Contact:
Bill G. Smith (608) 255-6083
Mandy Minick (614) 221-4107
MADISON, Dec. 19, 2005 – The American Tort Reform Foundation recently denounced the Wisconsin Supreme Court for four decisions it handed down over the course of four months in 2005. The foundation awards Dishonorable Mentions in recognition of a particularly abusive practice or unsound court decision. In March, the state Supreme Court handed down two decisions that weakened Wisconsin’s punitive damages statute.
Then in July, the court delivered two more damaging rulings – one that rejected limits on non-economic damages in medical malpractice cases, and one that vastly expanded liability for manufacturers and sellers.
“This is not the kind of distinction that will help grow Wisconsin’s economy,” said Bill G. Smith, State Director of the National Federation of Independent Business/Wisconsin, the state’s largest small-business advocacy group. “Small businesses are the lifeblood of our economy.
Decisions like the ones handed down by the Wisconsin Supreme Court this year threaten the ability of existing businesses to survive and grow while discouraging entrepreneurs from pursuing their dreams and starting new businesses in our state.”
While Wisconsin’s punitive damages statute provides that a plaintiff, “may receive punitive damages if evidence is submitted showing that the defendant acted maliciously toward the plaintiff or in an intentional disregard of the rights of the plaintiff,” the Supreme Court held that the legislature did not mean to require intent on the part of the defendant to cause injury to the plaintiff in order for damages to be awarded. In doing so, the court overturned a lower court’s decision and awarded damages where they had previously been denied.
In addition to its rulings on punitive damages, the Supreme Court also drastically expanded liability for manufacturers of lead paint in the case of Thomas v. Mallett. The court applied a “risk contribution theory” in the ruling that found manufacturers of potentially harmful products to be liable despite the inability of a plaintiff to identify which company’s product caused the injury. The risk contribution theory allows plaintiffs to sue an entire industry for injuries that the plaintiff sustained from a product, even if there is no proof that a specific manufacturer was responsible for the product in question.
Senate Bill 58, which has been approved by the legislature and is currently being reviewed by Governor Doyle would restore fairness and predictability to the state’s liability laws and provide some corrective legal relief from the court’s rulings. This legislation would limit or eliminate the civil liability of sellers and distributors of products, is widely supported by the small business community.
Approximately 86 percent of Wisconsin’s small business owners back this legislation which would eliminate liability of product sellers when the seller has no knowledge of the defect and had no role in the manufacture or modification of the product, according to research by NFIB.
“Governor Doyle should sign Senate Bill 58 into law to help restore a legal climate that will promote the growth and prosperity of our state’s Main Street economy,” said Smith.
Finally, the court moved to strike down legislative limits on non-economic damages in medical malpractice cases. Although in 2004 the court rejected a challenge to reasonable limits on pain and suffering damages in medical malpractice cases, this year in the case of Ferdon v. Wisconsin Patients Compensation Fund, the court rejected a law that limited non-economic damages in medical malpractice cases to $350,000. The court ruled that the law violated the equal protection guarantee provided in the Wisconsin Constitution despite the fact that courts in at least 13 other states have heard similar cases and ruled that reasonable limits on non-economic damages do not violate equal protection guarantees.
The impact of this decision will inevitably lead to higher malpractice premiums across our state,” Smith said. “It jeopardizes Wisconsin’s healthcare system by driving physicians out of the state and paralyzing the ones that stay, while driving up the cost of health insurance for small business owners and their employees throughout Wisconsin.”
Governor Doyle has vetoed legislation that would re-establish limits for non-economic damages in medical malpractice lawsuits, but the legislature will work to override the governor’s veto.
“The state’s legal climate has been severely damaged by these recent and unfortunate Supreme Court decisions,” said Smith, “the Dishonorable Mention award by a highly respected national organization is not the type of recognition that contributes to the governor’s goal of growing the state’s economy.”
###
The National Federation of Independent Business (NFIB) is the nation’s largest small-business advocacy group. A nonprofit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its 600,000 members in Washington, D.C. and all 50 state capitals. For more information on NFIB/Wisconsin, visit www.NFIB.com/WI.
