By Steve Brawner
© 2017 by Steve Brawner Communications, Inc.
It could be argued that two of the three most important votes this year in Arkansas state politics occurred Feb. 16 and Feb. 27, and the third will occur this Friday.
The first two votes are when the Arkansas Senate and Arkansas House advanced a proposed constitutional amendment limiting lawsuit awards. We voters will decide its fate in the November 2018 elections.
The third will be in Hot Springs June 16, when the Arkansas Bar Association’s House of Delegates votes on whether to pursue a dueling proposal barring such lawsuit limits that also would appear on the November 2018 ballot.
The one proposed by legislators would limit punitive damages in civil lawsuits to the greater of $500,000 or three times the compensatory damages awarded in the case, except when the harm was caused intentionally. Noneconomic damages, sort of a vague term, would be limited to $500,000. The Legislature would be empowered to increase both of those amounts with a two-thirds vote. Lawyers’ contingency fees would be limited to one-third the judgment.
The amendment is supported by powerful groups, including the Arkansas State Chamber of Commerce and those representing health care providers. They want to reduce the risk of jackpot jury verdicts that produce a climate of uncertainty, raise insurance rates, and require costly cover-your-rear actions ultimately paid by consumers and resulting in lost jobs. If your local hospital no longer delivers babies, it’s because the insurance is too high and the fear of a lawsuit is too great.
Opponents, including the Arkansas Bar Association, which represents attorneys, of course don’t see it that way. They say juries should be trusted, not limited, and that the awards prescribed by the amendment are so low that big, bad actors won’t be deterred from harmful activities. They say the upfront costs of lawsuits can be daunting with no guarantee of a payout, so capping attorneys’ fees will make it harder for Arkansans to find a lawyer willing to represent their case.
This already was going to be a heavyweight brawl between two groups with access to money and reasons to spend it. Aside from the legitimate philosophical differences, we’re talking about rich people’s livelihoods – those of business executives and medical providers who say enough is enough, and those of attorneys whose bottom lines would be significantly shortened. So Arkansas voters next year presumably will see plenty of 30-second ads defining the bad guys (evil corporations or unscrupulous lawyers, depending on who is funding the spot) and the heroes/victims (average Arkansans, either way).
But then the Arkansas Bar Association came up with another idea – pass its own, equally far-reaching amendment. It would do away with all the caps included in the Legislature’s measure while also taking more than a few shots at the legislators themselves – increasing transparency for campaign contributions, prohibiting legislators from directing how state funds are spent locally, reducing their authority over state agency decisions, and increasing the number of votes needed to override a governor’s veto from the current simple majority to two-thirds.
An added twist occurred last week, when the State Chamber’s President and CEO, Randy Zook, sent a letter to its members asking them to encourage their hired law firms to vote against the measure.
On Friday, the ABA’s House of Delegates will vote on whether to pursue the amendment, which its Legislation Committee unanimously endorsed.
The pluses? As a political strategy, the amendment would enable the ABA to play offense rather than just defense. Also, instead of the campaign being mostly lawyers vs. business owners and doctors, it also would be a more winnable lawyers vs. legislators.
But unlike the Legislature’s amendment, getting the proposal on the ballot would require supporters to collect 84,859 signatures, which would cost millions of dollars and inevitably lead to a lawsuit by opponents hoping to block the measure.
Things will get really interesting if they’re both on the ballot. One limits jury awards. The other says jury awards can’t be limited. One or the other could pass. If they both pass, the one with the most votes wins. If neither passes, things stay the same – meaning no lawsuit limits.
That means the Bar Association would have more paths to victory than the Chamber-supported amendment. Not necessarily better, but more.