Law Professor Thomas A. Eaton on Tort Reform
Earlier this month, the jury in the federal Donna Cisson transvaginal mesh case awarded Mrs. Cisson $1.75 million in punitive damages in addition to the $250,000 in compensatory damages.
The Cisson case established the Bard Avaulta mesh she received as a treatment for pelvic organ prolapse was defective. Yet readers learned something startling about any punitive monies awarded to a resident of Georgia, Mrs. Cisson’s home. According to state statutes, three-quarters of that punitive damage will be given to the state’s general fund, something called split-recovery.
You can thank the tort reform movement – the same force that established caps on damages in medical malpractice cases and a U.S. Supreme Court decision (Riegel v Medtronics) that precludes a jury trial if the medical product has underg0ne the FDA’s premarket approval (PMA).
MDND talked to Professor Thomas Eaton, from the University of Georgia’s School of Law about tort reform around the country and in Georgia.
Q: Was the Cisson outcome as far as punitive damages going to the general fund the result of tort reform?
Yes that statute was enacted at one of the earlier stages of tort reform. Tort reform is something that has come in different waves. There were tort reform movements in each of the decades beginning in the 1970s and this bill was I think in the 1980s when it was enacted.
Q: How many states have this sort of a split-recovery system?
Not very many at all, just a handful of states. Some states don’t allow any punitive damages at all.
Q: So at this point there are these women going online to figure what the statutes are.
I’m not sure how many people are going to be affected by this statute.
Any plaintiff who is not a Georgia resident won’t be affected at all. It’s a Georgia law that will affect Georgia claimants, but it won’t affect women who are residents of other states and since this is a multidistrict litigation (MDL) there are people from all over the country. Secondly, for the plaintiffs who are Georgia residents, it will only affect those who used that particular product. It’s my understanding there are a number of different mesh products that could be at issue.
Q: Well Bard has for the most part the Avaulta line so you are saying the Avaulta….
Well that particular Avaulta, the Avaulta Plus Posterior. I’m not sufficiently familiar with the details to know how many different product lines they have but if there are other products, the punitive damage award involving one of them would not preclude a punitive damage award involving a different product, or at least a court is going to have to decide whether this is one product or multiple products. The third point I would make I think the purposes of the cases going to trial is to establish value range of injuries. In a lot of multidistrict litigation what you’re doing is establishing a range that will ultimately lead to mass settlements. The vast majority of these cases are not going to trial anyway.
Q: However the Donna Cisson case, as it was decided, that would not be affected by a settlement?
That depends on what the parties negotiate.
Q: So if some other woman has the Bard Avaulta Plus Anterior are you saying this decision would not apply?
I’m saying there is an argument this decision would not preclude an award of punitive damages. The question is going to be whether the anterior is a different product than the posterior. The way that the statute is phrased it applies to a product.
Q: It’s up to whom?
Q: And the judge has leeway to award legal fees out of the punitive damages I understand?
The way the statute is written is the amount of money that goes to the state would have to take into account the fact that the private plaintiffs’ lawyers are the ones who incurred all of the expenses. So the actual amount that goes to the state would be less than 75 percent.
Q: So it’s feasible a woman could walk away with less money than her law firm?
I do not know the details of this arrangement, but it’s my understanding that in those situation the parentage of contingency (fee to attorneys) applies to both punitive and compensatory. So the individual client will always receive more than the attorney will receive in fees. Now the other variable to remember is that there are expenses in litigation and that is not money that’s paid to compensate them but to reimburse them for expenses that were incurred in bringing the lawsuit.
Q: Understandable and that can run into hundreds of thousands of dollars if not more.
Expert witnesses are not free.
Q: Right, that’s something people need to understand and the firms also take the chance of losing the case and never recovering their expenses.
And when you take into account a case like this takes a considerable amount of time over many years, that could be a considerable risk.
Q: People seem to be surprised that something like this can happen. How has tort reform sold to us, sort of like while you were sleeping this was happening?
Well I don’t know if people were sleeping as much as they were indifferent. Most people don’t view themselves as potential plaintiffs. On the other hand they view themselves as someone who is paying for insurance. So when they hear the rhetoric, “litigation explosion,” “runaway juries,” and they hear it often enough, they tend to believe it.
Now, I’ve conducted a fair amount of empirical research that in Georgia, neither one of those propositions is true. There has not been a litigation explosion. There are not runaway juries. In fact, the federal judge who initially struck down the constitutionality of the punitive damage statute, cited one of my early studies on that, but the Georgia Supreme Court has not twice ruled that the statute is constitutional. I think that the case for radical tort reform has been overstated and is not supported by the empirical data as some would have you believe. Ultimately, it’s a political decision. The forces that support tort reform are well-funded and are a constant presence.
Q: I think the genesis was Big Tobacco and Big Asbestos was it not?
Well that was certainly part of it but there’s more. Most of the medical community has been part of the coalition as has the Chamber of Commerce representing a lot of small and large businesses. I would say it’s a well orchestrated, well organized group that is exercising its own constitutional rights to try and influence policy.
Q: Is there anything citizens can do when this hits them over the head and they suddenly realize tort reform was not in my best interest?
Well they can try to change the rules. Any statute that’s been passed can be changed but it’s more difficult to organize potential victims than it is to organize potential defendants. Defendants are repeat players. They face the prospect of being sued on a regular basis.
People who are consumers of products or medical services or ride in automobiles just don’t tend to view themselves as, “I’m going to be in the courtroom one day as somebody who has been injured, I’m worried about what rights I might have.”
Q: And we’re dealing with a product that went through the FDA’s 510(k) process. If instead we were talking about a medical device that went through the FDA’s premarket approval (PMA) then citizens are really out of luck aren’t they?
Well there is a preemption issue that is absolutely the consequence of a holding that free market approval preempts any tort claim based on warning or design. Yes, you’ve got to hope the regulatory process has weighed the risks and benefits appropriately.
What I would like to calm the fears of a lot of the class members out there, this is part of a mass litigation process that in all likelihood will result in group settlement provisions. So the impact of this Georgia statute on the rest of the plaintiffs here is probably not as great as they may fear. It may certainly have an impact on other Georgia claimants, especially Georgia claimants who go to trial. If you were a plaintiff who lives in Oklahoma, the Georgia law isn’t going to affect them.
A: I guess before a plaintiff decides if they file in state court or the federal MDL (multidistrict litigation) they should check their state statutes?
The MDL technically only deals with the pretrial process. The judge who handles the MDL could send the case back to the original forum for trial, but it’s quite common that the judge who has handled all of the discovery will also handle the trial. There is a certain efficiency to have a judge who is familiar with all the issues in the trial, but it’s not required, so there is a choice that’s being made. The MDL process is the most realistic way to try and process the volume of claims that can be generated by a mass produced product that injures lots and lots of people.
Q: So you are saying if we have 4 bellwethers and split decisions, 2-2, for the plaintiff and defendants, Bard decides it wants to continue and not offer a settlement, the plaintiff has the option to go back to their originating forum for trial?
Yes, let’s go have a trial.
Q: Do you have any predictions what will happen if we have four losses for Bard?
Well the more losses and the higher the damage award, the higher the settlement value is going to be. But what we’ve seen in asbestos cases and other types of mass torts, both sides win some and lose some. Some will have some fact specific issues. In asbestos cases you had the role of smoking cigarettes by the injured which was always an issue. I’m not sure we have anything comparable here.
But the age of a claimant is going to be a factor in terms of the amount of damages, the kind of physical injuries that have occurred is going to be a factor. But clearly for either side, you want to win the bellwether cases. The more wins for the plaintiff, the more the settlement values are likely to be.
Q: The last case found the mesh was defective in its design, will that set a precedent for other cases?
It may not necessarily be binding for anybody else, but it certainly will be a big plus for the cases going forward. They will know what kind of arguments jurors have been receptive to, what kind of testimony that works and it is going to have a big impact.
Q: I don’t know if you follow these cases, one lawyer said it may rival Vioxx in the number of claimants and the amount that might be offered?
Certainly the injuries are painful and significant and it seems the jury in West Virginia took that into account.
When I graduated from law school I worked for a judge and we had one of the early mass torts with the Dalkon Shield. I kind of cut my teeth working for the judge on processing those cases. One of the, processing the numbers was logistically difficult. Quantifying damages was a very difficult task and with all of the mass torts we’ve been dealing with it is extremely difficult to individually quantify the monetary value of an injury.
Q: They came up with different tiers of injury in the Kugel Mesh case.
And that basically is what is going to happen with all of the mass torts. Ken Feinberg, who was special master in 9/11, did the best he could to come up with a variable that was most relevant. And you have the bellwether cases that put a value on the injuries that fall within those boxes and you negotiate and ultimately you get a resolution.
The MDL process is the most realistic way to try this volume of claims generated by a mass-produced product.
U.S. Chamber of Commerce – Tort Liability Costs for Small Business
SourceWatch – on the genesis of tort reform, Big Tobacco, Big Asbestos
Public Citizen, The Great Medical Malpractice Hoax, January 2007, says runaway juries and judgments are a hoax. Million dollar judgments are less than 1 percent of the total number of payments. In 2006, President Bush claimed “lawsuits are driving many good doctors out of practice.” The number of malpractice payments actually declined between 1991 and 2005. And while our attention is diverted to “ambulance chasers” “runaway juries” and “Jackpot Justice”, the real issue for most Americans – patient safety – is not seeing improvements in outcomes.
Hot Coffee – This documentary debunks the myth of Stella Liebeck, the woman scalded nearly to death by hot coffee served by McDonalds. The jury awarded her after the appearance of McDonald’s executives on the stand who showed reckless disregard for the safety of their customers. She only wanted medical bills covered and McDonalds declined. The award represented just two days coffee sales from McDonalds. It was portrayed as a jackpot for Stella Liebeck. The award was later reduced by a judge and Liebeck never fully recovered from her scalding injuries and has since died. See the trailer here.
Riegel v, Medtronic – Consumers who are injured by a defective medical device that received FDA approval, are preempted (prevented) from suing. The manufacturer enjoys immunity under this Supreme Court ruling. http://www.law.cornell.edu/supct/html/06-179.ZS.html
The Faces of Preemption