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Tort reform statutes evoke spirited arguments from the plaintiffs’ and defense bars. But as two state supreme court decisions from the final days of 2007 demonstrate, they also raise fundamental questions about the appropriate exercise of power by various branches of government in a constitutional democracy. Since 1975, Ohio’s legislative and executive branches tried to effect tort reform by capping certain kinds of common law tort damages, mandating deductions of recovery from collateral sources and having judges (rather than juries) decide the amount of punitive damages. In a series of six opinions, however, the Ohio Supreme Court had consistently declared these statutes unconstitutional. It was particularly stunning, then, when in the waning hours of 2007 the Ohio Supreme Court actually upheld aspects of Ohio’s 2005 tort reform statute, declaring that “[w]e have not dismissed all tort reform as an unconstitutional concept.” Arbino v. Johnson & Johnson, No. 06-1212, 2007 WL 4529719 (Ohio Dec. 27, 2007). In Arbino, the court chose to answer only two of the questions certified to it by the federal district court presiding over multidistrict litigation asserting products liability claims against the manufacturer of the Ortho Evra birth control patch. The first involved the constitutionality of a cap on noneconomic damages. The second involved a limitation on punitive damages. Opinion said that judiciary shouldn’t make public policy The notion that the judiciary is not equipped to make fundamental public policy choices runs throughout Chief Justice Thomas Moyer’s majority opinion: “[T]he General Assembly is responsible for weighing [policy] concerns and making policy choices; we are charged with evaluating the constitutionality of their choices. Issues such as the wisdom of damage limitations and whether the specific dollar amounts available under them best serve the public interest are not for us to decide.” Id. at *22. Indeed, the court made clear in setting forth the standard of review that “[a]ll statutes have a strong presumption of constitutionality,” and when a plaintiff lodges a facial challenge to a statute, she “must demonstrate that there is no set of circumstances in which the statute would be valid.” Id. at *6. Justice Paul Pfeifer � who served in both houses of Ohio’s General Assembly � lodged a vigorous dissent in which he gave no deference to the legislature’s statutes or its findings of fact, instead subjecting them to “strict scrutiny” review. According to Pfeifer, if a remedy was available at common law when Ohio’s Constitution was adopted, then the legislative and judicial branches are without power to limit it: “If the General Assembly had the courage of its convictions it would submit [damages] caps to the voters � that is the proper way to amend the Constitution. If the members of the majority had the courage of their convictions, they would not allow the General Assembly to circumvent the amendment process.” Id. at *46 (Pfeifer, J., dissenting) (citations omitted). The plaintiff in Arbino made five basic constitutional arguments against the caps on noneconomic and punitive damages. First, the plaintiff argued that both statutory schemes violated the Ohio Constitution’s guarantee of the right to a trial by jury by substituting an amount fixed by the legislature for what a jury ordinarily would determine on its own. The Arbino court rejected this challenge, holding that “[s]o long as the fact-finding process is not intruded upon and the resulting findings of fact are not ignored or replaced by another body’s findings, awards may be altered as a matter of law.” Id. at *8. Ohio’s statute capping noneconomic damages at between $250,000 and $350,000 (except for cases of permanent and substantial physical injury) is merely a limit that may be applied as a matter of law by the judge; it does not intrude on the jury’s fact-finding function, the majority reasoned. Furthermore, the court observed, the U.S. Supreme Court has specifically noted the broad discretion that legislatures have to limit permissible punitive damages awards. Id. at *19 (citing Cooper Industries Inc. v. Leatherman Tool Group, 532 U.S. 424, 433 (2001)). Justice Robert Cupp, in his concurrence, further pointed out that the fundamental purpose of the constitutional guarantee to a trial by jury was to protect against judicial bias and overreaching, not to prevent the implementation of laws duly passed by the legislature. Id. at *25-26 (Cupp, J., concurring). But Pfeifer, in his dissent, argued that “[h]owever you characterize it, a statute that authorizes a judge to ignore or change factual findings deprives litigants ‘of the benefits of Trial by Jury’ and must be declared unconstitutional.” Id. at *35 (Pfeifer, J., dissenting). He rejected the majority’s analogy to the trial judge’s right to remittitur, noting that when that right is exercised, the plaintiff is presented with the choice of either accepting the remittitur or having a new trial. And he distinguished the statutes that automatically treble a jury’s damage award as not relating to common law causes of action that existed when the Ohio Constitution was adopted. The plaintiff’s second argument was that the caps on noneconomic and punitive damages violate the “open courts” and “right to a remedy” clauses of the Ohio Constitution. The majority rejected this argument, too, holding that because the caps neither foreclose a plaintiff’s ability to pursue a claim nor “completely obliterates the entire jury award,” these constitutional provisions were not violated. Moreover, the majority noted, a plaintiff has no “right” to punitive damages, as they are not compensatory, but instead serve to punish the wrongdoer. The plaintiff’s third argument was that the tort reforms violated the “due course of law” clause of the Ohio Constitution, which is equivalent to the “due process” clause of the U.S. Constitution. The court rejected this challenge, too. First, it noted that it would apply a “rational basis” test � rather than a “strict scrutiny” test � because the statutes did not restrict the exercise of fundamental rights. Using this test, the court noted that the legislature had reviewed several forms of evidence to conclude that the public welfare was promoted by “limiting uncertain and potentially tainted noneconomic damage awards.” The court refused to scrutinize the evidence relied upon by the legislature, instructing that “we need not cross-check its findings to ensure that we would agree with its conclusions.” Id. at *11, *12. Pfeifer took the majority to task for not using the strict scrutiny test, as it had in Sorrell v. Thevenir, 633 N.E.2d 504 (Ohio 1994), where it had said that ” ‘the right to a jury trial in negligence and personal injury actions is a fundamental right.’ ” Id. at *37 (Pfeifer, J., dissenting) (quoting Sorrell). He then criticized each of the sources relied upon by the legislature as “not objective, not peer-reviewed, not Ohio-specific, and, in most cases, significantly flawed,” concluding that the legislature’s reliance upon these sources was arbitrary and unreasonable, thus violating due process. Id. at *40. The plaintiff’s fourth argument was that the tort reforms violated the equal protection clause of Ohio’s Constitution. Once again the majority used a “rational basis” test to conclude that the reforms bore a rational relationship to a legitimate government purpose: “reforming the state civil justice system to make it fairer and more predictable and thereby improving the state’s economy.” Id. at *14. Pfeifer disagreed, arguing that “[t]here is no rational reason to ‘improve’ the tort . . . system in Ohio at the sole expense of a small group of people who are able to prove that they suffered damages significant enough to exceed the caps imposed by the General Assembly.” Id. at *38 (Pfeifer, J., dissenting). The plaintiff’s fifth challenge to the tort reforms was that they violated the separation of powers clause of the Ohio Constitution by arrogating to the legislature the judiciary’s power to decide damages for personal injuries. The majority rejected this argument out of hand, noting that the judicial function “is not so exclusive as to prohibit the General Assembly from regulating the amount of damages available in certain circumstances,” as it had in a variety of statutes. Id. at *15. Oregon’s high court ruled on when a cap is too low The day after Arbino was issued, the Oregon Supreme Court issued an opinion in Clarke v. Oregon Health Sciences University, No. S53868, 2007 WL 4555266 (Ore. Dec. 28, 2007), which confronted the question of when a cap on damages is so low that it violates the “right to a remedy” clause of the Oregon Constitution. The court was faced with a statute that eliminated common law causes of action against state employees, substituting an action against the state itself with a damages cap of $200,000. The plaintiff had pleaded economic damages of more than $12 million, and noneconomic damages of $5 million. The court observed that the remedies clause “does not eliminate the power of the legislature to vary and modify both the form and the measure of recovery for an injury, as long as it does not leave the injured party with an ‘emasculated’ version of the remedy that was available at common law.” Id. at *14. Although it could not articulate a bright-line rule for when a remedy is so inadequate as to violate the remedies clause, the court concluded that only allowing recovery of less than 2% of one’s economic damages was clearly an “emasculated” version of the common law remedy and, as such, was unconstitutional. The Arbino and Clarke opinions illustrate the robust debate that continues in courts across the nation about how much deference should be given to legislative policy choices about tort reforms designed to benefit state economies and promote fairness and predictability. Although most states have found such reforms constitutional, not all of them have. Arbino, 2007 WL 4569719 at nn. 8-9. The debate is destined to continue. J. Russell Jackson is a partner in the complex mass torts group of New York’s Skadden, Arps, Slate, Meagher & Flom.

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