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Rarely do voters get a chance to weigh in on tort reform. But Texans have been asked to consider changing their state constitution to allow their Legislature to enact caps on civil suit damages. The rest of the country is watching a spirited campaign leading up to the Sept. 13 election. National advocates of “tort reform,” however, caution that it may not provide a model for the rest of the nation. Michael Hotra, director of legislation for the American Tort Reform Association in Washington, said he can recall only a couple of elections in California in which the public was asked to vote on initiatives that limit civil litigation. Tort reformers lost both. “But Proposition 12 is somewhat unique to Texas,” Hotra said. The election, he said, is “interesting from a political sense” in that Texas plaintiffs’ lawyers have lost fairly consistently in the Legislature, appellate courts and judicial elections during the past decade. “You can expect that they’re going to throw the kitchen sink at this initiative because they need a win,” Hotra said. Proposition 12 is on the ballot with 22 relatively innocuous constitutional amendments. One, for instance, would allow visitors to wineries in dry counties to end tours with a glass of wine. Prop 12 would allow the Legislature to limit non-economic damages, such as pain and suffering and mental anguish, in civil suits. The measure would ensure that damage caps approved in June for medical malpractice cases will survive a court test. An earlier such law was declared unconstitutional 15 years ago under the Texas Constitution’s 150-year-old “open courts” doctrine, which guarantees “meaningful access to courts.” Opponents say that the amendment would undermine both the doctrine and the checks and balances between branches of government. Advocates say the caps are needed to stop skyrocketing insurance premiums. Low turnout predicted The elections on constitutional amendments are always held on off years. Voter interest is usually slight. This battle has been particularly divisive-and expensive-whatever the interest level among the electorate. Both sides are expected to report this week that they have raised and spent $8 million on a special election that generally draws less than 7% of the electorate to the polls. A competitive statewide race for the Texas Supreme Court usually costs about $3 million. First-term GOP Governor Rick Perry has stumped the state for the amendment along with the leadership of both houses of the Legislature. In June and July, according to the latest financial disclosure statements available, insurance companies and the health care industry had pumped about $1.9 million into the pro-amendment radio and television campaign. Perhaps the most effective advocates have been physicians who have lobbied their patients, personally and with letters, to vote for Prop 12. Opposing the measure is a diverse coalition. Among trial lawyers are Houston’s Joe Jamail and Richard Mithoff, major players who each ponied up $250,000 of the $4.5 million raised in June and July, according to the latest disclosure. Unlikely allies The plaintiffs’ bar has found unlikely allies on both ends of the political spectrum, from the Eagle Forum and Mothers Against Drunk Driving to the Green Party and Sierra Club. Leading the anti-12 campaign are two Republican ex-state Supreme Court justices appointed by then-Governor George W. Bush, plus a former federal judge and a partner at Baker Botts, one of Texas’ oldest and largest law firms. Newspapers have editorialized widely against the measure. Immediately at stake is a bill signed into law by Perry on June 4 that limits liability for doctors, hospitals and nursing homes at $250,000 each for noneconomic damages. It caps the total award for such damages at $750,000 for each claimant. Quantifiable compensatory damages are not limited. Eleven of the 25 state legislatures that have capped noneconomic damages in medical liability actions have seen those caps overturned on appeal, according to January 2003 American Medical Association statistics. That’s what happened in Texas in 1988. The state Supreme Court used the open courts doctrine to reject caps on medical malpractice damages for the purpose of lower insurance premiums. The proposed amendment isn’t limited to medical malpractice, however. It specifies that the Legislature can set limits on any civil action. Opponents say corporate interests are trying to use the popularity of physicians to piggyback “tort reform” that otherwise would not pass. “The doctors are being used as a kind of Trojan horse for this far-reaching effort by the insurance industry and other special interests to impose the ability to put a one-size-fits-all limits for all civil suits,” said Daniel J. Lambe, executive director for Texas Watch, a lobbying organization on insurance and consumer law issues that generally opposes tort law changes. “This isn’t tort reform. This is a changing in the constitutional balance of powers. It offends most people in the legal professions.” “I am for tort reform. I always have been. But this goes way too far,” said former Texas Supreme Court Justice Deborah G. Hankinson, a partner in Hankinson & Whitaker in Dallas and a professor at the Southern Methodist University Dedman School of Law. She was appointed to the high court in 1997, won election in 1998 and served to 2002 when she chose not to run again. “Proposition 12 radically alters the Texas Constitution. It eliminates due process guarantees. There would be no judicial review and there’d be no limit,” said Hankinson. “The Legislature, rather than a court of law, would decide the damages in every case, in every kind of case.” From the other side, Richard J. Trabulsi of Houston, a liquor store owner and president of Texans for Lawsuit Reform, countered, “State law would benefit from a clear statement of the relative roles of the Legislature and the judiciary in the creation and regulation of remedies with respect to noneconomic damages.” Texas Medical Association general counsel Donald “Rocky” Wilcox noted that in 1977, the last time the Legislature capped damages, the Texas Supreme Court took 11 years before finding in Lucas v. U.S., 757 S.W. 687 (1988), that limiting recovery for the purpose of reducing malpractice premiums violated the Texas Open Courts Doctrine. “Insurance carriers won’t know whether to calculate [damage caps] into their rates,” Wilcox said. “If Proposition 12 passes, that would resolve their uncertainty.” “There has never before been this kind of controversy, this kind of attention around a constitutional amendment,” said Professor Anthony J. Champagne of the University of Texas at Dallas, who has studied Texas judicial campaigns for two decades. “Republican stalwarts have been speaking out against the proposition. Governor Perry and his people have been very visible speaking out in favor of. This has been just about as divisive as can be imagined for Texas Republicans.” “It remains to be seen what the long-term impact will be,” said Champagne. The physicians have shaped the debate around access to medical care, which has softened the hardest edge of the opposition’s argument against the amendment while isolating a long-term concern for an electorate in a geographically huge state that has both hundreds of isolated rural communities, most of which are far from health care, and three of the nation’s largest cities, which have an overabundance of doctors. Flow of money The ramifications have manifested in the expensive campaign for and against the proposed amendment. Since the mid-1990s when President Bush was governor and discovered the tort reform agenda, the state’s Republicans have tapped into a treasure chest of political monies flowing from businessmen and professionals angered at increasingly large damage awards in civil cases. “My sense,” Champagne said, “is that voters will approve Prop 12 because it basically pits an esoteric argument on the balance of power against a strong grassroots campaign coming from the doctors, who regular people know and respect. “Scheduling the election in September virtually guarantees low voter turnout. You’ll see mostly physicians, their loyal patients and hospital employees” at the polls. The governor set a special constitutional proposition election on Sept. 13, a Saturday, which is 54 days before the regular Nov. 4 ballot. This year’s off-year November elections feature several tax initiatives and mayoral races. In November 2001, nearly 40% of the 834,846 Texans voting on constitutional amendments (6.9% of total registered voters) were from Houston, which was holding its biannual mayoral contest, according to state election officials. “Their strategy from beginning was to succeed by insuring that turnout is depressed,” said Craig McDonald, director of Texans for Public Justice, an Austin-based lobbying organization that tracks campaign contributions, in a phone interview as he drove to a Lubbock rally against Prop 12. His organization on Sept. 2 reported that Gov. Perry, Lt. Governor David Dewhurst and legislators that supported the initiative were given $5.3 million in contributions for the 2002 election cycle. The 2003 Texas Legislature was dominated by Republicans, many of whom had run against “trial lawyer excess.” Faced with a $9.9 billion deficit and a shortage of money to fund some school districts for the entire year, the Legislature focused on tort reform as an issue on which it could accomplish something. The medical and the business communities forwarded separate measures to impose limits on civil damage awards. “There were times we felt that they were a drag on our efforts and vice versa, I’m sure,” said Wilcox, general counsel of the Texas Medical Association. “But overall, we worked pretty good together.” Doctors’ view The doctors sought caps on noneconomic damages. Led by the Texas Medical Association, they argued that money awarded on subjective criteria such as pain and suffering rather than on specific amounts tied to an invoice, were unpredictable and often voluminous, causing insurers to raise malpractice premiums. The doctors complained that their insurance costs had doubled, sometimes tripled, since 1999. Once caps were approved for med-mal suits, doctors asked for some sort of mechanism to allow insurance companies to more quickly include the new caps in their rate calculation. Insurers had indicated that given the likelihood of a constitutional challenge they would not consider the newly enacted caps until approved by the appellate courts. The legislative leaders came up with the constitutional amendment to enable the Legislature to set damage limits without judicial review, which they said would give the assurances necessary for swift action on insurance premiums. The leadership then tacked on the clause that would allow the setting of limits by legislators for all civil actions. “It was a strategic decision,” Wilcox said. Texas Medical Association polls show that the proposed amendment should pass easily. “This is something that is being watched nationally,” Wilcox said. “Win or lose it is a model of what can be done.”

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