Copyright 1999 The New York Times Company
The New
York Times
June 7, 1999, Monday, Late Edition - Final
SECTION: Section A; Page
1; Column 2; National Desk
LENGTH: 3519 words
HEADLINE:
DAMAGE CONTROL: A special report;
Some Plaintiffs Losing Out In Texas' War
on Lawsuits
BYLINE: By WILLIAM
GLABERSON
DATELINE: HOUSTON
BODY:
A father in a small Texas town won a verdict
of $250,000 against a hospital after his daughter was decapitated by an
inadequately medicated former psychiatric patient. But in 1996 the Texas Supreme
Court overturned the decision and the hospital paid nothing.
In a
Houston case, a judge agreed last fall with lawyers for a 9-year-old girl that
lax security made it easy for her to be raped by three teen-agers in a vacant
apartment. It was the kind of ruling that used to bring multimillion-dollar
awards. But the company that managed the property did not have to pay anything.
In San Antonio, a jury set damages at $42.5 million after finding that an oil
company's indifference to safety had caused the death of a worker in an
explosion. But in March, the judge reduced the amount to $200,000.
Over
the last decade, sweeping changes have transformed the legal system here in
Texas and in many other states. Under the banner of lawsuit reform, Texas has
helped lead the way, embracing one of the nation's most ambitious attempts to
hold down the cost of civil suits and limit the size of jury awards.
For
years, Texas had a reputation as the "lawsuit capital of America" because its
juries in injury cases were said to be overly generous. For example, in
mid-80's, after a prize bull died as a reaction to insecticide, a rancher won a
jury verdict of $8.5 million.
But starting in the late 1980's, the state
began adding restrictions, like limits on punitive damage awards, and provisions
that make it harder for injured workers to sue. It also enacted a measure that
critics say was originally drafted by the tobacco industry aimed at barring
suits by smokers against cigarette companies.
Now Texas is seen as one
of the most aggressive states in efforts to curb civil suits under the banner of
"tort reform." More than 30 states, including Alabama in early June, have passed
laws since 1995 aimed at reining in what critics call rampant lawsuit abuse.
Given its former reputation, Texas's experiment with civil justice
changes would draw notice under any circumstances. But because Gov. George W.
Bush is closely associated with the movement, his record on civil justice in
Texas is likely to be an issue if he runs for President.
"The most
important thing you and I can do to improve our economy and create jobs in Texas
is to reform our civil justice system," Mr. Bush said in his first State of the
State message in 1995.
Mr. Bush was not the architect of the movement to
change the law, and the legal system here had already begun to make sharp
changes before he took office. But he seized on lawsuit abuse as a potent
political issue, and he has benefited from its ability to attract campaign
contributions from businesses.
Curbing lawsuit abuse was one of just
four issues Mr. Bush emphasized in his campaign for governor in 1994. And he
delivered. Leaders of the movement here to change tort law, which deals with
injury cases, say Governor Bush helped bring their most impressive successes.
"On a scale of 1 to 10, he's a 10. There isn't any question about it: he
helped tremendously," said Ralph Wayne, president of the Texas Civil Justice
League, one of the leading business groups in Austin lobbying for limits on
lawsuits.
For one, Mr. Bush championed a package of bills that swept the
Texas Legislature in 1995, including the measure that imposed a new formula
capping punitive damages, and provisions that stopped plaintiffs' lawyers from
selecting sympathetic courts in which to file their suits.
Other bills
passed that year with the Governor's support included provisions that made it
more difficult for people to sue professionals like engineers and real estate
agents, and a new law that made it harder for people to recover damages when
their injuries were caused by more than one wrongdoer.
Proponents say
the changes are reintroducing fairness in a legal system gone haywire. But
critics in Texas and across the country say the "reform" label is being used to
force the most extensive cutback in the legal protections for citizens in this
century.
The debate over the direction of the legal system has divided
voters, legislators, lawyers and even judges. The Texas Supreme Court, an
elected body that was once controlled by Democrats, is now entirely Republican.
The court itself, its critics say, has been reshaped by the movement to limit
lawsuits; many of its members have received political contributions from groups
urging those limits.
Even before Mr. Bush's election, the court had been
propelling civil justice changes in scores of opinions that overturned jury
verdicts and cut back on legal rules that favored plaintiffs. The court, which
decided about 70 percent of its cases in favor of plaintiffs in the mid-1980's,
now rules against them three-quarters of the time, according to a study by a
watchdog group.
The Supreme Court's role in the movement to limit
lawsuits has provoked bitter criticism even inside the judiciary. Phil
Hardberger, a Democrat who is chief justice of Texas's District Court of Appeals
in San Antonio, said the changing attitudes in the legal system here are veiled
efforts to undermine the jury system as a democratic institution.
"The
bottom line," Justice Hardberger said in an interview, "is jury verdicts are
meaning less and less. There is an inherent distrust of the people." The reason,
he said, is that jurors are often sympathetic to plaintiffs.
The Supreme
Court's chief justice, Thomas R. Phillips, once a lawyer at a firm that
represented major corporations, said in an interview that his court is part of a
broad conservative trend in American civil law. His court's opinions, he said,
showed a "realization across America of the limits of the tort system."
But both sides here agree that, 10 years after the movement to change
civil law began, the legal culture in Texas is profoundly changed.
There
are fewer personal injury lawsuits, down by about 10,000 annually statewide from
a high of 65,000 in 1995. The Bush administration said that consumers have saved
more than $2.2 billion in insurance premiums because the 1995 legal changes have
meant insurance companies have been paying out less to people claiming injuries.
But consumer advocates say the result is windfall profits for insurance
companies.
In fact, the Southwest Insurance Information Service, an
industry group, said a typical Texas driver's automobile liability premium rose
to $789 in 1997, up from $727 in 1994. The group said that the full effect of
the changes has yet to be felt.
The Texas Department of Insurance said
there were many reasons that insurance profits were high, including the fact
that cars were safer and there has been less drunken driving. Tort "reform" was
not the only reason that they were paying less to claimants, the department
said.
A department spokesman said the profit rate for automotive
insurers in the state in 1996 was 19 percent return on net worth. In contrast,
the rate the department suggests is appropriate is about 12 percent and the
national rate is 13 percent.
Pervasive changes in attitudes by lawyers
and jurors have meant that the dollar amounts of lawsuit settlements are sharply
lower across the state, lawyers on both sides of the issue said. Some studies
suggest that plaintiffs' lawyers earn less on average than they did before the
movement to change the laws began.
In Austin, it is now accepted
political wisdom that the once-powerful trial lawyers no longer have the
influence they had wielded here for decades. "They have won," acknowledged
Hartley Hampton, the president of the Texas Trial Lawyers Association. "We're
just trying to keep them from bayoneting the dead."
The tort "reform"
movement has supplied the first potent challenge nationally to the trial
lawyers' political power. Heavily supported by business, the campaign has
pressed for changes in the law in virtually every state legislature in recent
years. This year there have been proposals in Florida, Pennsylvania, New York
and other states.
Battles over the measures are playing out in scores of
state courts across the country, including Illinois and Ohio, where some judges
have ruled that newly enacted changes violate fundamental rights of citizens to
have access to the courts.
Here, as in many states, proponents of
changes in the law, including many in the business community, say the courts had
bent too far toward plaintiffs. "The more you learn, the more ludicrous the
whole system becomes," said Richard W. Weekley, a leader of one of the state's
best-financed groups, Texans for Lawsuit Reform. Mr. Weekley's family owns a
major Houston house-building company that, like most businesses, has faced
liability suits.
But some of the people affected by the changing legal
rules and attitudes here say the Texas legal system has grown harsh because of
the changes.
In the small central Texas town of Kerrville, James O.
Clark, a retired Government ammunition inspector, said he was shocked when the
Texas Supreme Court overturned a jury verdict and said the hospital did not have
to do anything to compensate for his daughter's murder.
Mr. Clark's
son-in-law, a violently psychotic man, had threatened his daughter and set fire
to her car. But he was released by the state hospital without being given an
intravenous shot of anti-psychotic medication. Seven days later, he dismembered
her.
The hospital declined to comment. But the message from the courts
in his case, Mr. Clark said, was that psychiatric hospitals would not be held to
account for carelessness. "If they can get by with that," he said, "they can get
by with anything. If that can happen, what good is your court system?"
The Politics
Civil Law Minutiae Become an Issue
The
battle over once obscure portions of the civil law has become a permanent part
of the political system here. It is a battle of big money and bruising fights.
Hundreds of thousands of dollars have flowed from self-styled reformers mostly
into Republican campaigns, including Mr. Bush's. Proponents of the legal changes
say they are merely trying to counter the large political contributions that
have been given mostly to Democrats for years by the state's trial lawyers.
Texans for Lawsuit Reform is now one of the largest political action
committees in the state. It and its leading members contributed more than $1
million to candidates in state races in each of the last two elections and
succeeded in making civil justice changes a decisive issue in some legislative
races.
In political races, trial lawyers have been demonized across the
state, sometimes literally: in a State Senate campaign in the Rio Grande Valley,
one candidate won after he had a photograph distributed of his opponent, a trial
lawyer, doctored to show devilish features.
And the battle has included
extensive public relations campaigns across Texas by local groups called
Citizens Against Lawsuit Abuse, financed by small businesses and concerned
individuals.
For years before Mr. Bush's election boosted the movement
statewide, heavily financed media campaigns across Texas have drilled in
messages like: "Lawsuit abuse: we all pay, we all lose."
Jurors
sometimes cite such messages when they return verdicts for businesses that have
been sued.
The change in political attitudes has been so dramatic that
some politicians now seem to view measures protecting businesses from suits as
uncontroversial "pork" projects for their districts. Not long after a
15-year-old girl was thrown to her death from a carnival ride in Austin, a
liberal Democrat from El Paso introduced a bill in the Texas Legislature this
year that would have helped amusement park owners fight suits by injured riders.
In an interview, the liberal Democrat, State Representative Norma
Chavez, acknowledged that she had introduced the measure at the request of an El
Paso amusement park owner who runs the same ride that killed the teen-ager in
Austin. "I wasn't even aware that it was a big tort-reform bill," she said.
After a public outcry, the bill was dropped.
Consumer groups
here have countered the onslaught with campaigns of their own. Reports from
watchdog groups, like Texans for Public Justice, an Austin-based group that
tracks political financing, regularly point out that many of the "reformers" are
Texas businesses that might simply want to limit their losses in suits.
Business View
A Plus: Investment In Communities
The
business view of the court system is clear: it has to be brought under control.
Otherwise, investors and executives said, investment dollars will flee to places
that offer more protection from unpredictable verdicts.
Richard F.
Entoven, a Dallas real estate investor, said a statewide chain of coin-operated
laundries that he owned until recently had closed some of its locations partly
because his business was sued for providing inadequate security. In eight cases,
he said, suits were filed after people were attacked and, in one case, murdered
on his property by other people.
Mr. Entoven said legal rules made it
easy for juries to impose damages on businesses but did not take into account
that such verdicts discourage investment. Jurors, he said, can be moved by
sympathy for injured people far more than by the consequences of driving
investment dollars away from areas that need business activity. The result, he
said, is that business people make fewer investments in blighted areas.
"Guys like me," he said, "are not going to be there to be sued because
of some poor person who gets shot in the parking lot. The world doesn't see
that. The world only sees the poor person who is shot in the parking lot."
One business contributor to Texans for Lawsuit Reform, James McIngvale,
a Houston furniture store owner who advertises heavily on television as
"Mattress Mac," agreed. He said he had donated $25,000 to the cause. He had
learned from experience, he said, that the state's reputation as a haven for
lawsuits hurts business.
"As I became more successful," Mr. McIngvale
said, "I became more and more of a target for frivolous lawsuits."
He
acknowledged, however, that at least one suit had not been frivolous. In 1987,
he settled a case after a 300-pound African lion that was on a chain as an
attraction at a flea market he owned mauled an 8-year-old girl who was walking
by with her parents. The lion, it was later learned, had mauled two children the
previous year.
Plaintiffs' Positions
Ordinary People See
Little Help
But some Texans who have found themselves involved with the
courts here recently said they were more concerned with whether the system was
still helping protect ordinary people from injuries than with the safety of
investment dollars.
In San Antonio, Wilda H. Hosch, a retired secretary
who was a juror in the case of the burned refinery worker, said too much
protection for business could send a dangerous message. Jurors were angry, she
said, when the judge in the case used the law that Mr. Bush had signed limiting
punitive damages to cut the $42.5 million verdict.
She said the evidence
showed that the company, Ultramar Diamond Shamrock, could have prevented the
death of Charles Hall, a 52-year-old refinery worker, if a small sum had been
spent to uncover safety valves that had been left buried for years.
Mr.
Hall lingered for nine days with burns over half of his body.
In an
interview, his widow, Donna Hall, said she pursued the suit because, "I thought,
maybe this will make the refineries stop and think." The company did not respond
to requests for comment.
Mrs. Hosch, the juror, said the valves would
have given Mr. Hall a warning and a chance. Cutting the damages back so sharply,
she said, undermined the message the jurors wanted to send. The award of
"$200,000 is just pocket change," she said. "They'll just write this off."
The Courts' Function
Questioning Role Of Texas Judges
In scores of interviews across Texas with business executives, lawyers,
judges, legislators, lobbyists and ordinary people involved in lawsuits, it was
clear that the movement to change the law has left people deeply divided over
what the function of the courts ought to be.
Some said the courts had to
assure that businesses were protected from frivolous claims. But in Houston, a
laboratory technician, Kingsley Agbor, said the courts ought to be open to
powerless people trying to take on big institutions. But his own experience in a
suit, he said, made him think that was no longer true here.
During
birth, his son Dikeh was injured and left with one useless arm. The boy, he
said, cannot tie his own shoes. Mr. Agbor sued the doctor who attended the
birth. The doctor settled.
But Mr. Agbor also sued the hospital for
permitting the doctor to practice here. He said he did that because he did not
want another family to suffer as his has. It turned out that the hospital had
allowed the doctor to practice even though she had been sued for malpractice
numerous times and had no Texas insurance.
Half the states allow people
to sue hospitals if they believe the hospitals were negligent in giving doctors
credentials. But in 1997 the Texas Supreme Court, overruling an intermediate
appeals court in Mr. Agbor's case, said it would not permit such suits here.
After a request from a reporter, the hospital, St. Luke's Episcopal,
issued a statement saying the Texas Supreme Court "struck a proper balance." Mr.
Agbor said his case taught a different lesson. "I don't think the court is for
the little man," he said.
Mr. Agbor's case is sometimes cited by
consumer advocates here as an example of what they say is an obvious shift away
from injured individuals.
One analysis by a consumer group in Austin,
Court Watch, showed that individual people involved in suits like Mr. Agbor's
have won only 18 percent of the cases before the Supreme Court since the 1995
legal changes were passed. Manufacturers, hospitals and other businesses have
won more than 76 percent of the time.
Four of the current members of the
nine-member court were first appointed by Governor Bush to fill vacancies.
A study by Texans for Public Justice found that more than 68 percent of
the money raised by the current Supreme Court justices in their last elections
came from corporation lawyers or people identified as supporters of groups
pressing for civil justice changes. Only 4 percent came from plaintiffs' lawyers
or consumer groups.
In the interview, Justice Phillips defended his
court as one that simply decided each case on its merits. And, he said, the
reports suggesting the justices use their decisions to advance the cause of the
so-called lawsuit reformers were nothing more than partisan "adjuncts of
campaigns" to unseat the incumbent judges.
Stark Contrasts
A
Single Case, 2 Interpretations
In the end, civil litigation is measured
in dollars. In that cold language of personal injury law, injuries are simply
worth less here than they were before. The case of the 9-year-old rape victim,
her lawyers say, illustrates the changing legal culture of Texas.
The
9-year-old was raped by three youths in an unlocked and vacant apartment in the
complex where she lived. Later, prosecutors convicted three teen-agers of the
assault.
The girl's lawyers settled their claims against the absent
owner of the building for $250,000. But they hoped for more from the management
company.
Tommy W. Gillaspie, a Houston lawyer who represents the girl,
said that in the early 1990's, before the biggest successes of the movement to
limit suits, similar cases brought verdicts of $10 million.
After the
legal changes, the civil jury in the case of the 9-year-old found that, if she
was entitled to damages at all, they would be limited to $100,000. Since she had
received more than that from the complex owner, the judge ruled last fall, she
would receive nothing from the management company.
The two sides in the
suit saw the case in starkly different terms. After weeks of interviews here,
those different views sounded like summaries of the sharply different opinions
about the legal system across Texas.
In an interview, the girl's mother,
a school secretary, said the courts had let her down. After lawyers' fees were
deducted, the $166,000 she received from the owner went quickly toward
therapists and medical care. But she said the girl, now a teen-ager, has slipped
further into depression every year since the assault and needed help that her
family could not afford. In her view, the management company could and should
have paid because it had provided the place where her daughter was attacked.
But Brock C. Akers, a lawyer for the management company, said it was
only fair that the courts were not holding his client accountable. The courts,
he said, were right not to impose liability simply because a defendant had deep
pockets and something awful had happened.
"We cannot be responsible for
what these children do," he said. "If they were intent on having their way with
this child, they could just as easily have taken her into the woods."
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GRAPHIC: Photos:
Kingsley Agbor, whose son, Dikeh, 8, was injured during birth, was not allowed
to collect damages from the Houston hospital that allowed the attending doctor
to practice despite having been sued several times for malpractice and having no
Texas insurance. Even before Gov. George W. Bush of Texas seized on lawsuit
abuse as his rallying cry, heavily financed media campaigns, left, were drilling
in the message. (Photographs by F. Carter Smith for The New York Times)(pg. A20)
Graph: "AT A GLANCE -- Effects on Lawsuits in Texas"
Since
tort reformlegislation was enacted in 1995, civil suits are down and plaintiffs
win far less often in the Texas Supreme Court, where the top judges are mostly
supported by business interests. Graph tracks number of new personal injury
cases filed, from 1990 through 1998
BEFORE REFORM: Winners of
tort cases in the Texas Supreme Court in 1985 (67 cases)
Plaintiffs -- 69%
Manufacturers, hospitals and other defendants -- 28%
Split rulings -- 3%
AFTER REFORM: Winners from 199 1995-98 (301 cases) after reform.
Plaintiffs -- 18%
Manufacturers, hospitals and other defendants -- 76%
Split rulings -- 5%
Political contributions to the nine
members of the Texas Supreme Court in their last elections.
Defense and
corporate lawyers and tort reform groups -- 69%
Plaintiffs' lawyers and
consumer groups -- 4.0%
Unclassified contributions -- 28%
NOTE: Totals may not add to 100 because of rounding.
(Sources: Texas Judicial System; Court Watch (Austin, Tex.); Texans for
Public Justice)(pg. A20)
LOAD-DATE: June 7, 1999 
