Legal Reform Victory in SC
March 4, 2010
Carter Wood, once again, is on top of the latest legal reform news - this time with his ShopFloor hat on. Yesterday legislators in the South Carolina House overwhelmingly passed legal reform legislation in an effort to attract more business and capital investment to the state.
For more on the state of legal reform efforts in South Carolina, check out the South Carolina Civil Justice Coalition headed up by Cam Crawford. Cam and his team have been fighting the good fight in SC for some years now and aim to make the Palmetto State one of the nation’s top 25 states based on legal climate. Yesterday’s action by the state legislature is a step in that direction.
South Carolina Decision Highlights Need to Act On Punitive Damages
October 20, 2009
A recent South Carolina lawsuit highlights the problem of allowing emotionally-charged juries to award punitive damages with no guideposts. The case involved a man who claimed his medical insurance was wrongly rescinded. The jury originally awarded $186,000 for actual damages and a bad faith rescission claim. Sounds reasonable. But the jury tacked on an additional $15 million in punitive damages.
The South Carolina Supreme Court stepped in and reduced the punitive damages to $10 million, which it claimed was 9.2 times the “potential harm” the plaintiff suffered. But the punitive damages need to bear some relation to the actual harm, not some back-of-the-envelope calculation. Even using the Court’s absurdly high 9.2 ratio, the punitive damage award should have been no higher than $1.7 million.
Even more ominously, in a footnote the Court concluded that although punitive damage awards in South Carolina “have been on the low end of the single-digit-ratio spectrum…that does not mean the constitution requires this to be so.” In other words, the Court practically invited aggressive trial lawyers to shoot for ridiculously high punitive awards down the road.
All of which makes it even more urgent for South Carolina’s legislature to enact a pair of bills that would limit punitive damages to three times compensatory damages or $250,000. This would give runaway juries (and judges) the guidance they need to make reasonable determinations in awarding punitive damages.
Responding To The Latest From The Palmetto State’s Plaintiffs’ Bar
March 17, 2009
In a guest column in today’s edition of South Carolina’s The State, Pete Strom, president of the South Carolina trial lawyers association, claims the Palmetto state has “benefited from its good reputation for an efficient, fair, cost-effective judicial system.”
But business owners and business managers disagree.
In its most recent survey of business leaders, the U.S. Chamber of Commerce ranks South Carolina near the bottom, 43rd worst in the nation. When it comes to the impartiality and fairness of a state’s judges, South Carolina came in 44th in both categories. Although Governor Mark Sanford has enacted several important legal reforms, “pro-plaintiffs’ bar legislators continue to dominate the judicial nominations process,” according to the “2008 State Litigation Guide” published by Directorship magazine.
If Mr. Strom is serious about enhancing South Carolina’s reputation as a good place to do business, he should support legislation (S.350 and H.3489) to make the state’s courts more fair and predictable by establishing reasonable limits on non-economic damages. Cam Crawford of South Carolina Civil Justice Coalition recently wrote an important guest post on this reform legislation and how it will help South Carolina. You can find it here. Somehow I doubt Mr. Strom’s endorsement will be forthcoming, since trial lawyers specialize in redistributing wealth instead of creating it.
Legal Reform From The Front Lines In South Carolina
February 19, 2009
At the American Justice Partnership’s recent partner conference, many state tort reform leaders spoke about actions their states are taking to the kind of fair, stable legal environment needed to attract business investment and jobs. With legal reform dead at the national level for the foreseeable future, the states represent the front lines in the battle to take back our courts from the trial bar.
Recently, I asked Cam Crawford, Executive Director of the South Carolina Civil Justice Coalition, to do a guest post on developments in South Carolina:
Guest Post by Cam Crawford:
Speaker of the SC House Bobby Harrell and 45 co-sponsors introduced the South Carolina Fairness in Civil Justice Act of 2009 (H. 3489) on February 10, 2009. According to Speaker Harrell:
“This is reform for a reason, and that reason is to make South Carolina a more competitive state and a better place to do business. Our state’s future hinges on the strength of our economy and its ability to grow.”
Even though we enacted significant reform in 2005, South Carolina is still lagging behind neighboring states in legal climate surveys, causing us to lose jobs and investment to North Carolina, Georgia, Tennessee and Virginia. In the midst of continuously escalating unemployment rates and an uncertain economic environment, the competition among these states for jobs is extremely fierce.
Senator Larry Martin (R-Pickens) made this point crystal clear when he introduced the Senate companion tort reform bill (S. 350):
“If South Carolina is going to be competitive with our neighboring states in keeping and attracting jobs and investment, it is important that we take a common sense approach to our civil justice rules. [This bill will] bring about a greater sense of equity to the tort system and to encourage investment in South Carolina.”
Even setting aside the national economic crisis, SC leaders recognize that we must change the way we operate to compete in a global economy. When choosing sites for new plants, businesses look for locations with low costs and positive business climates. Civil justice issues – such as a predictable and stable litigation environment – play a huge role in creating positive business climates. The South Carolina Civil Justice Coalition (SCCJC), the unified voice of the South Carolina business community on legal reform issues, has identified three objectives to improve the business climate of the Palmetto State. Read more
Another Round of Tort Reform In South Carolina
February 4, 2009
South Carolina State Senator Larry Martin introduced legislation last Thursday that would discourage meritless litigation and improve the investment climate in the state. Among other reforms, the legislation would:
- Create reasonable guidelines for punitive and non-economic damages;
- Bring accountability to the state’s hiring of trial lawyers to sue industry;
- Limit the amount of bond that a business must post when appealing a large verdict;
- Reform state class action laws.
As the Wall Street Journal reported a few days ago, in the midst of today’s economy slump, states are racing to offer tax breaks and other financial incentives for businesses that create jobs. New Jersey Governor Jon Corzine has promised to give small businesses $3,000 for each new hire, while Colorado Governor Bill Ritter lured 500 Charles Schwab jobs to his state with $1 million in financial incentives.
But in today’s legal environment, defending against a single lawsuit can cost small businesses $100,000 or more and a single settlement with a financial services firm can easily exceed $1 million. That’s why smart political leaders like South Carolina’s Governor Mark Sanford understand that a state’s legal climate is every bit as important – in many cases, more important – to luring business investment as tax breaks.
Judicial Ruling Threatens Economic Health in South Carolina
September 5, 2008
A decision last month by the South Carolina Supreme Court threatens to make businesses in the state an even bigger target for enterprising trial attorneys.
Cam Crawford, Executive Director of the South Carolina Civil Justice Coalition says the new ruling (Colleton Prep Academy v. Hoover Universal) would allow personal injury lawyers and their plaintiffs to sue companies and recover big damage awards even if they’ve never been injured. In reaching its decision, the Court tossed aside long-standing precedent, shedding its role as an impartial arbiter of the law and assuming the power of the state’s regulatory and legislative bodies.
It doesn’t take much imagination to figure out what the impact of this ruling will be: South Carolina courts will soon be clogged with all manner of frivolous cases against every imaginable product manufacturer. Many innocent companies will be forced to the settlement table to pay off trial lawyers and their uninjured clients rather than risk a “bet-the-company” lawsuit.
Crawford says a legislative fix may be needed to reverse this legal travesty. This may stem the damage in the short-term. But one of the best solutions to an arrogant, out-of-control judiciary is to make judges more accountable to the people they are supposed to serve by replacing judicial appointments with democratic judicial elections.
Reining In The Trial Bar in South Carolina
July 25, 2008
Since his election in 2002, South Carolina Governor Mark Sanford has labored to bring jobs to his state by making it a better place to do business.
One of Gov. Sanford’s biggest, ongoing battles has been with the state’s Workers’ Compensation Commission. Unlike similar commissions in most other states, this SC commission has not been using objective American Medical Association standards to match compensation for workers with injuries. As a result, workers’ comp premiums have been soaring by double-digit rates, punishing local businesses and pushing South Carolina from ranking 49th in workers’ comp premiums down to 25th in just seven years.
If you think you smell the trial bar lurking here somewhere, you’re right on target. Enterprising trial lawyers hate objective AMA standards because they limit the ability to score big settlements and exorbitant legal fees.
The South Carolina State Legislature passed workers’ comp reform last year, which was helpful, and Gov. Sanford followed up with an executive order requiring the Commission to use objective ABA standards. As National Association of Manufacturers President John Engler (himself a former Governor) wrote at the time, Sanford’s executive order would have resulted in a 10-15% reduction in workers’ comp premiums.
But South Carolina businesses never saw these benefits because the Commission balked at Gov. Sanford’s executive order.
Yesterday, Gov. Sanford and the Commission reached a partial agreement that would force the disclosure of attorneys’ fees awarded in workers’ comp cases, ending the Commission’s practice of hiding these fees from public view. While sunlight is always a good disinfectant, apparently the Commission still refuses to use objective AMA standards. But the battle is far from over. As Cam Crawford, Director of the SC Civil Justice Coalition put it:
This is a skirmish in a larger war to protect South Carolina businesses, especially small businesses. If anything, this proposed settlement reinforces how important it is that we put objective workers’ compensation guidelines into the South Carolina code of laws.
South Carolina Voters, Make Your Voices Heard
April 30, 2008
FITSNews reports that the South Carolina Civil Justice Coalition (SCCJC) is stepping up its effort to support the drive to reform the state’s warped workers’ compensation system, which has been turned into an money machine for the local trial bar.
According to the organization, South Carolina has lost over 12,800 jobs because small business owners had to pay $276 million more for workers’ comp. premiums.
SCHotline has a copy of the mailing that the SCCJC is sending out.
I think it’s time for SC voters who value jobs to call their state senators. Phone numbers can be found here.