James P. Carey Press

Tort reform passes House committee

by Michelle Lore, Minnesota Lawyer, February 25th, 2011

The House Judiciary Committee has voted 18-15 in favor of H.F. 5, a bill that would cap non-economic damages and limit punitive damages in med-mal and pharmaceutical products liability cases.

Lawyers say bill would result in fewer cases

Plaintiffs’ lawyers say a sweeping federal tort reform bill is intended to drive lawyers away from helping injured clients. The bill, which would cap non-economic damages in a broad range of lawsuits at $250,000, severely limit punitive damages and pre-empt many state laws, has been approved by the House Judiciary Committee.

The committee voted 18-15 on Feb. 16 in favor of H.R. 5, known as the Help Efficient, Accessible, Low Cost, Timely Healthcare (HEALTH) Act, introduced last month by Rep. Phil Gingrey, R-Ga., a physician. It would apply to medical malpractice, pharmaceutical product liability cases and nursing home and health insurance claims.

The president of the Minnesota Association for Justice, James Carey, said the bill would make it nearly impossible for attorneys to be able to afford taking these kinds of cases.

"They cost a ton of money … and are high risk," he said. "The sole purpose of the limitations [in this bill] is to stop lawyers from taking meritorious claims." Terry Wade, a plaintiffs’ med-mal attorney with Robins Kaplan Miller & Ciresi in Minneapolis, agreed. "If this passed, I don’t think [my firm] would have a med-mal department," he said. "Maybe one nurse and one lawyer - and they’d be looking for those cases with huge economic loss."

Some of the key provisions of the bill are:

• Shortening the statute of limitations;
• Eliminating joint liability;
• Capping non-economic damages at $250,000;
• Creating a heightened standard for punitive damages and capping them at twice economic damages but no more than $250,000;
• Immunizing drug companies from punitive damages;
• Pre-empting state laws on attorney fees; and
• Allowing future damages over $50,000 to be paid in installments over time.

The bill is generating a strong response, particularly from the plaintiffs’ bar. Gibson Vance, president of the American Association for Justice, said in a statement that the bill provides "welfare to drug and insurance companies that stand to gain the most" from this proposal.

"By removing legal accountability, attention to safety will go down and more people will suffer injuries and death from negligent care," Vance said. Similarly, Carey called the bill "off the chart extreme" and "unnecessary" in that it’s not designed to meaningfully affect the cost of health care in this country.

"It provides protection and coverage for far more than doctors," he said. "It goes to drug companies; it goes to insurance companies; it protects nursing home providers, and places arbitrary caps on damages against those people even for their intentional conduct." Some defense lawyers agree the bill isn’t necessary.

St. Cloud defense attorney Steven Schwegman said that as a member of the American Board of Trial Advocates, he agrees with its goal of preserving the jury system.

"As a trial lawyer I would like to think the jury is in a good position to sort through these kinds of cases," he said. "If the jury hears a fair presentation from both sides of the case, I’d like to believe they are making a reasoned, well-thought out decision."

Fewer cases?

According to Wade, the only cases lawyers could continue to take if the bill passes are those with huge economic losses such as medical expenses and wage loss. "It’s going to be the very rare case," he said.

But not everyone is convinced the reform measures would result in fewer claims being filed.

"I think some of the reforms they propose make sense," said Minneapolis products liability defense attorney Michelle Rognlien Gilboe. Gilboe noted that several of the measures identified in H.R. 5 have gone into effect in other states and haven’t resulted in a dramatic decline in the number of products liability cases filed by plaintiffs’ counsel.

"A common attribute of tort reform is the idea of capping noneconomic damages," she said. "Plaintiffs’ counsel then often just find a way to make sure the economic damages portion of their claims are substantial. … [They] find different ways to approach their cases." Many lawyers - plaintiff and defense - believe any kind of tort reform should be handled at the state level. In fact, the Minnesota Legislature considered a law with similar provisions several years ago, but it didn’t get far.

"Minnesota has historically stayed away from [measures like damages caps] because I don’t think there’s a sense of a med-mal crisis within our state," said Schwegman.

Wade said that he talked with several Republican lawmakers when the bill arose in Minnesota, and even showed them videotapes of horrendously injured people who would have been unjustly limited under the proposal.

"I explained what was going to happen under the new law, and it never got anywhere," he said.

OFFICE LOCATIONS