Ohio's Latest Tort Reform

On January 6, 2005, Governor Taft approved the most recent version of Am. Sub. SB 80. The new law will become effective April 6, 2005 and made several significant changes to existing statutory provisions. The highlights of Ohio’s newest “tort reform” include the following:

1. The new law establishes a ten-year statute of repose for product liability claims and improvement to real property claims in wrongful death cases.

2. A manufacturer is immune from punitive damages if it complies with governmental safety and performance regulations as they relate to the alleged defense.

3. With some limited exceptions, non-economic damages are “capped” as follows: $250,000.00 per plaintiff, or three times the economic loss up to $350,000.00 per plaintiff, or the per plaintiff amount can further be limited by overall occurrence limit of $500,000.00.

4. The new law also establishes caps as it relates to the issue of punitive damages. Under the new law, a court cannot enter judgment for punitive damages that exceed two times the plaintiff’s compensatory damages. Further, if the defendant is a small employer or individual, the judgment for punitive damages shall be the lesser of two times the amount of compensatory damages, or ten percent of the individual’s or employer’s net worth when the alleged tort was committed.

5. The new law also addressed the issue of seat belts and now provides that if a driver or front seat passenger is not wearing their seat belt, it shall not be considered or used by the jury as evidence of negligence or contributory negligence. However, a jury may determine that non-use of a seat belt “contributed to the harm alleged” and may “diminish” the plaintiff’s non-economic compensation.

6. The new law also provides that a trial court shall instruct a jury regarding the extent to which compensatory or punitive damages are or are not taxable under federal or state income tax laws.

7. Finally, portions of the new bill immunize food manufacturers, sellers or suppliers from obesity lawsuits and also establish limits on liability for successor corporations in cases involving asbestos litigation.

The legislative intent accompanying the legislation confirms that there was a perception by the legislature that non-economic damage awards were somehow being confused by juries with punitive damage awards. Apparently, as a result of considerable lobbying on the part of pro-business groups, the legislature had a concern that pain and suffering awards, which by nature are subjective, were being inflated, and that these allegedly inflated damage awards created an improper resolution of civil justice claims. This in turn increased the cost of litigation, which resulted in higher insurance premiums for business owners, which were in turn passed on to the general public through higher prices for products and services.

It should be noted that hearings were held in connection with the issues related to Amended S.B. 80. The legislative findings allegedly justifying Amended S.B. 80 were contradicted by the legislative history, and the Chairman of the group contacted the Ohio Department of Insurance, Common Pleas judges, the Ohio Supreme Court, business groups and others requesting data supporting the notion that there were runaway juries in Ohio. The responses indicated there was no such data or no such problem. Further, every empirical study of punitive damages demonstrated that there was no state-wide damage crisis in Ohio.

What’s the practical effect for the injured plaintiff? The new law is just the latest effort for special interest groups in Ohio to impose caps on jury verdicts in direct contravention to the Ohio Constitution which establishes the right to a jury trial as a fundamental constitutional right. Unless or until injured claimants, workers and others similarly situated organize and respond politically, this is just the first step of the further erosion of one’s ability to be properly compensated by the legal process for injuries one suffers as a result of the wrong-doing of another.

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