JNOV):

Everyone is familiar with the concept of appealing a decision; if you lose your case, you can generally appeal it to a higher court. However, not everyone is familiar with a Judgment Not Withstanding the Verdict (JNOV). JNOV is an acronym for Judgment non obstante veredicto, which is Latin for “notwithstanding the verdict”.

A losing party in a lawsuit can often file a motion with the court requesting a JNOV. A JNOV is one of the ways that a judge can reduce the dollar amount of a verdict. Some states require that an attorney file a motion for a JNOV, while other states allow a judge to issue a JNOV sua sponte, which is Latin for “of its own accord.”

A JNOV can set aside an entire verdict, or just parts of a verdict. Here’s a good example of how a JNOV could correct an improper jury verdict:

In many states, if a jury finds that the conduct of a defendant in a lawsuit was “knowing” and/or “intentional”, the court must double or triple the amount of a jury verdict. Let’s assume that in a medical malpractice case, a doctor made an honest mistake. Maybe he transposed the numbers in a prescription, and the plaintiff ended up taking too much medication. But, for whatever reason, the jury found that this honest mistake was intentional, and awarded $100,000 dollars. Because the doctor’s conduct was found by the jury to be intentional, the judge would have to award the plaintiff $300,000 dollars. However, if the evidence was very convincing that this was an honest mistake, a JNOV could eliminate the finding of the jury that the doctor’s conduct was intentional, and the plaintiff would be awarded only the $100,000 dollar jury verdict.

Directed verdicts and JNOV’s are two mechanisms that judges have available to prevent juries from awarding damages when they should not, and to reduce jury verdicts that are clearly excessive. Of course, tort reformers don’t tell the public about these tools; they want to be able to prevent these large jury verdicts from ever occurring, and to prevent the bad press that accompanies the verdicts.

SETTLING AFTER A DECISION:

In many cases, such as the famed McDonald’s coffee case, the plaintiffs in a lawsuit will settle the case for less than they were awarded. In the McDonalds case, Stella Liebeck was awarded $2.7 million dollars, and the judge reduced the award to $480,000. Stella settled with McDonalds for a confidential amount less than $480,000.

Plaintiffs and plaintiff’s attorneys are often motivated to settle because a settlement means they won’t have to go through a lengthy and potentially risky appeals process. This is where big companies have the advantage over individual plaintiffs: A major corporation can afford to spend time and money to drag a case out for years. Settlements are extremely common, and are yet another way that very large jury verdicts are reduced.

APPEALING THE DECISION:

The majority of cases where a jury awards millions of dollars are appealed, and many times, those verdicts are reduced or overturned on appeal. For example, in the Igen case that was discussed earlier, the appellate court reduced the $505 million dollar verdict down to $19 million dollars– a $486 million dollar reduction.

While some verdicts are reduced, others are overturned entirely by appellate courts. It’s important to realize that the judges in appellate courts aren’t overly emotional jurors, but are seasoned judges who place far more weight upon the legal issues in a case then on the emotional issues. As such, incredibly large jury verdicts are rarely upheld by the many appellate courts in our country.

Despite what tort reformers claim, large jury verdicts are the exception, and not the rule. When juries do return large verdicts, the plaintiffs usually settle for less than verdict or see the verdict reduced or overturned by an appellate court.

Our justice system is a system of checks and balances. Before someone can even bring a case, they have to convince an attorney that their case is worth gambling time and money on. The contingent-fee agreement weeds out countless cases that have no merit. Once an attorney accepts the case, a judge will most likely scrutinize the facts and law applicable to the case through a summary judgment. If the judge decides that the case has merit, then the case will be presented to an impartial jury of twelve men and women. If those twelve men and women are convinced that the plaintiff has proven his or her case, the jury will then rule in favor of the plaintiff, and award compensation for the plaintiff’s injuries. The judge has an opportunity to modify, reduce, or set aside the jury’s verdict. Then, the defendant has an opportunity to appeal his case to higher courts, and even more experienced judges can then modify, reduce, or set aside a jury’s verdict.

The burden of proof in any case is always on the plaintiff; the deck is stacked in favor of the defendants in both civil and criminal cases. Multimillion-dollar jury verdicts rarely survive the appeals process. Yet tort reformers continue to argue that we need more barriers to file lawsuits, and statutory limitations on how much money can be awarded in the lawsuits we’re able to file. The reason is that the big corporations who push for tort reform don’t want the bad press and public scrutiny that accompanies trials where people are severely injured or killed. Instead, they prefer to enter into confidential settlements that the public never knows about.

Tort reform isn’t about fixing a “broken” justice system; it’s about protecting the public image and bottom lines of the biggest and most powerful companies in the world. Tort reform isn’t about protecting doctors from high insurance rates; it’s about protecting their insurers from having to pay large judgments. Tort reform isn’t about keeping “greedy lawyers” from filing frivolous lawsuits; it’s about keeping those who are severely injured out of the court system and away from the public eye.