Chamber move sparks flurry of litigation bills

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Three business-friendly tort reform measures offered at the 2018 General Assembly triggered a trial-lawyer counter-attack this month with bills that would remove the cap on punitive damages, allow claims for loss of consortium, and open avenues of recovery for crime victims.

Among other suggested reforms: Overruling the Virginia Supreme Court on spoliation remedies and allowing bystanders to recover for exposure to violence. Game-changing proposals were pitched both as logical reforms and as payback.

A slate of bills advanced by the Virginia Chamber of Commerce violated an unwritten 2013 truce between trial lawyers and business interests, trial lawyers complained. The chamber’s agenda was promptly met by a volley of pro-plaintiff bills – some from the Virginia Trial Lawyers Association, others from lawyer-legislators.

Seeking a sideline perch, doctors howled that they were caught in the legislative cross-fire, exposed to open-ended liability by the VTLA’s loss-of-consortium bill. Just days after the brush fire flared, it appeared few of the litigation reforms would survive the session.

‘Gentleman’s agreement’

The 2013 battle over litigation reform was quelled by agreement on a compromise package. With “peace in the valley” came an understanding that the door would stay closed on changes to the tort system “for some time,” in the words of then-VTLA executive director Jack Harris.

Opinions differed this month on whether the détente period was over.

“The trial lawyers acted in good faith” in resisting litigation tweaks, said Del. Gregory Habeeb, R-Salem, adding he spoke for himself and not for the VTLA. He said the plaintiff’s bar withdrew a 2016 bill to raise the cap on punitive damages from $350,000 to $500,000 out of respect “for the integrity of the deal.”

The deal had timed out, the Chamber contended.

“The gentleman’s agreement was for two years,” said Chamber general counsel Keith Martin. He said the Chamber’s Legal & Regulatory Reform Institute has been working for five years to identify ways to make the legal system more business friendly.

The Chamber’s study produced five proposed reforms, three of which had been introduced as of Jan. 17. The most notable bill would require a new lawsuit to be filed within 14 days after a plaintiff takes a nonsuit. The legislation also called for proportionate discovery, heightened standards for expert witnesses and protections for corporate executives called to sit for depositions.

The VTLA responded with a five-point agenda: Allow an injured victim’s family members to sue on their own for loss of consortium and other associated damages; allow bystanders, such as those at the Charlottesville rally on Aug. 12, to recover for exposure to violence; make it easier for crime victims to sue neglectful business owners; ease the process for moving a general district claim to circuit court and increase damages and fees recoverable in Bowman wrongful termination cases.

VTLA president Lee Livingston said the organization’s agenda was not a “tit-for-tat” response to the Chamber program, but represented “concerns that we see as major problems.”

The VTLA’s salvo was joined by a fusillade of bills from member legislators. Habeeb proposed to drop the cap on punitive damages and to rewrite a recent Supreme Court opinion on spoliation. He joined an earlier proposal from Sen. Chap Petersen, D-Fairfax, to allow lawsuits against insurance companies who don’t deal in good faith on under- and uninsured motorist claims.

Sen. Scott Surovell, D-Mount Vernon, and Habeeb urged a “discovery rule” to extend the limitations deadline for toxic tort and over-the-counter drug lawsuits.

Cold Senate reception

With seven of the civil justice bills pending in the Senate Courts Committee that he chairs, Sen. Mark Obenshain, R-Harrisonburg, gave advocates on both sides until Jan. 17 to come to terms. They did not.

“We made what we thought was a very reasonable proposal that was rejected by them this morning,” said VTLA advocate Elliott M. Buckner that Wednesday afternoon.

In the absence of compromise, Obenshain presided over a unanimous voice vote shelving five of the bills until next year. Gone were Senate versions of proposals to reform nonsuits, discovery standards, expert witness benchmarks, bystander liability and district-circuit case transfers.

The Senate version of the consortium proposal was already dead. It got the ax Jan. 15 in the Senate Commerce and Labor Committee.

The Senate’s Bowman bill was expected to be withdrawn by its supporters. “It is my expectation that that will meet a similar fate,” Obenshain told the committee.

House versions of many of the litigation reform bills remained alive and in play, said both Martin and Buckner, but neither spoke optimistically about further talks.

Cross-fire

One of the “Scud missiles” fired between the Chamber and the trial lawyers landed squarely on the heads of doctors, complained a key lobbyist for physicians at the Assembly.

W. Scott Johnson with the Medical Society of Virginia said the trial lawyers’ proposal to allow loss-of-consortium claims would expose doctors to liability outside their insurance coverage and unrestrained by the medical malpractice cap.

Physicians’ insurance policies and the med mal cap apply only to claims by patients, he explained. Claims from family members would present unlimited exposure with no coverage, Johnson said.

Until the consortium bill came in, the doctors stood neutral in the clash, Johnson said.

The Medical Society “is not a part of the ongoing liability battle” between the Chamber and the VTLA, he wrote to bill sponsors. “However, as these two entities battle each other, the Medical Society and the entire healthcare community (including physicians) face irreparable harm and excessive costs as an innocent bystander, as the result of your legislation,” Johnson wrote Jan. 15.

Low expectations

A week after the session convened, even though House bills remained, it seemed as though the air had leaked from the litigation advocates’ trial balloons.

“We’re happy to continue to discuss things,” Buckner offered.

Livingston said it appeared that this was not the year for significant changes to the civil justice system. “We made an effort to work some things out with the Chamber but did not meet with success,” he said.