Tort Reform Bill Expected to Change Arkansas? Image

Two years after a Polk County jury awarded what became the state’s punitive damage-cap poster child — a $78 million award against Rich Mountain Nursing and Rehabilitation Center of Mena and two related firms — tort reform has become reality in Arkansas.

The Civil Justice Reform Act of 2003 changed the state’s joint and several liability, caps punitive damages and prevents venue shopping. Lobbyists claimed the law was needed to keep insurance costs from spiraling out of control.

The bill is intended to repair Arkansas’ reputation as a “jackpot justice” state —where sympathetic juries and judges help plaintiffs cash in on companies by awarding punitive damages that often have no relation to actual damages.

The June 2001 Mena case, which included $63 million in punitive damages for the death of 93-year-old Margaretha Sauer, is believed to have marked a sentiment turning point in the public and the Arkansas General Assembly.

But the award pales in comparison to the top eight given nationally last year. Of those cases (See chart), four were related to “breach of contract,” three were for personal injuries and one was an antitrust suit. They totaled $32.5 billion.