Vital Signs

Federalizing Tort Reform

On May 20, 1996, the United States Supreme Court engaged in its own version of tort reform by striking down the punitive damages award of two million dollars in the BMW of North America v. Gore case. Unfortunately, this case represents an example of two of the worst trends in public policy: expansion of the federal government's intrusion on the states and judicial usurpation of legislative authority. While the BMW case was proceeding to the Supreme Court, the Ohio legislature was considering a broad tort reform proposal that would dramatically alter the state's personal injury lawsuit system. On October 28, after more than 20 months of legislative tinkering, Governor George Voinovich signed the tort reform bill into law.

There is plenty of evidence that our society has become too litigious and that lawsuit abuse is extremely costly to consumers, businesses, and professionals. According to a recent study, the estimated direct cost to Americans of our civil litigation system is $132 billion per year. Over the past two decades, the average jury award has more than tripled. American companies pay liability insurance premiums that are 20 percent to 50 percent higher than those paid by foreign companies. And, of course, incidents like the one concerning the spilled McDonald's coffee are reported regularly in the press.

Personal injury lawsuits have historically been regulated at the state level....

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