Senator on tort reform bill: ‘We’ve got a problem’

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By FRED HORLBECK, Senior Staff Writer

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An amendment tacked onto a legislative proposal that would limit punitive damages in civil cases threatens to derail the bill on the Senate floor, said state Sen. Larry Martin, a key supporter of the proposed cap.

The amendment would turn South Carolina away from the state Supreme Court’s 2010 designation of the risk-utility analysis as the sole test for defective design in many products liability cases.

In Branham v. Ford Motor Co., a split court reversed a $31 million verdict against the automaker last August and said state courts no longer would charge juries with the venerable consumer-expectations test except in manufacturing-defect cases (see story in the Aug. 23, 2010, issue of Lawyers Weekly).

In a recent meeting, however, the Senate Judiciary Committee amended H. 3375, the Civil Fairness in Justice Act of 2011, to include new language aimed at restoring the pre-Branham status quo.

Sen. C. Bradley Hutto, D-Allendale, Bamberg, Barnwell and Orangeburg, proposed the amendment but said it wouldn’t reverse Branham itself.

“I don’t think the legislature has the authority to undo the actual case involving the parties that the Supreme Court adjudicated. Unless somebody appeals it to the U.S. Supreme Court, their word is the final word on the facts of that case to those parties,” said Hutto, who practices law in Orangeburg.

The bill is expected to hit the full Senate this week or next, but Martin, R-Pickens, said the amendment has started to raise eyebrows among senators.

“A few folks have mentioned it to me, but a lot of folks that aren’t on the Judiciary Committee don’t know about it or have just heard some amendments were adopted that weren’t all that friendly to the bill. The word is getting around that we’ve got a problem,” Martin said.

He said he plans to counter on the floor of the Senate with a proposal to strike the amendment and to “make the argument that the Branham case is just not something that we need to tie up in this bill.”

Martin said the amendment was beyond the scope of the bill and that some committee members were unfamiliar with the Branham case when Hutto proposed the change.

“Number one, it was somewhat unfair for the members of the committee to be asked to act on something that we really didn’t know much about. Number two, we were attempting to keep the tort reform bill pretty much along the parameters that we had dealt with before the end of the last session,” Martin said.

But Hutto said he didn’t think the amendment would hinder passage of a cap on punitives.

“I still think that there is a very strong likelihood that a tort reform bill will pass this year. I don’t think it will be in the exact format that it came out of the Senate Judiciary Committee, nor do I think it will be in the exact format that it passed the House,” he said.

The bill would limit a plaintiff’s punitive damages to $350,000 or three times the amount of his compensatory damages, whichever is greater, subject to several exceptions.  It also would allow trial courts in civil actions to admit evidence of plaintiffs’ failure to wear seat belts.

The amendment would repeal S.C. Code Ann. § 15-73-30 and replace it with proposed § 15-73-31. It says comments to § 402A of the Restatement (Second) of Torts “are incorporated herein by reference thereto as the legislative intent of this chapter.”

Section 402A and its comments were a key issue in Branham. Pointing to the comments as the basis for the consumer-expectations test, the General Assembly had adopted the section in 1974 and had identified the comments as legislative intent via § 15-73-30. But a majority of the court said the Restatement (Third) of Torts had moved away from the consumer-expectations test and toward the risk-utility test.

Under the consumer-expectations test, plaintiffs had to show an alleged defect was unreasonably dangerous to consumers under conditions foreseeable in the use of a product. The risk-utility test requires plaintiffs to provide proof of an alternative feasible design.

At the time, a defense lawyer hailed Branham as a “game-changer” in products liability cases, but John E. Parker of Hampton, a lawyer for the plaintiff, said it would send litigation costs skyrocketing.

He told Lawyers Weekly he hasn’t changed his views.

“It adds tremendous cost and tremendous more burden to someone who is injured by a defective product,” Parker said, because it can be difficult to prove whether a defect resulted from a design flaw or a manufacturing problem.

“If, in fact, it’s a design defect, you then have to prove there was an alternative feasible design,” he said. “You have to go through that added burden and those added steps, which is really against the interest of the public.”