Just Saying: ‘Tort Reform’ Harms us All

by: Prince, Glover & Hayes Tuesday, July 5th, 2011

With so many controversial bills emerging out of the last legislative session, it was easy to miss the passage of five more measures designed to make Alabama more “business-friendly” by insulating companies from consumer lawsuits.

Portrayed as “tort reform,” the current restrictions, signed by Governor Robert Bentley a couple of weeks ago, reduce the statute of limitations on some suits, prohibit suits against businesses that merely sell a harmful product, reduce post-judgment interest rates, prohibit “forum shopping” for wrongful death cases and redefine the standards for expert testimony.

Those restrictions join a previous set passed in 1999 that, among other things, placed a $1.5 million limit on punitive damages.

The message from politicians to businesses is clear: If you’ll bring jobs to Alabama, we don’t mind if you defraud our citizens, sell us products that will kill us, operate in a careless way or generally do whatever it is you’d like to do to increase profits. Just please, employ a few of my constituents so I can claim job increases during the next election.

Amazingly, though, many of those constituents have been fooled by big businesses’ PR campaigns into backing this nonsense. It’s a campaign that’s used outright lies, scare tactics and horror tales to get the average person to vote against their own interests.

Here’s an example of how the scheme works:

In 1999, a jury awarded $581 million to a family in Hale County after they were defrauded of less than $1,000 by Whirlpool Corporation. The company’s door-to-door salesman had lied to the family about the terms of purchasing a satellite dish.

The PR campaign kicked in at this point and all you heard about was the “jackpot justice” verdict and a bunch of jurors who allowed their emotions to get in the way of common sense. These verdicts, they said, were killing business in the state, sending corporations scrambling and pushing insurance rates through the roof. It was the worst thing to happen since Hitler.

Missing from the discussion were the facts of the case.

Whirlpool and several other companies were making big bucks pulling a scheme on poor, uneducated families all over the state, in which they offered financing on satellite dishes for a rate they said was 20 percent but was actually more than 300 percent. They were intentionally deceptive, and in many cases flat out lied about the terms and the costs.

The jury heard about the depths to which the salesmen would sink, highlighted by a sale to a legally blind woman who didn’t own a TV set. They also heard from a former salesman who said it was accepted practice to prey on the elderly and uneducated and that he had personally trained other salesmen to lie about the terms of the contracts.

To put a stop to this widespread and outright fraud, the jury sent a message with a big verdict.

And the result was this: Whirlpool and several other companies stopped the scheme in Alabama. Whirlpool sold its finance company and got out of the business completely.

But instead of applauding our court system for watching out for their constituents, our politicians buckled under the weight of all those big-business campaign contributions and made sure it never happened again.

In doing so, they lessened the effectiveness of the last line of defense between everyday folks and major companies by limiting punitive damages.

“The civil courts are the place where average citizens can hold big corporations accountable — it’s about the only place,” said attorney Jere Beasley, the senior member of the Beasley Allen Law Firm. “(Business interests) have used fear to get the general public to go along with these so-called reforms.”

Truly, it’s baffling that an average person would ever back tort reform bills, because the premise of “frivolous lawsuits clogging our courts and hurting business” makes no sense.

If a lawsuit is truly “frivolous,” there’s a guy in a black robe in every courtroom that can kick it out before it sees the light of day. In addition, Beasley points out that there is a statute in this state that allows for any person who is the victim of a frivolous lawsuit to sue the lawyers, law firm and plaintiff who brought that suit and recoup any damages suffered.

On top of that, if the jury verdict is too large, the judge reduces the penalty.But more important than all of that, creating these restrictions undercuts the guarantee of the Seventh Amendment of our Constitution, which grants us all the right to a trial by jury in civil disagreements over values greater than $20.

It seems to me that the argument that many have bought is that we can’t trust a jury of our peers — like the ones we trust with our freedom in criminal courts — to make rational decisions in civil court, but we can trust politicians financed by big business who haven’t seen one shred of evidence in any of these cases.

That line of thinking is what needs to be reformed.

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