{"id":88,"date":"2014-09-17T00:42:06","date_gmt":"2014-09-17T00:42:06","guid":{"rendered":"https:\/\/courses.candelalearning.com\/buslegalenv\/?post_type=chapter&#038;p=88"},"modified":"2015-04-20T21:28:34","modified_gmt":"2015-04-20T21:28:34","slug":"9-5-tort-reform","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/chapter\/9-5-tort-reform\/","title":{"raw":"Tort Reform","rendered":"Tort Reform"},"content":{"raw":"<div class=\"bcc-box bcc-highlight\">\r\n<h3>Learning Objectives<\/h3>\r\nBy the end of this section, you will be able to:\r\n<ul id=\"mayer_1.0-ch52_s02_l01\" class=\"im_orderedlist\">\r\n\t<li>See why tort reform is advocated, why it is opposed, and what interests take each side.<\/li>\r\n\t<li>Understand some of the significant state reforms in the last two decades.<\/li>\r\n\t<li>Know what federal reforms have been instituted.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<div id=\"mayer_1.0-ch20_s05_s01\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">The Cry for Reform<\/h2>\r\nIn 1988, The Conference Board published a study that resulted from a survey of more than 500 chief executive officers from large and small companies regarding the effects of products liability on their firms. The study concluded that US companies are less competitive in international business because of these effects and that products-liability laws must be reformed. The reform effort has been under way ever since, with varying degrees of alarms and finger-pointing as to who is to blame for the \u201ctort crisis,\u201d if there even is one. Business and professional groups beat the drums for tort reform as a means to guarantee \u201cfairness\u201d in the courts as well as spur US economic competitiveness in a global marketplace, while plaintiffs\u2019 attorneys and consumer advocates claim that businesses simply want to externalize costs by denying recovery to victims of greed and carelessness.\r\n\r\nEach side vilifies the other in very unseemly language: probusiness advocates call consumer-oriented states \u201cjudicial hell-holes\u201d and complain of \u201cwell-orchestrated campaign[s] by tort lawyer lobbyists and allies to undo years of tort reform at the state level,\u201d<span id=\"mayer_1.0-fn20_023\" class=\"im_footnote\">American Tort Reform Association website, accessed March 1, 2011, <a class=\"im_link\" href=\"http:\/\/www.atra.org\" target=\"_blank\">http:\/\/www.atra.org<\/a>.<\/span> while pro-plaintiff interests claim that there is \u201cscant evidence\u201d of any tort abuse. <span id=\"mayer_1.0-fn20_024\" class=\"im_footnote\"><a class=\"im_link\" href=\"http:\/\/www.epi.org\/publications\/entry\/bp157\" target=\"_blank\">http:\/\/www.shragerlaw.com\/html\/legal_rights.html<\/a>.<\/span> It would be more amusing if it were not so shrill and partisan. Perhaps the most one can say with any certainty is that peoples\u2019 perception of reality is highly colored by their self-interest. In any event, there have been reforms (or, as the detractors say, \u201cdeforms\u201d).\r\n\r\n<\/div>\r\n<div id=\"mayer_1.0-ch20_s05_s02\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">State Reforms<\/h2>\r\nProdded by astute lobbying by manufacturing and other business trade associations, state legislatures responded to the cries of manufacturers about the hardships that the judicial transformation of the products-liability lawsuit ostensibly worked on them. Most state legislatures have enacted at least one of some three dozen \u201creform\u201d proposal pressed on them over the last two decades. Some of these measures do little more than affirm and clarify case law. Among the most that have passed in several states are outlined in the next sections.\r\n<div id=\"mayer_1.0-ch20_s05_s02_s01\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Statutes of Repose<\/h2>\r\nPerhaps nothing so frightens the manufacturer as the occasional reports of cases involving products that were fifty or sixty years old or more at the time they injured the plaintiff. Many states have addressed this problem by enacting the so-called <span class=\"im_margin_term\"><span class=\"im_glossterm\">statute of repose<\/span><\/span>. This statute establishes a time period, generally ranging from six to twelve years; the manufacturer is not liable for injuries caused by the product after this time has passed.\r\n\r\n<\/div>\r\n<div id=\"mayer_1.0-ch20_s05_s02_s02\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">State-of-the-Art Defense<\/h2>\r\nSeveral states have enacted laws that prevent advances in technology from being held against the manufacturer. The fear is that a plaintiff will convince a jury a product was defective because it did not use technology that was later available. Manufacturers have often failed to adopt new advances in technology for fear that the change will be held against them in a products-liability suit. These new statutes declare that a manufacturer has a valid defense if it would have been technologically impossible to have used the new and safer technology at the time the product was manufactured.\r\n\r\n<\/div>\r\n<div id=\"mayer_1.0-ch20_s05_s02_s03\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Failure to Warn<\/h2>\r\nSince it is often easier to prove that an injury resulted because the manufacturer failed to warn against a certain use than it is to prove an injury was caused by a defective design, manufacturers are subjected to a considerable degree of hindsight. Some of the state statutes limit the degree to which the failure to warn can be used to connect the product and the injury. For example, the manufacturer has a valid defense if it would have been impossible to foresee that the consumer might misuse the product in a certain way.\r\n\r\n<\/div>\r\n<div id=\"mayer_1.0-ch20_s05_s02_s04\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Comparative Fault for Consumer Misuse<\/h2>\r\nContributory negligence is generally not a defense in a strict liability action, while assumption of risk is. In states that have enacted so-called comparative fault statutes, the user\u2019s damages are pegged to the percentage of responsibility for the injury that the defendant bears. Thus if the consumer\u2019s misuse of the product is assessed as having been 20 percent responsible for the accident (or for the extent of the injuries), the consumer is entitled to only 80 percent of damages, the amount for which the defendant manufacturer is responsible.\r\n\r\n<\/div>\r\n<div id=\"mayer_1.0-ch20_s05_s02_s05\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Criminal Penalties<\/h2>\r\nNot all state reform is favorable to manufacturers. Under the California Corporate Criminal Liability Act, which took effect twenty years ago, companies and managers must notify a state regulatory agency if they know that a product they are selling in California has a safety defect, and the same rule applies under certain federal standards, as Toyota executives were informed by their lawyers following alarms about sudden acceleration in some Toyota automobiles. Failure to provide notice may result in corporate and individual criminal liability.\r\n\r\n<\/div>\r\n<\/div>\r\n<div id=\"mayer_1.0-ch20_s05_s03\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Federal Reform<\/h2>\r\nPiecemeal reform of products-liability law in each state has contributed to the basic lack of uniformity from state to state, giving it a crazy-quilt effect. In the nineteenth century, this might have made little difference, but today most manufacturers sell in the national market and are subjected to the varying requirements of the law in every state. For years there has been talk in and out of Congress of enacting a federal products-liability law that would include reforms adopted in many states, as discussed earlier. So far, these efforts have been without much success.\r\n\r\nCongressional tort legislation is not the only possible federal action to cope with products-related injuries. In 1972, Congress created the Consumer Product Safety Commission (CPSC) and gave the commission broad power to act to prevent unsafe consumer products. The CPSC can issue mandatory safety standards governing design, construction, contents, performance, packaging, and labeling of more than 10,000 consumer products. It can recall unsafe products, recover costs on behalf of injured consumers, prosecute those who violate standards, and require manufacturers to issue warnings on hazardous products. It also regulates four federal laws previously administered by other departments: the Flammable Fabrics Act, the Hazardous Substances Act, the Poison Prevention Packaging Act, and the Refrigerator Safety Act. In its early years, the CPSC issued standards for bicycles, power mowers, television sets, architectural glass, extension cords, book matches, pool slides, and space heaters. But the list of products is long, and the CPSC\u2019s record is mixed: it has come under fire for being short on regulation and for taking too long to promulgate the relatively few safety standards it has issued in a decade.\r\n<div id=\"mayer_1.0-ch20_s05_s03_n01\" class=\"im_key_takeaways im_editable im_block textbox\">\r\n<h3 class=\"im_title\">Key Takeaway<\/h3>\r\nBusiness advocates claim the American tort system\u2014products-liability law included\u2014is broken and corrupted by grasping plaintiffs\u2019 lawyers; plaintiffs\u2019 lawyers say businesses are greedy and careless and need to be smacked into recognition of its responsibilities to be more careful. The debate rages on, decade after decade. But there have been some reforms at the state level, and at the federal level the Consumer Product Safety Act sets out standards for safe products and requires recalls for defective ones. It is regularly castigated for (1) being officious and meddling or (2) being too timid.\r\n\r\n<\/div>\r\n<div class=\"bcc-box bcc-info\">\r\n<h3>Exercises<\/h3>\r\n<section id=\"self-check-questions\">\r\n<ol>\r\n\t<li>Why is it so difficult to determine if there really is a \u201ctort crisis\u201d in the United States?<\/li>\r\n\t<li>What reforms have been made to state tort law?<\/li>\r\n\t<li>What federal legislation affects consumer safety?<\/li>\r\n<\/ol>\r\n<\/section><\/div>\r\n<div id=\"mayer_1.0-ch52_s02_s06_n02\" class=\"im_exercises im_editable im_block\"><\/div>\r\n<\/div>","rendered":"<div class=\"bcc-box bcc-highlight\">\n<h3>Learning Objectives<\/h3>\n<p>By the end of this section, you will be able to:<\/p>\n<ul id=\"mayer_1.0-ch52_s02_l01\" class=\"im_orderedlist\">\n<li>See why tort reform is advocated, why it is opposed, and what interests take each side.<\/li>\n<li>Understand some of the significant state reforms in the last two decades.<\/li>\n<li>Know what federal reforms have been instituted.<\/li>\n<\/ul>\n<\/div>\n<div id=\"mayer_1.0-ch20_s05_s01\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">The Cry for Reform<\/h2>\n<p>In 1988, The Conference Board published a study that resulted from a survey of more than 500 chief executive officers from large and small companies regarding the effects of products liability on their firms. The study concluded that US companies are less competitive in international business because of these effects and that products-liability laws must be reformed. The reform effort has been under way ever since, with varying degrees of alarms and finger-pointing as to who is to blame for the \u201ctort crisis,\u201d if there even is one. Business and professional groups beat the drums for tort reform as a means to guarantee \u201cfairness\u201d in the courts as well as spur US economic competitiveness in a global marketplace, while plaintiffs\u2019 attorneys and consumer advocates claim that businesses simply want to externalize costs by denying recovery to victims of greed and carelessness.<\/p>\n<p>Each side vilifies the other in very unseemly language: probusiness advocates call consumer-oriented states \u201cjudicial hell-holes\u201d and complain of \u201cwell-orchestrated campaign[s] by tort lawyer lobbyists and allies to undo years of tort reform at the state level,\u201d<span id=\"mayer_1.0-fn20_023\" class=\"im_footnote\">American Tort Reform Association website, accessed March 1, 2011, <a class=\"im_link\" href=\"http:\/\/www.atra.org\" target=\"_blank\">http:\/\/www.atra.org<\/a>.<\/span> while pro-plaintiff interests claim that there is \u201cscant evidence\u201d of any tort abuse. <span id=\"mayer_1.0-fn20_024\" class=\"im_footnote\"><a class=\"im_link\" href=\"http:\/\/www.epi.org\/publications\/entry\/bp157\" target=\"_blank\">http:\/\/www.shragerlaw.com\/html\/legal_rights.html<\/a>.<\/span> It would be more amusing if it were not so shrill and partisan. Perhaps the most one can say with any certainty is that peoples\u2019 perception of reality is highly colored by their self-interest. In any event, there have been reforms (or, as the detractors say, \u201cdeforms\u201d).<\/p>\n<\/div>\n<div id=\"mayer_1.0-ch20_s05_s02\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">State Reforms<\/h2>\n<p>Prodded by astute lobbying by manufacturing and other business trade associations, state legislatures responded to the cries of manufacturers about the hardships that the judicial transformation of the products-liability lawsuit ostensibly worked on them. Most state legislatures have enacted at least one of some three dozen \u201creform\u201d proposal pressed on them over the last two decades. Some of these measures do little more than affirm and clarify case law. Among the most that have passed in several states are outlined in the next sections.<\/p>\n<div id=\"mayer_1.0-ch20_s05_s02_s01\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Statutes of Repose<\/h2>\n<p>Perhaps nothing so frightens the manufacturer as the occasional reports of cases involving products that were fifty or sixty years old or more at the time they injured the plaintiff. Many states have addressed this problem by enacting the so-called <span class=\"im_margin_term\"><span class=\"im_glossterm\">statute of repose<\/span><\/span>. This statute establishes a time period, generally ranging from six to twelve years; the manufacturer is not liable for injuries caused by the product after this time has passed.<\/p>\n<\/div>\n<div id=\"mayer_1.0-ch20_s05_s02_s02\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">State-of-the-Art Defense<\/h2>\n<p>Several states have enacted laws that prevent advances in technology from being held against the manufacturer. The fear is that a plaintiff will convince a jury a product was defective because it did not use technology that was later available. Manufacturers have often failed to adopt new advances in technology for fear that the change will be held against them in a products-liability suit. These new statutes declare that a manufacturer has a valid defense if it would have been technologically impossible to have used the new and safer technology at the time the product was manufactured.<\/p>\n<\/div>\n<div id=\"mayer_1.0-ch20_s05_s02_s03\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Failure to Warn<\/h2>\n<p>Since it is often easier to prove that an injury resulted because the manufacturer failed to warn against a certain use than it is to prove an injury was caused by a defective design, manufacturers are subjected to a considerable degree of hindsight. Some of the state statutes limit the degree to which the failure to warn can be used to connect the product and the injury. For example, the manufacturer has a valid defense if it would have been impossible to foresee that the consumer might misuse the product in a certain way.<\/p>\n<\/div>\n<div id=\"mayer_1.0-ch20_s05_s02_s04\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Comparative Fault for Consumer Misuse<\/h2>\n<p>Contributory negligence is generally not a defense in a strict liability action, while assumption of risk is. In states that have enacted so-called comparative fault statutes, the user\u2019s damages are pegged to the percentage of responsibility for the injury that the defendant bears. Thus if the consumer\u2019s misuse of the product is assessed as having been 20 percent responsible for the accident (or for the extent of the injuries), the consumer is entitled to only 80 percent of damages, the amount for which the defendant manufacturer is responsible.<\/p>\n<\/div>\n<div id=\"mayer_1.0-ch20_s05_s02_s05\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Criminal Penalties<\/h2>\n<p>Not all state reform is favorable to manufacturers. Under the California Corporate Criminal Liability Act, which took effect twenty years ago, companies and managers must notify a state regulatory agency if they know that a product they are selling in California has a safety defect, and the same rule applies under certain federal standards, as Toyota executives were informed by their lawyers following alarms about sudden acceleration in some Toyota automobiles. Failure to provide notice may result in corporate and individual criminal liability.<\/p>\n<\/div>\n<\/div>\n<div id=\"mayer_1.0-ch20_s05_s03\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Federal Reform<\/h2>\n<p>Piecemeal reform of products-liability law in each state has contributed to the basic lack of uniformity from state to state, giving it a crazy-quilt effect. In the nineteenth century, this might have made little difference, but today most manufacturers sell in the national market and are subjected to the varying requirements of the law in every state. For years there has been talk in and out of Congress of enacting a federal products-liability law that would include reforms adopted in many states, as discussed earlier. So far, these efforts have been without much success.<\/p>\n<p>Congressional tort legislation is not the only possible federal action to cope with products-related injuries. In 1972, Congress created the Consumer Product Safety Commission (CPSC) and gave the commission broad power to act to prevent unsafe consumer products. The CPSC can issue mandatory safety standards governing design, construction, contents, performance, packaging, and labeling of more than 10,000 consumer products. It can recall unsafe products, recover costs on behalf of injured consumers, prosecute those who violate standards, and require manufacturers to issue warnings on hazardous products. It also regulates four federal laws previously administered by other departments: the Flammable Fabrics Act, the Hazardous Substances Act, the Poison Prevention Packaging Act, and the Refrigerator Safety Act. In its early years, the CPSC issued standards for bicycles, power mowers, television sets, architectural glass, extension cords, book matches, pool slides, and space heaters. But the list of products is long, and the CPSC\u2019s record is mixed: it has come under fire for being short on regulation and for taking too long to promulgate the relatively few safety standards it has issued in a decade.<\/p>\n<div id=\"mayer_1.0-ch20_s05_s03_n01\" class=\"im_key_takeaways im_editable im_block textbox\">\n<h3 class=\"im_title\">Key Takeaway<\/h3>\n<p>Business advocates claim the American tort system\u2014products-liability law included\u2014is broken and corrupted by grasping plaintiffs\u2019 lawyers; plaintiffs\u2019 lawyers say businesses are greedy and careless and need to be smacked into recognition of its responsibilities to be more careful. The debate rages on, decade after decade. But there have been some reforms at the state level, and at the federal level the Consumer Product Safety Act sets out standards for safe products and requires recalls for defective ones. It is regularly castigated for (1) being officious and meddling or (2) being too timid.<\/p>\n<\/div>\n<div class=\"bcc-box bcc-info\">\n<h3>Exercises<\/h3>\n<section id=\"self-check-questions\">\n<ol>\n<li>Why is it so difficult to determine if there really is a \u201ctort crisis\u201d in the United States?<\/li>\n<li>What reforms have been made to state tort law?<\/li>\n<li>What federal legislation affects consumer safety?<\/li>\n<\/ol>\n<\/section>\n<\/div>\n<div id=\"mayer_1.0-ch52_s02_s06_n02\" class=\"im_exercises im_editable im_block\"><\/div>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-88\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Business and the Legal Environment. <strong>Authored by<\/strong>: Anonymous. <strong>Provided by<\/strong>: Anonymous. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/2012books.lardbucket.org\/books\/business-and-the-legal-environment\/\">http:\/\/2012books.lardbucket.org\/books\/business-and-the-legal-environment\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-sa\/4.0\/\">CC BY-NC-SA: Attribution-NonCommercial-ShareAlike<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":5,"menu_order":63,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Business and the Legal Environment\",\"author\":\"Anonymous\",\"organization\":\"Anonymous\",\"url\":\"http:\/\/2012books.lardbucket.org\/books\/business-and-the-legal-environment\/\",\"project\":\"\",\"license\":\"cc-by-nc-sa\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-88","chapter","type-chapter","status-publish","hentry"],"part":775,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/pressbooks\/v2\/chapters\/88","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/wp\/v2\/users\/5"}],"version-history":[{"count":4,"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/pressbooks\/v2\/chapters\/88\/revisions"}],"predecessor-version":[{"id":1148,"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/pressbooks\/v2\/chapters\/88\/revisions\/1148"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/pressbooks\/v2\/parts\/775"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/pressbooks\/v2\/chapters\/88\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/wp\/v2\/media?parent=88"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/pressbooks\/v2\/chapter-type?post=88"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/wp\/v2\/contributor?post=88"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/wp-json\/wp\/v2\/license?post=88"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}