Tort Reform
TORT REFORM -- (House of Representatives - April 23, 2007)
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Mr. CLEAVER. Mr. Speaker, I would like to associate myself with the comments of the gentlewoman from West Virginia (Mrs. Capito). I too would like to express sympathy to Ms. Millender-McDonald's family and to the families of those young people whose lives were senselessly taken at Virginia Tech.
The issue surfaces from time to time that there is a desperate need for us to do something major legislatively for tort reform, that these greedy trial lawyers are out damaging if not destroying the Nation, running people out of the medical profession, creating economic problems for oil companies. I take a different view of that. Obviously, there are inappropriate lawsuits, and I think the courts usually deal with those.
But trial lawyers work to provide somewhat of a level playing field for most Americans, small Americans, so they can hold even the most powerful corporations accountable for their actions when they cause injury or death.
Today drug companies and oil companies, big insurance companies and large corporations too often dominate our political process and they begin to ask legislators to restrict access to the courts. When corporations and CEOs act irresponsibly by refusing or delaying to pay insurance claims, producing unsafe products, polluting our environment or swindling their employees or shareholders, the last resort for Americans, and this is our system, is to hold them accountable in our courts of law. By holding them accountable, trial lawyers and their families are able to feel that this is a safer America.
From automobile fuel tanks that explode in rear-end collisions to bulletproof vests that fail to stop bullets aimed at police officers, we have to realize that there must be some corporation, some individual held accountable. And these cases that I mentioned earlier were actual cases and they brought to light deceptive practices and cover-ups by manufacturers that resulted in serious injury and even death.
The civil justice system helps provide compensation to those that are injured and helps prevent other needless injury from occurring.
I will now yield to the gentlewoman from West Virginia (Mrs. Capito).
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Mr. CLEAVER. I think there are perhaps some legitimate concerns by small business owners, but I don't think that the trouble is with the litigation. I think the problem is with insurance companies. Now, the gentlewoman and I both serve on the Financial Services Committee; and one of the concerns we have been grappling with, particularly in the aftermath of Hurricanes Katrina and Rita on the gulf coast, is that insurance companies that are not regulated by the United States Federal Government from time to time are the culprits, and I will get back to that in just a minute. But I wanted to say that the tort filings in State courts have declined by 10 percent since 1994. And automobile filings which make up the majority of tort claims have fallen 14 percent.
So what you are finding is that more and more cases are not finding their way into the courts. But what troubles me and I think will trouble Americans when they find out more about it is the fact that the insurance companies end up really being the beneficiaries in the debate that occurs from time to time in this country on the subject of tort reform. The reason I say that is that there was a study done that showed that even in States where tort reform occurred, insurance premiums never dropped, and in some instances they actually increased.
So we have a problem with the small businesses that I agree exists, but I am suggesting that one of the ways in which we deal with this problem is not trying to restrict the courts from dealing with the claims that people bring before them, but rather for the insurance companies.
Let me give one example, Mr. Speaker. A month after passing malpractice caps, South Carolina's two largest insurers increased rates by as much as 22 percent after increasing their rates by 27 percent the year before.
And after Texas passed rate caps in 2003, the Joint Underwriters Association requested a 35 percent premium increase for physicians and 68 percent for hospitals. This is after tort reform, after things were supposed to have been reformed so that people are protected. So the winner ends up being the insurance companies.
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Mr. CLEAVER. I think, to some degree, that helps my position, not with West Virginia because I am not familiar with West Virginia, but you are absolutely right about my home State of Missouri. But it all relates back to my earlier comments about insurance companies.
A national study conducted in 2005 by former Missouri Insurance Commissioner Jay Angoff found that insurance companies have been price-gouging doctors by dramatically and drastically raising their insurance premiums, even though claims for payments have been flat or decreasing. According to the annual statements of 15 large insurance companies, the 15th largest in fact, the amount malpractice insurers collected in premiums increased by 120.2 percent between 2000 and 2004, while claim payouts rose by only 5.7 percent.
I think if you look at the report from Jay Angoff from the Missouri Insurance Commission, you find that clearly the insurance companies are the ones doing enormous damage to this country.
The other issue is that I think the insurance companies have gouged so much that many of the people in the country, probably even in my home State, operate under the assumption that malpractice costs run physicians away from their profession.
The truth of the matter is that, according to the American Medical Association, the number of physicians in the United States of America increased by 40 percent since 1990, 40 percent. And so more and more men and women are going into the profession, even as the insurance companies are creating this crisis, and they are the ones that seem to be held harmless. They are rarely the center of the debate. It is usually the lawyers and the physicians.
I take the position that neither of them are actually the villains here. It is the insurance companies that continue to increase the rates. They pay out less money in the payments and then they are getting fatter and fatter.
One last comment on this. According to the Bush administration's Justice Department, if I can find their study, the Justice Department actually says that we are dropping in the number of cases that are being brought forward in the courts, and so I think what we end up doing, I think, is fighting a ghost, because the insurance companies have become ghostly in that they can become invisible during the debate because they do not have to get in it because they have not been portrayed as either the victim or the villain. So I would suggest that our positions may not be dramatically different except that I see the problem more in the hands of the insurance companies.
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Mr. CLEAVER. The gentlewoman from West Virginia makes a good point. I do, however, think that this may cause her to join me. That is, according to the Bush administration, this is what I was looking for earlier, this is from the Justice Department of the Bush administration, their researchers found that the median inflated adjusted award in 2001 was just $28,000. And most of the discussion, you hear people talking about, millions, maybe even billions, but the average median inflated adjusted award in 2001 was $28,000. And even in medical malpractice cases in which the injuries tend to be far, far more serious than the average torte case, the median award was only $170,000, which is far from the multibillion dollar lottery torte reformers have often brought before us.
The other issue that I would like to bring forth is that, according to the Congressional Budget Office, malpractice costs amount to less than 2 percent of the overall medical cost. And so when we start talking about the cost of medicine and how it is skyrocketing, and it is, but when you think about the fact that the cost for malpractice or the cost for the insurance, which supercedes the cost really paid out, it accounts for only 2 percent of the overall medical costs in the United States, which is Herculean; but 2 percent is almost nonexistent.
And I think what has happened is that we have created a mountain out of a mole hill. That is not to say that there are not problems, but judges will quite often tell a lawyer that the case submitted is simply frivolous, and that case will never come to court, and then of course summary judgments can also prevent cases from ever coming to court. So judges have the option of looking at a case and deciding whether or not it is worthy of taking up the time and resources of the court.
And then the other part of it is that in an overwhelming majority of these cases, the amount or the award of the judgment is set by a jury, which are everyday people. And this is not to say that there should not be something done. I just think putting artificial caps would be the wrong thing to do. And that is generally one of the proposals that comes up. I'm not sure if the gentlewoman from West Virginia is supporting caps or not, but I think that if that is one of the solutions, I think a one-size-fits-all kind of solution is unfair to people who may suffer a very, very debilitating injury in the same category of someone who has a fender bender.
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Mr. CLEAVER. The meritless cases, however, rarely ever win in the first place. I was offended when I first heard that somebody sued McDonald's because they ordered a cup of hot coffee and were burned by the hot coffee that they ordered. I was offended by that as well, and I think most Americans are. But in reality, the meritless cases rarely ever win in the first place, and that is contrary to the allegations that generally come forth, particularly from the major corporations.
They would have us believe that the frivolous lawsuits are just automatically finding their way to the courtroom and that they are meritless, but they win. And the truth of the matter is that our intricate system, with the law and juries and judges and even independent reviewers, will pretty much weed out the frivolous lawsuits. And they are filed to no one's benefit, except a lawyer, who I think we can find one in any profession who is going to try to take advantage of their system. And it has nothing to do with having gone to law school. It has something to do with human nature.
But I think that the way that this whole issue has been played out ends up actually protecting the one entity that I think is the most culpable, and that is the insurance companies that are not regulated.
ANNOUNCEMENT BY THE SPEAKER PRO TEMPORE
The SPEAKER pro tempore. There being no Republican hour at this time,
the gentleman from Missouri is recognized for the remainder of the hour.
Mr. CLEAVER. I would yield to the gentlelady from West Virginia for closing remarks on the debate with regard to torte reform, and then I think we would like to express some concerns about civility, Mr. Speaker.
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Mr. CLEAVER. Mr. Speaker, there are people all around this country who look at C-SPAN on a daily basis and who look listen to radio talk shows, look at television news programs, and they see Members of Congress, both House and Senate, screaming at each other. They see from time to time the animated debates that take place on these shows, and even here in this great hall.
Many, many great patriots have stepped into the well of the House of Representatives to wax eloquent, because this is the place where the great orators stood and presented their cases to each other and to the American public. But in the past decade or so, we have seen a dramatic drop in the civility exercised by Members of this body, and we have seen it from both sides of the aisle.
Let me share something with you that I read the other day by William Penn, the founder of Pennsylvania. He said this: ``I know of no religion that destroys courtesy, civility or kindness.'' That is the kind of statement that the Members of this great body ought to keep in mind when we step into the well.
I came to Washington and to the Congress with this desire in my heart, to do what I could to make this a more civil place. With the intensity and intention of debate, sometimes it is difficult to restrain ourselves. But restraint is something that we can do and feel better about having done it on the morrow. It is delayed satisfaction. We might get some immediate joy from being nasty, but the greater joy is restraint and receiving greater joy later, that you actually had the discipline to control your tongue.
I have opinions that are very, very strong. I feel strong about tort reform, not because I am an attorney. I have four children. None of them are attorneys. But I personally feel strongly about it because of some personal things that happened in my own family that could have gone to court, that we did not take to court for a lot of reasons. One of the things that we felt strongly about was our own integrity, so we didn't go to court.
But my challenge is to state whatever strong feelings I have in a tone that raises the level of the conversation and honors those who disagree with me.
When you look at the roots of the word ``civility,'' to be civil is to be a citizen, a respected part of the community. So to be uncivil is to fracture the community, locally, nationally and internationally, and that is something that none of us can afford to do.
Not long ago President Gerald Ford died, and I was reminded of a story of his days here in this House. He held regular debates here in Washington with his Democratic counterpart Congressman Thomas Hale Boggs. They would debate at the National Press Club. At Congressman Gerald Ford's suggestion, they would ride over from the Capitol to the National Press Club and agree on the topic of the debate. Can you imagine that happening in 2007? Then, after the debate, they would go out and have lunch.
Mr. Speaker, that is the kind of House I think we need to demand as a part of what takes place in this city called Washington, D.C. I hope, I even pray, that the men and women of this great body will learn to exercise restraint, because what we do and say here in this hallowed place actually reverberates and ends up traveling all across the length and breadth of this Nation, and the words we say will impact the people around this country.
I say again, there are few Members of this Congress, if any, who would say to their children, watch C-SPAN and watch the leaders of this Nation debate, so that they can show you how to act around people with whom you have a disagreement.
We can do better, and I think we will. I believe that because Mrs. Capito is interested in doing this, the road towards civility is now under construction, and I enjoy serving with the gentlelady from West Virginia.
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