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House Moves Forward On Tort Reform — And With A Nod To Federalism

Thursday, March 16, 2017 13:10
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(Before It's News)

As I note in a post at Overlawyered, the House of Representatives has been moving quickly on litigation reform, both on perennial measures long stymied by Democratic opposition and on others of newer vintage (more). Of particular interest, two measures track recommendations Cato scholars have been making for years, while a third has been scaled back in a way that at least nods to concerns Cato scholars have expressed.

The new 8th edition Cato Handbook for Policymakers contains a chapter on tort and class action law prepared by Robert Levy, Mark Moller, and me. Its first federal-level recommendation is that “Congress should restore meaningful sanctions for meritless litigation in federal court.” On March 10, by a largely party-line vote of 230-188, the House passed the Lawsuit Abuse Reduction Act (LARA), H.R. 720, which would restore the regime of strong Rule 11 sanctions in federal litigation that were gutted in 1993 (committee report here). LARA has been proposed in one form or another for many Congresses and has passed the House more than once before stalling in the Senate; more on it here.

Our handbook chapter also recommends that Congress “implement further reforms for class actions that cross state lines,” a type of suit that often enables state courts to assert their power over transactions and parties in other states. While our recommendations are multi-faceted, many of them overlap with provisions in the pending H.R. 985, the Fairness in Class Action Litigation Act (committee report; passed the House March 9, 220-201). FICALA in turn adds other provisions of its own; attorney Andrew Trask, author of multiple essays on class action law for the Cato Supreme Court Review, takes a relatively favorable view of its overall impact.

Finally, there has been a development worth noting on H.R. 1215, the Protecting Access To Care Act, which passed committee by an 18-17 vote on Feb. 28. I and others have repeatedly criticized federal medical liability bills on the grounds that they run into serious problems of federalism and enumerated powers, seeking to justify federal involvement by way of loose New Deal doctrines of impact on interstate commerce, and overriding the workings of state courts even as to the large mass of medical malpractice disputes in which both parties to the lawsuit are local to the state and the costs of error are apt to be local as well. As I argued in this space:

That doesn’t mean federal policymakers are to be left with no role at all. For example, if Washington is paying for a large share of hospital stays, it may make sense as a cost containment measure for it to steer beneficiaries into lower-cost ways of resolving disputes over care quality, or even to ask beneficiaries as a condition of treatment to agree not to file certain suits at all. But that would require stepping back toward a more careful—and more Constitutionally appropriate—view of the federal role.

This year, PACA includes a new limiting provision. To quote Rep. Bob Goodlatte, on the bill’s latest version:

Unlike past iterations, this bill only applies to claims concerning the provision of goods or services for which coverage is provided in whole or in part via a Federal program, subsidy, or tax benefit, giving it a clear federal nexus. Wherever federal policy affects the distribution of health care, there is a clear federal interest in reducing the costs of such federal policies.

Whether the provision in question is drafted in such a way as to pass federalist muster is a question for another day — but it does at least seem that someone on Capitol Hill may have been listening to our past critiques.



Source: https://www.cato.org/blog/house-moves-forward-lawsuit-reform-nod-federalism

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