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State tort reform proponents urged to build political clout

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WASHINGTON-Achieving tort reform on the state level isn't possible unless pro-reform forces exercise considerable political clout, according to successful state tort reform advocates.

But "sometimes you see a great deal of passivity in the corporate community," said Hugh Rice Kelly, general counsel of Texans for Lawsuit Reform in Austin. Too often, "the corporate community is a little too focused on quarter-to-quarter thinking" for its own good, said Mr. Kelly during a discussion of state tort reform efforts at the American Enterprise Institute in Washington last week.

Pro-reform forces in Texas turned to small businesses and other sources that were willing to put money into the successful effort to reform the state's tort laws, he said. As a result, Texans for Lawsuit Reform was able to create one of the biggest political action committees in the state. That allows it to help its political allies, Mr. Kelly said.

And being a single-issue group, the tort reform proponents were able to remain focused, he said. By contrast, large companies have numerous legislative issues that they want to influence, he said. Tort reform is a "good government" issue that's "about No. 17 on the list" of a corporation's agenda, he said.

Reform forces finally prevailed in Texas in 2003, noted Mr. Kelly. The Texas Legislature approved comprehensive tort reform despite opposition from one of the most politically powerful trial bars in the country. The reforms included:

c Instituting a specialized type of "loser pays" system in which the losing party in a lawsuit may be required to foot at least part of the legal fees of the winner.

c Capping noneconomic damage awards in medical malpractice cases.

c Giving the state Supreme Court greater power in hearing appeals from a trial court order certifying or refusing to certify a class in a class action.

c Creating an "innocent dealer" defense in product liability cases.

c Limiting appeals bonds to the lesser of 50% of a defendant's net worth or $25 million.

"Without political power, you're not going to change the tort law," he said.

Linda Woggon, vp-governmental affairs for the Ohio Chamber of Commerce in Columbus, said that pro-reform efforts there resulted in comprehensive civil justice reform legislation in 1987, but the reforms were "chipped away by the courts until there was nothing left."

As result of unfavorable judicial rulings, reformers in Ohio turned their attention to judicial races, notably those involving the state Supreme Court, and ultimately managed to elect a pro-reform majority, she said. That majority will be tested next month, when Ohioans choose justices for the next six years.

Reform forces had some trouble in the state Legislature because of Ohio's term limit law, which results in "constant turnover," she said. Further complicating the matter is that the real electoral contest is often at the primary election level for Republicans, which can mean choosing candidates who are much more concerned about social issues than legal reform, she said. She cautioned, however, that there is no guarantee that simply because a lawmaker happens to be Republican that he or she will have any great enthusiasm for tort reform.

In Mississippi, unity among the business community and the election of an unabashedly pro-reform governor proved key to achieving significant reforms in a state that has often been cited by reformers as one of the most plaintiff-friendly in the country, said Andrew R. Stephens-vp policy and research for the U.S. Chamber Institute for Legal Reform in Washington.

Republican Gov. Haley Barbour and his running mate, Amy Tuck, made tort reform "a centerpiece of their campaign," said Mr. Stephens. At the same time, business groups remained committed to tort reform rather than splintering over parochial concerns, such as those that have doomed some federal tort reform efforts, said Mr. Stephens.

Michelle J. White, a professor of economics at the University of California at San Diego who has researched patterns in asbestos litigation, noted that over the past 30 years or so, asbestos liability cases have migrated to state courts considered to be the most favorably disposed toward plaintiffs. "Forum shopping is very profitable," she said.

In a particular state, plaintiffs attorneys will look for a court with a pro-plaintiff reputation-often a small court with only a couple of judges-in which to file asbestos-related class actions, she said. Securing pro-plaintiff judges means that procedural questions will often be answered in a pro-plaintiff manner, said Ms. White, who stressed that she is an academic and not working for or against tort reform.

"Tort reform goes beyond one state, two states, three states," she said. There will always be a state that is the most favorable to the plaintiffs bar, she said.

Michael S. Greve, director of the Federalism Project and the Liability Project at the AEI, moderated the discussion.