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Matt Dunning

Election outcome could affect evolution of state tort reform laws

November 12, 2012 - 6:00am

2012 Election Outcome State Tort Reform Laws

Nine states saw control of their legislatures change hands on Nov. 6. Legislatures in New York, Minnesota, Colorado, Maine and Oregon that previously had been held by Republicans or split between parties were flipped to Democratic control.


The results of last week's elections could have significant implications for the evolution of tort reform laws in several states, while little is expected to change at the federal level, legal experts said.

Nine states saw control of their legislatures change hands on Nov. 6. Legislatures in New York, Minnesota, Colorado, Maine and Oregon that previously had been held by Republicans or split between parties were flipped to Democratic control.

Meanwhile, Republican lawmakers gained majority control of legislatures in Wisconsin, Arkansas and Alaska. New Hampshire, where Republicans previously had held both houses of the state's General Court, is now split after Democrats overtook the House of Representatives.

The shifted power balances could create opportunities for the expansion or contraction of civil litigation limits, especially in states where one party soon will control the executive and legislative branches of government, experts said.

“Depending on the tort climate and the legislative compositions of those states, you could see some potential action,” said Jim Copeland, legal policy director at the New York-based Manhattan Institute for Policy Research.

In particular, experts said Wisconsin — which has passed five tort reform laws since Gov. Scott Walker took office in January 2011 — could become even more fertile ground for new reforms now that Republicans have regained control of both legislative houses. Tort reform advocates are likely to pursue stricter limitations on civil liability and damage awards in North Carolina, where the GOP will control the governor's office and the state's General Assembly for the first time in more than a century.

“With each of these states, it comes down to what is needed in each particular state,” said Victor Schwartz, general counsel for the Washington-based American Tort Reform Association. “You don't want to pass legislation just to pass legislation. The primary focus still needs to be on the beliefs and needs of the people who live and work there.”

Conversely, experts said other states likely will become friendlier to plaintiffs' advocates after Democratic gains in Tuesday's elections. Come January, Democrats will retake full governmental control in Oregon, Minnesota and — perhaps most significantly, experts said — New York.

“New York could become a haven for trial lawyers,” Mr. Schwartz said. “The plaintiffs' bar has always been able to defeat civil justice reform in New York, but now that's an area where I believe they'll begin seeking new ways to sue.”

Federal landscape largely unchanged

The elections are far less likely to have a measurable effect on tort reform legislation at the federal level, experts said, especially in light of the enduring polarization in congress.

“I don't expect things to be all that much different on Capitol Hill with the new congress compared to the last one,” said Matt Webb, a senior vice president at the U.S. Chamber of Commerce Institute for Legal Reform. “With tort reform, in order to get anything done at the federal level, it's always been a bipartisan game.”

Linda Lipsen, CEO of the Washington-based American Association for Justice — which represents plaintiffs' attorneys — struck a slightly more optimistic tone in an email to Business Insurance.

“Accountability and justice are not partisan issues and we will continue to promote a strong civil justice system, regardless of what political party is in power,” Ms. Lipsen said. “The American Association for Justice and our state associations are eager to work with the president, congress and state legislators throughout the country to take down barriers to justice and protect Americans' rights.”

If conditions in Washington change at all in the coming years, experts said it is more likely to be to the benefit of plaintiffs' advocates. The Supreme Court of the United States began or resumed hearings in October on several high-profile cases involving limitations on class action litigation and corporate liability, including jurisdictional rules under the 2005 Class Action Fairness Act and the 1789 Alien Tort Statute.

The importance of those cases — and many more like them on the high court's docket — is underpinned by the prospect that one or more Supreme Court justices could retire during President Obama's second term, experts said.

“There's always that chance of a shift, depending on the makeup of the judiciary,” Mr. Copeland said. “But even if there is a change at the Supreme Court level, it will still be years before there's a well-pleaded case to come up through the appellate circuits with enough of a split to warrant a cert. It's not like it would happen very quickly.”

There is also the chance that regulatory agencies could impact the civil litigation landscape in the coming term through enforcement actions and guidance, experts said, as well as the remote possibility of the White House lending its endorsement to pending reform legislation, such as the Lawsuit Abuse Reduction Act of 2011.

“Legal reform is not something that's been near and dear to the president's heart, and I don't think that's going to change much in his second term,” Mr. Webb said, though he noted Mr. Obama's support of the Class Action Fairness Act as a member of the Senate in 2005. “I do think we have to watch the regulatory agencies to see what, if any, pro-litigation activities and rules they end up putting together.”

 



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