Subsidizing Bad Behavior: The Injustice of Tort Reform
On April 5, 2010, the community of Montcoal, West Virginia was devastated when an explosion at the Upper Big Branch mine took the lives of 29 men. For the families impacted by this disaster, coping with the unexpected loss of loved ones is only the beginning of what is sure to be a long and arduous quest for justice. Not only does the tragedy of Upper Big Branch demonstrate the inadequacy of regulations alone to protect vulnerable workers and their families, it highlights the vital importance of our nation's civil justice system as a means of compensating victims and punishing those whose reckless conduct harms others.
As news of the explosion at Upper Big Branch unfolded, it wasn't long before details of the mine's troubling history began to surface. According to the New York Times, "the mine had been cited for hundreds of violations over the last year, including many serious ones."
Why then, did the mine continue to operate? The early evidence suggests that the owner was gaming the system to protect its bottom line, putting profits ahead of the safety of its workers.
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In order to avoid steep fines and delay the need for compliance, the Massey Energy Company fostered bureaucratic gridlock by contesting most of the Upper Big Branch mine's safety violations. While regulatory officials at the Mine Safety and Health Administration (MSHA) waded through stacks of appeal documents, hamstrung by weaknesses in the 1977 Mine Safety Act, the mine continued to operate unimpeded. What's more, the mining industry (as with many other regulated industries) has long had a revolving door between the regulators and the regulated. The ranks of the regulators are often filled with folks who come out of the mining industry. Likewise, the industry provides opportunities for advancement for regulators who decide to leave government service. This calls into question the zeal with which some regulators carry out their duties. Does a regulator really want to get tough on the company that might provide him with his next job?
Of course, regulatory regimes do nothing to compensate the victims or their families for the damages they suffer in such catastrophes. The fines that errant corporations pay for violating government regulations go to government, not the victims of those violations. But justice requires that there be a means to ensure that wrongdoers are made to compensate for the harm they inflict on those who suffer as a result of their wrongdoing, and this is where the much maligned civil justice system – better known as the tort system – comes in.
The term "tort" refers to a private or civil wrong. Derived from the medieval Latin word tortum ("wrong"), the root of the word goes back to the ancient Latin verb torquere, which means to twist (compare our modern use of the word "torque"). The tort system is designed to "straighten out" the injustices suffered by the innocent at the hands of wrongdoers by requiring compensation for the harms they have suffered.
But the reach of Big Business extends even to the judicial system, and there is a dangerous move afoot to immunize corporate malefactors from full accountability to their victims. Under the rubric of so-called tort reform, corporate brigands like Massey Energy use their clout in the political arena (derived from generous campaign contributions) to secure the passage of laws that artificially "cap" the amount of damages innocent victims can recover. Caps as low as $250,000 are routinely advocated for "non-economic" damages like pain, suffering, disability, and disfigurement, regardless of how much the victims have suffered. Tort reform means that bureaucrats and special interests far from the scene determine the amount of damages an injured party can recover, rather than a jury drawn from the community where the wrongdoing occurred.
Not content to limit the compensatory damages available to victims of corporate wrongdoing, business interests also seek to limit the recovery of punitive damages as well. Punitive damages are awardable in cases where a wrongdoer engages in intentional or reckless misconduct. Historically, such damages are levied as punishment, with the purpose of deterring similar misconduct by others. In taking into account the amounts to be awarded, juries are permitted to consider such things as the reprehensibility of the misconduct, the vulnerability of the victim, the profit resulting from the misconduct, the financial condition of the wrongdoer, and the extent to which the wrongdoer tried to conceal the wrongdoing. Juries may only punish – they are not permitted to bankrupt – the perpetrators of such misconduct.
But wrongdoers don't like to be held accountable, so business interests – through lobby groups like the U.S. Chamber of Commerce – have launched a full scale assault on the civil justice system, seeking to emasculate the rights of innocent victims and their ability to hold wrongdoers fully accountable. In addition to advocating caps on damages, they try to shorten statutes of limitations, secure immunity from liability, and place other legal hurdles in the path of the victims.
Sadly, this campaign has had great success. And without robust legal mechanisms in place to send a message that it's cheaper to do business the right way than it is to cut corners, businesses like Massey Energy will continue to do things the wrong way, and the innocent and unwitting will continue to suffer the consequences. If tort reform continues to be successful, it is inevitable that more and more communities across America will find themselves, much like the families of Montcoal, West Virginia, at the center of a senseless industrial tragedy.
