Trials and Tribulations of Reform Settlements with High Punitive Damages Have Businesses Calling for Tort Changes

Article excerpt

In September, when a Louisiana jury hit CSX Transportation with

$2.5 billion in punitive damages, the Jacksonville-based firm

suddenly found itself thrust into the spotlight, the latest

symbol of what critics call an out-of-control jury system.

The controversial penalty resulted from a September 1987 tank

car fire in which thick black smoke billowed into the air.

The blaze, fueled by a petrochemical in the tanker, forced

residents from roughly a 200-block area in New Orleans to

evacuate their homes. No lives were lost, though 8,000 people,

according to their lawyers, suffered damage to their homes,

difficulty breathing and mental anguish.

CSX's role in the accident, which resulted from a leaky

gasket, largely consisted of the burning car's presence in the

company's railyard.

As such, the facts just do not support the jury's award, said

Adam Hollingsworth, a spokesman for CSX.

Furthermore, the massive penalty is emblematic of a civil

justice system that has careened out of control, not just in

Louisiana but throughout the United States, he said.

"There is not a company in America that doesn't believe that

if they are responsible for a person's injuries that they should

compensate them for lost wages or damages that they have

incurred," he said. "Where the system has gotten out of whack is

when a company is asked to pay outrageous punitive damage awards

regardless of any finding of fault."

September's gargantuan award against CSX is under appeal.

And experts say such oversized jury verdicts often get reduced

or overturned on review.

Still, it's little surprise that the Jacksonville-based

railroad is among the many companies and trade groups backing an

extensive overhaul of Florida's liability laws.

Though the legislative session is still months away, business

groups and trial lawyers are already girding for an ugly,

bare-knuckle showdown this spring.

And it's not just the usual sparring of special interest groups.

For many lawmakers in the Republican-controlled Legislature,

it's pay-back time.

Many of the business groups that want change strongly

supported the Republicans in their successful campaign to take

over the Legislature in 1996, said Rep. Jim King, R-Jacksonville,

the majority leader of the Florida House of Representatives.

The trial lawyers are viewed by many as close allies of the

Democrats, he said.

"There are some business interests that would like us to take

a wooden stake and drive it into the barely pulsating heart of

the trial academy," King said.

But there's more at stake for Florida's citizens than settling

political scores.

Lawmakers are poised to recast the complex series of laws that

decide who is legally responsible for a wide variety of negligent

acts.

Such mishaps include the damage caused in automobile

collisions, injury from a faulty product or a doctor's mistake in

surgery.

These laws not only shape who is to blame, but how much they

will have to pay.

The main proposals would:

Put a 12-year limit on liability for product manufacturers.

This would cover everything from disposable razors to new homes

to industrial machinery.

Cap liability of property owners when someone else is using

the property. This covers everything from a friend lending an

automobile to the vehicles rented by national rental car companies.

Limit liability protection for someone who is hurt while

intoxicated, using drugs or who is trespassing. …