Galligan, Doyle, Reid & Galligan, P.C.

Fighting for a Safer Iowa

THE TRUTH ABOUT TORT REFORM

TORT REFORM IN IOWA: A SOLUTION LOOKING FOR A PROBLEM
Iowa jury awards are not outrageous. In an annual study of state liability systems conducted by the U.S. Chamber of Commerce,
Iowa ranked 4th best in the nation for 2006. The ranking is based upon a survey of in-house general counsel and other senior litigators at public corporations. Iowa ranked 3rd in jury predictability and 2nd in jury fairness and 4th in the area of judge impartiality.

Lawsuits filed by injured Iowans are not clogging our courts According to the Office of the Iowa State Court Administrator, between 1992 and 2002, an average of 475 civil jury trials were tried each year in the entire state of Iowa. That number was down to 267 in 2005. Civil case filings in general have been in decline over the past 25 years. In 1980, 30,020 civil cases were filed in Iowa. The number of filings in 2002 was down to 27,489 and was 27,300 in 2005. The vast majority of these civil lawsuits were filed by businesses. In 2002, Iowa businesses filed 14,000 lawsuits compared to 4,462 filed by individuals.

Filings of medical malpractice suit filings in Iowa have decreased by 29% since 2002. All “tort” or injury related civil lawsuit filings have decreased 18.3% since 2002. Filings by businesses for debt collection and mortgage foreclosures have increased 22.7% and 24.9% respectively during this same period.

THE “TOO MANY LAWSUITS”MYTH

Number of Civil Trials Dropped by 47 Percent Between 1992 and 2001.
According to statistics released by the U.S. Department of Justice, the number of civil trials dropped by 47 percent between 1992 and 2001. The number of personal injury cases decreased by 31.8% during the same period. ["Civil Trial Cases and Verdicts in Large Counties, 2001," Bureau of Justice Statistics, U.S. Dept. of Justice, 2004]

Tort Filings are Decreasing While Contract Cases are Increasing.
According to the non-partisan National Center for State Courts, tort (personal injury) filings by individuals are steadily decreasing while contract cases are greatly increasing. Tort filings have declined 5% since 1993. Contract filings, which are more likely to involve businesses than tort cases, rose by 21% over the same period. ["Examining the Work of State Courts, 2003," National Center for State Courts, 2004]

Federal Litigation is Decreasing

• A 2005 report issued by the U.S. Department of Justice's Bureau of Justice Statistics shows that the number of tort cases resolved in U.S. district courts fell 79 percent between 1985 and 2003. Federal Tort Trials and Verdicts, 2002-03, Cohen, Thomas H., Bureau of Justice Statistics, August 17, 2005.
• According to the Administrative Office of the U.S. Courts, tort actions in the U.S. District Courts dropped by 28% from 2002 to 2003. Judicial Facts and Figures, Table 2.2, Administrative Office of the U.S. Courts.
• In addition, over the last five years federal civil filings have not only decreased 8%, but the percentage of civil filings that are personal injury cases has also declined to a mere 18.2% Federal Judicial Caseload Statistics, Judicial Caseload Indicators, 2002 & 2003, Administrative Office of the U.S. Courts.

State Litigation is Decreasing

• The Bureau of Justice Statistics (BJS), a division of the Department of Justice, performed a study of civil trials in state courts and found that the number of civil trials dropped by 47% between 1992 and 2001. Civil Trial Cases and Verdicts in Large Counties, 2001, Thomas H. Cohen, Steven K. Smith, Bureau of Justice Statistics, 2004.
• The number of tort cases decreased 31.8% during the same period. Civil Trial Cases and Verdicts in Large Counties, 2001, Thomas H. Cohen, Steven K. Smith, Bureau of Justice Statistics, 2004 (Study examined state courts in the 75 largest counties in the country).
• The trend in award size was also down. The median inflation-adjusted award in all tort cases dropped 56.3% between 1992 and 2001 to $28,000. Civil Trial Cases and Verdicts in Large Counties, 2001, Thomas H. Cohen, Steven K. Smith, Bureau of Justice Statistics, 2004.

Lawsuit Filings are Decreasing

• Tort filings have declined 5% since 1993. Examining the Work of State Courts, 2003, at 23, National Center for State Courts, 2004.
• Contract filings, which are more likely to involve businesses than tort cases, rose by 21% over the same period. Examining the Work of State Courts, 2003, at 23, National Center for State Courts, 2004.
• Automobile tort filings, which make up the majority of all tort claims, have fallen by 5% since 1993 and by 14% since their high in 1996. Examining the Work of State Courts, 2003, at 27, National Center for State Courts, 2004.
• Medical malpractice filings per 100,000 population have fallen by 1% since 1998. Medical Malpractice Filings per 100,000 Population in 11 and 17 States, 1993-2002, National Center for State Courts, 2004 (unpublished, on file with author).

Asbestos Case Filings are Decreasing

• Civil filings in the U.S. District Courts decreased 3 percent in 2003 to 256,858. This overall decline in filings resulted from an 83 percent reduction in asbestos cases filed. Judicial Business, at 14, Administrative Office of the U.S. Courts. (In which the United States was not a party)

Class Action Cases are Rare

• In its study of civil litigation in state courts, the BJS found only one case out of 11,908 cases that could truly be classified as a class action. That case, Bell v. Farmers Insurance Exchange, involved an insurance company’s attempt to classify claims’ representatives as administrative personnel in order to avoid paying them overtime wages.

Medical Malpractice Filings are Decreasing While Numbers of Doctors are Increasing

• The number of physicians in the United States has steadily increased from 268 per 100,000 population in 1996 to 285 per 100,000 population in 2002. Health Care State Rankings, 1998 through 2004, "Rate of nonfederal physicians," Morgan Quinto.
• From 2000 through 2002, the three most recent years of data available, the rate of physicians has risen in every single state. Health Care State Rankings, 2000 through 2002, "Rate of nonfederal physicians," Morgan Quinto.
• Medical malpractice filings per 100,000 population have fallen by 1% since 1998. Medical Malpractice Filings per 100,000 Population in 11 and 17 States, 1993-2002, National Center for State Courts, 2004 (unpublished, on file with author).

Misleading Legal System Costs Based on Study Done By Insurance-Industry Consulting Firm.
Bush and other proponents of so-called "tort reform," (the limitation of Americans' legal rights), have based their assertion that consumers pay a $200+ billion cost for our legal system on a study by the insurance industry-consulting firm, Tillinghast-Towers Perrin. Yet, data from the Congressional Budget Office, Business Week, and now the Economic Policy Institute (EPI) all discredit this report. EPI concludes that TTP's cost estimates are one-sided, inflate the impact of the tort system and ignore its benefits, and that corroboration supporting their numbers is weak or nonexistent. [Economic Policy Institute, 5/17/05]

The costs of the legal system are created by those who cause injury, not those injured through no fault of their own.

Proponents of so-called "tort reform" claim that litigation and the fear of litigation hinders job growth and stifles economic development. "Frivolous lawsuits are on the rise," businesses tell Congress, making it hard to compete and difficult to succeed. But studies by the federal government and neutral academic experts prove there is no statistical basis for these claims.

Median Payout for All Tort Cases Dropped 56 Percent Between 1992 and 2001.
According to the U.S. Department of Justice, the trend in damage size for tort cases is down. The median inflation-adjusted payout in all tort (personal injury) cases dropped 56.3% between 1992 and 2001 to $28,000. ["Civil Trial Cases and Verdicts in Large Counties, 2001," Bureau of Justice Statistics, U.S. Dept. of Justice, 2004]

Damage Awards are Down

• Median payout for all tort cases dropped 56 percent between 1992 and 2001. According to the U.S. Department of Justice, the trend in damage size for tort cases is down. The median inflation-adjusted payout in all tort (personal injury) cases dropped 56.3% between 1992 and 2001 to $28,000. Civil Trial Cases and Verdicts in Large Counties, 2001, Bureau of Justice Statistics, U.S. Dept. of Justice, 2004]

READ HOW LAWSUITS HAVE MADE US SAFER

THE FACTS ON MEDICAL MALPRACTICE

Debunking the Top 5 Myths about Medical Malpractice

You may have heard a number of myths about medical malpractice and the civil justice system. Here are the facts:

1. Myth: Debate over malpractice compensation is just about frivolous lawsuits.
   
   Fact: The proposed limits on damages would apply to all cases, no matter how serious the injury or how egregious the malpractice by the doctor, hospital or drug manufacturer.
2. Myth: Medical malpractice claims are driving up the cost of health care for everyone.
   
   Fact: The Congressional Budget Office (CBO) reports that all costs related to medical malpractice account for less than 2% of total health care costs.
3. Myth: We need caps on damages to reduce doctors' malpractice insurance premiums.
   
   Fact: States that have enacted caps haven't seen lower rates—and insurers admit they won't reduce rates if new legal restrictions are enacted.
4. Myth: Fear of being sued forces doctors to practice defensive medicine.
   
   Fact: The General Accounting Office (GAO) says the evidence that defensive medicine occurs is "weak and inconclusive." And the CBO says "savings from reducing defensive medicine would be very small."
5. Myth: Medical malpractice and negligence are not a problem.
   
   Fact: As many as 98,000 individuals die every year because of medical errors - more people than die in motor vehicle accidents or from breast cancer.

Kaiser Family Foundation Study: Claims Per Physician Have Actually Decreased. A new study by the Kaiser Family Foundation found:

• Total malpractice payouts have actually fallen an average of 4 percent per year since 2001, when adjusted for medical inflation.
• In the 10 years prior to 2001, malpractice payouts increased by only 2.5 percent annually.
• The number of physicians rose 31 percent, from 623,378 in 1992 to 814,909 in 2003.
• These factors produced a 25 percent decrease in the average number of claims per physician. [“Medical Malpractice Law in the United States,” The Kaiser Family Foundation, May 2005]

Insurance Industry Official: Premiums Increased, In Part, to Make Up for Lost Investments. Lawrence Smarr, president of the Physician Insurers Association of America, admitted to the Detroit News that premiums are in part rising to make up for lost investment income. [Detroit News, 7/8/05]

AIA Suggested Prices Will Continue to Rise, Even with Tort “Reform.” Dennis Kelly of the American Insurance Association has said, “We have not promised price reductions with tort reform.” [Chicago Tribune, 1/3/05]

The Congressional Budget Office: Malpractice Costs Amount to Less than 2 Percent of Health Care Spending. According to the Congressional Budget Office, malpractice costs amount to “less than 2 percent of overall health care spending. Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.” [“Limiting Tort Liability for Medical Malpractice,” Congressional Budget Office, 1/08/04]

CBO: Savings from Reducing Defensive Medicine would be “Very Small.” According to the Congressional Budget Office (CBO) “… some so-called defensive medicine may be motivated less by liability concerns than by the income it generates for physicians or by the positive (albeit small) benefits to patients. On the basis of existing studies and its own research, CBO believes that savings from reducing defensive medicine would be very small.” [“Limiting Tort Liability for Medical Malpractice,” Congressional Budget Office, 1/08/04; emphasis added]

AMA Data: The Growth in the Number of Emergency Room Doctors, OB-GYNs, and Neurosurgeons Has Outpaced Increases in the U.S. Population. According to the American Medical Association, the number of emergency room doctors has increased from 5,699 in 1980 to 27,864 in 2004 – an increase of 388 percent. The number of OB-GYNs has increased by nearly 60 percent – from 26,305 in 1980 to 42,059 in 2004. The number of neurosurgeons has also increased by nearly 60 percent – from 3,341 in 1980 to 5,288 in 2004. Over the same time period, the total U.S. population increased by only 29 percent – from 227.7 million in 1980 to 293.9 million in 2004 [“Physician Characteristics and Distribution in the U.S.,” American Medical Association, 2006 edition, p.312; U.S. Census Bureau data, http://www.census.gov/prod/ 2005pubs/06statab/pop.pdf

GAO: Malpractice Cases Have Not Widely Affected Access to Health Care. The Government Accountability Office (GAO) (formerly the General Accounting Office) found that “many of the reported provider actions taken in response to malpractice pressures were not substantiated or did not widely affect access to health care … some reports of physicians relocating to other states, retiring, or closing practices were not accurate or involved relatively few physicians.” [“Medical Malpractice: Implications of Rising Premiums on Access to Health Care,” GAO, 9/29/03.

THE FACTS ON PRODUCT LIABILITY

Product Liability Laws Make America Safer

America's product liability laws are a powerful warning to even the most audacious wrongdoers that they cannot market and sell products that injure or kill consumers and expect to get away with it. The following are just a few of the safety changes prompted by our liability laws and punitive damages.

1. (Case No. CJ-2004-62) in the District Court for Mayes County, Oklahoma; U.S. Sues Bulletproof Vest Makers, CNN.com, 7/2/2005
2. , Association of Trial Lawyers of America
3. Gryc v. Dayton Hudson Corp., 297 N.W.2d 727 (Minn. 1980), cert. denied
   101 S. Ct. 320 (1980).
4. O'Gilvie v. International Playtex, Inc., 609 F. Supp. 817 (D. Kan. 1985), rev'd, 821 F.2d 1438 (10th Cir. 1987), cert. denied, 108 S. Ct. 2014 (1988).
5. Benedi v. McNeil-P.P.C., Inc., 66 F.3d 1378 (4th Cir. 1995).
6. Airco, Inc. v. Simmons First National Bank, 638 S.W.2d 660 (Ark. 1982).
7. Ford Motor Co. v. Nowak, 638 S.W.2d 582 (Tex. App. 1982).
8. Steve Wulf, "The Safest Season; No One Died from a Football- Related Injury Last Year," Sports Illustrated, Apr. 29, 1991, at 16.
9. Maria Lopez, "Jury Awards Woman $3.1 Million for Failed Jaw Implant Surgery," Tucson Citizen, May 11, 1995.
10. Borom v. Eli Lilly & Co., No. 83-38-COL (M.D. Ga., Nov. 21, 1983); Washington Post, Nov. 22, 1983, at A1.
11. See, e.g., MDU Resources Group v. W.R. Grace & Co., 14 F.3d 1274 (8th Cir. 1994), cert. denied, 115 S. Ct. 89 (1994); Borel v. Fibreboard Paper Products Co., 493 F.2d 1076 (5th Cir. 1974), cert. denied, 419 U.S. 869 (1974); Fischer v. Johns-Manville Corp., 472 A.2d 577 (N.J. Super. 1984), aff'd, 512 A.2d 466 (N.J. 1986).
12. Grimshaw v. Ford Motor Co., 174 Cal. Rptr. 348 (Cal. App. 1981).
13. Teuton v. A.H. Robins Co., 738 P.2d 1210 (Kan. 1987).
14. Crusan v. Bassett Furniture Co., Cal. Sacramento Super. Ct., June 11, 1986.
15. "Texas Judge Orders Release of Chrysler Minivan Documents to Public," Automotive Litigation Reporter, Aug. 6, 1996; "Settlement Approved in Minivan Latch Lawsuit," Bergen Record, Dec. 3, 1995, at A22.