Federalism and Tort Reform

The Hill has an interesting article about co-blogger Randy Barnett’s constitutional critique of GOP efforts to impose federally mandated tort reform on the states [HT: Instapundit]:

Opponents of a House medical malpractice bill are trumpeting an attack on the legislation from a prominent conservative lawyer.

Georgetown University law professor Randy Barnett accused the GOP of practicing “fair-weather federalism” on the malpractice bill, which would preempt state laws that conflict with its cap on some jury awards.

Barnett represents the National Federation of Independent Business in its lawsuit challenging the healthcare law’s requirement that most people buy insurance. Opponents of the malpractice bill say those conservative bona fides lend credibility to his criticism.

“I think that’s huge,” said Susan Parnas Frederick of the National Conference of State Legislatures.

NCSL says restrictions on malpractice suits should be left to the states. The House bill would set a limit of $250,000 on noneconomic damages and preempt state laws that have established higher caps. Some state constitutions also block the type of changes the bill would make. They would also be overridden.

“State court is an area for state law, not federal law,” Frederick said.

Although the article mistakenly labels Randy as a “conservative” (he is in fact an even more consistent libertarian than I am), I’m happy to see that his critique is having an impact. Hopefully, at least some Republican conservatives will begin to see that you can’t advocate strict limits on federal power with one hand while trying to impose sweeping federal control over state tort law with the other.

In this post, I explained why federally mandated tort reform is, in most cases, both constitutionally dubious and unnecessary. The better way to restrict abusive tort suits is through interstate competition combined with constraints on states’ ability to regulate conduct outside their borders.

UPDATE: Tort reform advocate Ted Frank responds to this post here. He seems to agree that “the real problem” is that states have sometimes used tort law to regulate conduct outside their borders, but claims that this problem is politically impossible to fix, therefore requiring the federal government to restrict the substance of state tort law. But if it is politically feasible for Congress to restructure state tort law as a whole, surely it can find the political will to take the much less intrusive step of restricting states’ abilities to impose abusive tort law standards on conduct that occurred outside their borders. Similarly, if the problem is bias against out of state defendants, Congress could craft a remedy narrowly targeted at that issue. Indeed, the ability of defendants to “remove” such suits to federal court already constrains in-state bias by state courts.

Finally, it should be reiterated that it is not true that state tort law abuses will run amok indefinitely unless Congress intervenes. As I explained in this post, over the last two decades, numerous states have enacted tort reform laws curbing abusive lawsuits in large part because of the pressure of interstate competition. The reformed states include even such previously notorious tort “hellholes” as Alabama.

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