"Silent" Tort Reform Slowly Eroding Consumers' Rights to Sue

By: Gerri L. Elder

The term "tort reform" has slowly but surely crept into mainstream American speech, as a topic for discussion at dinner parties as well as debate on the floor of Congress. Several high-profile politicians have made mention of the term during presidential primary debates, most notably Republican candidate Rudolph Giuliani and Republican nominee John McCain.

The term "tort reform" is used to describe proposals of reform on liability rules for lawsuits and placing caps on punitive damages in jury verdicts. It often refers to enacting medical malpractice caps with the intent of driving down health insurance premiums. A term you'll hear a lot thrown around by proponents of tort reform is "frivolous lawsuits."

However, when it comes to policymaking on the issues of tort reform and medical malpractice, changes are already happening, and any real decisions to limit verdicts and settlements for medical malpractice lawsuits or conversely to strike down limits, may come too late, as a recent New York Times article suggests.

That's because federal agencies may be effectively ending the tort reform discussion with unilateral action supported in some cases by the Supreme Court. These regulations put in place to curb or end lawsuits for defective products or other liability lawsuits have been becoming more and more prominent with the Supreme Court's decision in February to make lawsuits against manufacturers for medical devices that have been approved by the FDA much tougher. Many are calling it "silent tort reform."

However, the process didn't start there. February also saw the Consumer Safety Products Commission (CPSC) adopt regulations to limit the liability of the bedding industry under state laws for mattresses that catch fire. Why is this particular incident so important? It's the first time the CPSC in its 33-year existence has ever decided to limit consumer lawsuits.

And there's plenty more. In January, the FDA approved a drug label rule that preempts state regulations in lawsuits in which the state rules may have been more favorable. The questionably-named Office of Thrift Supervision recently preempted a Washington county law that sought to deter discriminatory lending practices. The National Highway Traffic Safety Administration is currently considering preemptions of state laws on car roofs and seat positions; they are also considering regulations that would prevent any state from mandating harsher fuel emissions standards for certain vehicles than their national regulations.

Arguments for and against this federal preemption abound, but can be boiled down into major arguments on both sides. Those who agree with the federal agency preemption and regulations believe that the federal standards are tough and that on a federal level, policymakers have access to more data and studies and examples to sue in their decision making. They cite the number of frivolous lawsuits as an example of how people have been abusing legal privileges.

Those against these federal mandates point out to the mistakes often made by federal agencies and suggest that depriving individuals of a right to sue over FDA-approved items would severely hamper their right to compensation for a personal injury.

This may all come to a head in the fall, when the Supreme Court hears a case against drug maker Wyeth over whether or not FDA approval preempts Vermont state product liability laws. If the court continues on its recent path, it could be a bad news for defective drug victims and good news for drug companies.