Order In The Torts

Despite company plans to settle asbestos claims, business continues to seek federal civil-suit limits. The states, however, may have the final word.

Don't assume that recently announced plans by Honeywell International Inc., Halliburton Co. and ABB Ltd. to settle asbestos claims against them represent the final verdict on tort reform. Indeed, the emotion-charged public policy issue of tort reform -- which includes rules specifying who may sue manufacturers and for how much in civil courts -- won't be going away any time soon. "The fact that there are businesses who are looking at alternatives to legislation as a way to fix their own liability is fine. But it doesn't do away with the [asbestos claims] problem," stresses Jan Amundson, senior vice president and general counsel at the National Association of Manufacturers (NAM), Washington, D.C. "The problem is this burgeoning number of cases -- over 200,000 cases pending and the expectation of more [being filed] by entrepreneurial members of the trial bar that aren't representing people who really have a claim," she argues. "There are some that say it won't be over until [the year] 2050." Significantly, Amundson separates the asbestos liability issue from what she regards as the legal-reform issues: punitive damages, statutes of limitation, class actions and product liability. "I think we are going to see at least an atmosphere where we can start to look at legal reform," she says. The NAM and other business groups argue that reform must be federal and nationwide because nearly all products are part of interstate commerce. On Capitol Hill, proposed tort-reform legislation passing through the judiciary and commerce committees in the Republican-controlled House and Senate will create a national focus "and that has considerable force, if not in the production of law itself then in stepping up the public discourse," suggests Andrew F. Popper, a professor of law at American University's Washington School of Law in Washington, D.C. President Bush has already involved himself by calling for medical liability reform during his Jan. 16 visit to Scranton, Pa. ". . . This is a national problem, and we just cannot allow a bunch of needless partisanship to prevent a good, solid solution from going forward," he insisted. "This problem will be solved by getting at the source of the problem, which are the frivolous lawsuits." The White House Council of Economic Advisers figures that "excessive tort costs" amounted to a $650 "litigation tax" on the economy for every person in the U.S. in the year 2000. Separately and to differing degrees, the current Congress will deal with medical malpractice reform, class-action lawsuits and asbestos claims, believes James Wootton, president of the Washington, D.C.-based U.S. Chamber of Commerce's Institute for Legal Reform and a Washington, D.C., partner in the Chicago-based law firm of Mayer Brown Rowe and Maw. A so-called class-action fairness measure, which would remove some suits against national companies from state court jurisdiction, seems to have the best chance. "I think we've seen enough support in the sort of moderate, business-oriented Democratic senators that we'll have the votes to get the bill to the floor and, at that point, we're very confident we have the votes for passage," says Wootton. Nevertheless, others believe tort reform will -- or should -- come from the states, not from Congress. "The Republican administration and George W. Bush's rather broad federal view of the world in terms of medical malpractice is misguided," asserts Stephen A. Cozen, founder and chairman of Cozen O'Connor, a Philadelphia-based law firm. "I think it has to be a state-based remedy. So there is little he can do, except from a bully pulpit standpoint, to produce any kind of legislation that would be helpful." Contends Maria Katina Karos, an equity partner and litigator with the law firm of Bell Nunnally & Martin LLP in Dallas, "Tort reform will continue to be debated on a national level and a state level, although I think that the states eventually will be the entities to take control of the problem and pass reform bills." Why the states? Finances, she says. When corporations leave states as high-dollar judgments start piling up, the states collect fewer tax dollars and face budget crises, explains Karos, who has experience in both state and federal toxic-tort-defense cases. "The tort system is a state-based system of state-based laws and state civil liability, and so when individual states cap liabilities, when individual states limit damages, that's when you have a real effect," stresses American University's Popper.

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