Arkansas Senate approves tort reform referendum, resolution now goes to House

As a dozens of interested parties gathered in the gallery and around the Senate chamber, tort reform supporters got just enough votes on Thursday (Feb. 16) to put a proposed constitutional amendment before Arkansas voters that would revamp how damages are awarded in lawsuits and give the Legislature authority to set rules for all courts.

The proposal must now survive a vote in the Arkansas House.

In a spirited 90-minute floor debate that delved into separation of powers, discussed the pros and cons of caps on punitive awards, and revisited a similar tort reform discussion in the early 2000’s, the Senate approved Senate Joint Resolution 8 by Sen. Missy Irvin, R-Mountain View, in a 21-10 vote with little margin for error.

Irvin began the debate by calling SJR8 an economic development tool, saying that the resolution would create a “level playing field” for Arkansas citizens by limiting attorney contingency fees in civil actions, placing a regional cap on punitive and so-called “noneconomic damages,” and giving the Legislature the power to write the rules and practices for state courts.

The Republican senator added that if SJR8 is enacted into law, Arkansas’ civil justice system would revert back to the time before voters approved Amendment 80 to the Constitution in 2000. In 2012, the Arkansas Supreme Court tossed out a part of the 2003 law that specified who would be considered an expert in medical malpractice cases.

“I think it is absolutely critical that we look at what we can do in civil justice reform to complete that process and complete our policy,” Irvin said. “This is part of that puzzle that we need to have in place something to make Arkansas competitive with other states around us.”

‘NOT OVER BY ANY MEANS’
Following Irvin’s testimony, Senate lawmakers spent the next hour going back and forth on the merits of the proposed ballot item. One of the most colorful speeches came from Democrat lawmaker Sen. Will Bond of Little Rock, who was part of the legislature in 2003 when lawmakers approved in Act 649 that capped punitive damages at $1 million and limited awards in medical malpractice cases to the amounts actually billed.

“This talk going about to 2003 is the most misleading statement ever. Totally incorrect, totally inaccurate,” said Bond, an attorney. “In 2003, there was not a cap on attorney’s fees and non-economic damages and there wasn’t a wholesale takeover of the judicial branch of government.”

Sen. Eddie Joe Williams, R-Cabot, countered Bond’s lively speech with a story about his daughter getting caught up in a frivolous insurance lawsuit following a car accident in Northeast Arkansas.

“That’s the environment we are in. We can talk about hypotheticals and about things that might happen — but this happened to me,” Williams said. “We need an environment where that is very difficult to do.”

William closed by asking his fellow senators to let Arkansas voters decide if tort reform is needed, but also took a swipe at the opponents of the bill.

“If we change the law to the chicken house – who’s going to complain, the chicken or the fox?” he said.

After the Senate body approved the resolution, dozens of onlookers streamed out of the galleries and milled around the chamber to attempt to talk with lawmakers after the vote. Randy Zook, president and CEO of the State Chamber of Commerce, which created a nonprofit group in 2014 to focus on grassroots efforts to get a tort reform measure on the ballot, said he was encouraged by the efforts to get Senate approval but still was cautious about celebrating a victory now.

“We got a lot of work to do on the other end of the building,” Zook said. “There was really a lot of good points made in the debate and we have some facts to respond to some of the comments … and make them clearer. It’s a long run. It is not over by any means.”

HUTCHINSON SEEKS ‘SAFETY VALVES’
In an earlier press conference at the other end of the State Capitol during the Senate debate, Gov. Asa Hutchinson, an attorney, said he has always backed a tort reform package.

“I have been supportive of some of the authority being returned to the Legislature in terms of the ability to set reasonable caps on punitive damages or … noncompensatory damages, but I’ve also had some criteria that there needs to be some safety valves in place, needs to be a proper balance there,” he said.

Hutchinson said he planned to meet with both sides after the Senate vote and would continue to evaluate the proposed constitutional amendment. He said he had concerns about the current draft, including language that the courts would have to get legislative approval for rule changes on the size of paper for pleadings and the time the Supreme Court opens.

“Whenever you have an egregious case of damage that the average person would call for a significant remuneration in terms of pain and suffering, there needs to be an ability to bypass or have a heavier burden of proof but not to be held to that $250,000 cap,” the governor said. “I’m supportive of tort reform in general and hope a proposal can get to the people for a decision.”

In a hearing before the Senate State Agencies and Government Affairs Committee earlier this week, Arkansas Chief Justice Dan Kemp and the state Bar Association objected to certain parts of the proposal to put the tort reform referendum before Arkansas voters. The Arkansas Trial Lawyers Association has also spoken against the ballot issue.

During the Senate committee hearing, Judge Kemp told lawmakers he was only concerned about the part of the resolution called Section 3, which dealt with the rulemaking authority of the judicial branch.

“Section 3 of SJR 8 destroys the delicate balance which our state constitution has provided for the separation of powers within state government,” Kemp said.

Still, the Senate chose to recommend SJR8 over eight other amendments for the full Senate to consider. If approved by the House, it would be presented to the voters in the fall 2018 election.

To date, 31 proposed amendments have been filed by House and Senate lawmakers. The Arkansas Constitution gives the Legislature the ability to refer three proposed amendments, but under rules adopted this year, the House and Senate each will originate one, with a third possible with a two-thirds vote of both chambers.