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Punitive Damages And Tort Reform

I'm in favor of tort reform that makes it easier to defend against frivolous cases without closing the courtroom door to legitimate cases. I don't mind addressing the best method of applying punitive damages as long as it's not a one-size fits all cap, that simply turns the penalty for wrongdoing into a plannable cost of doing business.

If you can figure out how to do this, by all means write a book and become famous :)
 
I haven't seen a convincing case made for tort reform. As far as I have seen, judges do a good job of reining in excessive jury awards with tools like remittitur. Of course, remittitur doesn't make for sexxy headlines, which I think explains why people clamor for reform. That and the urban legends the pro-reform side sometimes relies on to help make its case.

I favor punitive damages, yes. But only in limited cases (which is the way the law is already). My state doesn't allow punitive damages at all.

Recommended reading for this thread is Carl Bogus' Why Lawsuits Are Good for America.
 
"Frivolous lawsuits" are a right wing myth. Truly frivolous suits are simply thrown out of court. Often, the losers of lawsuits are made to pay for the defendant's legal fees. Anecdotal examples of outrageous monetary rewards won by frivolous are largely made up or exaggerated (the McDonalds coffee case being a famous example). Corporations would love to limit the public's ability to sue which is why this whole concept of "tort reform" was manufactured in the first place.
 
gnome said:
I don't mind addressing the best method of applying punitive damages as long as it's not a one-size fits all cap, that simply turns the penalty for wrongdoing into a plannable cost of doing business.
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I agree with this. In order for punitive damages to work, they have to be shockingly high in certain cases. I believe the limit in federal court is 9:1, and the practical limit is 3:1. But if it is, as you say, plannable, wealthy defendants (especially corporate defendants) can calculate the potential cost and make a rational decision whether or not to engage in the tortious behavior. But the point of punitives, as I see them, is not merely to make that species of tortious behavior unpleasant to engage in, but to make it so unpleasant to engage in that no rational actor would engage in it. So instituting a 3:1 cap does not help punitives achieve their goal.

ETA: To be fair, the federal cap is based not on policy considerations, but on the Eighth Amendment. Now, I'm not sure if I agree with the Court that the Eighth Amendment is implicated by a very high punitive damages award, but if you do accept that it is, then that has to pretty much trump any policy-based reasoning you have on the other side.
 
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psychictv said:
"Frivolous lawsuits" are a right wing myth. Truly frivolous suits are simply thrown out of court.
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Tell that to the owners of that dry cleaners sued over and over again for $54 million by an administrative law judge for losing his pants.

Story from 2007.

Sure, he was ordered to pay the dry cleaners legal bills and court costs. Problem was, he couldn't pay. So what ultimately happened to the dry cleaners?

Story from 2009:
Pearson, who represented himself in federal court, also lost his lawsuit against the owners of Custom Cleaners, which closed under the weight of legal bills.
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Bold emphasis mine.

It doesn't get any more frivolous than that, yet a small business was ultimately forced out of business from the legal bills. If there is in fact something in place to stop frivolous lawsuits, it was nowhere to be found here.
 
WildCat said:
Tell that to the owners of that dry cleaners sued over and over again for $54 million by an administrative law judge for losing his pants.

Story from 2007.

Sure, he was ordered to pay the dry cleaners legal bills and court costs. Problem was, he couldn't pay. So what ultimately happened to the dry cleaners?

Story from 2009:

Bold emphasis mine.

It doesn't get any more frivolous than that, yet a small business was ultimately forced out of business from the legal bills. If there is in fact something in place to stop frivolous lawsuits, it was nowhere to be found here.
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Everytime this issue comes up, normally smart people suddenly accept isolated incidents as vast trends. Why is that?

No one is saying the system is perfect.
 
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Caps on damages does not address frivolous lawsuits. Damages are only awarded in cases the plaintiff wins. If the plaintiff wins, the case has to have had merit.
 
KingMerv00 said:
Oh, and the Chungs did recover their costs (according to wiki anyway):
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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 said:
Caps on damages does not address frivolous lawsuits. Damages are only awarded in cases the plaintiff wins. If the plaintiff wins, the case has to have had merit.
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The topic is punitive damages and tort reform.
 
WildCat said:
Tell that to the owners of that dry cleaners sued over and over again for $54 million by an administrative law judge for losing his pants.

Story from 2007.

Sure, he was ordered to pay the dry cleaners legal bills and court costs. Problem was, he couldn't pay. So what ultimately happened to the dry cleaners?

Story from 2009:

Bold emphasis mine.

It doesn't get any more frivolous than that, yet a small business was ultimately forced out of business from the legal bills. If there is in fact something in place to stop frivolous lawsuits, it was nowhere to be found here.
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And how would caps on punitive damages have affected this story?

If the suit was frivolous, it couldn't have won. If it didn't win, no damages were awarded.

I agree that something should be done to stop the sort of thing in this story from happening. I think simply whenever a defendant wins a suit, the fact finder should also be asked the question, "Was this a frivolous suit?" If it was, the plaintiff has to pay to reimburse the defendant's legal bills.
 
KingMerv00 said:
Not just federal court. The decisions are applied to state court too. It also might surprise you that the "caps" on punitive damages come from analysis of the 14th amendment rather than the 8th.
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Good catches on both counts. I think for the "federal" thing I was getting confused thinking about the Exxon Valdez litigation. The Court applied a 1:1 ratio, but that was limited to federal maritime actions. As for the eighth amendment thing, I don't think I have an excuse - just misremembering State Farm and BMW v Gore I guess.
 
JoeTheJuggler said:
As I said, caps on damages is not good tort reform. It doesn't address the problem of frivolous suits. I've given a suggestion that would.
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I don't think caps on damages are a good idea either, and I've said as much many time on this forum. However, there are plenty of things we can do to discourage frivolous lawsuits. No secret settlements for one.
 
WildCat 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?
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It is entirely possible the the store closed down as a direct result of the lawsuit. You were still wrong about the lawyers fees. The Chungs chose not to get damages from the plaintiff. Not a major mistake but a mistake nonetheless.

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.
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Hundreds? Where did you get that number from? How do you it isn't "tens" or less? If you are going to debate the size of the problem, bring some evidence.

I once saw... *snipped more anecdotal evidence*
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Stop doing that.

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.
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Not a terrible idea.
 
WildCat said:
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.
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Are you suggesting that this would have helped with the crazy pants lawsuit? Not that you need to be suggesting that for this to be a good idea; I'm only wondering.

One problem with it is that courts really really like people to settle, and this discourages settlement.

JoeTheJuggler said:
I think simply whenever a defendant wins a suit, the fact finder should also be asked the question, "Was this a frivolous suit?" If it was, the plaintiff has to pay to reimburse the defendant's legal bills.
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Why do you think the fact finder should make the determination? Whether a lawsuit is frivolous or not usually depends much more on the law than on the facts, I'd argue. Also, if the suit is frivolous, it ought not to get to the factfinding stage - that's what summary judgment/summary disposition/involuntary dismissal/directed verdict is for.

As things stand, a court will require a plaintiff to pay the defendant's legal fees is the suit is frivolous, but I get the impression that it's a pretty tough thing to show frivolity.


What it comes down to is, no system is going to be perfect - no matter what we do, we will either allow frivolous lawsuits through the door (although hopefully cut them off as quickly as possible), or we'll bar legitimate lawsuits from being heard, or both. Ideally, you minimize both, but when you have to make a choice, I'd rather err on the side of letting cases be heard.
 
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