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The Obama Administration's Likely Effect on Tort Law and the Civil Justice System Generally


Tuesday, Nov. 18, 2008

Now that the election is over, political pundits are trying to predict how the Obama Administration and the Democratic Congress will govern. In this column, I will make a few predictions about whether we can expect any changes in the civil justice system after Inauguration Day.

My quick answer is that there will be very few changes, although the tort reform movement will be stopped in its tracks at the federal level. The real question is whether there will be substantial rollbacks of any of the tort reforms that were achieved under the last two Bush Administrations. For reasons I'll explain below, I predict that there will be few rollbacks, either.

The Evidence So Far As To Obama's Views on Tort Reform and Trial Lawyers

First, what do we know about Barack Obama's views of the civil justice system? He did not say very much on the campaign trail or in the debates, but then again, with the economy crashing and two wars, the issue did not come up very much. His campaign issued a brief one-and-a-half-page fact sheet on his views, which revealed very little.

What little Obama did say suggests that he thinks of himself as different from traditional Democrats (like John Edwards) in that he has broken with the trial lawyers' lobby. For instance, in the debates and in interviews, he proudly referred to his support of the Class Action Fairness Act ("CAFA"), which he voted for early in his Senate career, as evidence of his independence from the trial lawyers' lobby. CAFA moves class actions from state courts to federal courts, where, it is hoped, important questions like class certification will be treated more skeptically by federal judges than by state judges, who are often elected and beholden to "special interests." (I discussed CAFA in greater detail in a prior column.)

Let us leave to one side the fact that many of the assumptions behind CAFA were false, and that there is no evidence that the law really has helped suppress "junk" lawsuits. The point is that, when it was proposed, the trial lawyers opposed it and Obama voted for it anyway. The problem is, so did a lot of other Democrats. In fact, by the time Obama voted for it, it was a done deal. His support was not courageous, and he took no heat for joining 71 other senators on the final vote.

Nonetheless, there is some evidence that, at least on some issues, Obama may be willing to think outside the usual "pro-litigation" box that has defined the Democratic Party. I find it intriguing, for instance, that the largest single donation to Obama's campaign from the legal community came from Kirkland & Ellis, the huge Chicago firm that defends Philip Morris.

Obama's Views on Medical Malpractice: The Plan He and Hillary Clinton Jointly Created and Tried to Make Law

Even more intriguing are Obama's views about medical malpractice, which have remained constant since he entered politics. While in the Illinois state legislature, he voted in favor of caps on non-economic damages (such as pain-and-suffering damages) in medical malpractice cases. When he was in the U.S. Senate, he co-authored an article with Hilary Clinton in the New England Journal of Medicine recommending an alternative dispute resolution mechanism for medical malpractice claims - a solution that could not be easily characterized as favorable to either the plaintiffs' or the defense bar. In the article, Obama and Clinton recommended a non-binding process by which physicians could confidentially accept responsibility for medical errors in exchange for an offer of "fair compensation" and the patient's promise not to sue. The plan is based on a program developed by the Veteran's Administration which seems to have reduced its liability expenses in hospitals where it has been tested.

Obama and Clinton tried to get their plan enacted into law in 2006, but their attempt failed. It is not clear who hated it more-the medical community, who saw it as too weak, since it did not abrogate the right to sue entirely; or the plaintiffs' bar, which is always opposed to arbitration and anything that would weaken access by their clients to a "real" Article III court or state trial court.

Obama's experience at Chicago Law School, where he taught as a "super adjunct," should not be ignored. Chicago is not an easy place to pigeonhole ideologically. There are some very conservative torts scholars there, such as Richard Epstein, but there are also scholars like Cass Sunstein, who, although a liberal, has written quite critically of the current civil justice system, and especially its allowance of large punitive damages awards.

My prediction is that Obama will not instinctively defend the civil justice system, and that he may even be open to experimentation that limits the right to sue, especially in the context of medical malpractice claims. Accordingly, the Supreme Court Justices he appoints may be much more in the pragmatist vein when it comes to civil justice-in other words, we are more likely to see new Justices who are like Stephen Breyer, rather than like Ruth Bader Ginsburg.

Ultimately, the Last Word on Civil Justice Will Not Be Obama's, But Congress's

But the real question is not what Obama will want to do with the civil justice system, but what Congress will want to do with it. The Democrats now firmly control the Senate, and some of them may want to reverse the achievements of the tort reform movement. Will Obama want to stand in their way? I don't think so.

So what will the Senate Democrats try to do? I don't think that they will try to reverse any current legislation. This is because the tort reformers really did not get that much important legislation through Congress over the last eight years. Their real successes, other than CAFA, were either at the state level or through the Supreme Court. Thus, putting CAFA aside, there is not much for Congress to undo.

However, the Senate might be interested in doing a little tort reform in the other direction-that is, by changing the law to tip the playing field more in favor of plaintiffs. The first area where the Senate may want to pass some pro-plaintiff legislation is in the area of federal preemption of state pharmaceutical cases. If the Supreme Court decides to expand the scope of implicit preemption involving drugs approved by the FDA-and, as I discussed in a previous set of columns with Benjamin C. Zipursky, there is an important case before the Court where the Justices could do just that-then the Senate, led by Ted Kennedy, may want to step in and amend the relevant legislation to repeal the Supreme Court's decision.

Second, the Senate may want to take up the issue of mandatory arbitration clauses governing potential class action litigation. This issue has been simmering for some time now. For years now, sellers of goods and services have asked buyers to waive their right to sue via a class action (or their right to sue in its entirety) when they open up the package (which is known as a "shrink-wrap waiver") or when they purchase something on the Internet (which is known as a "click-through waiver"). However, most consumers have no idea what they are giving up at the point of waiver, and most are in no position to bargain with the seller anyway.

Consumer advocates hate these waivers and have lobbied state legislatures to ban them, with some success. Some courts have found these waivers to be unenforceable, too, for various public policy reasons. However, the ultimate attack on these waivers would be a federal ban, based on the Commerce Clause. It may be a longshot, but I think that certain senators may be willing to flex their new muscles to get this kind of tort reform passed.

I suspect that President Obama would sign a federal "anti"-preemption bill, or a federal ban on the waiver of a consumer's right to participate in class actions. I don't believe, however, that he will take the lead on these issues. My prediction then, is that when it comes to civil justice issues, interested parties should focus upon watching the Senate, not the White House.

Anthony J. Sebok, a FindLaw columnist, is a Professor at Benjamin N. Cardozo School of Law in New York City. His other columns on tort issues may be found in the archive of his columns on this site.

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