Fallin signs lawsuit reform bills before Republican allies, business leaders and medical doctors.
Published: April 5th, 2011
Oklahoma Governor Mary Fallin on Tuesday, April 5 signed three lawsuit reform bills into law, at a state Capitol ceremony attended by business allies, medical doctors and legislators who guided the legislation to final passage. A press release from the State Chamber, Oklahoma’s association of commerce and industry, said the measure would catapult Oklahoma “ahead of many states in the legal reform arena.”
The most contentious measure, denounced just three hours before the ceremony by a bi-partisan group of senators, is House Bill 2128. The measure was sponsored by Speaker of the House Kris Steele of Shawnee and state Sen. Anthony Sykes of Moore. The measure puts in place a “hard cap” of $350,000 on non-economic damages in tort litigation. According to the Chamber’s summary, “The bill also lays out exceptions to the cap cases of gross negligence, reckless disregard, intentional actions, or malicious conduct.”
At the signing ceremony this afternoon, the chief executive said she had asked legislative leaders just over a week ago to “fast track” priority bills and get them to her desk for signing. With the notable exception of the health care exchange, which she has encountered road blocks in the Senate, Fallin seems to be moving rapidly with her Republican allies to achieve major policy goals.
Senate Bill 862, co-sponsored by Sen. Sykes and state Rep. Dan Sullivan of Tulsa, ends what is termed “joint and several liability” in tort litigation. Supporters say the new structure establishes a “fair share” rule to allocate damages fairly, in proportion to actual fault.
Senate Bill 865, also by Sykes and Sullivan, touches on jury instructions in tort litigation, and includes notice to juries that awards are not subject to federal or state taxation.
Fallin told the assembled supporters, and a large contingent of reporters, that the bills were “milestone pieces” in fulfillment of GOP promises to focus on jobs creation.
She said, “For too long, inflated legal fees have been an unnecessary cost-driver in the private sector and a burden on the medical community. As a result, we’ve seen businesses and doctors choose to locate in other states, depriving our citizens of good jobs, reducing access to medical care and driving up the costs for medical treatment.
“I’m thrilled to be able to sign into law measures which will directly address skyrocketing legal fees, protect our doctors, and help to bring more jobs and businesses into Oklahoma while still protecting the rights of plaintiffs and those who have suffered injuries. This is a great day for anyone who is committed to building a more prosperous state and a stronger economy.”
She said, “Taken all together, these bills send a signal that Oklahoma is open and ready for business.”
Fallin’s staff summarized the reform measures this way:
* H.B. 2128 places a $350,000 hard cap on non-economic damages. Caps on non-economic damages have been proven to help create jobs and lower medical liability insurance premiums in other states. A 2008 study by the Perryman Group reports that after implementing non-economic damage caps, the state of Texas created 223,700 jobs, increased annual consumer and business spending by $55.3 billion, and grew state revenues by $1.4 billion. The study also reported that medical liability insurance premiums decreased by 21.3 percent and the number of lawsuits filed against hospitals decreased by 70 percent. Thirty states have now placed similar hard caps on non-economic damages, not including Oklahoma. H.B. 2128 will not impact economic damages, such as lost wages, medical expenses and future loss of expected wages. The bill also includes an exception to the cap in cases of malicious conduct, gross negligence and reckless disregard.
* S.B. 862 eliminates joint and several liability, sometimes known as the “deep pocket” rule, where each and every defendant in a tort lawsuit is liable for the entire amount of a plaintiff’s damage regardless of their degree of fault. S.B. 862 eliminates the “deep pocket” consideration, ensuring that plaintiffs seek defendants who are most at fault rather than defendants with the most financial assets.
* S.B. 865 requires that juries be instructed in civil cases that no part of an award for damages for personal injury or wrongful death is subject to federal or state income tax; and the jury should not consider income taxes when determining a proper compensation award.
Speaker Steele said signing of the bills marked “a great day, an historic day for Oklahoma.” He remembered that when he first ran for the Legislature 11 years ago, he campaigned specifically on lawsuit reforms. Steele praised Republican colleagues, including Sullivan, and called state Rep. Doug Cox “a champion” for the cause.
Senate Pro Tem Brian Bingman of Sapulpa noted the occasion was “the culmination of years of efforts.” He hailed Sykes for his leadership, as well as the hard work of Sen. Rob Johnson of Kingfisher. Bingman pointed to his predecessor as pro tem, Secretary of State Glenn Coffee, as a leader in the fight for this achievement.
Also speaking at the signing ceremony was Fred Morgan, a former legislator and currently president of the State Chamber. He told reporters, “For years, we have fought for lawsuit reform to help bring fairness and consistency to our courts for the business community and those who have been injured alike.
“We can celebrate that this day is finally here, and relish the message it sends to companies looking to relocate nationwide — that Oklahoma truly is open for business.”
Morgan concluded, “We have fallen behind states like Texas, Missouri, Mississippi and others that have passed significant lawsuit reform in recent years. But, as this legislation becomes law we will be able to compete for jobs like we never have before.”
The signing ceremony came just three hours after a bi-partisan group of legislators expressed displeasure at both the substance of the “hard cap” bill and the procedures used to gain its passage. State Sen. Steve Russell of Oklahoma City, a Republican, flatly predicted that the “hard cap” would be overruled in judicial review. Sen. Charlie Laster, a Democrat, predicted the issue of tort reform “would be back.”