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The Verdict, Wisconsin Academy of Trial Lawyers, 23:2, Summer 2000

In February, Gov. George W. Bush released his “Comprehensive Plan to Reform the Civil Justice System,” which declares that “A litigation explosion is clogging America’s civil courts, costing U.S. high-tech companies, small businesses, and consumers more than $150 billion a year.”[1] It also states that “As the number of lawsuits has increased, so too has the size of the awards” and claims that there has been “a loss in confidence in the civil courts.”

Thomas J. Donohue, President of the U.S. Chamber of Commerce, has skewed the Chamber’s agenda towards “Legal/Tort Reform” calling for “comprehensive tort reform legislation, including product liability and medical malpractice reforms, to restore balance to the U.S. civil justice system.”[2] Mr. Donohue seeks a change in the laws that will “reform rules pertaining to punitive and non-economic damages and contingency fees, limit the application of joint and several liability, discourage frivolous lawsuits and restore credibility to the judicial system.”  Further, the Chamber’s website proclaims that “product liability litigation and resulting insurance costs caused 47 percent of American businesses to cut product lines and/ or raise prices” and that “rampant medical malpractice litigation has had a dramatic effect on the U.S. health care system.”

To a trial lawyer, these sentiments are not surprising.  This type of misinformation has essentially run unbridled over the course of the last 20 years.  It was for this reason that I was recently surprised to read an exceptional series of articles done by The Dallas Morning News.[3] The articles, which are inspiring because they speak the truth and troublesome for the same reason, debunk some of the myths and propaganda touted by anti-civil justice proponents.  If we as new trial lawyers, hope to continue helping people through our chosen vocation, then we need to embrace such journalism and use it to combat the political rhetoric.  Hopefully, this article gives a few of us a start on this so that we may use the facts to speak about these issues within our sphere of influence – our clients, peers, and families.  Here, briefly are some highlights of the paper’s findings and some other related information.[4]

The Dallas articles report the findings of a six-month study conducted by the paper and Southern Methodist University School of Law.  The paper reports information that many of us may have already known presenting these independently and professionally.  One article begins by noting that “Bit by bit, case by case and state by state, American’s celebrated right to trial by jury is being diminished” and that “no state has seen the role of juries more altered during the last decade than Texas.”[5] The author then sets forth the proof of this National trend showing that:

(1)   34 states have limits on the amount of money civil juries can award;

(2)   42 states have restricted the types of cases juries can hear;

(3)   Several states limit the amount of punitive damages that can be awarded and one has banned these;

(4)   Various states enacted bans and immunities on certain types of lawsuits;

(5)   States are substantially narrowing the time limitations for filing lawsuits; and

(6)   Both legislatures and judges are increasingly taking decisions away from juries.

Three other articles within the series reiterate the diminishing significance of juries showing how:

(a)    fine print arbitration clauses are used to limit or eliminate responsibility;[6]

(b)   some courts use cases like Daubert to take away jurors’ fact-finding and evidence weighing duties;[7] and

(c)    statutes can shield companies from responsibility.[8]

One of the more revealing articles reports findings from a survey of 1,000 federal and state trial judges.[9] Aptly, the writer notes how “The judges’ responses reflect a high level of day-to-day confidence in a system whose shortcomings are often measured by a few, highly publicized verdicts….”  The survey further found that:

• 98% of judges said juries do at least “moderately well” in reaching a “just and fair” verdict.
• 96% of judges said they agree with jury verdicts most or all of the time.
• Only 1% of judges give the jury system low marks.

Finally, the research confirms that juries “rarely give big awards”[10] and when they do, they do not want a law they were not told about to render their time, deliberations and verdict meaningless.[11] The findings included the conclusion that “Statistics and studies show that civil juries are becoming less and less willing to hand out money, contrary to widely held opinion.”[12] One judge said that “Runaway juries are a myth” and that “The public perception of what juries do and the reality of what juries really do are in separate universes.”  As shown in the article, the truth is in the numbers.  For example, in Dallas County:

• From 1998 to 1992, the median jury award plunged by about two-thirds to $25,200 and juries issued less than half as many million-dollar verdicts.
• In 1998, juries made 25 awards of less than $1000 and only did that 4 times in 1992.
• Victory for the plaintiff wasn’t worth a dime in 12 cases in 1998.
• In 1998, juries levied punitive damages in 19 trials, the lowest number in 20 years,  and judges eventually reduce or throw out half of such awards.  Since 1992, the median punitive damage award fell 43% to $31,000.
• In more than 40 soft tissue injury cases in the past 3 years, juries awarded the winning plaintiff less than their medical bills or lost wages, and in each such case, defendants were found 100% at fault or admitted fault and a licensed medical provider testified as to the injuries and costs.

Nationally, from 1998 to 1992, the median punitive damage award has fallen more than 20% and the median jury award has plunged by about two-thirds to $35,000.

Though Wisconsin does not maintain the scope of jury verdict data that Texas has, the truth is reflected in the diminishing “loss ratios” of Wisconsin insurers, which are shown in the corresponding graph.  Nationally, as well, insurers are having substantial and increased profits – which are not necessarily related to “investment gain.”[13] State Farm recently declared a “$1 Billion dividend for auto insurance customers,” which in Wisconsin will result in $13,500,000 being returned to insureds.[14] Of course, when there are underwriting gains, decreasing loss ratios and increased profits, this gets credited to being “well-capitalized, strong investment returns and a lack of catastrophic losses.”[15] However, when there is some bad news insurers blame “higher auto claims”[16] and political affiliates point a finger at “the litigation explosion” and “size of the awards.”  Certainly, it is not any wonder why the American Insurance Association would “applaud” Gov. Bush’s  federal tort reform proposals.[17]

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[1]. Gov. George W. Bush, “Comprehensive Plan to Reform the Civil Justice System,” February 9, 2000; See http://www.georgewbush.com/news/2000/february/TortReformFactSheet.pdf.

[2].   This information may be found on the Internet at http://www.uschamber.org/, which is replete with Tort Reform and civil justice misinformation.

[3].  “Tipping the Scales: Juries on Trial,” The Dallas Morning News, May 7, 2000 and May 8, 2000.  On the web, see http://dallasnews.com/juries/.

[4].  For more in depth reading related to these issues, two excellent articles are: Peck, Robert, et al., “Tort Reform 1999: A Building Without a Foundation,” Florida State Univ. Law Review, Vol. 27:397 (1999); and Galanter, Marc, “An Oil Strike in Hell: Contemporary Legends About the Civil Justice System,” Arizona Law Review, Vol. 40:3 (1998).

[5].  Mark Curriden, “Right to trial by jury fades under court rulings, new laws,” The Dallas Morning News, May 7, 2000.

[6].  Mark Curriden, “Arbitration is weapon against liability: Fine print often removes jury resolution as option for complaints,” The Dallas Morning News, May 7, 2000.

[7].  Mark Curriden, “Power shift: Laws are snatching authority from jurors and transferring it to the hands of judges,” The Dallas Morning News, May 7, 2000.

[8].  Mark Curriden, “Statutes can shield companies: Sometimes merit can be irrelevant,” The Dallas Morning News, May 7, 2000.  Golfers may be able to relate to this article’s reference to a federal law, which would ban any lawsuit claiming a defect in assembly or parts in the small jet that crash and caused Payne Stewart’s death.

[9].  Allen Pusey, “Surveys by Morning News, SMU law school find overwhelming support for citizens’ role in court system” The Dallas Morning News, May 7, 2000.

[10].  Mark Curriden, “Juries’ bad rap: Panels rarely give big awards or buy novel defenses,” The Dallas Morning News, May 8, 2000.

[11].   Mark Curriden, “Jury awards fall under weight of obscure law” The Dallas Morning News, May 7, 2000.  Citing jurors’ anger about a tort reform law enacted by Gov. George W. Bush and the Texas legislature, which made meaningless jurors’ long deliberations and award of $42.5 million in punitive damages by slashing it to $200,000 after the defendant was found to have recklessly caused the plaintiff’s husband’s death.

[12].  See supra note 7.

[13].  “Auto Insurance Companies Are Making Enormous Sums of Money,” Public Citizen, table at http://www.citizen.org/ based on data from the National Association of Insurance Commissioners, “Report on Profitability By Line and By State,” 1996; see also Diamond, Randy, “Auto insurers rebut report of high profits,”  The Record, February 9, 2000; and “Property/Casualty Rating Trends Reflect Capital Strength, Earnings Stability,” A.M. Best Company Special Report, September 7, 1999.

[14].  State Farm Mutual Automobile Insurance Company Press Release, Bloomington, Ill., June 12, 2000.

[15].  Panko, Ron, “P/C Insolvencies Reach Lowest Level in 27 Years,” BestWeek, November 29, 1999.

[16].  See Bowers, Barbara, “Allstate Posts 44% Drop In Quarterly Net Income,” BestWeek, February 14, 2000 (stating “Allstate Corp. posted a 44.1% drop in fourth-quarter net income before special charges, citing lower premium rates and higher auto claims.”).

[17].   Gov. George W. Bush Press Release, “AIA Applauds Bush Federal Tort Reform Proposal,” February 9, 2000.  See http://www.georgewbush.com/news/2000/february/pr020900_tort.asp.

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