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Day 17

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The Case of the Judge and the $54 Million Pair of Pants

An Embarrassment, Not an Argument for Tort Reform

by LARRY ATKINS

District of Columbia Administrative Law Judge Roy Pearson’s attempt to sue the pants off of his local dry cleaners has been a rallying cry for those who champion tort reform. Pearson sued the dry cleaners for $54 million for misplacing his pants and failing to honor a "Satisfaction Guaranteed" sign at the business. Last week, Pearson’s suit was dismissed.

It’s frivolous lawsuits like this that give ammunition to those who want tort reform. Unfortunately, while tort reform sounds like a great idea on paper, the ramifications of tort reform would hurt seriously injured consumers and reward businesses and corporations that engage in negligent or reckless behavior.

The American Association of Justice has called for a disciplinary investigation of Pearson, and AAJ President Lewis Eidson recently stated, "This case is clearly atypical and we cannot allow those who oppose us on fundamental issues of access to the civil justice system to turn this case into an indictment of that system. Our mission continues to be to ensure Americans have a level playing field in our courtrooms–even when it means taking on the most powerful corporations."

Restricting products liability lawsuits has been a long-time priority for businesses, which argue that a litigation explosion has occurred in which out-of-control juries are awarding excessive punitive damages. They argue that products liability lawsuits lead to skyrocketing litigation costs and liability insurance rates, lost jobs, rising consumer prices, and the closing of organizations such as hospitals, day care centers, ski resorts, and public swimming pools that can’t afford such costs. Advocates of tort reform complain about lengthy delays in getting cases to trial, high attorneys’ fees, overly generous damage awards, and the possibility that the fear of large damage awards deters businesses from product innovations. They assert that because businesses are targeted by litigation-happy lawyers as rich deep pockets, they are faced with frivolous cases that they are forced to settle rather than risk huge jury awards.

While tort reform is packaged by its advocates to sound like a progressive philosophy that benefits everyone, in reality, its actual effect of limiting consumer lawsuits would make manufacturers less responsive to complaints about defective goods and deprive many individuals who have been injured by a defective product of an effective remedy. Limiting punitive damages would give manufacturers less exposure for any defects in their products and make it more likely that defective products would remain on the market. Setting arbitrary limits on damages as a general tort reform goal could have the effect of rendering damages inadequate in situations involving brain damage, paralysis, burn injuries, or chronic medical problems.

Contrary to businesses’ assertions, punitive damage awards in products liability cases are rare, and those that are made result in positive improvements in the product.

Public Citizen cites academic studies showing that there were only 379 punitive damage awards in state and federal products liability lawsuits between 1965 and 1994-an average of 13 per year. Many of these awards were reduced or overturned on appeal. One study showed that in nearly 80% of those cases the manufacturer took some subsequent safety measure in the wake of punitive damages.

In its January 2007 Congress Watch, Public Citizen reported that the number of medical malpractice payments declined 15.4 percent between 1991 and 2005, that payments for million-dollar verdicts were less than three percent of all payments in 2005, and that, adjusted for inflation, the average annual payment for verdicts declined eight percent between 1991 and 2005.

It might seem fashionable and indeed often appropriate to bash trial lawyers and to put them one step below carjackers and mass murderers. However, without trial lawyers and contingent fee arrangements, most victims of defective products would have little or no access to courts. Furthermore, there are rules that provide sanctions against attorneys who file frivolous lawsuits. By portraying trial lawyers as the poster children of tort reform, its advocates deliberately shift the focus away from the victims of defective products. The real victims are drivers of Sport Utility Vehicles that roll over; children who suffer severe burns because of pajamas that are not fire retardant; and homeowners who are injured in a propane gas explosion because the supplier failed properly to odorize the gas. The current products liability system isn’t perfect, but it works fairly well in punishing and preventing corporate neglect and misconduct and in compensating injured consumers.

Judge Pearson’s recent multimillion dollar suit for his missing pants is an embarrassment. It also hurts those severely injured consumers who need to rely on products liability to recover damages for legitimate claims.

LARRY ATKINS is a lawyer who teaches Journalism at Temple University and Arcadia University. His email address is larryLTatkins@aol.com