North Carolina: Business Friendly vs People Friendly

In politics, it is important to know that successful business professionals are usually contributors to political campaigns and regular folks, well, some of them are but most are not … So, when the General Assembly decided to take up the issue of Tort Reform, it is the perfect match-up for big “national” business versus North Carolinians. 

Are we just going to be a state that is “business friendly” or do we care about being “people friendly”? HB 542 (now, SB 33) may hold the answer.

The over-arching reasons for Torn Reform in NC seem weak, at best. Many Republicans argue that the federal government is too big and intrudes on our lives in too many ways, shifting personal responsibility to government oversight or “big brother-ism.” Yet, this legislation, sponsored by Republicans in the NC General Assembly, relies on those big government regulatory agencies to ensure products and processes are safe for me and you. That is a puzzling contradiction.

A tort, or compensation for a “wrong” or “harm” by one party to another, is determined by juries. Many believe that jury awards have been too large in some cases so there should be a cap on what this impartial panel of citizens can apply to an injury.

Government agencies inspect, monitor, evaluate, approve a range of activities that affect our lives – Agriculture inspects food supply, Food and Drug Admin. approves drugs, agencies review business lending practices, agencies review workplace safety, agencies review new product development, agencies review automobile safety. The list goes on … the water we drink, the way we dispose of wastes, all regulated. We are all familiar with product recalls, tampering cases with drugs, food recalls, safety testing of city water supply. These agencies review business processes and products in order to “protect the public.” But these agencies do not have the capacity to review every single item before we use those products, rather they oversee the larger processes and standards, and take action when there is an issue. Recalls are usually “voluntary” and these agencies rely on self-reporting from manufacturers. This is a huge part of federal and state government.

I don’t know about you, but I am glad we have these processes but I don’t expect the FDA to know the details of every baby aspirin I take so if I take one and the aspirin has been tainted with something and I suffer a dramatic medical condition because of a problem caused by the manufacturer, I want to know that I can present the case to a jury of my peers and receive compensation for damage caused. It is only fair – I did not cause my injury. SB 33 will take away the right of a citizen to sue a manufacturer of a defective drug that harms us by granting immunity to manufacturers if a “state or federal agency” inspected or approved it.

As for a “cap” for damages, how can a NC legislature know the extent of individual damages or the harm to apply a maximum amount a victim can receive? A jury hears details from experts and has the duty to consider how a life has been altered or irreparably changed. The jury gets to see the victim, the pain, the harm. That is not something that can be arbitrarily determined in the legislature and equally applied or even considered for all possibilities. We trust juries to make judgment in murder trials where a life is at stake, why not keep trusting them here?

Immunity from lawsuit for a company that uses another company’s faulty product? That means that if a defective product affects a community and the people there by causing business, property and personal injuries, the insurer for the company must pay the claims and can not seek recovery from the manufacturer. Your town could not seek compensation, our State could not seek compensation.  Why would a business even want to be in NC with this risk?

Just last week in Michigan, a state with an “FDA defense,” the Courts ruled that the state was barred from recovering more than $20 million from the makers of Vioxx, a drug that proved deadly for more than 17,000 people. How much will this really cost us as a state and as a society?

Why should injured people not be able to seek compensation for bad drugs or defective products if the makers knew or should have known something was wrong with them, or if they failed to give people proper warnings about what the drugs or devices might do, just because they followed the government rules to get the approval to sell their products?   This bill makes North Carolina a dump for defective products.

This bill is not balanced at the present time. It shifts the costs from the potential perpetrators of harm to the victims who did nothing to cause the harm. And none of us know when we will find ourselves the recipient of a harm that permanently alters our life. The costs will shift to us, regular North Carolinians.

Another puzzling argument is that we are perfect ground for reform.  North Carolina is not one of the most litigious states. In fact, we are in the top three “least litigious states” based on a Tort Index compiled by the Pacific Research Institute. So, while there is certainly a national movement for Tort Reform, North Carolina is not the best case for testing reform.  Why us and why now?

And, last is the argument of rising cost of health care as a result of defensive medicine. But the crux of this issue is whether or not proposed malpractice reforms will actually slow the rate of increase of healthcare costs. Modeling this legislation after one in Texas that included a cap of $250,000 for noneconomic damages and Emergency Room immunity, medicare costs in Texas increased faster than most other states, including North Carolina.

Giving manufacturers and negligent physicians a “free pass” for injuring people is not a value I embrace. We never know when we or someone we love will be a victim of harm caused by something beyond our control. Can a legislature effectively know how much the loss of a limb, scarring or disfigurement is worth to you and I without knowing the details of the situation? One size does not fit all and a legislature cannot arbitrarily impose a one size fits all rule. Not trusting a jury means the legislature does not trust me and you because we are the jury pool.

The goal and intent of the tort system is to deter defects, harm so when the system is restructured, the threat of monetary punishment is removed and profit without care becomes the motive. Again, not a value I embrace.

I am hopeful of the outcome of this legislation based on what a wise former Speaker of the NC House, Joe Mavretic, said about this bill. He said that when a bill encompasses so many provisions that affect so many categories of people, and affects them to the extent that they are “out and engaged” on the issue, wise politicians realize that is impossible to battle everyone at once, especially when there are other priorities and another election is on the horizon. That means the bill that comes out has to be dramatically different from what we are seeing now.

But don’t let this ray of optimism stop you from contacting your legislator to let them know what you think about the need for Tort Reform in NC.

Jeanne Milliken Bonds is a PR Consultant, Political Analyst, NC Spin Commentator

Cross Post: NC Spin
Thanks, Jeanne. And for more discussion on the Tort Reform and Product Liability bill be sure to watch this week’s edition of NC SPIN.
Posted by NC Blogger at 4/8/2011 5:04 PM 
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About jeannemillikenbonds

Former Mayor, Former Special Assistant to NC Chief Justice. PR Consultant, Government Relations Professional, Commentator, Political Analyst Passionate about all things NC, especially politics.
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