TORT REFORM IN ALABAMA

May 15, 1999

Weekend Edition

National Public Radio (transcript)

Note Copyright Warning:

Copyright 1999 National Public Radio (R). All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to National Public Radio. This transcript may not be reproduced in whole or in part without prior written permission. For further information, please contact NPR's Permissions Coordinator at (202) 414-2000.

National Public Radio (NPR)

Tort Reform in Alabama

Anchor: Scott Simon

Reporter: Debbie Elliott

SCOTT SIMON, host:

The US civil justice system, victimhood can sometime exact a prohibitive cost. State legislatures around the country are attempting to rein in civil awards. Florida lawmakers recently passed the most sweeping court reforms in that state's history. In Alabama, the issue catapulted to the forefront this week after a $ 581 million jury verdict was delivered. NPR's Debbie Elliott reports.

DEBBIE ELLIOTT reporting:

Alabama already had a reputation as the lawsuit lotto state where juries are likely to return multimillion dollar punitive damage awards. The state's most notorious high jury verdict came in 1992 when a Birmingham jury awarded $ 4 million to a doctor who sued BMW for not telling him about a touch-up paint job on his new car. In 1996, the US Supreme Court struck down that verdict as grossly excessive.

Now a jury in rural Hale County, Alabama, has ordered a finance company to pay a Greensboro family a record $ 581 million for a $ 1,200 overcharge on a credit agreement to purchase two satellite dishes. The verdict breathed new life into a package of tort reform bills pushed by the state's business community.

Mr. JOHN McMILLAN (Alabama Civil Justice Reform Committee): I don't think there's any doubt at all that that was a catalyst for moving our legislation to the floor.

ELLIOTT: John McMillan is with the Alabama Civil Justice Reform Committee.

Mr. McMILLAN: How can anybody say we don't have a problem. You know, that's been one of the big things. Even with some of the trial lawyer friends in the state Senate has been, Well, you know, we just don't have a problem.' And this is so outrageous and absurd that argument won't hold water for anybody to make.

ELLIOTT: For more than a decade, the battle over tort reform has been wedged between two of Alabama's most powerful interest groups: trial lawyers and business. Both sides have contributed heavily to Supreme Court and legislative races. In 1987, the Legislature passed a tort reform package, but it was struck down by the Alabama Supreme Court. Since then, similar measures have been stalled in the state Senate by allies of plaintiffs' lawyers. But this year, the state Senate is led by Steve Windom, the first Republican lieutenant governor in Alabama since Reconstruction. Windom's campaign was backed by business interests and he promised that tort reform would get a hearing, but that hearing almost didn't come. It was the reaction to last week's record verdict that finally brought business interests and plaintiffs' attorneys to the negotiating table. The lawyers say they wanted to be part of the solution, according to Greg Breedlove, president of the Alabama Trial Lawyers Association. Breedlove says that doesn't mean the group agrees that Alabama's civil justice system is out of control.

Mr. GREG BREEDLOVE (President, Alabama Trial Lawyers Association): We don't really think that any of these tort reform measures are needed, when you consider that the argument is always that these tort reform bills are needed just to promote business in Alabama, because business has never been better than it is right now.

ELLIOTT: The trial lawyers' group and consumer advocates contend large punitive damage awards serve a purpose in this state by keeping dangerous products off the market and protecting the public from corporate greed. Breedlove says consumers in Alabama have no chance for justice except through the civil jury system.

Mr. BREEDLOVE: The jury is the consumer protection laws that we have. Our state has the poorest consumer protection laws of any state in the country.

ELLIOTT: Many of Alabama's large jury verdicts have come from the state's poorer, rural counties where there's not much of a corporate presence. High punitive damages like the recent Hale County verdict send a message, says Montgomery attorney Jere Beasley whose firm represented the plaintiffs.

Mr. JERE BEASLEY (Attorney): I think that jury was simply trying to tell the world that, Look, we are tired of people coming into Alabama, taking advantage of low-income, underprivileged, oftentimes undereducated persons.'

ELLIOTT: But businesses say the message gets muddled when the damages are disproportionate to the injury. In the satellite dish case, jurors awarded $ 581 million to punish a $ 1,200 overcharge. American Tort Reform Association president Sherman Joyce says it's those kinds of verdicts that earned Alabama the nickname tort hell.'

Mr. SHERMAN JOYCE (President, American Tort Reform Association): Well, Alabama's had a series of cases where what's been most remarkable is with respect to punitive damages, is the relationship or the lack of relationship between the size of the punitive damage verdict and the alleged underlying harm. And I think that's what really got attention in this satellite dish case.

ELLIOTT: Joyce says at least 30 states have changed their civil justice laws. About a dozen have passed sweeping tort reform legislation limiting punitive damage awards and setting new legal standards for civil lawsuits. Late this week, the Alabama Senate approved three tort reform measures. The bills would restrict where lawsuits can be filed, make it harder to file class-action lawsuits and cap punitive damage awards. Under that bill, the Hale County verdict would have been limited to $ 2.9 million.