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The Coming Tort Reform Juggernaut:
Are There Constitutional Limits on How Much the President and Congress Can Do In This Area?

Monday, May. 19, 2003

Tort reform has come to Washington, D.C. with a vengeance. Congress, with the White House's blessing, has begun to propose a dizzying array of federal laws designed to change the way lawsuits are handled in the 50 states.

Many are dubious of the wisdom of this legislative agenda. In this column, however, we will ask a different question: Do Congress and the President have complete discretion to extend federal power into state tort law, or are they constrained by the Constitution from doing so?

Today's Federal Tort Reform: Bigger and Bolder

This Congress's tort reform agenda is unprecedented in scope.

Twentieth Century legislation created federal rights of action for railroad workers, harbor workers, and victims of certain civil rights violations. But these laws were either limited in scope, or aimed to clean up - not supplant - huge pieces of the states' own tort regimes.

Likewise, Congress has occasionally directly interfered with small parts of state tort law - for example, in the context of litigation over Black Lung disease or against vaccine manufacturers. In these instances, Congress always provided an alternative compensation system in exchange for its limitation on plaintiffs' rights to sue in tort.

Recent proposals for asbestos litigation seem likely to take a similar form. But other recent bills - such as the medical malpractice bill entitled the Help Efficient, Accessible, Low-Cost, Timely Healthcare Act of 2003 ("HEALTH Act") - represent a new breed of legislation.

The HEALTH act would cap the non-economic damages a plaintiff in a malpractice suit could win in a state court at $250,000, even if under her states statutes and constitution, she could win more. Unlike all previous forms of federal tort legislation, the HEALTH Act takes without giving back. There is no alternative compensation scheme.

The bill barring suits against handgun manufacturers (the "Protection of Lawful Commerce in Arms Act") goes even further. State tort law might give a state citizen the right to sue gun manufacturers who violate a legal duty to sell guns in a reasonable fashion. The federal act would take away that entire lawsuit - effectively reducing damages not to $250,000, but to zero.

Does the Constitution Limit Federal Tort Reform Efforts?

From the point of view of integrity, one can argue that federalism advocates who also champion such broad tort reform are being hypocritical. But they may respond that the changes in tort litigation in the U.S. over the past 50 years justify a campaign of tort "reform" at all levels, both state and federal.

From the point of view of policy, one can question the need for such dramatic measures. On one hand, there is a great deal of misinformation circulating about the tort system being out of control. On the other hand, it is indeed the case that tort litigation has changed in the United States over the past century. The scale of non-economic damages (damages compensating for pain and suffering and other forms of emotional distress) has increased very quickly in comparison to the rate of increase in other kinds of damages, or inflation, or the GNP.

Moreover, it seems clear to us that, as a policy matter, there may be some instances in which the federal government is in a position to do a better job of tort reform than the individual states. A well-designed federal law is probably our only hope for a workable solution to the current asbestos litigation crisis. But in contrast, as a matter of policy, the question of liability in the context of handgun manufacturing may be best left to the individual states to resolve.

But putting aside these policy issues for the moment, we will look another question: Does the Constitution limit Congress's options in the arena of tort reform?

The Constitution and Tort Reform: Some Basics

Under the Constitution, Congress may only act within a sphere created by the powers enumerated in Article I. Does Article I authorize federal tort reform legislation?

After all, state law has traditionally governed areas such as medical malpractice and products liability.

Given this history, the Rehnquist Court may strike down at least some versions of federal tort reform as exceeding Congress's Article I authority. (A recent column by Michael Dorf offers an illuminating discussion of these issues.)

Moreover, even if Congress does have Article I power to legislate in the tort area, some types of legislation may violate rights enshrined in the Bill of Rights -

Due Process, Tort Defendants, and Tort Plaintiffs

What do the Due Process Clauses of the Fifth and Fourteenth Amendments (the former applies to the federal government; the latter to the states) mean? That is perhaps the most hotly contested question of modern constitutional law. One thing is clear, however: it goes beyond simply ensuring that authorities follow certain fair procedures.

Consider the famous, recent 5-4 decision BMW v. Gore. There, the Court struck down a $2 million punitive damage award to a doctor who had sold a supposedly new, but actually partially repainted BMW. The Court reasoned that the award was so high, it violated BMW's right, under the Fourteenth Amendment's Due Process Clause, not to be deprived of its property without due process of law.

Of course, plenty of process occurred. Rather than simply seizing BMW's bank accounts, the state of Alabama allowed it adversarial presentation of evidence before a jury, with all the normal trial safeguards - which, in an earlier decision, the Court had already deemed fair.

Thus, under the Court's logic, the Due Process problem was not procedural; it was substantive. The state of Alabama had, in effect, imposed a fine through its tort law that was so large relative to the minor misconduct in question as to amount to a constitutionally excessive fine.

What about federal tort reform? Does it also violate Due Process, thus conceived? Gore made clear there is a Due Process right of defendants not to be overpunished. Is there similarly a Due Process right of victims of torts not to be undercompensated - or, more specifically, not to be made subject to government legislation unjustifiably eliminating or interfering with their state law rights to be compensated for their injuries?

Different Kinds of Underlying Rights May Lead to Different Due Process Rights

Or is there a difference?

BMW already owned its assets and had rights to them. Call its rights "primary rights" - such as the right to continue to own existing property. The huge damage judgment for repainting the "new" car interfered with BMW's rights to keep the money in its bank accounts: primary rights.

Rather, it inhibits victims' ability to respond when someone else invades those rights. Call their rights "secondary" rights -defined as rights to sue someone who has invaded your primary rights.

Some have argued that the Constitution's Due Process clause - which by their language protect only against deprivations of life, liberty, and property - only protect against deprivations of primary rights. Thus, they do not protect against the kind of deprivations of secondary rights that tort reform legislation accomplishes.

But it's not that simple - as an analogy to Takings Clause precedents will show.

A Takings Clause Analogy Shows Due Process Protects Even Secondary Rights

Consider the following hypothetical tort reform law: To improve public access to a hard-to-reach public beach, a state government wants to give the public the ability to walk across private yards to reach the beach. So it passes a law creating a new, complete "access-to-public-beach" defense to the tort of trespass to property, applicable in all future suits. The law guarantees trespass suits will, in the future, always fail if the trespasser is only heading to a public beach.

The law does not partially destroy a primary right - by, for instance, creating a public easement over private property to make a new path to the beach, thus literally taking away property. Instead, it partially destroys a secondary right: the right to sue for trespassing, which now cannot be exercised in certain instances.

But it is still, we believe, a Constitutional violation, of the Takings Clause, which bars governments from "taking" private property without justly compensating the property owner. Why? Because, by limiting the owners' tort remedies, it effectively disables them from vindicating their primary right against having others intentionally invade their property.

Plainly, the Constitution sometimes does protect not only primary, but secondary property rights - and protects them from tort reform. Moreover, it seems to follow from this that other basic rights - such as the rights to bodily integrity and freedom of movement - should be similarly protected.

After all, those rights are generally taken to be more important than the right to property ownership. (For example, absent a threat to your person, you aren't allowed to kill someone just to protect your property.)

Setting Due Process Limits

In sum, it seems correct to conclude that the Fifth Amendment's Due Process Clause sets limits on the ability of Congress to enact tort reform measures. But what limits, exactly, and when do they apply? This is a question the courts will have to wrestle with in the near future: we can offer only some preliminary remarks.

The takings analogy would suggest that, at a minimum, the Constitution forbids any tort reform that leaves individuals unable to respond to intentionally-caused interferences with core interests - such as bodily integrity and freedom of movement.

For instance, neither the federal or state governments could simply abolish the torts of assault, battery, and false imprisonment, as applied to intentional misconduct. Since they haven't been inclined to do so, however, this conclusion has little practical import.

Should the same analysis extend to certain unintentional invasions of core interests? That's the million-dollar issue, for it affects many of tort reform proposals currently before Congress.

In our view, there is a respectable argument that this analysis ought to extend to certain claims of negligence - and, in particular, to claims alleging that the defendant has engaged in affirmatively careless misconduct that has caused bodily injury to the plaintiff.

A victim of such misconduct (as opposed to careless failures to protect or rescue) can justifiably look to the government for remedies. Thus, tort reform that strips away the causes of action that might remedy such injuries may also run afoul of the Due Process clause.

If our conclusion is correct, the Constitution constrains - but does not completely forbid - Congressional tort reform. More carefully crafted reform measures, such as those that limit non-economic damages, may well still pass constitutional muster.

But crude limits - such as the across-the-board damage caps that have been enacted in states including Nebraska and Virginia - would likely be struck down. And that is a good thing, from both a legal and a policy perspective, for these caps would limit the recovery of the most severely injured tort victims to only a tiny fraction of the medical expenses and lost wages they have suffered.

Anthony J. Sebok, a FindLaw columnist, is a Professor of Law at Brooklyn Law School, where he teaches Torts, among other subjects. Professor Sebok has written several columns earlier for this site about another federal regulation of state tort law, relating to the September 11 attacks; these columns may be found in the archive of his columns on this site.

John C. P. Goldberg is a professor at Vanderbilt Law School in Nashville. He is the author of numerous articles on tort law, including the forthcoming article "Due Process Limits on Tort Reform."

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