Shedding new light; exposing eight myths that cloud the truth about civil justice.

Exposing eight myths that could the truth about civil justice

It is not easy to hear all the world's ills blamed on lawyers. The finger-pointing comes from various directions, but the message--packaged and repackaged over the years--remains the same: Lawyers ruin the economy and hurt society with frivolous lawsuits.

The past several decades have brought special challenges. We have listened as misleading rhetoric from self-appointed industry tort "reformers" feeds public mistrust. We have watched as deceptive commercials from the tobacco lobby accuse us of greed and self-dealing. And we have fought dangerous legislation that would restrict the rights of injured citizens--our clients.

In a climate like this, it would be easy to become frustrated. Yet we know our efforts make new lives possible for clients who have been devastated by traumatic injuries. We know our victories against large corporations force them to design safer products and repeal dangerous policies. And we know our advocacy in court makes small voices powerful. In short, we know lawyers accomplish good things every day.

Unfortunately, this is not often the public perception, thanks to tort "reform" propaganda disseminated by our powerful opponents. With so many big-monied voices pitched against us, perhaps our toughest battle lies in the court of public opinion.

How do we win? We can start by arming ourselves with the truth behind the lies. Here are eight common myths about the civil justice system and the facts you can use to refute them.

Myth 1: If the ERISA preemption now protecting managed health care decision makers is eliminated, lawsuits will increase and health insurance costs will rise.

The Employee Retirement Income Security Act of 1974 (ERISA) preempts state laws that "relate to" an employee benefit plan. Thus, if an employee receives health benefits from a private sector employer, ERISA dictates the legal remedy available when benefits are delayed or denied and the employee is harmed.

Unfortunately, injured patients or their families are often left with no remedy at all because ERISA broadly preempts all state law remedies and holds managed care responsible only for the cost of the benefit delayed or denied.(1)

Critics of proposed legislation to hold managed care accountable in state court argue that such legislation would generate excessive litigation and drive up health care premiums. However, a recent study for the Kaiser Family Foundation negates this conclusion.

The study, conducted by Coopers & Lybrand, examined three large health plans for state and local government employees, who are not subject to ERISA preemption. Researchers found that few patients have sued--there were 0.3 to 1.4 cases per 100,000 enrollees per year--and litigation costs have been small--between 3 and 13 cents a month per enrollee, or 0.03 percent to 0.11 percent of premiums.(2)

Texas's recent experience supports a similar conclusion. In September 1997, the state legislature enacted a program allowing patients to appeal their health insurers' decision to deny care.

Officials at the Texas Department of Insurance reportedly expected to see about 4,400 complaints by the end of this year. But in the first eight months since the program went into effect in November 1997, only 147 complaints had been filed, and not one lawsuit had been filed.(3)

Other critics argue that legislation allowing state lawsuits against managed care would make employers vulnerable to suit. But as long as an employer does not directly make determinations about the administration of health benefits, it has no risk of being involved in suits based on the denial of health care benefits. Moreover, most proposed legislation to eliminate ERISA preemption explicitly protects employers from liability.

Myth 2: Personal injury lawsuits are clogging the courts, causing a litigation "explosion."

This is clearly not the case, according to the latest findings by the National Center for State Courts (NCSC). In a recent report based on data from 16,000 trial courts in 50 states, the center concludes that "the bottom line is that there is no evidence of a tort litigation `explosion.'"(4) The report notes that "although Congress and many state legislatures continue to debate tort reform, there is no evidence that the number of tort cases is increasing."(5)

Further, civil caseloads grew more slowly than other caseloads: Between 1984 and 1996, civil filings increased by 31 percent compared to criminal filings, which increased by 41 percent; juvenile filings, which increased by 64 percent; and domestic relations filings, which increased by 74 percent.(6)

There is also no medical malpractice or products liability explosion. NCSC data show that in 1992, medical cases comprised only 2.4 percent, and products cases, only 1.7 percent, of all civil cases.(7)

The real culprit clogging the courts is business litigation. According to NCSC data, contract and property cases--most of which involve businesses--comprise more than one-third of all civil cases in state courts.

Citing data from a study of litigation patterns of Fortune 1000 companies, the Wall Street Journal noted that businesses suing each other over contract disputes comprised the single largest category of lawsuits filed in federal court. "Federal suits over contracts outpaced any other single category of litigation," the article noted.(8)

Myth 3: Juries are awarding "runaway verdicts," and punitive damages awards are out of control.

Studies show just the opposite. A RAND Institute for Civil Justice study of jury verdicts between 1985 and 1994 found that "despite the attention they have received from policy makers and from the media, punitive damages are rarely awarded."(9)

This finding was confirmed by NCSC data analyzed by Cornell University law professor Theodore Eisenberg and NCSC researchers in 1996. After examining information that included jury trial data from fiscal year 1991-92, the researchers found prevailing plaintiffs were awarded punitive damages in just 6 percent of cases. Since plaintiffs won about half the time, punitive damages were awarded in just 3 percent of all verdicts.(10)

So where are the punitive damages really being awarded? According to the RAND study cited above, business cases account for 47 percent of all punitive damages awards. In comparison, only 4.4 percent of these damages were awarded in products liability cases and only 2 percent in medical malpractice cases.(11)

Not only are punitive damages rare in products cases, but compensatory verdicts in these cases are consistent and conservative. A study by the U.S. General Accounting Office concluded that verdicts in products cases generally correlated to the severity of the injury and the amount of actual economic loss.(12)

Myth 4: Undeserving plaintiffs recover millions in frivolous lawsuits.

When so-called frivolous lawsuits are examined, it becomes clear that most are anything but frivolous. In fact, they often accomplish a great deal by bringing about measurable safety improvements or exposing consumer fraud.

Reports of large verdicts are often replete with distorted facts and omissions. Perhaps no case has been more distorted than the McDonald's scalding coffee case. Reports focused on the substantial punitive damages award, the fact that people know coffee is hot, and the claim that the plaintiff contributed to her injury.

What the reports failed to mention was that when the cup of coffee spilled in 79-year-old Stella Liebeck's lap, she suffered third-degree burns over 6 percent of her body--including her inner thighs, buttocks, and genital and groin area. She required eight days' hospitalization and painful skin grafts and debridement. When she attempted to settle her claim for $20,000, McDonald's refused.

At the time of the spill, she was sitting in a parked car attempting to remove the cup's lid to add cream and sugar. Contrary to some reports, she was not driving the vehicle, nor was it moving.

The reports also failed to mention that McDonald's knew its coffee had scalded consumers--it had received more than 700 burn claims between 1982 and 1992. Despite this, the company maintained a policy requiring coffee be kept at 180 to 190 degrees Fahrenheit--much hotter than coffee from other restaurants--even though McDonald's knew that a burn hazard exists with substances served above 140 degrees.

The jury's punitive damages verdict of $2.7 million equaled about two days of McDonald's coffee sales.(13) Although it was reduced by the judge to $480,000 and the parties later settled, the verdict sent a clear message to the company, which immediately lowered the temperature of its coffee. Thanks to Stella Liebeck, McDonald's customers who order coffee should no longer risk third-degree burns.

This case is just one example of a verdict effecting powerful change, but there are many others. In her lawsuit against Domino's Pizza alleging the company's driver had run a red light and broadsided her car, causing her serious injuries, Jean Kinder charged the company's fast-delivery policy encouraged drivers to speed and take unnecessary risks. Four days after the Missouri jury awarded punitive damages, Domino's dropped the policy.(14)

Claims against football helmet manufacturers have forced them to make their products safer. Citing research by the National Center for Catastrophic Sports Injury Research, Sports Illustrated reported that in 1990, no high school or college football player died from a head or spinal injury--the first time this had happened in 60 years.(15) The reduction in deaths is credited in part to safer helmets.

And there are numerous other examples of how jury verdicts have forced safety improvements in cars, tractors, industrial equipment, children's pajamas, drugs, and other products.

So where are the real frivolous lawsuits? Many involve businesses suing businesses. Consider the following--

* Hormel Foods, the maker of the luncheon meat SPAM, sued Jim Henson Productions to stop the company from merchandising a movie character named "Spa'am." Hormel claimed that the character represented "an unclean grotesque boar" that would call into question the purity of its meats and that SPAM sales would drop if the product were linked with "evil in porcine form." After a full trial, a federal judge rejected Hormel's claim. Hormel appealed, but again lost.(16)

* Scott Paper's Canadian division sued Procter & Gamble in 1995, alleging it had exaggerated the performance of its Bounty paper towels by comparing an 11-inch-long Bounty sheet with the nine-inch sheet generally used in Canada.(17)

* Mattel sued MCA Records for copyright infringement after the record company released a CD that included a song called "Barbie Girl," in which Barbie is referred to as a "blond bimbo girl in a fantasy world." The court denied Mattel's request for an injunction, noting the song is a parody and not likely to confuse consumers or harm the Barbie product line.(18)

Products liability legislation sought by tort "reformers" would not affect lawsuits like these. But workers killed or injured in these companies' plants might be left without any rights.

Myth 5: Medical malpractice suits are forcing physicians to practice "defensive" medicine and thereby are driving up the cost of medical services.

In fact, only about 8 percent of diagnostic procedures are ordered because of doctors' conscious fear of liability, according to a 1994 report by the Office of Technology Assessment (OTA), the nonpartisan research arm of the U.S. Congress, which was defunded after the Republican party took over the House of Representatives in 1994.(19) Most doctors surveyed said they order procedures because they think they are medically necessary.

Similarly, a report in the Journal of the American Medical Association found that being the subject of a malpractice suit did not cause doctors to alter their practices. After examining the records of a random sample of physicians, the researchers found doctors who had been sued did not order more ultrasounds, referrals, or cesarean deliveries than doctors who had not been sued.(20)

Moreover, a number of groups have concluded that most "defensive" medicine actually benefits patients. For example, in its 1994 report, the OTA noted that "a high percentage of defensive medical procedures are ordered to minimize the risk of being wrong when the medical consequences of being wrong are severe."(21)

Myth 6: Damages caps reduce malpractice insurance premiums and help contain rising health care costs.

That caps have no effect on health care costs is evident from the experiences of various states. For example, in 1975, California enacted the Medical Injury Compensation Reform Act