Tort Reform Safe for Now

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Commentary – August 2012

By Mike Hull and Brent Cooper 

On March 27, a federal judge in Marshall ruled that the Texas tort reform law that caps noneconomic damages in health care lawsuits is constitutional. During the course of this lawsuit, Watson v. Harrison County Hospital Association, three different federal judges had the opportunity to overturn the cap. None did.

The trial lawyers spent two years preparing their case. They selected the court and combined 11 independent cases they thought gave them the best chance for victory. Additionally, they brought in the Washington, D.C.-based Center for Constitutional Litigation, an experienced, formidable, and accomplished legal team, to prosecute the case. The center is a trial lawyer-funded organization that has the seemingly singular goal of fighting tort reform in the courts. It filed claims under numerous provisions of the Constitution. Along the way, one magistrate issued an opinion, and two district court judges rendered decisions favoring our position. Ultimately, the plaintiffs lost. The time for filing an appeal of the Watson decision has passed, so we may safely put this particular threat to rest.

Aside from the court victory, Watson is notable because so many Texas Alliance for Patient Access (TAPA) members pitched in to present a united front in defense of the trial lawyer attack. With the blessing of the TAPA Board of Directors and its diverse membership, TAPA took the lead in organizing the defense. The lawyers included ourselves, former Texas Supreme Court Chief Justice Tom Phillips, Diana Faust, and Bryce Benjet.

In light of Watson, some ask where we now stand in the Texas state courts and the legislature. After the legislature passed House Bill 4 in 2003, TAPA and Texas Medical Association members quickly understood that we won't be sure what the law says until the courts tell us what it says. TAPA has continually filed legal briefs in numerous appellate and Texas Supreme Court cases interpreting HB 4. We are about 100 appellate decisions down the road, and some issues are less murky.

HB 4 was intended to address both frequency (number of claims filed as a percentage of insured physicians per year) and severity (the size of payouts). The frequency reforms include various expert reporting provisions and how trial court decisions on those matters are handled. Given that the frequency provisions occur on the front end of a lawsuit, they constitute the overwhelming majority of all reported decisions. Thankfully, the courts continue to interpret HB 4 according to its plain language and in the way we understand the legislature intended.

Although there are still quite a few frequency decisions on appeal, we are beginning to see a decrease in the number of novel frequency issues raised on appeal. The appellate courts have, by and large, affirmed the legislation as it was intended.

However, we now see increased postjudgment appeals involving issues of severity, such as whether the $250,000 cap is constitutional as was litigated in the Watson decision. Watson notwithstanding, the severity side of the appeals is really in its infancy and we have a long way to go. Severity challenges raised by the plaintiffs include: 

  • Whether multiple caps can be applied to a single verdict such as a wrongful death case involving a noneconomic damage award;
  • The order in which caps are to be applied;
  • Numerous questions about the future damage provisions;
  • The untested language related to judgments in excess of policy limits; and
  • The allocation of noneconomic damages to settling and nonsettling parties.  

A resolution of any of these issues adverse to our understanding of the legislature's intentions would roll back tort reform and likely reduce access to care and increase liability premiums. We now have assurance from Watson about the validity of the cap under federal law and a measure of clarity from our state courts about the frequency provisions of HB 4. We now enter into the long grind of state legal challenges to the severity provisions. TAPA will continue to meet these challenges.

TAPA and TMA also must be aware of the dramatic changes in the political landscape. Most of the statewide officials in office when HB 4 passed no longer serve in the capacity they held in 2003. When the ballots are counted in November, it is entirely possible the lieutenant governor, the bill author, and at least12 of the senators who voted on HB 4 will be gone. In the House, the speaker has changed since 2003, and the bill author is no longer in office. Nearly two-thirds of the members who voted on HB 4 in 2003 might not be in office in 2013.

We also see a change in party politics itself. Trial lawyer sympathizers are running for office as Republicans. Also, trial lawyer issues are cloaked in the social agendas of the Republican Party.

As a result, the TAPA lobby team continues to educate our elected officials, both new and veteran, about the importance of tort reform to maintaining and improving access to health care for all Texans.

The real lesson to be learned from Watson, the ongoing court battles, the legislative challenges, and the change in party politics is that the fight to preserve HB 4 and access to care is never-ending. This is an ongoing struggle in which a single false step by our side gives our opponents a chance to increase the frequency or severity of suits and thereby reduce access to care. Rest assured we are committed to defending reforms in the legislature, in the courthouse, and in the court of public opinion. 

Mike Hull and Brent Cooper are attorneys of the Texas Alliance for Patient Access.  

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