Tort Reform and Term Limits: The 2004 Ohio Experience

Author:James T. O'Reilly
Position:Professor of Law, University of Cincinnati

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I Introduction

The absence from a legislative body of a pool of experienced members' expertise and commitment on issues is one of the byproducts of the "term limits" revolution in American legislative selection. New members' ideals and energy should, in theory, displace old ways of governance, according to term limits proponents. A tradeoff results, however. The "new blood" may have only an anemic grasp of the difficult issues that members and committee chairs learn over years of legislative debate and drafting.

The periodic departure of veteran legislators and committee leaders means the election of individuals who, as novice legislators, have no prior exposure to complex issues confounding modern governmental bodies. Data supporting policies may be neutral, but its presentation will not be. Inevitably, lobbyists increase in power as individual members rotate out and into the legislative body. Complex public policy choices, such as the allocation of injury losses in products liability law, will require that the new legislator's "learning curve" be filled with information on the particular topic. Getting that information in an easy, impressive format facilitates the outcome desired by the lobbyist, especially when the legislative body lacks a deep and experienced staff of subject matter specialists.

In Congress, the depth and detail of the permanent career research and analysis professionals assures stability in the institutional memory. Bills proposing regulations on complex technical issues appear regularly, lessons of the past are employed in analysis, and debates recur with comparable sets of questions. But in states like Ohio, a relatively thin supporting staff exists to analyze and describe the consequences of certain legislative choices.

One consequence is that those lobbyists most interested in particular outcomes become the key source of legislators' information. The 2004 Ohio "Tort Reform" statute was a paradigm of bad decisional processes culminating in forced last-minute decisions, inartful draftsmanship, massive exercises of industry self-interest, and collective hubris among thePage 530 dominant members of the electoral majority. Ohio is worse off with this unforeseen consequence of the term limits experience. The student of legislative history sees throughout the 2004 Ohio experience that the Senate sponsors put into the bill exactly the pages given to them by Washington and Columbus lobbyists, so this legislation was virtually "on autopilot" from the American Tort Reform Association and other national lobbying groups for the insurance and manufacturing industries. Whether that is a proper way to consider public laws is for the reader to decide; nonetheless, the absence of strong institutional safeguards against private sector overreaching is a systemic weakness of the post-term limits Ohio legislature.

This Article begins with the historical context of tort reform in the legislature and the courts. Next, this Article addresses the specific history of Ohio Senate Bill 80, which was adopted in 2004. Finally, this Article examines an illustrative issue of pharmaceutical immunity and draws several lessons from the Ohio experience that may be useful in other state "tort reform" debates.

II Background

The outlook for "tort reform" in the United States in 2003 was optimistic, according to the industry coalition of insurers and manufacturers allied in the American Tort Reform Association, Products Liability Advisory Council, and their local affiliate, the Ohio Alliance for Civil Justice. Efforts to win national products liability changes in Congress had been diminished with several constraints and limits, so the action shifted to the states. Ohio was viewed as a critically important venue for the challenge to the plaintiffs' bar. Jobs creation was the national rallying cry for state tort reform advocates, and that was their theme in Ohio as well.1

Ohio's legislature and the Ohio Supreme Court have clashed over tort law issues for almost three decades.2 Tort law was a branch of judicially determined common law for centuries. Codification and statutory adoptionPage 531 of "strict liability" norms is a relatively recent phenomenon.3 Defendants in tort cases are more likely to be institutions and corporations with economic power and the political attributes that accompany that power. When tort law became statutory, rather than simply a judicial field of endeavor, astute defendants in the tobacco, chemical, food, pharmaceutical, and other industries came to recognize that intervention on statutory changes could preserve assets that otherwise would have been at risk from juries making common law decisions regarding specific facts. Removal of these vulnerabilities through legislation became a paramount objective of those industries that were repeatedly sued.

The electoral connection of tort law to political funding was never as close as it appeared in 1987 when Governor Richard Celeste promised at the Teamsters Union annual meeting that the products liability legislation moving through the legislature "must be good for workers and consumers."4 The union's first priority was the codification of the pro-plaintiff standard of liability known as the "consumer expectation" theory.5 The 1987 tort reform law was a milestone of union and plaintiffs' counsels' efforts to preserve what had been won in the Ohio Supreme Court's tort decisions of the 1970s and 1980s6 against encroachment by the business enterprises who wished to alter the then-existing balance of products liability power in Ohio.7 It is important to begin to recognize that unions as well as heavy industries already knew how to play the game of products liability "reform."

The political dynamic in Ohio changed with the collapse of the large, unionized "rust belt" employers in steel, rubber, and other industrial commodities during the 1980s and 1990s. The political imperatives shifted to the state and local agencies' efforts to help the service industries, smaller employers, and suburban white collar job creation in a post-industrial economy. Throughout the 1995-96 debates on the 1996 statute and the 2003 debates on the 2004 statute, proponents again and again emphasized job creation and manufacturing job retention as critical reasons why Ohio industry should be free from risks of tort liability. The Ohio General Assembly leadership and the state offices tilted heavily to thePage 532 Republican Party. The post-census reapportionment of districts was used adroitly to expand the party's majority position.8

Among the initiatives linked to the job creation agenda was the desire to bring into Ohio industrial companies that would hire displaced workers. The products liability exposure of industrial companies for defective products is either a minor item on a long checklist of relocation incentives, or a vitally important attribute for relocation decisions, depending on which advocacy group is addressing the issue. Governor Robert Taft handwrote on a letter encouraging the chair of the House Judiciary Committee to expedite products liability legislation, stating, "[T]his is the number 1 thing we can do to improve the manufacturing climate in Ohio!"9 From this perspective, the reduction in the crisis of rapidly increasing tort suits would aid the jobs creation imperative.

The flaw that Republican House members saw in this logic was that there has not been a surge in products liability filings. House Judiciary Committee hearings, statistics offered by the Ohio Supreme Court,10 and specific testimony that Ohio has had only one significant (non-asbestos) punitive damage award11: tended to undercut the claim of a crisis in tort law warranting legislative haste.

III Legislative Agendas

Ohio has had tort law remedies in its common law for two centuries. Strict products liability for defects in unreasonably dangerous products arrived in 1977.12 The political nexus for the statutory reform of products liability law arose in the mid-1980s after Ohio Supreme Court decisions in 1982 favoring plaintiffs in strict products liability cases13 and workplacePage 533 "intentional torts [cases]."14 Governor Richard Celeste vetoed the legislature's effort to enact a 1986 product liability and insurance reform law, in part because of the legislature's refusal to include the "consumer expectations" design defect test.15 After further bargaining, a 1987 compromise tort reform law was passed.16 But the controversies flared up again in the mid-1990s, and the political battle reached its ultimate level of smoke and fire in December 2004 with the passage of Senate Bill 80.17

The 2004 legislation was supported by overwhelming numbers of conservative Republicans who dominated both houses of the 125th General Assembly,18 but the flow that produced the bill did not run smoothly from a single source. Three separate lobbying efforts came together. The Washington-based "tort reform" groups, including the American Tort Reform Association19 and the Product Liability Advisory Council (PLAC), which drafted the text and supporting papers, were financially dominant.20 The PLAC and other national law advocates equipped a Columbus lawyer and a lobbyist to manage the effort under the umbrella "Ohio Alliance for Civil Justice."21

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The second source of tort reform initiatives came from Ohio insurers and companies impacted by tens of thousands of asbestos injury claims. The asbestos cases are difficult and time consuming reminders of heavy manufacturing plants and shipyards that once...

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