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14. Corporations Win Big on Tort Reform, Justice Suffers

Sources: Dollars and Sense, Issue #252, March/April 2004, Title: “Supremes Limit Punitive Damages,” Author: Jamie Court, http://www.dollarsandsense.org/0304court.html; Democracy now! Feb 4, 2005, Title: “Tort reform: The Big Payoff for Corporations, Curbing the Lawsuits that Hold Them Accountable,” Author: Amy Goodman et al (Juan Gonzalez interview with Joanne Doroshow), http://www.democracynow.org/article.pl?sid=05/02/04/1537236

Faculty Evaluator: Perry Marker, Ph. D.
Student Researcher: Chris Bui

On February 18, 2005, President Bush signed into law the most sweeping federal tort reform measure in more than a decade. The Class Action Fairness Act puts into effect a tort reform that will take away people’s access to the courts, undermining the constitutional right to trial by jury. These reforms weaken consumer and worker protections, denying due process of law in civil cases to all but the wealthiest in our society. The act will move many civil lawsuits from state to federal courts in an attempt to end so-called “forum shopping” by trial lawyers seeking districts most hospitable to multi-party suits against companies.

What has been lost in all the partisan rhetoric is the fact that class action suits are most often lawsuits brought by people who have been hurt by HMO abuses, civil rights violations, or workplace injuries and violations. These are the suits that allow for compensation when large numbers of people are hurt by companies in the pursuit of profit. Although, at times, individual injuries may be relatively small, they represent a pattern of behavior on the part of the defendant. While legal recourse may not be available on an individual level, by joining together at the state level, people have been able to affect responsible change in the conduct of corporations. Federal courts are not expert in these cases, are already overburdened, and are much smaller than state courts. Critics claim that the real intention of this law is to make sure these cases get buried quickly and are ultimately dismissed.

Attached to this bill is a mass tort section that will severely restrict large class action suits against pharmaceutical companies and paves the way for medical malpractice reform, effectively immunizing abusive or negligent corporations from liability.

The reform sets a cap of $250,000 per lawsuit while shielding drug companies from responsibility for punitive damages and lawsuits where the drug had been approved by the FDA. One woman who was taking the FDA approved drug Vioxx, for example, had a stroke and continued taking the drug because she wasn’t warned of its major side effect-stroke. She went on to have a second stroke. The new reform would limit her settlement to $250,000 for a lifetime of disabilities. Under this new legislation corporations will not be held accountable for their faulty products and will only be punished with a slap on the wrist in terms of financial payment.

Update by Jamie Court: The Supreme Court ruling in Campbell seems to be an eye-glazing experience for the mainstream media. For example, the press ignored the significance of the ruling in covering the Congressional debate over 2005 legislation signed into law by President Bush that created new hurdles to class action lawsuits. Given the Campbell ruling’s limits, the new class action restrictions give a virtual guarantee to banks, insurers, drug makers, and other big industries that no matter how egregious their conduct, the penalty will always be financially manageable. Indeed if the media had taken more notice of the ruling, President Bush’s campaign plank of limiting lawsuits of all kind would be seen in a far different light.

Read the State Farm v. Campbell case at http://www.supremecourtus.gov/.

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