BY GARY PERILLOUX

Daily Journal

Alabama thought it had tort reform in 1987.

But real change didn't occur until 1999, when the state was courting Honda, the second of four major automakers to move to Alabama in the last decade. The Alabama Legislature passed 10 tort reform bills in 1987, but the legislation couldn't overcome another hurdle.

"We had a hostile (state) Supreme Court and they tossed the reforms out almost immediately," said Matt McDonald, general counsel to the Business Council of Alabama. That group compares to a combined Mississippi Manufacturers Association and Mississippi Economic Council.

"So we said you really can't reform the tort system until you reform the court. Because if you don't have courts that permit some reason to be brought into the system, they're just going to throw your reforms out."

In 1999, the state capped punitive damages and real change began to occur, McDonald said.

In Louisiana, policymakers tackled a medical malpractice crisis a quarter-century ago with a compensation fund married to caps on noneconomic damages. Both states' changes could have application to tort reform proposals being scrutinized by the Mississippi Legislature.

Alabama's experience

McDonald believes Alabama's system is improved but still needs work.

"I think they've been extremely helpful for the membership of our coalition that fought for tort reform," he said. "Not only their amount of litigation has fallen, but their exposure to litigation they're still involved in is much more predictable and manageable. And there's not a sky-is-the-limit kind of problem anymore."

The biggest reform came in the judicial arena, he said.

"I would say, though, that the situation with the Alabama Supreme Court is as critical if not more so than the enactment of tort reform," McDonald said. "So when we came back in Alabama (after the 1987 defeat), the business community and people that were interested in improving the system elected some fair and balanced and reasonable justices to the Alabama Supreme Court.

"And then we passed tort reform."

"(Alabama has) a Supreme Court that respects the Legislature's right to enact tort reform and has shown some restraint in its interpretation of the law," said Mike Hotra of the American Tort Reform Association, formed in 1986 by the American Consulting Engineers Council and the American Medical Association. "It has reversed egregious trial court decisions. So you've had some legislative tort reform and some court reform. Those two things have cleaned up Alabama and I think we would support both in Mississippi."

Numerous calls seeking comment from Alabama Trial Lawyers Association members weren't answered for this story.

Louisiana's cure

Dr. Donald Palmisano is president-elect of the American Medical Association and a professor of surgery and law at Tulane University in New Orleans.

Monroe, La., ophthalmologist John Cooksey - now a Louisiana congressman - was the architect of Louisiana's Medical Malpractice Act in 1975 and Palmisano joined him.

"At that time, the hospitals were unable to buy insurance at any price or they were offered a million dollars coverage for a million dollars," Palmisano said. "So we were able to show it was an access problem for patients and vital services could be jeopardized."

The Louisiana Legislature held hearings throughout the summer and through the haze of political confusion focused on a conclusion that a serious problem existed.

"The Legislature found there was a problem and it needed to be fixed," Palmisano said. "And to their credit, they were way ahead of their time."

Meanwhile, Palmisano and the AMA are fighting the tort reform battle on the national front, touting California's medical malpractice reforms that include limits of $250,000 on noneconomic damages such as pain and suffering. If a state allows punitive damages, those damages would be capped at twice economic damages or up to $250,000. The bill is House Resolution 4600.

"We really need a national law to help states that have been unable to pass effective legislation," said Palmisano, who added that Mississippi is one of 12 states deemed to be in crisis by the AMA. "Because it's too important for the health of our patients."

Attorneys have questioned the effectiveness of California's medical tort reform act, saying medical malpractice insurance rates have risen with the rest of the nation.

While medical insurance rates in California have risen, the rate has been slower than elsewhere. And the American Tort Reform Association's Hotra said that spells success.

"From 1976 through 1999, medical liability rates nationally increased 420 percent," he said. "In California, they increased 168 percent. (They've) created predictability in the risk market and they have maintained an environment in which patients are treated well and safely."