I’ve got a guest column up at the widely read PowerLine blog, my first there, countering misleading criticisms of the Protection of Lawful Commerce in Arms Act in the Washington Post and elsewhere. Rep. Adam Schiff (D-Calif.) is trying to rally efforts to gut or repeal PLCAA in line with the critics’ charges, but his efforts have picked up little traction thus far.
P.S. Thanks to Eugene Volokh for the link and kind words (“I generally quite agree with it, except that the title (‘six myths about the law that bans gun lawsuits’ is imprecise — the law bans many lawsuits against gun manufacturers and dealers, but by no means all,” citing the law’s sec. 4(5)(A).)
A new empirical study from Joanna Shepherd (Emory) in the Vanderbilt Law Review looks at the question (via Chris Robinette/TortsProf). Among the conclusions:
My empirical results indicate that several reforms that restrict the scope of products liability have a significant impact on economic activity. Statutes of repose that limit the time period for which manufacturers are liable for product defects, comparative negligence reforms that reduce damage awards when plaintiffs engage in negligent activity, and reforms that eliminate strict liability for nonmanufacturer product sellers are all associated with statistically significant increases in economic activity. Specifically, my results suggest that these reforms increase the number of businesses, employment, and production in the industries that bear most of the products liability claims: the manufacturing, retail, distribution, wholesale, and insurance industries.
In contrast, other reforms have a weak effect on economic activity. My results suggest that caps on noneconomic damages and reforms to the traditional collateral source rule are only weakly associated with increases in economic activity. Meanwhile, caps on punitive damages and reforms eliminating joint and several liability are weakly associated with decreases in certain measures of economic activity.
Commentary’s Jennifer Rubin notices:
A friend points out a little nugget of absurdity and political mendacity in the Pelosi health-care bill. Remember Obama’s effort to try a “test” for tort reform? (We don’t actually need a test, since it has worked to lower medical malpractice coverage and help increase access to doctors in states that have tried it.) Well, Pelosi’s bill has an anti-tort-reform measure. On pages 1431-1433 of the 1990-page spellbinder, there is a financial incentive for states to try “alternative medical liability laws.” But look — you don’t get the incentive if you have a law that would “limit attorneys’ fees or impose caps on damages.”
In other words, Congress is providing a financial incentive to uncap damages. Marvelous.
I don’t agree with every one of the suggestions proposed by this Chamber of Commerce Institute for Legal Reform document authored by Victor Schwartz and Cary Silverman, but I agree with more than 90% of them, and it’s a good starting point for any discussion of tort reform.
I summarize my recent testimony on the Hill in today’s American:
As I discussed in recent testimony on Capitol Hill, if one takes conservative estimates from these economic studies and adds it all up, the total cost to the economy from excessive litigation can be estimated to be between $600 billion and $900 billion a year, the vast majority of which is simply wealth destruction. That is between 4 and 6 percent of GNP, a tort tax of between $8,000 and $12,000 a year for an average family of four.
The entire hearing is on YouTube, or you can watch a highlight reel.
In 2007, the Texas Supreme Court unanimously decided Borg-Warner v. Flores, holding that a defendant in an asbestos case was not liable unless its product was a “substantial factor” in causing injury.
But there are now bills in the Texas House and Senate, SB 1123 (recently reported out of Senate committee) and HB 1811, that seek to undo this by defining “substantial factor” to merely mean that a product “contributed to the [plaintiff’s] cumulative exposure”—whether or not other defendants’ products were far more responsible for a plaintiff’s injury. The effect of this rollback would be to return Texas to the role of asbestos magnet, since it could conceivably create indiscriminate liability for hundreds of innocent businesses in any given case. The effect will be very similar to the infamous Lipke rule in Madison County, Illinois that extracted billions of dollars from the innocent this decade.
Texans for Lawsuit Reform has a fact-sheet, as does the Texas Civil Justice League.
Today I testified before the Senate Republican Conference about the effect on the economy of excessive litigation. A podcast is available on-line and, for the insomniacs among you, the hearing will be broadcast on C-SPAN tonight at 10:56 PM Eastern and again at 2:09 AM Eastern. Also testifying was Life Without Lawyers author Philip Howard; Crystal Chodes, who lost her job because of the expense of a meritless ADA filing mill suit; Texas doctor David Teuscher; and arbitration expert and University of Kansas law professor Christopher Drahozal.
If you just prefer reading what I have to say, my written testimony is on-line also:
The total loss to the economy from excessive tort litigation above and beyond a baseline of an employment at will regime and an average industrialized tort system can be estimated at between over $600 billion and over $900 billion a year, 4.3% to 6.5% of GNP, or a tort tax of between $8,000 and $12,000/year for an average family of four. And this is very much a conservative estimate, as other economists find much stronger effects than I have estimated here, as I have not tried to estimate a number of identifiable secondary and tertiary effects of excessive tort litigation on allocation of economic resources, and as I have not tried to estimate the likely effect of recent Congressional expansions of tort liability in the last twelve months.
I was pleased to hear from multiple Congressional staffers who are regular Overlawyered readers: one even surreptitiously added the website into my official biography. Carter Wood talks about the hearing and Senator Cornyn’s remarks over at Point of Law.
Update: video on-line at C-SPAN; my segment begins at 43:15 or so. And C-SPAN2 is rebroadcasting at 4:16 pm Eastern on Tuesday, March 17, which suggests that my appearance will be at about 5 pm Eastern.
Carter Wood notes that the incoming White House chief of staff cast votes in Congress in support of some legal reform measures (and against some others). (Point of Law, Nov. 9).
“McCain challenged Obama on where he’s broken with his party, and Obama offered some specifics: A vote for tort reform, ‘which wasn’t very popular with trial lawyers’ and which divided Democrats, and support for charter schools and clean coal technology.” (Ben Smith, The Politico, Oct. 15).
Co-blogger Ted (who, it should be noted, is actively supporting McCain this fall) has written on Obama’s legal reform votes here and here.
A USA Today story delves deeply into how Biden’s done the bidding of the litigation lobby special interest group, particularly with respect to the bipartisan asbestos litigation reform bill.