Justices fail to rule on tort reform:  State’s high court cites ‘lack of jurisdiction’ in dismissing challenge

BY SETH BLOMELEY ARKANSAS DEMOCRAT-GAZETTE
June 18, 2004

    The Arkansas Supreme Court on Thursday dismissed a legal challenge to the state tort reform law, ruling it couldn’t settle the dispute yet.

    The court, without elaborating, cited a "lack of jurisdiction" in dismissing the case.
  

WELCH

"The court did not rule on the constitutionality of [the tort law]," said lawyer Morgan "Chip" Welch, who filed the action. "All they ruled was that they didn’t have jurisdiction. There are other ways to pursue this thing. This law will be challenged."       Ron Russell of Little Rock, president of the state Chamber of Commerce, said the court recognized Welch’s "cagey tactics" and was right to dismiss the case.

"As they typically do, the Arkansas Trial Lawyers were trying to pull a back-end run by knowingly filing this frivolous lawsuit in the wrong court, wasting the court’s time and more Arkansas taxpayer money," Russell said in a written statement.     Welch of Little Rock represents the Arkansas AFL-CIO, the Arkansas Trial Lawyers Association and the Arkansas Advocates for Nursing Home Residents in the case. He sued the state’s circuit judges on April 20 to keep them from enforcing the tort law, which limits damage awards in lawsuits.

RUSSELL

    Ron Russell of Little Rock, president of the state Chamber of Commerce, said the court recognized Welch’s "cagey tactics" and was right to dismiss the case.     "As they typically do, the Arkansas Trial Lawyers were trying to pull a back-end run by knowingly filing this frivolous lawsuit in the wrong court, wasting the court’s time and more Arkansas taxpayer money," Russell said in a written statement.     Welch of Little Rock represents the Arkansas AFL-CIO, the Arkansas Trial Lawyers Association and the Arkansas Advocates for Nursing Home Residents in the case. He sued the state’s circuit judges on April 20 to keep them from enforcing the tort law, which limits damage awards in lawsuits.

    Welch said he was trying to save the court’s time and money. He said he wanted to streamline the litigation. Deciding the merits of the law after numerous lawsuits affected by the law were filed in lower courts would take years. He said each of those cases may only address parts of the law, so it was better for the court to address all at one time.

    "What we were trying to do was to avoid multiple pieces of litigation with multiple victims who would have to wait three or four years from now to see if the law is unconstitutional," Welch said.

    Act 649 of 2003 was passed after a debate in which lawyers accused businesses and doctors of being greedy and not wanting to accept responsibility for their wrongs.

    Businesses and doctors in turn accused lawyers of greedily seeking unfairly large damage awards.

    Attorney General Mike Beebe’s office defended the circuit judges in Welch’s lawsuits. Assistant Attorney General Collette D. Honorable wrote that the Supreme Court’s rules allow direct filings only in limited circumstances, most of which involve proposed statewide referendums or contempt citations.     "There is no pending case before any trial court from which these issues arise and petitioners have failed to cite any legal authority that supports their petition that original jurisdiction exists," Honorable wrote in a brief.

    Welch asserted that the court’s rules allow such actions but acknowledged that he knows of no similar action that the court accepted previously.

    "We’re just going to have to go back to the drawing board," Welch said.

    He said he would consider a federal lawsuit but didn’t know for sure what federal issues to pursue. He would also consider asking the court to reconsider the dismissal. He also would consider first challenging the law in a lower court.

    "The impact [of waiting] will be on those people least able to bear it and who are the victims," Welch said. "I haven’t seen any insurance premium reductions [since the tort law was passed]. I’ve just seen more corporate profits."

    Supporters of the tort law said last year that insurance premiums would go down if the tort law passed.

    According to the state Insurance Department, two of the four major medical malpractice insurance carriers doing business in the state increased rates in 2003 — one by 20 percent, another by 10 percent.

    So far in 2004, only one has increased rates, by 12 percent.

    John Hartnedy, deputy insurance commissioner, said it’s too early to tell if the tort law has affected rates.

    "Some carriers have said they’re not going to lower rates until they see what happens," he said. "Their experience has been that in many states courts have thrown out tort reform laws."

    Act 649, among other things, limits punitive damages in civil lawsuits to $250,000 or three times compensatory damages, whichever is greater, but no more than $1 million.

    Punitive damages can be awarded only if the plaintiff receives compensatory damages and proves by "clear and convincing evidence" that the defendant knew his conduct would likely injure the plaintiff but continued the conduct with malice or an intent to cause injury.     "Clear and convincing evidence" is a more demanding standard than some others, such as "a preponderance of" the evidence.

    The caps on damages don’t apply if clear and convincing evidence shows that the defendant intentionally tried to harm and, "in fact, did harm" the plaintiff.

    Act 649 also provides that defendants partly responsible for damages don’t have to pay the entire judgment if other defendants fail to pay their share.

    The law sets stricter evidence requirements in medical malpractice cases and provides that lawsuits in such cases can be filed only in the county where the alleged misconduct occurred.



Russell



Welch