Caps on Punitive and Non-Economic Damages Under Attack
The first major attack from the plaintiff’s bar against our recent reforms to Ohio’s civil justice system came last June in the Arbino v. Johnson & Johnson case.  Four questions were certified from the U. S. District Court for the Northern District of Ohio to the Ohio Supreme Court (Court).  The Court was asked to rule on the constitutionality of three major provisions passed in 2004 in our comprehensive civil justice reform bill, SB 80. The provisions include the caps enacted on punitive and non-economic damages as well as the collateral source provisions.  The OACJ filed an amicus brief on December 16, 2006 defending the constitutionality of the limitations on non-economic damages.  Special thanks go out to all of the national organizations that filed an amicus brief in this case urging the Court to find all provisions constitutional. The Court heard oral arguments on May 1, 2007 and is expected to make its decision sometime this summer.
 
OATL and Ohio AFL-CIO urge Court to Find SB 80 Provisions Unconstitutional
 
On December 29, 2006, the Ohio Supreme Court agreed to answer nine questions challenging the constitutionality of SB 80 in the Groch v. General Motors Corp. case.  Three of the questions relate to the workers’ compensation subrogation statutes and will be addressed in a brief filed directly by a handful of statewide business associations.  Five of the questions challenge the constitutionality of the statute of repose for products enacted in SB 80.  The final question asks the Court to generally rule on the issue of whether SB 80 violates Ohio’s rule against having more than one subject.
 
The Groch v. General Motors Corp. case is the second major challenge to the comprehensive civil justice reforms enacted by SB 80 from the 125th General Assembly.  The Ohio Chamber and OACJ are preparing to file an amicus brief by May 15, 2007 asking the Court to uphold the constitutionality of SB 80 on both issues.  Amicus briefs have already been filed by the Ohio Academy of Trial Lawyers and the Ohio AFL-CIO asking the Court to find SB 80 unconstitutional on both fronts.
 
Governor Strickland’s Veto of SB 117 Prompts Legislature’s Lawsuit
SB 117 was passed during the lame duck session of 126th General Assembly and contains two significant reforms to Ohio’s civil justice system.  The first issue sends a clear message to contingency fee trial lawyers – stop using public nuisance law to circumvent Ohio’s products liability statute.  While the paint industry is the current target in Ohio, several other industries, such as auto, asbestos and firearm manufacturers, have come under attack in other states by contingency fee lawyers using the same public nuisance theory.  The second issue addresses a recent Ohio Supreme Court decision that allows recovery of non-economic damages in Consumer Sales Practices Act (CSPA) cases by limiting such damages to $5,000.
 
Governor Bob Taft intended for SB 117 to become law without his signature, but after he left office newly elected Governor Ted Strickland vetoed the bill.  The Ohio House of Representatives and Senate filed a lawsuit against newly elected Secretary of State Jennifer Brunner for inappropriately returning SB 117 to Governor Strickland.  Attorney General Marc Dann filed a response to this lawsuit requesting that the Court dismiss the case.  The OACJ filed a brief on Friday, March 9 to ask the Court not to dismiss the case and to consider resolving the case in favor of the Ohio legislature.
 
Once the Court decided to consider the case, the Ohio Chamber and OACJ filed another brief to support the Ohio legislature’s suit to uphold the important reforms in SB 117.  The case is State ex. rel. Ohio General Assembly vs. Ohio Secretary of State Jennifer Brunner.  The Ohio Supreme Court will hear oral arguments on the SB 117 case as well as the Arbino vs. Johnson & Johnson case on Tuesday, May 1, 2007.  In the Arbino case, several groups have lined up against us in support of finding the punitive and non-economic damage limitations and collateral source provisions unconstitutional.  These groups include the Ohio Academy of Trial Lawyers (OATL) and the Ohio Employment Lawyers Association.
 
There are several other cases pending before Ohio courts that could jeopardize our hard fought civil justice reforms passed over the last six years.  The Ohio Chamber and OACJ filed an amicus brief in the case of In re: Special Docket No. 73958 to uphold the retroactive application of the medical criteria contained in HB 292 – Ohio’s asbestos reform law.  While we continue to protect the civil justice reforms already enacted in Ohio law, there are still several areas that need to be reformed.
 
 
Ohio Attorney General Consolidates Municipal Lawsuits Against Paint Manufacturers
At the end of March 2007, Ohio Attorney General Marc Dann sued companies in the paint industry for products that were legally produced several decades ago. This action by the AG follows a disturbing national trend of government entities lining up to file suit, using public nuisance actions, against companies who many years ago produced a useful and legal product.  In this case, the target was the paint industry, but industries such as cranberry growers, energy companies, and automobile manufacturers, have been inappropriately sued by AGs in other states under the public nuisance laws.  These actions send a negative message to businesses that are making tough decisions about where to locate operations and make investments that create the kind of jobs Ohio desperately needs to attract and retain.  The Ohio Chamber of Commerce, and several statewide business groups in the OACJ, distributed a press release expressing grave concerns about the AG’s decision to consolidate these claims against paint manufacturers.  
 
 
Studies Rank Ohio’s Legal Climate

The Ohio Chamber of Commerce has been a strong advocate to stop lawsuit abuse and promote a common sense civil justice system in Ohio.  Once ranked one of the worst in the country, Ohio’s civil justice system now ranks fourth in the nation according to the 2006 U.S. Tort Liability Index.  But for the passage of Ohio Chamber led efforts to pass comprehensive civil justice reforms in 2004 Ohio would rank 41st instead of its top 10 finish. Unfortunately, these reforms are already under attack in the courts.
 
The PRI study can be downloaded at: www.americanjusticepartnership.org.
 
The U.S. Chamber Institute for Legal Reform (ILR) released a study on April 25, ranking the best and worst legal climates in the country according to a survey of 1,599 corporate attorneys.  Unfortunately, in this study Ohio’s ranking slipped from 19th to 24th over the past year.  While the state’s legal climate has improved in recent years, uncertainty still remains in the system and other states are moving ahead of Ohio as they make improvements to their legal systems.
 
Lawsuit Climate 2007: Ranking the States, conducted for the ILR by the nonpartisan polling firm Harris Interactive, focuses on 12 different factors that affect a state’s tort liability system.  These factors range from a company’s perception of the overall treatment of tort and contract litigation to judges’ competence and impartiality.
 
The following statements were released to the press regarding the new U.S. Chamber study.
 
 “Perception is just as important as reality when it comes to a company’s assessment of where to expand or locate,” said Ohio Chamber director of labor & human resources policy and Ohio Alliance for Civil Justice Chairman Tony Fiore.  “Lawsuits challenging the constitutionality of Ohio’s recent civil justice reforms, coupled with Governor Ted Strickland’s veto of Senate Bill 117, are sending a chilling effect throughout the job provider community.  The perception is that Ohio’s legal climate is improving, but recent legal reforms may be at risk.”
 
“These actions are stalling Ohio's economic recovery and creating another deterrent for the type of job growth our state desperately needs.  Ohio lawmakers have taken bold, positive steps in curbing lawsuit abuse,” said Fiore.  “We must protect the reforms we have in place by asking the court to find them constitutional and continue working with lawmakers to make reforms to Ohio’s legal system.  Once the courts have resolved these lawsuits and veto challenges, we feel certain Ohioans will once again enjoy the benefits of a fair and predictable legal climate.”
 
The U.S. Chamber of Commerce's report can be found at: www.instituteforlegalreform.org.
 
New Study Says Litigation Lottery Costs America $865 Billion Per year
A new study released by PRI, a free-market think tank based in San Francisco, puts the price tag on America’s out-of-control legal system at over $865 billion every year.  This important study adds up how much of a drain the current civil justice system has on the U.S. economy – especially the negative effects to all employers, employees, investors and property owners.
The new PRI study provides the most comprehensive examination ever of U.S. tort costs.  According to the study’s lead author, Dr. Lawrence J. McQuillan, unlike previous studies, Jackpot Justice calculates both the direct and indirect costs of America’s legal system. 
 
These include not just the direct cost of annual damage awards, plaintiffs’ attorney fees, defense costs and administrative expenses from torts but also the indirect cost of the legal system’s impact on research and development spending, the cost of defensive medicine, the related rise in health care spending and reduced access to health care, and the loss of output resulting from deaths due to excess liability.
 
The new PRI study can be downloaded at: www.americanjusticepartnership.org.
 
Current Legislative Efforts Under Consideration
While the Ohio Chamber and OACJ have been very successful, particularly in the last six years, in passing significant reforms to Ohio’s civil justice system our work is far from over.  Several issues under consideration on our legislative agenda include: (1) reforms to Ohio’s employment law statute (i.e. caps on punitive and non-economic damages similar to federal law), (2) further reforms to the Consumer Sales Practices Act (i.e. right to cure), and (3) legislative oversight of contingency fee contracts (i.e. legislative approval for large contingency fee contracts between government and personal injury law firms). 
 
The Ohio Chamber of Commerce will continue to defend our comprehensive civil justice reforms and fight for a fair and predictable legal climate for Ohio businesses.  For more information on civil justice reform issues, please contact Tony Fiore at afiore@ohiochamber.com or (614) 228-4201.  Mr. Fiore is the Director of Labor & Human Resources Policy for the Ohio Chamber and the Chairman of the Ohio Alliance for Civil Justice.
 
The Ohio Alliance for Civil Justice (OACJ) was founded in the mid 1980s to stop lawsuit abuse and promote a common sense civil justice system in Ohio.  The OACJ is comprised of representatives of more than 200 Ohio trade and professional associations, small and large businesses, medical groups, farmers, non-profit organizations and local government associations for a combined representation of more than 100,000 individuals and businesses.
 
Read related articles published in our past editions of Legislative Update.
 
Learn more about our Legal Reform issues.