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2019-2020 Points of Light

This report’s Points of Light typically comprise noteworthy actions taken by judges and lawmakers to stem abuses of the civil justice system not detailed elsewhere in the report.

There are five ways to douse the flames in Judicial Hellholes and help out-of-balance jurisdictions develop more evenhanded civil courts:

  1. Constructive media attention and public education can help encourage reform;
  2. Trial court judges can engage in self-correction;
  3. Appellate courts can overturn bad trial court decisions and limit future judicial malfeasance;
  4. Legislatures and other state officials can adopt reforms; and
  5. Voters can reject liability-expanding judges or enact ballot initiative to address particular problems.

IN THE COURTS

MISSOURI COURT DISMISSES MESH CASE FOR LACK OF PERSONAL JURISDICTION

On June 19, 2019, the United States District Court for the Eastern District of Missouri held that the court did not have personal jurisdiction over 99 plaintiffs’ claims because there was no connection between the plaintiffs and Missouri. The defendants were not “at home” in Missouri, nor were 96 of the 99 plaintiffs. The court properly relied on recent U.S. Supreme Court precedent and found that the plaintiffs, even if they were injured, were not injured by any activity committed by the defendant in Missouri.

The complaint was originally filed in the City of St. Louis Circuit Court but was removed to Missouri federal court by defendants.

NORTH DAKOTA SUPREME COURT UPHOLDS $500,000 NONECONOMIC DAMAGE LIMIT

In April 2019, the Supreme Court of North Dakota overruled a district court that found the state’s $500,000 limit on noneconomic damages to be unconstitutional.

The Supreme Court compared the legislative limit to a previous limit on medical malpractice liability that had been found unconstitutional but distinguished the new law because it did not limit a person’s economic damages. The previous court was worried about limiting the amount a plaintiff could recover to less than what was required to satisfy their medical bills, which is not an issue if there is no limit on economic damages.

The Court found convincing the fact that the limit was put in place at the recommendation of a task force that was created to improve the health care system. The goals of the task force were to (1) increase access; (2) control costs; and (3) to maintain or increase quality of health care in the state. The Ccourt concluded that there was a close correspondence between the damages limit and the legitimate legislative goal of improving the health care system such that the law was not unconstitutional.

These limits protect access to healthcare and ensure that affordable medical liability insurance is available to doctors. Placing reasonable constraints on medical liability reduce and stabilize medical liability insurance rates, improve access to critical specialists for local residents, and lessen the incentive to engage in costly defensive medicine. Statutory limits on the subjective and unpredictable portion of an award also make it easier for parties to reach fair settlements.

SOUTH DAKOTA SUPREME COURT REFUSES TO EXPAND “BAD FAITH” LIABILITY FOR INSURERS

In September 2019, the South Dakota Supreme Court ruled that liability for insurance bad faith requires a showing of an insurer’s knowledge or reckless disregard of the lack of a reasonable basis for denial of a claim. The Court rejected a more expansive view of the state’s bad faith law put forth by the plaintiff. It stated, “[s]uch an expansion of the bad faith doctrine is not supported by our case law or the facts before the Court.”

An employee who was denied workers’ comp benefits brought a bad faith action against her employer’s insurer, alleging the insurer pursued a frivolous appeal of a state agency’s benefits decision to avoid paying benefits.

IN THE LEGISLATURES

  • Alabama enacted the Asbestos Exposure Transparency Act (S.B. 45), which addresses the misleading practice of plaintiffs claiming in litigation that their exposure to asbestos was due to the named solvent companies, but asserting in claims for compensation from trusts established by bankrupt companies that their exposure is due to those businesses. The new law requires a plaintiff to file a sworn statement regarding the plaintiff ’s exposure to asbestos or, alternatively, to file available asbestos trust claims and produce all trust claims materials before trial. It also creates a rebuttable presumption that asbestos trust claim materials are admissible as evidence in litigation and permits a defendant to seek discovery from an asbestos trust.
  • Florida enacted legislation to curb abuse of assignment of insurance benefits (H.B. 7065) and provide a more reasonable time for insurers and their policyholders to resolve disputes before resorting to litigation (H.B. 301). The legislature also enacted legislation overturning a Florida Supreme Court decision that had imposed vicarious liability on companies that lease construction equipment. (S.B. 862)
  • Mississippi adopted the “Landowners Protection Act,” which will reduce premise liability exposure. The new law provides that a person who owns, leases, or manages property is generally not liable for criminal conduct that occurs on its property by a third party. The new law will stop lawsuits that seek to make businesses that operate in dangerous neighborhoods pay large awards for criminal attacks that occur in a store or parking lot unless the business truly knew of the danger and failed to address it. The law also allows a jury, when allocating fault in a premises liability action, to consider an attacker’s conduct. (S.B. 2901).
  • Missouri enacted legislation that will reduce excessive, costly discovery. The bill requires discovery requests to be proportional to the needs of the case and places other limits on depositions, document requests, and production of electronically-stored information. (S.B. 224). The Show Me state also adopted legislation that will allow juries in product liability actions alleging that an automobile is defective to learn whether a plaintiff wore his or her seatbelt (S.B. 30). Lastly, Missouri enacted legislation designed to prevent the practice of out-of-state plaintiffs whose claims have no connection to the state from joining with local residents to bring lawsuits in a plaintiff-friendly court, such as in the City of St. Louis. (S.B. 7)
  • Tennessee became the first state to enact a law prohibiting specific misleading lawsuit advertising practices, such as presenting an ad as a “medical alert.” The law also requires certain disclosures in lawsuit ads, such as the identity of the sponsor and a warning to speak with a doctor before discontinuing a prescribed medication that is targeted by the ad. Those who use, obtain, sell, transfer, or disclose protected health information for the purpose of soliciting individuals to bring lawsuits are subject to criminal penalties. (H.B. 352).
  • Texas became the first state to address the barrage of lawsuits filed by local governments at the invitation of contingency-fee lawyers. The law requires transparency when retaining outside counsel and provides the attorney general with authority to review and approve a political subdivision’s outside counsel contracts to ensure to lawsuit is not duplicative of, or conflict with, state litigation or policy. (H.B. 2826). Texas also reduced the potential for excessive “per violation” penalties under the state’s Deceptive Trade Practices Act (S.B. 2140), provided that the American law Institute’s Restatements of the Law are not controlling in Texas courts (H.B. 2757), and prohibited misleading lawsuit advertising practices (S.B. 1189).
  • Virginia addressed the practice of outside advocacy groups embedding private lawyers in state attorneys general offices by providing that the sole source of compensation to employees of the Office of the Attorney General must be state appropriations (H.B. 1700). The Commonwealth also adopted a law that will make it possible to obtain summary judgment in certain types of litigation, which, until now, was generally not available even in the weakest of cases. (H.B .2197/S.B. 1486).

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