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7 posts from February 2010

Thursday, February 25, 2010

A New Face on the Senate Judiciary Committee

NJLRA is sad to report that Senator Bill Baroni (R-Mercer) has decided to leave the legislature to accept an appointment from Governor Chris Christie as deputy executive director of the Port Authority of New York and New Jersey.  Senator Baroni has been a thoughful and effective senator in his own right, and a friend to NJLRA and the mission of tort reform as well.  We wish him well in his new role.

His departure creates a vacancy on the powerful Senate Judiciary Committee (SJU), which has jurisdiction over civil justice issues, among others. 

NJLRA is pleased to welcome Senator Kevin O'Toole (R-Bergen and Passaic) to the SJU, who was appointed to serve in Baroni's slot by Senate Minority Leader Tom Kean.  

We look forward to working with Senator O'Toole in his new role.

Wednesday, February 17, 2010

In Atlantic County, the trial bar hits the jackpot, and consumers pay - again

Atlantic County added another case to its “Judicial Hellhole” resume yesterday, by awarding $25 million in compensatory damages to an Alabama man who claimed Accutane caused his inflammatory bowel syndrome.  Yesterday’s verdict in state Superior Court in Atlantic County was a retrial of a 2007 verdict, in which the defendant was awarded $2.6 million in damages. 

It took the jury just 3 ½ hours to decide that the plaintiff deserved the award.  By comparison, they found that his medical expenses warranted an award of $159,000.

The plaintiff’s lawyers argued that New Jersey-based Roche, which manufactured Accutane, failed to provide an adequate warning about the acne medication’s potential side effects.  By not listing “inflammatory bowel disease” on the warning label, they claimed that Roche violated New Jersey’s Consumer Fraud Act. 

Accutane was introduced in 1982 and is credited with helping millions of people who suffer from severe acne. 

A $25 million warning label is a hefty pricetag for Accutane’s consumers to bear.  Unfortunately for consumers, though, the trial bar was able to claim an additional victory; faced with the threat of an additional 1,000 lawsuits with similar claims and the high cost of defending personal injury lawsuits, Roche discontinued Accutane in June 2009. 

Thanks to weaknesses in New Jersey’s Consumer Fraud Act, an Alabama resident’s litigation was able to help drive a popular medication from the marketplace. 

Report: Trial Lawyers are an “Economic Burden”

FOR IMMEDIATE RELEASE                                             Contact: AnnMarie McDonald

February 12, 2010                                                                   (609) 649-3167




Report: Trial Lawyers are an “Economic Burden”


Trial Lawyers have made more campaign contributions than any other interest group during the last decade; Rayner calls it an obstacle for states’ economic recovery


TRENTON, N.J. – The Manhattan Institute for Policy Research has just released a scathing report chronicling the lobbying practices of the trial lawyers, formerly known as the Association of Trial Lawyers of America. 

The trial lawyers donated $725 million dollars to candidates for state offices during the last 10 years.  According to the study, such influence has allowed trial lawyers to block civil justice reforms which would strengthen many states’ economies.  The annual direct cost of American tort litigation—excluding much securities litigation, punitive damages, and the multibillion-dollar settlement reached between the tobacco companies and the states in 1998—exceeds $250 billion, almost 2 percent of gross domestic product, it finds. 

Says Marcus Rayner, executive director of the New Jersey Lawsuit Reform Alliance, “The trial bar’s donations to state campaigns are strategic, because the state level is where grassroots tort reform movements begin.  The trial bar is effectively trumping the ability for lawmakers and citizens to decide what is best for their states, especially as their financial influence seeps into the judicial branch. 

“As states begin considering tort reform as a common-sense, cost-neutral initiative to promote job growth, the trial bar is presenting an additional obstacle to economic recovery at exactly the wrong time.

Among such efforts is a federal tax break for contingent-fee lawyers that is worth more than $1 billion.  It allows state juries to override federal regulations and discourages arbitration in disputes that are too expensive for trial. 

The entire text of the study can be found on the Manhattan Institute’s website, at http://www.triallawyersinc.com/kstreet/kstr01.html . 


Wednesday, February 10, 2010

Pennsylvania echoes California and New Jersey in push for tort reform to stimulate private-sector job growth

The Pennsylvania Chamber of Business and Industry has called on Pennsylvania Governor Ed Rendell to consider the benefits of tort reform as he begins the final year of his term. 

Chamber President Floyd Warner said that curbing lawsuit abuse would “create an environment that is conducive to job and economic growth.” 

The Pennsylvania Chamber’s recommendation to pursue tort reform as a cost-neutral alternative to profound tax increases and spending cuts follows similar calls for economic stimulus in California and New Jersey.  California Governor Arnold Schwarzenegger outlined extensive proposals which would curb frivolous litigation, allow defendants to appeal class action status, and create opportunities for private sector growth.  NJLRA’s executive director Marcus Rayner asked the New Jersey Legislature to make tort reform a priority as well, noting the similarities between each state’s economic challenges.  In a letter to the editor which ran in the Home News Tribune, he said that tort reform could be a crucial job creation tool in both states.  Governor Christie made frequent references to tort reform during his campaign and stated that it would be a priority for his administration.  We’re glad to see that a similar movement is underway in Pennsylvania as well. 

A Major Setback for Tort Reform in Illinois

Last week, the Illinois Supreme Court struck down a cap on medical malpractice awards.  The law, enacted by then-Governor Rod Blagojevich, capped non-economic damages against doctors at $500,000, and at $1,000,000 against hospitals.  The exodus of doctors from the state, particularly in the high-premium specialties of neurosurgery and obstetrics, prompted the Legislature to prioritize tort reform. At that time, according to the American Medical Association, doctors began to limit services retire early, or move to other states were liability premiums were more stable, rather than try to absorb the average 10 to 12 percent in increases each year.   

Many of us are deeply concerned about the ruling.  Some are speculating that the possibility for unlimited damages will further restrict access to care for Illinois residents in high-premium fields.  James Rohack, President of the American Medical Association, said that doctors faced significant obstacles prior to 2005, and cautioned that such conditions are now likely to return. 

In the 4-2 decision, the majority wrote that the Legislature had overstepped its boundaries.  The $500,000 figure was also described as arbitrary by the justices.  Dissenting Justice Lloyd Karmeier noted the irony of the majority’s decision: by finding that the Legislature’s effort to impose noneconomic caps “runs afoul of the separation of powers clause,” the Judiciary interjected itself into the legislative process.  "We have no business telling the General Assembly that it has exceeded its constitutional power if we must ignore the constitutional constraints on our own authority to do so," he said. 

The 2005 legislative remedy to Illinois’s healthcare crisis – the makings of which we may be experiencing in New Jersey as well – stemmed from a grassroots effort led by the Illinois Civil Justice League, the Illinois Lawsuit Abuse Watch, and other tort reform groups.  This was their second legislative success in securing noneconomic damage caps, and the second time it was reversed by the Illinois Supreme Court.  For everyone’s sake, let’s hope the trial bar doesn’t win a third time. 

Thursday, February 04, 2010

NJLRA's Testimony at the New Jersey Assembly Bipartisan Leadership Committee Hearing

Testimony Before the New Jersey Assembly Bipartisan Leadership Committee Hearing

By Marcus Rayner, executive director

New Jersey Lawsuit Reform Alliance

Tuesday, February 2, 2010


Good afternoon. My name is Marcus Rayner and I am the executive director of the New Jersey Lawsuit Reform Alliance (NJLRA).  I would like to thank you for holding this hearing today and for the opportunity to appear before you.

In this economy I know that you are all looking for ways to create jobs and encourage economic growth, but that daunting budget deficits and diminishing tax revenues limit your policy options. 

When the state’s leading employers formed NJLRA in 2007, our economy was still relatively strong.  New Jersey was then, and is now, a target for abusive lawsuits, especially by out-of-state litigants.  In fact, 94% of the pharmaceutical mass torts in New Jersey's courts have been brought by out-of-state plaintiffs because of the favorability of New Jersey’s laws to these suits, many of which would not see the light of day in their home jurisdiction.    Our economy is much more challenging today, and the rise in abusive lawsuits experienced by our business community has only made matters worse.  The Healthcare Institute of New Jersey estimates that 1,200 pharmaceutical jobs were lost between June 2008 and June 2009. 

Today I offer some ideas for fair civil justice reform.  Collectively, they will help employers, reduce costs for consumers, and restore New Jersey as a state that welcomes business investment.  Perhaps as important, these ideas present you with policy options that are budget-neutral at a time when we hope to encourage job creation without adding to the State’s budget deficit. 

NJLRA has been working with many members of the legislature, including several who are present today, to identify solutions and submit legislative proposals for consideration:

  • First, New Jersey would benefit from an expanded appeal bond cap.  We have been working closely with Assemblymen Jon Bramnick and Gary Schaer, as well as Senator Ray Lesniak, to introduce a bill that would expand NJ's appeal bond cap to all civil defendants.  Right now, only tobacco companies benefit from a cap on the bonds civil defendants must pay when they lose a trial court judgment and appeal the case to a higher court.  Defendants, like plaintiffs, deserve to appeal a trial court decision that they believe was wrong.  But unlike plaintiffs, defendants in NJ must pre-pay to do so.  This bond requirement, which siphons money that would otherwise be used for ongoing business investments, often forces defendants to settle promising cases or discourages them from exercising their right to appellate review in order to avoid the bond.  A reasonable cap of $50 million - or the full judgment amount, whichever is less, would protect the appellate rights of defendants without harming plaintiffs.
  • Next, New Jersey’s Consumer Fraud Act is in need of reform.  The CFA was originally enacted in 1960 to protect NJ consumers from questionable business practices.  Today, our Consumer Fraud Act is one of the most abused in the nation.  The NJCFA is being widely applied by the courts as a national law to be used for large class actions against our employers.  Today, we are the only state, or one of the only states, whose CFA does the following: NJ’s CFA mandates treble damages; we allow out-of-state plaintiffs to sue in our courts – even if the consumer transaction took place elsewhere; and finally, we do not even require a that consumer has actually been defrauded in order to sue . 
  • Finally, New Jersey's rules of evidence for expert testimony are in need of reform to ensure that only true experts testify in court when medical science is a determining factor in a civil suit.  Junk science in the courtroom distorts justice and leads to unfair verdicts benefiting no one. 

Thank you again for the opportunity to testify today and welcome the opportunity to talk with each of you further about these reforms.

Monday, February 01, 2010

Around the web: Customers Impacted by New Jersey District Court Decision

Marcus is quoted in Paul Williamson’s article in the Ocean County Examiner, regarding the United States District Court for New Jersey’s decision in a class-action lawsuit involving AT&T.  The decision found that AT&T’s flat-rate early termination fees were unlawful, to the tune of $16,000,000.00