Ohio Supreme Court axes tort `reform' law.

In a blistering opinion rebuking state legislators for overstepping the bounds of their lawmaking authority, the Ohio Supreme Court recently struck down in its entirety that state's sweeping tort "reform" law. (Ohio Academy of Trial Lawyers v. Sheward, No. 97-2419, 1999 WL 617856 (Ohio Aug. 16, 1999).)

By a 4-3 margin, the court found that by enacting the law--which drastically curtailed the rights of plaintiffs to recover damages for injuries caused by tortious conduct--lawmakers had violated the state constitution's separation of powers doctrine.

"It marks the first time in modern history that the General Assembly has openly challenged this court's authority to prescribe rules governing the courts of Ohio and to render definitive interpretations of the Ohio Constitution binding upon the other branches," Justice Alice Robie Resnick wrote.

ATLA President Richard Middleton Jr. praised the decision as "an enormous victory for the citizens of Ohio, the rule of law, and the separation of powers that is the backbone of our constitutional form of government."

"The decision has enormous significance, first in Ohio and then in the nation," said Robert Peck, senior director of ATLA's Legal Affairs Department. ATLA's legal affairs staff provided legal representation to the Ohio Academy of Trial Lawyers throughout the case, and Peck, along with Cleveland lawyer Don Iler, argued the challenge before the court.

"For those injured in Ohio, it means that meaningful recoveries are still available through the courts. And because the case was viewed by experts on both sides of the issue as a national bellwether, it has enormous persuasive power to suggest that such laws cannot be upheld in other states," Peck said.

"The Ohio Supreme Court has once again said that the constitution is there to protect individuals as well as corporations, and families as well as big business," said Ohio Academy of Trial Lawyers President J. Michael Monteleone.

The ruling is the latest in a string of courtroom defeats for advocates of tort "reform." Courts in states that have enacted similar laws have issued 90 decisions overturning them, according to Victor Schwartz, general counsel for the American Tort Reform Association, which filed an amicus brief in support of the Ohio law.

"Just look at the decisions over the past five years," Schwartz said. "Those that have struck down these laws have far outweighed those that have sustained them."

Some legal experts say these decisions mark a change in the tort "reform" tide. From the mid-1980s to the mid-1990s, liability limits survived constitutional challenges by a margin of 2 to 1. (Harvey Berkman, Ironies Abound in Tort Reform Battle, Nat'l L.J., Aug. 30, 1999, at A4.) But in recent years, courts have tossed "reform" laws out, often finding, like the Ohio court did, that state legislators have impermissibly encroached on judicial territory.

According to Peck, it is no coincidence that the decisions over that period have been largely favorable. The turning tide coincides with the activities of ATLA's constitutional litigation program, he said.

Schwartz credits ATLAs litigation efforts for the shift. "I really hail the brilliance of the ATLA directors who conceived of a strategy of using untested provisions of state constitutions to nullify tort reform," Schwartz said.

That strategy centers on asking judges to throw "reform" measures out based on provisions in their own state constitutions. For example, just one month before the Ohio decision, the Indiana Supreme Court struck down a two-year statute of limitations for medical malpractice as it applied to the plaintiff in that case, in part because the law abrogated her state constitutional guarantee "of a remedy by due course of law." ATLA's constitutional litigation team played a significant part in that case. (Oregon, Indiana Courts Weigh in on Side of Consumers in Tort `Reform' Cases, TRIAL, Sept. 1999, at 14.)

Peck acknowledged ATLA's role in the recent court victories. "Since ATLA put together its constitutional litigation program, we have seen encouraging results in the courts. Those results are a reflection of the constitutional expertise that we were able to assemble in-house and the experience our legal staff has in putting the proper elements together to mount a successful constitutional challenge," Peck said.

The parties who challenged the Ohio law, the Ohio Academy of Trial Lawyers and the Ohio AFL-CIO, among others, took the unusual move of filing a writ of mandamus and prohibition, asking the state's high court to strike down the law without waiting for a test case.

Although several business and "reform" advocacy groups filed opposing briefs, the Ohio high court granted the writ, noting that "by doing otherwise, this court would become a willing participant in divesting the courts of judicial power and a coconspirator in the abdication of fundamental individual rights and liberties contained in our constitution."

Peck described the law as a "wish list" for "reform" advocates. It capped noneconomic and punitive damages; limited joint liability; attempted to limit the courts' ability to interpret the state constitution; and abrogated the collateral source rule, which provides that evidence of a plaintiff's compensation from collateral sources--like insurance--is not admissible to reduce the amount of damages for a plaintiff.

The court noted a striking similarity between some of these provisions and legislation that the court had previously stuck down as unconstitutional. The legislature's "attempt to nullify [those] opinions," the majority said, was "openly subversive of the separation of powers and, in particular, of the judicial system" established by the state constitution.

"The General Assembly has chosen to circumvent our mandates, while attempting to establish itself as the final arbiter of the validity of its own legislation. It has boldly seized the power of constitutional adjudication, appropriated the authority to establish rules of court and overrule judicial declarations of unconstitutionality, and, under the thinly veiled guise of declaring `public policy,' establishing `jurisdiction,' and enacting substantive law, forbade the courts the province of judicial review," Resnick wrote.

The court also found that the law violated the state constitution's one-subject provision, which requires each piece of legislation to address related matters.

The law "attempts to combine the wearing of seat belts with employment-discrimination claims, class actions arising from the sale of securities with limitations on agency liability in actions against a hospital, recall notification with qualified immunity for athletic coaches, actions by a roller skater with supporting affidavits in a medical claim, and so on," Resnick wrote.

A dissenting opinion chastised the majority for sparking dissension between the courts and the legislature. Writing for the minority, Chief Justice Thomas Moyer said, "I fear today's decision will unnecessarily create tension between this court and the General Assembly.... [I]n referring to the General Assembly with inflammatory and accusatory language, the majority appears to be throwing down the gauntlet to that coequal legislative branch of government."

This brought an unusual rebuttal opinion from the majority. "The dissenting justices mischaracterize our findings, misconstrue prior decisions of this court ... all in an obvious effort to distort our opinion into a form susceptible to conflagrant criticism and protect this legislation from any timely, meaningful, and inclusive judicial review," Resnick wrote.

Brilliant strategy

Tort reform advocate Schwartz said the decision to challenge tort reform laws on state constitutional grounds was "brilliant" for two reasons. First, the volume of case law interpreting the federal Constitution can hobble challenges based on its provisions if, as Schwartz believes happened in the Ohio case, the court is asked to issue a decision based on the opinions of individual judges rather than constitutional principles.

"The federal constitution has a long history behind its provisions that makes it difficult to fill with your own point of view," Schwartz said.

Second, a decision spiking a law on state constitutional principles cannot be appealed to the U.S. Supreme Court.

"It creates a checkmate against tort reform," Schwartz said.

Peck dismissed the idea that the Ohio decision was opinion driven, noting the bipartisan makeup of the majority. Two of the four judges in the Sheward majority are Republicans. The other two are the court's only Democrats.

Yet the opinion clearly unnerved the Ohio legislature's Republican party, which spearheaded passage of the law three years ago. "We continue to believe that tort reform remains in the best interest of all Ohioans in order to curtail the filing of frivolous lawsuits. We also believe that there is significant support in the Ohio General Assembly to craft another tort reform bill, which is the prerogative of the legislature," said Senate President Richard Finan and House Speaker Jo Ann Davidson, both Republicans, in a joint statement issued after the decision came down.

Chamber of Commerce spokeswoman Linda Woggon denounced the decision as putting "Ohio on a `blacklist' of states that have a judicial climate hostile to business development."

"Nothing could be further from the truth," Ohio Academy of Trial Lawyers President Monteleone said. "Ohio has an outstanding business climate. It has more new business coming into the state than almost any other state in the country. It has very low unemployment."

William Burga, the president of the Ohio AFL-CIO, said although Republican legislators have threatened to pass replacement legislation, the real battle over "reform" is likely to be waged on the campaign trail next year.

Burga said the business community has been "very vocal" about replacing the four justices who formed the Sheward majority. The theory is that a more conservative court would be more receptive to any future "reform" measures. Resnick, a Democrat, as well as one of the minority justices, Deborah Cook, a Republican, are up for reelection next year.

Schwartz confirmed that reform advocates hope to seat reform-friendly judges and legislators in upcoming elections. "The public mind will be the next battlefield," he said.

Schwartz also said his group is studying whether there could be federal grounds on which to appeal these cases. "A great deal of study is being undertaken to see if the decisions, being opinion law, can be challenged as violating the constitutional rights of those who support [the legislation]. We would say, `This decision violated the federal due process of those who sponsored the bill.' But that is a very difficult road."

Peck said he is confident "reform" opponents would win at the federal level, too.

Monteleone warned "reform" supporters to heed the Sheward court's strong language. "It is my hope that they will recognize that judges are sworn to uphold the law. If they plan any other so-called reform measures, they better make sure they don't violate the constitution," he said.

Monteleone also said the laws are unnecessary. "The whole premise behind any type of tort `reform' is that there is something wrong that needs to be corrected. There is nothing wrong with our civil justice system--the jury system--other than that the business community can't buy it," he said.

Peck said the laws are fundamentally flawed because they "attempt to create one-size-fits-all solutions that run roughshod over the authority of courts and juries. Such `reforms' will never pass constitutional muster."