Punitive Damages And Tort Reform

[Meadmaker]

Bolding mine.

That's just it. Product liability does not apply to the manufacturer when misuse of the product causes the injury.

I'm not so certain of that. If the misuse is forseeable? I would like to think you are right, but I'm not certain you are.

If the accident happened in a state that bans cell use while driving, the court could easily say it would be against public policy to reward people for breaking the law.

The dead girl wasn't the one using the cell phone. It was another driver.

 

[WildCat]

*snipped stuff that wasn't stats*

Are you really going to claim that many frivolous lawsuits aren't settled, and that even the ones that are fought until dismissal don't cost money?

I doubt such stats exist, because out of court settlements are't available for scrutiny and the costs of defending even lawsuits that are ultimately dismissed by the courts are not a matter of public record.

 

[KingMerv00]

I'm not so certain of that. If the misuse is forseeable? I would like to think you are right, but I'm not certain you are.

Not all forseeable misuse is grounds to sue the manufacturer. For example, I can't sue a knife manufacturer when I get stabbed. The manufacturer IS required to make the product as safe as is reasonably possible for its intended purpose. Common knowledge and warning labels limit any left over liability.

The dead girl wasn't the one using the cell phone. It was another driver.

Thanks. Like I said, I didn't want to sign up for the link. The case is SLIGHTLY less stupid now.

 

[KingMerv00]

Are you really going to claim that many frivolous lawsuits aren't settled, and that even the ones that are fought until dismissal don't cost money?

Of course not. I never even implied such a thing.

I doubt such stats exist, because out of court settlements are't available for scrutiny and the costs of defending even lawsuits that are ultimately dismissed by the courts are not a matter of public record.

I started asking for stats because you were trying to use anecdotal evidence to prove the extent of the problem.

 

[WildCat]

I started asking for stats because you were trying to use anecdotal evidence to prove the extent of the problem.

False, the anecdotal evidence proves that a problem exists. I made no claims as to the extent.

 

[KingMerv00]

I made no claims as to the extent.

Oh?

You said:

Their business is no more.

And what kind of system depends on fund raising from 3rd party sources for an injustice to be addressed?

This is just an extreme case which made the news, for every one of these there are hundreds of meritless, frivolous suits settled out of court because the settlement is less than the legal fees incurred fighting it.

I once saw a minor CTA bus crash years ago. Upon seeing the crash, about a dozen people rushed over and lay on the ground next to the bus to claim they were injured victims of the crash. Why would they do this? Because everyone here knows the CTA will pay you $5,000 rather than challenge you in court, which will cost more than $5,000.

Here's an idea: Once a lawsuit is filed, all settlements should be public record. No secret settlements allowed once you involve the courts. I think this would cut down on frivolous suits.

 

[JoeTheJuggler]

Is it your contention that the size of potential damages awarded to a plaintiff have no impact on the size of a settlement?

No. My contention is that caps on damages has no effect on frivolous lawsuits, which is usually cited as the justification for this type of tort reform.

If a case is meritless, then there is no prospect of winning any kind of damages. So the size of those potential damages is irrelevant.

If the plaintiffs in frivolous or meritless cases are given settlements, the problem lies elsewhere. (I think in the case of malpractice claims, the problem is that indemnifiers are quick to settle when they know that their own interests aren't adversely affected by it since they'll just jack up the premiums the doctor or hospital pays.)

 

[KingMerv00]

If the plaintiffs in frivolous or meritless cases are given settlements, the problem lies elsewhere. (I think in the case of malpractice claims, the problem is that indemnifiers are quick to settle when they know that their own interests aren't adversely affected by it since they'll just jack up the premiums the doctor or hospital pays.)

FWIW, I think the medmal "crisis" is overblown too. Yes, doctor premiums are expensive but they only make up about 3.5% of the doctors' income. Even if we assume they are paying twice what they should, they are only losing 1.75% of their salary unfairly.

(Yes, I can find a link to that figure, just not right now. If you want it, I'll get it.)

 

[JoeTheJuggler]

FWIW, I think the medmal "crisis" is overblown too. Yes, doctor premiums are expensive but they only make up about 3.5% of the doctors' income. Even if we assume they are paying twice what they should, they are only losing 1.75% of their salary unfairly.

(Yes, I can find a link to that figure, just not right now. If you want it, I'll get it.)

And, in the healthcare costs discussion, that means the contribution of unreasonable malpractice premiums to the per capita healthcare cost is pretty miniscule (less than 1%, certainly).

I think the problem with tort reform in general is one some of you guys are discussing: seemingly outrageous anecdotes take the place of actual information. We hear about a crazy high damages awarded to a plaintiff who is partially at fault, and we think the system is crazy, and those poor corporations are losing their shirts due to suits like that (whether or not the actually facts of these anecdotally cited suits are anything like the outrageous version of them reported in the news).

Oh yeah, and the poor corporations have no choice but to pass those costs along to the rest of consumers (since absurdly high executive pay and bloated marketing budgets are beyond question). . . .

 

[Meadmaker]

If a case is meritless, then there is no prospect of winning any kind of damages. So the size of those potential damages is irrelevant.

Would that it were true.

As Dunstan pointed out, the same American who declares a suit meritless when reading about it will end up awarding money if on a jury. Such changes of heart are not, in my opinion, due to astute legal opinion or careful presentation of facts, but due to emotional manipulation.

 

[KingMerv00]

Such changes of heart are not, in my opinion, due to astute legal opinion or careful presentation of facts, but due to emotional manipulation.

Those are not mutually exclusive. In fact, depending solely on the latter is grounds for dismissal and possibly contempt of court if you go really far.

 

[JoeTheJuggler]

Would that it were true.

As Dunstan pointed out, the same American who declares a suit meritless when reading about it will end up awarding money if on a jury. Such changes of heart are not, in my opinion, due to astute legal opinion or careful presentation of facts, but due to emotional manipulation.

The point is, for purposes of a settlement the determination of "meritless" is between the parties involved. In fact, it's really the call of the defendant. If the defendant is confident he or she would win in court (that the case is meritless), then he isn't likely to settle.

So really the issue of what a jury would or wouldn't do never arises when there is a settlement. Again, a cap on awards doesn't deter frivolous suits since the size of an award is only an issue if the plaintiff wins.

Again, if a plaintiff wins, the suit must not have been frivolous. You might disagree with the jury's decision, but a frivolous case is one that couldn't possibly win.

I suspect some people here are using "frivolous" to refer to any weak case regardless of the legal standing of the case.

Wiki's definition of frivolous litigation (my bolding):

Frivolous litigation is the practice of starting or carrying on law suits that have no chance of winning. There are both legal and colloquial definitions of the term. In popular usage, lay persons typically call a lawsuit "frivolous" if they personally find a claim to be absurd, regardless of its legal standing. But in official usage, as by the judiciary of the United States, "frivolous litigation" is considered to consist of a legal claim or defense presented even though the party or the party's legal counsel had reason to know that the claim or defense was manifestly insufficient or futile, that is to say, had no legal merit. The remainder of this article discusses the usage of the term within the legal profession.

ETA: So by the legal definition of "frivolous"--caps on damages would have no effect on cases that have no chance of winning in court.

If someone wishes to use the colloquial definition of frivolous, then looking to tort reform (changes in legal processes) won't do anything. That is, if "frivolous" doesn't refer to the legal standing of a case, I doubt very much that any legal reform will affect this type of frivolous suit.

 

[Brown]

Cross reference to:
Bush: "Frivolous lawsuits" hurt business

What can be done? First, limit punitive damage awards. Second, make class action lawsuits for damages MUCH more difficult to bring. Third, liability based upon scientific or technical grounds beyond the knowledge of lay people should be reviewed by a court-appointed expert. Fourth, allow regulated companies the opportunity to defend themselves based upon compulsory regulation. (The bill pending in Congress, when I last checked, would make this a complete defense, but only for drug companies. Bad approach.) Fifth, scale back indemnity rights in work-related injury cases. Sixth, don't dole out sweetheart protections to big contributors; don't make others pay for their wrongs.

and

Supreme Court Limits Liability of Medical Device Manufacturers

 

[MikeMangum]

The dead girl wasn't the one using the cell phone. It was another driver.

Which doesn't change the fact that the driver who caused the crash is the responsible party, not the company that manufactured the cell phone, or the company that provided the wireless service. If a crash is caused by a woman applying mascara, Maybeline is not responsible. If a crash is caused by a couple having sex while driving, Trojan Condoms is not responsible.

Of course, the driver may not have any money to pay a judgement...but the cell phone companies do.

 

[MikeMangum]

No. My contention is that caps on damages has no effect on frivolous lawsuits, which is usually cited as the justification for this type of tort reform.

Yes, and no. A lowered cap on punitive damages will not have much effect on any specific frivolous case, but if the potential payout is lower, there will be fewer frivolous suits. I think that would be very difficult to argue.

Punitive damages are counterproductive. I'm not sure I understand why a tort needs to also be a quasi criminal case. Puntive damages are exactly that - punitive, punishment. Civil suits should be limited to restitution - repairing the wrong done to one party by another party. Punishment should only be meted out for criminal offenses.

There would be noone willing to do swoop and squats if they only recieved as payment enough to cover their medical bills, legal bills, and time spent on the suit; there would be little or no profit in doing so (unless they were getting kickbacks from the doctor or the lawyer).

A swoop and squat isn't technically a frivolous suit, but it is a lawsuit brought to make a profit, not to address a wrong or settle a dispute.

If the plaintiffs in frivolous or meritless cases are given settlements, the problem lies elsewhere.

Not if the settlement cost is lower than the cost of a legal defense.

 

[Dunstan]

I object to your 10% figure. I am not sure how many billable hours it takes to prepare for a stupid case like this (perhaps Dunstan can tell us) but it seems unlikely that an average person's assets would only cover 10% of that.

I think NoZed's response (quoted below) hits most of the key points. Obviously it's going to vary from case to case, but analyzing a complaint, researching the relevant law, drafting and arguing a motion to dismiss (both the initial and reply briefs), as well as possibly a motion for sanctions, is not a trivial amount of time. And that assumes it's the kind of case that can be dealt with on a motion to dismiss -- if your defense is based in any way on claiming that the plaintiff's factual allegations are false, then you need a motion for summary judgment, with appropriate affidavits from witnesses and (usually) some discovery to show that the plaintiff's claims lack support.

As I said, I am not speaking to the larger issue because I am not sure there is a better way of handling it. I am not arguing for a change in the system; I am simply saying the recovery of attorney's fees and expenses as sanctions does not typically have much to do with the pros and cons.

The standard for showing a claim to be completely frivolous is not trivial, to begin with. Many "novel" theories of receovery were once thought inapplicable, but are now accepted. Courts are loathe to hold pleadings as completely without merit if there is any way to justify the plaintiff is making an argument for a good-faith extension of the laws. It is not trivial to obtain an award of fees in the first place. Even there, you have the expense of answering the suit, answering initial discovery (or drafting and arguing motions for protective orders), communications with the plaintiff and court, and the possibility no dismissal will be granted until after written discovery or even a deposition or two has been allowed.

I agree with all of that. I'd also add that even if the court agrees to award the defendant its attorneys' fees, courts rarely award the full amount. Judges love to chop down the fee award, so defendants rarely even get a judgment for the amount they had to pay their attorneys. And then, of course, good luck collecting it.

Not all forseeable misuse is grounds to sue the manufacturer. For example, I can't sue a knife manufacturer when I get stabbed.

I don't know about knives, but there have been a wave of lawsuits against gun manufacturers. I think they've pretty much all failed so far, but I haven't followed that issue very closely. I believe it's been enough of a concern that the manufacturers are pressing Congress to give them statutory immunity.

Punitive damage are counterproductive. I'm not sure I understand why a tort needs to also be a quasi criminal case. Puntive damage are exactly that - punitive. Civil suits should be limited to restitution - repairing the wrong done to a party by another party. A party should only be forced by the government to pay another party equal to the damage caused unless convicted in a criminal court, in which case fines would go to the government.

There are some theoretical justifications for "punitive" damages beyond the simple punitive aspect. Some torts may be hard to detect or prove. Suppose a defendant anticipates that a particular act will cause $X of harm, but there is only a 1 in 3 chance that the injured party(ies) will actually sue and prevail. Then the defendant's expected liability is only $X/3, and it doesn't fully internalize the costs of the act or omission. Punitives (or treble damages under statutes like antitrust law) basically "make up" for all the times that a defendant "gets away" without liability. That's one theory, anyway.

 

[leftysergeant]

Which doesn't change the fact that the driver who caused the crash is the responsible party, not the company that manufactured the cell phone, or the company that provided the wireless service.

The idiot cell phone makers and service providers have fouhgt restrictions on their use. That means that they have support the righht of the idiots who phone while driving. Contributory negligence, horse high, hog tight and bull strong.

Of course, the driver may not have any money to pay a judgement...but the cell phone companies do.

And, because they promote the irresponsible use of their product, they can come up off some of that ill-gotten gain to make whole those their product has harmed.

 

[JoeTheJuggler]

Yes, and no. A lowered cap on punitive damages will not have much effect on any specific frivolous case, but if the potential payout is lower, there will be fewer frivolous suits. I think that would be very difficult to argue.

If a case is frivolous in the actual legal meaning of the term, it has no chance of winning. If it has no chance of winning, there is zero potential payout and no incentive to the defendant to settle.

Punitive damages are counterproductive. I'm not sure I understand why a tort needs to also be a quasi criminal case. Puntive damages are exactly that - punitive, punishment. Civil suits should be limited to restitution - repairing the wrong done to one party by another party. Punishment should only be meted out for criminal offenses.

Civil suits have never been limited to restitution. If you lose a finger due to someone else's negligence, they cannot give you your finger back, but only award damages. But again, I suspect you're using "restitution" in other than the strict legal sense.

At any rate, punitive damages are as you say meant to punish a wrong. I have no problem with that. Just because a large corporation can afford to cover the costs of avoidable human injuries, for example, doesn't mean that makes it right. Punitive damages are meant to stop them from doing whatever it was that was causing the injuries, even if they could otherwise afford the compensatory damages.

A swoop and squat isn't technically a frivolous suit, but it is a lawsuit brought to make a profit, not to address a wrong or settle a dispute.

Yes--that's technically not a frivolous suit, or even non-technically. That's actually the crime of fraud.

Not if the settlement cost is lower than the cost of a legal defense.

If the suit is frivolous, there is no chance of winning. The defendant needn't spend anything (other than maybe whatever it costs to make a motion to dismiss the case). Again, I think maybe you're lumping weak cases with frivolous ones.

 

[JoeTheJuggler]

I suspect you are right, but I have to wonder about it. Clearly, the use of cell phones in cars is a forseeable consequence of providing cell phones. The people who make cell phones and provide cell phone service profit heavily from their use. Should they not have to compensate people for the consequences of misuse?

From what I read of the story (in the NY Times article), they cited an earlier case where the case was dismissed (and the dismissal upheld at the appellate court) based on " the unforeseeability of the accident and the absence of a legal relationship between the" plaintiff and the cell phone company.

ETA: FWIW, both of those are pretty weak arguments. That the accident was unforeseeable conflicts with the defense in this case (see below--the idea that everyone already knows talking on the cell phone can cause accidents). That there is no legal relationship between the cell-phone company and the plaintiff is pretty bogus. If nothing else, the cell phone companies make use of public airwaves and should do so in a responsible manner. (But I don't think it has to go that far. If a piece of an airplane fell off a plane and damaged my house, the fact that I wasn't a passenger on the plane is pretty irrelevant. The company and the plaintiff are indeed in a legal relationship--that of plaintiff and defendant in a civil suit!)

In this case, the distracted driver has already pleaded guilty to criminal charges. He has testified that it was his fault and not that of the cell-phone company, but he admits that he never read the warnings against driving while talking on the phone in the user manual or whatever, and he admits that one of the biggest selling points of cell phones is that you can talk while you drive. So I suppose the question is whether or not the cell phone company is marketing cell phones as safe to use while driving.

The defense is basically arguing that consumers already know the risks of driving while talking on a cell phone, so they think even if this guy had known it was dangerous, he probably would have made the same choice.

At any rate, I agree with your apparent conclusion, Meadmaker, that this isn't a frivolous case, even if we don't necessarily agree with the plaintiff's side.

 

[KingMerv00]

The idiot cell phone makers and service providers have fouhgt restrictions on their use. That means that they have support the righht of the idiots who phone while driving. Contributory negligence, horse high, hog tight and bull strong.

People have a right to influence the legislature in any legal way they like, even if they work for an evil corporation.