LITTLE ROCK — The business community criticized and trial lawyers praised a state Supreme Court ruling Thursday that overturned Arkansas’ tort reform law. The high court, in a unanimous decision, struck down the 2003 Civil Justice Reform Act, which limits punitive damages in civil cases to $1 million. The court said the law conflicts with Amendment 26, which it gives the Legislature the power to enact measures to prescribe the amount of compensation to be paid employees for injury or death.
The tort reform law is unconstitutional under Amendment 26 because it “limits the amount of recovery outside the employment relationship,” the court said in the opinion written by Justice Courtney Goodson.
The Legislature passed the law after a jury awarded a $78 million judgment against a Mena nursing home in a resident’s death. The state Supreme Court reduced the award to $26 million in May 2003.
The ruling Thursday affirmed a Lonoke County judge’s $48 million judgment against Bayer CropScience in a lawsuit brought by rice farmers who claimed their crops were tainted by genetically modified rice the company produced.
Proponents of the tort reform law said Thursday’s ruling was a setback for economic development as well as a blow to the Legislature’s authority to execute the will of the people.
Independent reporting for Pine Bluff & Jefferson County since 1879.
Randy Zook, president and CEO of the State Chamber of Commerce/Associated Industries of Arkansas, described the ruling as roadblock to job-creation.
“The cost of this ruling will be significant,” Zook said, adding that the state chamber worked with a number of groups and lawmakers to get the legislation passed.
Kenneth Hall, executive vice president of the state chamber, said he expects the issue to be addressed in the 2013 session.
“I think it’s reasonable to think that we will be looking at something along civil justice reform for the 2013 session,” Hall said.
Former state Sen. Bob Johnson of Bigelow, who sponsored the tort reform legislation in the Senate and ushered it to a 34-1 vote in the chamber, suggested that a future Legislature might be able to develop a tort reform measure that protects business people while allowing aggrieved plaintiffs to recoup their losses and misbehaving companies or groups to be punished.
Sen. Gilbert Baker, R-Conway, a co-sponsor of the 2003 legislation, said he was “shocked and dismayed” by the Supreme Court’s ruling Thursday and that it “undermined the process by which Arkansas citizens govern themselves.”
The ruling “severely limits the Legislature’s authority to carry out the wishes of the majority of Arkansans who understand the wisdom of tort reform,” Baker said in a release, noting the measure passed the Senate 34-1 and the House 71-28.
“The democratic process is the major casualty in this legal ruling,” he said.
Nathan Pittman, director of public affairs for the Arkansas Trial Lawyers Association, described the high court’s decision as “a good day for the people of Arkansas.”
“The spirit of our constitution, and that means the spirit to which our founding fathers created our civil justice system, was made in a way to hold wrongdoers accountable regardless of how big or powerful those corporations are,” Pittman said.
“Punitive damages are handed down by a jury as a method of punishing offenders for their actions,” he said. “They serve as a deterrent for not only that party but for others that may prey on consumers.”
Attorney General Dustin McDaniel declined comment on the Supreme Court ruling. The attorney general’s office, which generally defends the state against challenges to legislative acts, did not present oral arguments in the case that produced Thursday’s ruling.
Matt DeCample, spokesman for Gov. Mike Beebe, said the governor’s office is reviewing the ruling and declined comment.