Legislative Folly in North Carolina
A few comments on portions of the so-called “tort reform” bills now in the North Carolina legislature being pushed by lawmakers who are supported by the insurance industry.
The product liability portion of the current legislation is setting up a constitutional challenge in the aviation area. The Federal Aviation Act of 1958 and cases say that the federal regulations as to aircraft are “minimum standards” and do not establish a level or guarantee of safety. Every aircraft design is approved, to various degrees, by the federal authorities. But there are federal cases saying that these approvals, and the Federal Aviation Regulations (FAR’s) themselves, are not determinative of the legal safety of a design (that’s my summary of 40 years of case law—there are exceptions). I have not fully thought this all through, but it seems to me that this provides ample constitutional and preemptive challenges to be in the courts for years.
There are great practical problems. In something called “Delegated Option Authority (DOA),” a manufacturer simply sends a letter to the FAA saying it has complied with the FAR’s in its design. That’s all it takes. The FAA does not see one drawing, one blueprint, one operational test. Nothing. I can prove it.
Additionally, I handled the world’s largest civilian helicopter crash where a manufacturer rushed through a modification that was the cause of the crash and the FAA never got to see the mod. The manufacturer designed and implemented the mod under the “Designated Engineering Representative” program, which meant the manufacturer’s employee put on his “FAA hat” and signed one piece of paper saying the mod conformed to the FAR’s. Thirty people died.
So just imagine when a design flaw is discovered in an airliner that causes a crash at RDU and 100+ people die—some of them could even be legislators. The aircraft’s design would necessarily have been approved by the FAA. The airline would be exonerated since the crash was not its fault. The manufacturer could walk, especially with NC’s outdated “lex loci” choice of law rule, applying the law of NC to an accident that occurred in NC, which I have argued for years out to be replaced with a “significant relationship” test.
If all of these so-called “tort reform” measures pass, it will be difficult to avoid them if the injury occurs in NC—even if the product was designed, made and sold elsewhere, and just happened to wind up in North Carolina because it happened to be shipped here. Complete happenstance when it comes to products. With significant relationship standard, we could seek to apply the law of the place of design, manufacture or sale, etc.
As to the medical malpractice lawsuit reforms—note that the legislature is doing nothing to address the medical malpractice itself, most of which rarely sees the light of day, let alone the courtroom–we all know that jury awards are not the major cost of litigation—it is in defense costs. How many “bell-ringer” verdicts can you recall? How many times has a valid but lower value case been pushed to mat by the opposing lawyer and his/her real boss, the insurance company?
Let’s pick a sampling of cases and compare what defense attorneys are paid against what the plaintiff gets by settlement or verdict.
It is folly to think that all of those insurance law firm partners, associates, paralegals, underwriters, adjusters and their higher ups will forsake their gravy trains. No, they will defend the $250k just as much as they defend the situation now. Nothing will be saved in the true cost of litigation—defense costs. They will perpetuate the system that is truly responsible for the costs.
And as to “unnecessary” medical tests, I can’t think of a single time a doctor practiced “defensive medicine” on me—and I am a LAWYER! An “unnecessary test” is, by definition, unnecessary. And if it really were unnecessary, wouldn’t the insurance bean counters who fight every legitimate test or procedure catch it and deny it? Come on—how much fiction can a legislator buy? Maybe that’s wrong question—how much fiction can a lobbyist sell? Answer—a lot, especially to legislator already receiving or looking for campaign contributions.
If all of this reform doesn’t bring down the cost of my medical insurance, which has tripled in 10 years, doesn’t that prove that litigation wasn’t the problem after all? Will they agree to a sunset provision?
Labels: Defensive Medicine, Manufacturer Airplane Design, NC Tort Reform, Unnecessary Medical Testing
Posted by 8:21 pm