Federal Tort Reform Is an Awful Idea

Published March 11, 2010

President Barack Obama has larded $50 million into his latest iteration of a health care bill, for grants to the states so they can “study” innovative ways of controlling medical malpractice costs. Please spare us.

Malpractice reform has been studied to death over the past three decades and more. All 50 states have already enacted reform measures of one kind or another. The last thing we need is more study, more meddling by the federal government in state affairs, and more unnecessary federal spending.

But Obama gets credit for understanding how the legal system works, which is more than one can say about the Republicans.

The GOP clamor for “meaningful” federal tort reform in medical malpractice cases is positively deafening—drowning out consideration of what a terrible and perhaps unconstitutional idea it really is. The GOP argues tort reform would substantially reduce health care costs. They’re right—about $185 billion would be saved. But only if reform happens in the states.

Tort reform includes several types of measures affecting malpractice cases. These include caps on noneconomic damages and punitive damages, limits on joint and several liability (in which one defendant is held liable for the malpractice of all defendants in multiparty cases), limits on contingent fees charged by attorneys, required filing of a physician’s certification that a case has merit, and qualifications for expert witnesses.

Federal tort reform would raise hundreds of legal issues of unprecedented complexity. Resolving them would delay damage recoveries in valid cases while the overburdened judicial system struggled to decide each issue individually. The costs of defending malpractice cases would rise, thus hiking malpractice insurance premiums even further. This is the very problem reform is supposed to cure.

This nation has two judicial systems, state and federal. Generally, federal courts hear only federal law claims, and state courts hear only state law claims. Medical malpractice cases arise under state law, which defines what constitutes malpractice. Usually that means when a doctor fails to provide the same treatment a prudent, trained, and experienced doctor in the same community would have provided. Expert testimony establishes the proper treatment for a particular malady.

These cases can be heard only in state court, unless the case involves a plaintiff and a defendant from different states. Such federal cases are extremely rare. There were 1,164 of them brought in 2007, while 85,000 cases were brought in state courts. Even in federal court, state law applies.

Under the language now in the reform bill, lawyers would be able to argue a new federal cause of action has been created for all malpractice cases. This would shift them entirely to federal courts. Federal trial judges already carry about 500 cases a year, and this would add about 100 more to their caseload.

The legal issues raised by this hybrid state/federal system are extremely complicated and would take decades to resolve. First, does Congress have the constitutional authority to enact this bill in the first place? Probably not. The basis invoked is the Commerce Clause, but this clause applies to intrastate commerce only if it involves a commodity with a substantial effect on interstate commerce. Treatment decisions made in a doctor’s office or hospital are not commodities.

And that’s just for starters. Everyone knows lawyers can argue for days about how many angels are on the head of a pin. When it comes to tort reform, the answer is: Too many.

Maureen Martin ([email protected]), an attorney, is senior fellow for legal affairs at The Heartland Institute.