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Wall Street Journal

 

Lawsuit Reform in Washington

December 24, 2005

By Walter Olson

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When government leaves us exposed to criminal violence, do we have a right to sue it for damages? The law's traditional answer (roughly speaking) has been "not unless a legislature says so" -- an answer confirmed by the U.S. Supreme Court in 1989's DeShaney v. Winnebago County Department of Social Services, which arose after a county failed to protect a boy from his brutal father.

The opinion drew a famously emotive dissent ("Poor Joshua!") from the late Justice Harry Blackmun, accusing the majority of a "formalistic" distancing of itself from "natural sympathy" in refusing to recognize a right to sue. DeShaney -- and this summer's related case of Castle Rock v. Gonzales -- were decided on somewhat technical constitutional grounds. Yet lurking in the background is a policy question about how much deference ought to be given to the old principle of governmental or sovereign immunity.

What would life be like had Blackmun's view prevailed in DeShaney? Consider Washington state, whose courts have opened the door more widely than any other to failure-to-protect lawsuits. The result: a series of costly verdicts and settlements disrupting state budget and operations, and touching off a public uproar across party lines. Now freshman GOP Attorney General Rob McKenna is readying a bill that would roll back public liability to a level more like that prevailing elsewhere.

Many popular accounts misleadingly describe sovereign immunity as rooted in a hoary monarchical precept that "the King can do no wrong." In fact all sorts of nations have embraced the immunity principle over the centuries. It reflects in part a recognition that taxpayers too count as an innocent party, and that their representatives deserve a say regarding the measure of burdens heaped on them. As Prof. Greg Sisk of the University of St. Thomas School of Law has noted, immunity "may be appreciated as but a species of separation of powers, under which the courts defer to the elected political branches of government" on purse and policy.

Nonetheless, sovereign immunity by the 1950s was deeply unpopular in progressive legal circles, and by the 1960s and 1970s both legislatures and (more controversially) courts nationwide were revamping the old rules to make it easier to sue. More fairness, better spreading of the risks of injuries, more accountability in high places: Such were the promises.

Part of this revolution is widely accepted, namely taxpayer liability over routine mishaps analogous to those in the private sector. Nearly every state accepts liability for crashes of public delivery vehicles or slip-falls in office buildings. But most carefully limit their exposure, usually capping the damages payable and sometimes steering the cases into special courts or claims panels without juries. And most states refuse to accept liability for injuries arising from distinctively governmental ("discretionary/policy-making") functions. Most, for example, do not consent to expose themselves to suits after a doctor improvidently licensed by their medical board harms patients, or after a short-staffed inspection bureau fails to notice a hazardous condition at a regulated business.

In the mid-1970s, however, Washington state courts began giving a green light to suits that would have failed in most other places -- over family violence that state social workers might have prevented, for example, and above all, over negligent supervision of parolees who commit further crimes. Payouts began to rise, from a few hundred thousand dollars a year to tens of millions today, with annual defense costs alone amounting to $15 million. (The state employs 50 defense attorneys.)

Although its high court has backtracked a bit, Attorney General McKenna says Washington is still "the most exposed state in the country." With colleague Michael Tardif, Mr. McKenna has published an analysis of public liability in the Seattle University Law Review. Among its findings: The great bulk of growth in payouts arises from novel rather than traditional areas of liability, specifically from cases involving criminal misdeeds that the state is sued for failing to prevent.

Some examples: $8.8 million paid to a woman abused by her husband, who was receiving checks from the state to take care of her; $6 million after a parolee killed a teenage girl; $4 million after a toddler was injured in a day-care facility whose license the state allegedly should have revoked. In the latest high-profile case, a paroled, first-time assault offender stole a car and fatally crashed it into the vehicle of a Tacoma woman. While the state high court in September ordered a retrial of the $22.4 million verdict, it reaffirmed the broad principle that left the state liable.

Trial lawyers say such decisions create an incentive for the state to be more careful in its handling of dodgy parolees, bad parents and other miscreants. But what does "careful" mean? Jumping in earlier to yank kids out of families? Keeping offenders locked up unless their chance of recidivism equals zero? Loading regulatory burdens onto licensed day care at the risk of encouraging the unlicensed kind?

Maybe there's some plausibility to the view that big businesses precisely adjust their behavior to reflect the expected outcomes of the litigation system. But friends and foes alike seem to agree that state agencies ignore the policy signals sent by many of the large payouts, whether because they disagree with those signals or because they view them as incoherent.

What to do? One possibility would be to adopt limits on payouts per case, as other states have done, but that would require overcoming the united opposition of trial lawyers, a key lobby in Olympia. "It's always interesting to watch a trial attorney when you say caps," former Sen. Betti Sheldon (D., Bremerton) told the Tacoma News-Tribune. "They lift right out of their chair."

Instead of caps, Attorney General McKenna favors revising the law so that the state no longer would pay for the wrongdoing of third parties unless its acts were a direct cause of the injury. Since third-party crime cases appear to dominate the docket as a financial matter, which might end the state's budgetary plight right there.

With all respect to the late Justice Blackmun: It's a good thing this experiment was confined to one state, and not imposed on all 50.

Original Source: http://www.manhattan-institute.org/html/_wsj-lawsuit_reform.htm

 

 
 
 

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