Bogus, Carl

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Introduction: Genuine Tort Reform

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Roger Williams UniversityDOCS@RWULaw Faculty Scholarship Law Faculty ScholarshipWinter 2008Introduction: Genuine Tort ReformCarl BogusRoger Williams University School of LawFollow this and additional works at: http://docs.rwu.edu/law_fac_fsPart of the Litigation Commons, and the Torts CommonsThis Article is brought to you for free and open access by the Law Faculty Scholarship at DOCS@RWU. It has been accepted for inclusion in LawFaculty Scholarship by an authorized administrator of DOCS@RWU. For more information, please contact mwu@rwu.edu.Recommended CitationCarl T. Bogus, Introduction: Genuine Tort Reform, 13 Roger Williams U. L. Rev. 1, 7 (2008)? ???? ?????Citation: 13 Roger Williams U. L. Rev. 1 2008 Provided by: Roger Williams University School of Law LibraryContent downloaded/printed from HeinOnlineWed Mar  8 10:07:16 2017-- Your use of this HeinOnline PDF indicates your acceptance   of HeinOnline's Terms and Conditions of the license   agreement available at http://heinonline.org/HOL/License-- The search text of this PDF is generated from    uncorrected OCR text.-- To obtain permission to use this article beyond the scope   of your HeinOnline license, please use:Copyright InformationSymposiumIntroduction: Genuine Tort ReformCarl T. Bogus*I am not sure who coined the term "tort reform," but as far asI know it was first used in 1974 in a student article published bythe UCLA Law Review. 1 That article was very much a Sixtiespiece. The author praised Justice Roger Traynor and theCalifornia Supreme Court for their leadership in "placing tortliability on the party who is best able to spread the risk of loss."She continued:Though judicial activism is generally regarded bytraditional legal process scholars as undesirable, in tortlaw, it appears to be an appropriate fulfillment of thehistorical function of the common law-to meld theprecedents of the past and needs and concerns of thepresent. 2For nearly a decade thereafter, "tort reform" was stilloccasionally used to refer to efforts to make the tort system moredynamic by making it easier for victims to hold accountablewrongdoers and those who were in a position to prevent harm.3* Professor of Law, Roger Williams University School of Law.1. Dian Dickson Ogilvie, Comment, Judicial Activism in Tort Reform:The Guest Statute Exemplar and a Proposal for Comparative Negligence, 21UCLA L. REV. 1566 (1974).2. Id. at 1566.3. See, e.g., Mark D. Seltzer, Comment, Personal Injury HazardousWaste Litigation: A Proposal for Tort Reform, 10 B.C. ENVTL. AFF. L. REV. 797(1983).2 ROGER WILLIAMS UNIVERSITYLAWREVIEW [Vol. 13:1Times, however, were changing. The modern conservativemovement was gaining force. That movement was repelled bywhat it considered judicial activism. The movement's originaltarget was the Warren Court and its constitutional innovations incivil rights, voting rights, and criminal procedure. In 1968,Richard M. Nixon campaigned for the presidency on a promise toappoint "law and order" judges, by which he meant judges whowould stop enlarging protections for criminal defendants.Conservatives felt that an era of permissiveness had frayed thesocial fabric. Stability was breaking down.Before long conservatives began seeing tort reforms-especially the advent of strict liability for defective andunreasonably dangerous products-as part and parcel of the samephenomenon. That is, they increasingly saw courts as anti-order,anti-establishment, anti-free enterprise. In 1971, Lewis F. Powell,Jr., who was then a corporate lawyer, wrote a memorandum forthe U.S. Chamber of Commerce in which he famously said "theAmerican free enterprise system is under broad attack. '4 Powelllumped together "Communists, New Leftists, and otherrevolutionaries" with the American Civil Liberties Union andRalph Nader, whom Powell called "[p]erhaps the single mosteffective antagonist of American business."5 Powell urged that theChamber of Commerce lead a political and social counterassault.He wanted the counterassault launched in the venues wherepublic opinion is molded-college campuses, graduate schools,secondary schools, textbooks, television and radio, scholarlyjournals, newspapers and popular magazines-as well as in allbranches of government. Powell wanted the Chamber and itsallies to focus particularly on the courts. Powell was not arguingagainst an activist judiciary; he was arguing for a pro-businessactivist judiciary. "Under our constitutional system," he wrote,"especially with an activist-minded Supreme Court, the judiciarymay be the most important instrument for social, economic, and4. Lewis F. Powell, Jr., Confidential Memorandum: Attack on AmericanFree Enterprise System, To Eugene B. Syndor, Jr., Chairman, EducationCommittee, U.S. Chamber of Commerce (Aug. 23, 1971) available athttp://reclaimdemocracy.org/corporate-accountability/powell memolewis.html (hereinafter Powell Memorandum). See also Jeffrey Rosen, SupremeCourt Inc., N.Y. TIMES MAG., Mar. 16, 2008, at 38 (discussing importance ofPowell's memorandum).5. Powell Memorandum, supra note 4.2008] INTRODUCTION TO GENUINE TORT REFORM 3political change." Powell continued: "This is a vast area ofopportunity for the Chamber, if it is willing to undertake the roleof spokesman for American business and if, in turn, business iswilling to provide the funds."6Powell saw his vision realized more quickly and effectivelythan he could have imagined. The Chamber led the assault thatPowell envisioned, helping to develop a powerful infrastructure oftrade association and advocacy groups. The Business Roundtablewas founded in 1972, 7 the Heritage Institute in 1973,8 the CatoInstitute in 1977,9 the Washington Legal Foundation in 1978,10the Manhattan Institute in 1980,11 and the American Tort ReformAssociation (ATRA) in 1986,12 to name only the most prominentgroups dedicated to protecting business from governmentalregulation generally and from the civil justice system specifically.Moreover, only two months after Powell wrote his famousmemorandum, President Nixon nominated him to a seat on theUnited States Supreme Court. Powell's elevation to the Court wasthe beginning of a long conversion of the Court from protector ofcitizen rights to hold big business accountable to protector ofbusiness from citizen lawsuits. 13Today "tort reform" means the opposite of what it meant aquarter of a century ago. Notwithstanding the progressive soundof the word reform, the phrase tort reform now stands for acollection of regressive proposals designed to shield big businessand medicine from citizen lawsuits. It has been enormouslysuccessful. ATRA is able to boast that "85 percent of Americansbelieve too many frivolous lawsuits clog our courts," and "more6. Id.7. About the Business Roundtable, http://www.businessroundtable.org/aboutUs/history.aspx (last visited Mar. 21, 2008).8. About the Heritage Foundation, http://www.heritage.org/about/ (lastvisited Mar. 21, 2008).9. About CATO, http://www.cato.org/about.php (last visited Mar. 21,2008).10. Washington Legal Foundation Mission, http://www.wlf.org/Resources/WLFMissionl (last visited March 21, 2008).11. Manhattan Forums (Manhattan Institute for Policy Research, NewYork N.Y.), available at http://www.manhattan-institute.org/pdf/mi-five.pdf(last visited Mar. 21, 2008).12. About the American Tort Reform Association, http://www.atra.org/about/ (last visited Mar. 21, 2008).13. See Rosen, supra note 4.4 ROGER WILLIAMS UNIVERSITY LAWREVIEW [Vol. 13:1than 45 states have enacted portions of ATRA's legislativeagenda."'14 Those two facts are directly related. Powell's strategyof simultaneously waging a two-front war--one in the branches ofgovernment and the other in the media, on the newsstands, and inuniversities and think tanks-worked. ATRA achieved successesin legislatures and the courts because it and its allies worked atshaping public opinion. Meanwhile, for too long the principaldefender of the civil justice system, the American Association ofJustice, directed its efforts principally at lobbying the politicalbranches of government and litigating in the courts and largelyneglected the public relations war.15 As a result, AAJ was like theboy with its thumb in the dike. It was able to succeed for a whilebut with the waters of adverse public opinion rising constantly, itsposition became increasingly untenable.The public today believes that citizen litigation is expandingand that the courts are filled with frivolous lawsuits-notwithstanding that the data prove otherwise. 16  Theconventional wisdom, however, affects not only voters, butlegislators, judges, and juries. Champions of civil justice areincreasingly defeated in all forums. At least twenty-five stateshave capped non-economic damages. 17 Thirty-four states havecapped punitive damages. I8 The United States Supreme Courthas also effectively imposed a constitutional cap on punitive14. ATRA, "A Track Record of Success," available at http://www.atra.org/about/ (last visited March 27, 2008). For additional polling data about publicattitudes toward the torts and civil justice systems, see WILLIAM HALTOM &MICHAEL MCCANN, DISTORTING THE LAW: POLITICS, MEDIA, AND THE LITIGATIONCRISES 267-68 (2004).15. During the period of time when public relations was neglected, theAmerican Association of Justice (AAJ) was named the Association of TrialLawyers of America, but for simplicity's sake I refer to organizationthroughout as AAJ. For the history of how AAJ neglected the public relationswar, see HALTOM & MCCANN, supra note 15, at 122-27 (2004).16. See generally CARL T. BOGUS, WHY LAWSUITS ARE GOOD FOR AMERICA:DISCIPLINED DEMOCRACY, BIG BUSINESS AND THE COMMON LAW (2001); JAY M.FEINMAN, UN-MAKING LAW: THE CONSERVATIVE CAMPAIGN To ROLL BACK THECOMMON LAW (2004); and HALTOM & MCCANN, supra note 15.17. See Joseph Sanders, Reforming General Damages: A Good TortReform, 13 ROGER WILLIAMS U. L. REV. 73, 132 (2008).18. Scott S. Evans, Note, Dynamic Incentives: Improving the Safety,Effectivity, and Availability of Medical Products through ProgressivelyIncreasing Damage Caps for Manufacturers, 2007 U. ILL. L. REV. 1069, 1081(2007).2008] INTRODUCTION TO GENUINE TORT REFORM 5damages by declaring that punitive awards are constitutionallysuspect if they are more than four times compensatory damagesand that "few awards exceeding a single-digit ratio betweenpunitive and compensatory damages . . . will satisfy dueprocess." 19  Taking advantage of hysteria over rising medicalmalpractice premiums, in the first half of 2005 alone the heathcare industries persuaded thirty-one state legislatures to enactsome form of medical malpractice tort reform. 20 A majority ofstates have also enacted tort reform measures regarding joint andseveral liability and the collateral source rule.21 At the federallevel, Congress has enacted a panoply of statutes designed toprotect particular industries-including gun manufacturers andan industry of special importance to national welfare, namely, thecruise ship industry-from lawsuits. 22The success of the tort reform movement is unfortunate. Thecommon law plays an important role in protecting public healthand safety. Lawsuits shine light into dark corners, exposingcorporate wrongdoing or shortcuts that have placed citizens at19. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003).What about a case such as Westbrook Pegler's deliberate attempt to destroythe reputation of the writer Quentin Reynolds by telling outrageous liesabout him in Pegler's syndicated column that was published in 186newspapers? The maliciousness was proved, but compensatory damageswere difficult to establish because magazines continued to publish Reynoldswork and his income did not decline. The jury awarded one dollar incompensatory damages and $175,000 in punitive damages - that's more than$1.3 million in 2007 dollars - an award that, I submit, most observers wouldconsider fair and just? Reynolds v. Pegler, 123 F. Supp. 36 (S.D.N.Y. 1954),aff'd, 223 F.2d 429 (2d Cir. 1955), cert. denied, 350 U.S. 846 (1955). The casebecame famous from the riveting account in Louis NIZER, MY LIFE IN COURT17-152 (1961). Cases in which affluent defendants maliciously or recklesslyput people at grave risk but thankfully caused little injury may not beexceedingly rare. Although the Supreme Court arguably has left room forsuch cases, few judges are likely to let awards with a punitive tocompensatory ratio exceeding nine to one stand.20. Edward J. Kionka, Things To Do (or Not) To Address the MedicalMalpractice Insurance Problem, 26 N. ILL. L. REV. 469, 479 (2006).21. JAMES A. HENDERSON, JR. & AARON D. TWERSKI, PRODUCTS LIABILITY:PROBLEMS AND PROCESS 859-62 (2d. ed. 1992).22. See Terry Carter, Piecemeal Tort Reform, A.B.A.J., Dec. 2001, at 50(regarding statutes protecting particular industries generally), id. at 53(regarding cruise ship industry). The legislation protecting firearmmanufacturers, distributors, and dealers from litigation is the Protection ofLawful Commerce in Arms Act, 15 U.S.C. § 7901 (2006).6 ROGER WILLIAMS UNIVERSITY LAWREVIEW [Vol. 13:1risk. Indeed, it may be the exposure function that matters most,even more than the money judgments. But of course moneymatters too, providing incentives for business and health careproviders to find ways to reduce injuries. Examples abound.Evidence shows that products liability has played a significantrole in reducing the automobile fatality rate by 79 percent sincethe adoption of strict liability and the crashworthiness doctrine. 23Escalating medical malpractice premiums provided the incentivethat caused the health care and insurance industries to team up,analyze why there were so many anesthesia-related fatalities, andfind ways to make anesthesia safer-indeed, making a twenty-foldimprovement in the anesthesia mortality rate.24  Moreover,contrary to popular opinion, the tort system is cost effective: thebest evidence is that the "tort tax" -how much of the retail pricewe pay for products covers litigation costs-is on average 0.21percent and the "malpractice tax" is between one and two percentof health care expenses. 25 Although more research must beundertaken to provide conclusive evidence, the best data availablenow suggest that there is an inverse relationship betweenmalpractice risk and injuries due to medical negligence, that is,the stronger the medical malpractice litigation system the saferthe health care system. 26There is a great need for more research by scholars who areinterested in improving the tort system. It is in this spirit that weorganized this symposium. The Roscoe Pound Foundation made agenerous grant that made it possible for us to bring together someof the nation's most prominent and respected legal scholars. Weasked the symposium participants to each make one proposal forimproving the tort system. We did not define what we meant by"improving" the system, and we did not place any parameters onwhat they might suggest. We call this project a Symposium forGenuine Tort Reform to distinguish it from efforts with the23. See BOGUS, supra note 16 at 138-72 (arguing that products liabilityplayed a major role in the reduction of automobile fatalities).24. See TOM BAKER, THE MEDICAL MALPRACTICE MYTH 108-110 (2005);and David A. Hyman & Charles Silver, The Poor State of Health Care Qualityin the U.S.: Is Malpractice Liability Part of the Problem or Part of theSolution, 90 CORNELL L. REV. 893, 917-23 (2005).25. See respectively BOGUS, supra note 16 at 218-18 (regarding tort tax)and BAKER, supra note 24 at 40 (regarding malpractice tax).26. Hyman & Silver, supra note 24 at 915-16.2008] INTRODUCTION TO GENUINE TORT REFORM 7objective of curtailing the civil justice system. Our participantshave not disappointed; they have provided thoughtful andprovocative proposals and insights.

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