Bring PA Toward the Mainstream in Limiting Lawsuit Abuse

This commentary first appeared in The Morning Call.

Having defeated a slew of trial-lawyer amendments, Pennsylvania's House of Representatives approved the Fair Share Act for the third time on Monday. The legislation, which has passed both chambers of the General Assembly twice before, would reform the outdated deep-pockets rule of "joint-and-several" liability by establishing proportional liability, with certain expansive exceptions.

Under the Fair Share Act, defendants less than 60 percent responsible for a harm would be required to pay damages equal to their percentage of responsibility—but not more. Any defendant with a 60 percent or greater share of responsibility could be forced to pay up to 100 percent of damages, as could any defendant who (1) committed an intentional act, (2) dumped hazardous waste, or (3) violated the Liquor Code.  Today, a defendant found even minimally responsible in any kind of civil case can be on the hook for 100 percent of damages.

That deep-pocket rule gives the lawsuit industry a powerful weapon to shake down employers, hospitals, local governments, and other large institutions, knowing that they will pay the ransom of a settlement rather than risk a ruinous damage award at trial.  The avenue of attack allowed by "joint-and-several" liability is a major competitive disadvantage for Pennsylvania's economy because we are one of the last states—and the only populous, industrial state—to retain this unfair practice.  In contrast, the Fair Share Act is comparable to existing law across the river in New Jersey.

In 2002, the Fair Share Act was approved by the legislature and signed by Governor Schweiker, but House Democrat leaders Bill DeWeese and Mike Veon challenged the law on procedural grounds. The state Supreme Court invalidated the law, which led reformers to carefully re-enact—in the most straightforward manner—the same legislation in 2006. Regrettably, Governor Rendell then vetoed the Fair Share Act, despite candidate Rendell's pledge to support it.  So nine years later, Pennsylvanians are still waiting for the benefits of this baseline reform, which is standard practice in almost all of our competitor states.

The coalition supporting legal reform includes more than 50 statewide trade organizations representing Pennsylvania's doctors, hospitals, employers, insurers, farmers, non-profits, and local governments. The lawsuit industry stands alone in defending the status quo, joined only by the left-wing pressure groups it funds and Big Labor. Hysterical trial-bar rhetoric about the "Draconian" nature of the reform shouldn't obscure the reality that adopting the Fair Share Act will move Pennsylvania toward the American mainstream.

The Corbett Administration understands that "[e]xcessive and frivolous lawsuits hinder job growth and hurt taxpayers by increasing costs for business, healthcare, consumer goods and services. Pennsylvania should no longer remain one of the few states where the legal system can hold a person, company or local government agency liable for 100 percent of the damages despite having had only a minor role in any incident resulting in a lawsuit." As Governor Corbett explained in his budget address, the current system is "irrational. It's unjust. And it's got to end."

In the hours prior to House passage of the Fair Share Act tomorrow, Monday will also bring a Senate Judiciary Committee hearing on the issue of "joint-and-several" liability, including the Senate version of the Fair Share Act.  The call to action by Governor Corbett, the final House passage of the Fair Share Act, and the support of Senate leaders should combine to restore the Fair Share Act in the very near future.

Of course, eliminating the deep-pockets rule is only a first step toward comprehensive legal reform for Pennsylvania. Additional reforms are urgently needed: requiring suits to be heard in the county where a harm was alleged to have occurred, quality standards for expert witnesses, a 15-year time limit for filing a lawsuit, and protections for innocent sellers, among others.  But our elected officials in Harrisburg can start the long journey toward a more balanced legal system—and a more prosperous economy—by ending the deep-pockets rule and reinstating the long-overdue Fair Share Act.

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Guest Commentary by David N. Taylor, Executive Director of the Pennsylvania Manufacturers' Association, a Harrisburg-based statewide trade association representing the manufacturing sector in Pennsylvania's public policy process since 1909.  For more information, visit www.pamanufacturers.org.