If tort-reform bills now before state legislators had been laws two years ago, Lindy Orlowski would be out about $60,000.
In 2004, Orlowski was in a car that was t-boned at an intersection in South Milwaukee, leaving her with a torn rotator cuff. Surgery to her shoulder and months of therapy followed.
Her medical bills totaled $72,985.94. Her medical insurer, United Healthcare, then negotiated those bills down and paid $11,498.55.
But Orlowski still won the original $72,985.94 through a lawsuit against her auto insurer, State Farm Mutual Auto Insurance Co. She then paid back United Healthcare for the actual amount of the bills.
That should not have happened, according to proponents of state tort reform. They have proposed four bills, one that would have reduced the money Orlowski received, a second that caps contingency fees for attorneys working for the state, a third that changes compensation for asbestos and other personal-injury victims, and a fourth that sets restrictions on apologies from health care providers.
In cases such as Orlowski’s, tort-reform proponents say, the winnings are phantom damages and should be reduced to the amount the insurer actually pays.
Insurance consumers eventually pay, through increased premiums, the difference between the original and actual costs, said Arthur Simpson, a lawyer at Milwaukee’s Simpson & Deardorff SC.
“You are paying more for liability insurance to cover this so-called benefit,” he said, “so I can make a big profit if I have a personal-injury claim.”
But lawyer Keith Stachowiak, of Murphy & Practhauser SC, who represented Orlowski in her case against State Farm, said she deserved the higher amount because she invested in good insurance, which resulted in the discounted bills.
“I have paid twenty-grand a year in health insurance premiums,” he argued for Orlowski, “and that’s why I’m getting those discounts.”
Those competing interests are at the heart of the tort-reform proposals.
Backing them, explicitly or implicitly, are a slew of national groups, including the U.S. Chamber of Commerce, the American Tort Reform Association and the American Legislative Exchange Council, which drafts pro-business model legislation that it encourages states to adopt.
State Rep. Andre Jacque, R-De Pere, this session introduced Assembly Bill 29, which seeks to limit payouts such as that which went to Orlowski. The bill would allow the admission of evidence showing so-called collateral-source payments a personal-injury victim receives from sources other than the defendant in a case. In Orlowski’s case, the collateral-source payment was the amount covered by her medical insurance.
Jacque also is the author of Assembly Bill 19, which would attempt to prevent plaintiffs from “double dipping” into trusts used to compensate asbestos and other personal-injury victims.
He said he was inspired to take action, in part, after reading about frivolous lawsuits in Reader’s Digest.
But critics of the proposals, such as Jeff Pitman, of Pitman Kyle Sicula and Dentice sc, president of the Wisconsin Association for Justice, say such tort-reform measures are taking rights away from people.
“If you are not a corporation,” Pitman said, “they are not passing laws to help you. They are taking away people’s rights to compensation. They are limiting compensation. Everything is one-sided.”
It’s a concern, he said, that’s increasing as more tort reform measures are introduced.
“I’ve seen more tort reform-type bills in the past 2 1/2 years,” Pitman said, “than we did in the last 20-plus.”
Gov. Scott Walker started the ball rolling by making a sweeping tort-reform proposal the first bill he requested be introduced in a special legislative session in early 2011, shortly after he took office. The resulting 2011 Wisconsin Act 2 won immediate praise from pro-business groups such as the American Coatings Association, which in a March 2012 press release proclaimed “Wisconsin has taken the lead in the tort reform sphere.”
Jacque said he has not heard one constituent complain about the effects of Act 2, which prevents plaintiffs who cannot prove they directly were harmed by a product from collecting reimbursement from the maker of that product. The act also tightens the standards governing who can provide expert testimony, among other things.
But concerns have come from other quarters, particularly about an Act 2 provision barring the use of health investigation records in civil suits filed against nursing homes, hospices and other providers of long-term medical care.
In response to the legislation, a group of Democratic lawmakers in October 2011 introduced a bill called the Senior Citizen Protection Act, which was meant to roll back some of the tort reforms that were deemed particularly harmful to the elderly. That proposal was turned down in early 2012 on a 60-36 vote.
Jacque said he and his fellow Republicans are trying to correct some of the flaws that long have tilted Wisconsin’s legal system against business. And now is the time to pursue those ends, he said, with members of his party controlling both houses of the Legislature and the governor’s office.
“The only time when tort-reform measures are likely to have an opportunity to be heard,” he said, “is when Republicans have a say in the process.”
But some of those measures, said Milwaukee lawyer Daniel Rottier, of Habush Habush and Rottier SC, are solutions in search of a problem.
Two of the bills, Assembly Bill 27 and Senate Bill 19, would place a $30 million cap on the contingency fees lawyers can collect from the state, even though bill proponents have cited only one Wisconsin contingency-fee case: the legal battle against big tobacco companies in the 1990s.
Rottier, who worked on the tobacco case, said it’s obvious what the proposals are really about: winning political points.
“[Legislators] get a gold star if they submit an ALEC bill,” he said. “They can say they pushed back against plaintiffs lawyers. It doesn’t matter that there is no problem.”
But Jacque argued against waiting until problems emerge.
“If this is really not happening or being abused now,” he said, “then what’s the harm in trying to establish higher standards?”
Pitman said legislators should tread carefully, however.
“I think, generally speaking, once these things are in place, they are difficult to repeal,” he said.
And with the recent redrawing of state legislative districts to favor Republicans, Pitman said, “there is going to be this continuing assault on the rights of the common person.”
For Orlowski, the larger payout she received has made a real difference. Though a lot of the money went to taxes and paying her attorneys, she said, she also used some to renovate the upper story of her house, which she and her husband rent to a tenant.
Since her accident, Orlowski, 58, said she has undergone a triple-bypass operation and suffered a stroke, which she blamed on the stress she was under from being treated for her initial injuries and from the related legal wrangling.
Although she said she wishes she had saved some of the winnings to fix her roof, she is grateful for what she got. She laughed as she remembered the first thing the driver who hit her had said to her at the crash scene.
“He jumped out of the car,” Orlowski said, “and said, ‘I hope you have good insurance.’”