Bringing Common Sense To Our Legal System
Why? Because numerous state laws explicitly encourage litigation when other means of dispute resolution would be quicker and more cost effective; poorly drafted statutes invite endless lawsuits over their interpretation; and antiquated policies limit the ability of our state to improve its legal climate.
Below is a list of common sense reform measures that would ensure New Jersey’s legal system is well-positioned for the future.
More Sensible Consumer Protection Laws
Rather than incentivizing legal shakedowns, our consumer protection laws should be doing what their name suggests – protecting consumers. New Jersey’s Consumer Fraud Act (“NJCFA”) encourages litigation even when there is no actual harm against consumers. There are numerous instances of frivolous litigation brought under the NJCFA.
Notably, NJCJI developed and implemented a multi-year strategy to stop shakedown class action lawsuits under the New Jersey Truth-In-Consumer Contract, Warranty and Notice Act (“TCCWNA”). This law was used by plaintiffs’ lawyers for over a decade to extract hundreds of millions of settlement dollars from businesses that caused no harm and had no intention to deceive consumers. NJCJI’s advocacy before New Jersey’s Appellate Division and Supreme Court succeeded in largely eliminating class action liability under this law.
Class Action Reform
“If you bought a Subway Six Inch or Footlong Sandwich between January 1, 2003 and October 2, 2015 your rights could be affected by a lawsuit.” This ominous message from a class action claims website is intended to alert sandwich-eaters everywhere that our long national nightmare is over, the Subway “Footlong” lawsuit has been settled.
So, what does the sandwich-loving public get from this litigation? Money? Free sandwiches for life?
The named plaintiffs get $500 a piece, the attorneys get $525,000, but all the other Joe Schmoe plaintiffs only get assurances that Subway will improve its quality control program. This is a rather underwhelming reward considering Subway already weighs all the dough before it bakes it, so even if your bread is 11 inches long, you still get the same amount of bread as the 12 inch folks, it’s just thicker. You also get the same amount of toppings since that is standardized by Subway.
The courts should step up their gatekeeping role and bring greater scrutiny to class action cases and settlements. Class actions are supposed to help the plaintiffs recover losses, not merely compensate enterprising attorneys.
An Appealing Policy Change
Did you know New Jersey is one of only eleven states where the court system is required to give tobacco companies a benefit that other defendants are denied? It’s true. As part of the Master Settlement Agreement reached in 1998, the New Jersey Legislature agreed to put a cap on the amount of money tobacco companies must post as bond in order to appeal adverse verdicts in exchange for money and other concessions from the five tobacco companies involved in the litigation. To this day, tobacco companies are the only defendants in New Jersey that get the benefit of an appeal bond cap.
It is time for New Jersey to recognize that in today’s world of high-dollar verdicts, tobacco companies are not the only litigants who might want to appeal a big case. Our state should adopt an appeal bond cap for all defendants. Giving all companies the ability to appeal big verdicts against them without mortgaging their future or declaring bankruptcy is good legal policy. Like plaintiffs, defendants should have their day in court; and appeal bond caps allow that to happen.
Establish Firm Statutes of Limitations
Do you remember what you had for lunch yesterday? How about 2 weeks ago? How about 10 years ago? Even if you do remember, do you think you could come up with evidence – like witnesses or receipts – to back up your story, or do we just have to take your word for it?
The task of proving or defending any type of claim becomes more difficult as time passes. Witnesses become difficult to locate or pass away, records are lost or discarded, and memories fade. The ordinary “he-said-she-said” of litigation can turn into a one-sided allegation by a plaintiff that an event happened because the person says it happened, while the defendant lacks the ability to appear or muster facts that might disprove the allegation.
The New Jersey Civil Justice Institute supports strong statutes of limitations for all types of claims to ensure that defendants are not denied due process simply because time has passed and mounting a defense is impossible.
Stop Regulating Business One Jury at a Time
When the only tool you have is a hammer, a lot of your problems start looking like nails. Reading through many of the bills that have been proposed to address employment and consumer issues over the past few legislative sessions, you might think the only tool the legislature has for bringing bad actors into line is the hammer of litigation. Litigation is a powerful tool, but it is not the only way, or even the best way, to solve every problem.
The New Jersey Civil Justice Institute opposes legislation that seeks to regulate business one jury at a time rather than relying on other, more uniform and predictable enforcement mechanisms. In many situations, the parties involved could obtain justice far more efficiently via an administrative remedy with a schedule of fines without incurring the added expense of hiring lawyer.
NJCJI will also continue to advocate against including unnecessary fee-shifting provisions in legislation that is enforced via litigation. These provisions, which allow prevailing plaintiffs to recover attorney’s fees and court costs, always benefit attorneys, but can end up harming plaintiffs. In general, fee-shifting provisions should be used sparingly, and should only be included in legislation at the request of a bill’s sponsor.
Medical Liability Reform
Over the past few years, a number of studies and surveys have drawn attention to an emerging problem in the healthcare industry – care is being dictated not just by medical necessity, but also by fear of litigation. Defensive medicine is just one symptom of a larger problem. Our litigation-friendly legal culture is also driving up the costs of liability insurance for physicians to the point that many are restricting their practices, moving out of state, or retiring.
The New Jersey Civil Justice Institute is working with a coalition of healthcare professionals and providers interested in advancing common sense reforms that will preserve patients’ access to care and help reduce health care costs while protecting doctors from frivolous litigation.
Robust Standards for Expert Testimony
After a ten-year strategic effort, NJCJI and its member-companies persuaded the New Jersey Supreme Court to adopt the federal standard for evaluating expert testimony in civil cases, which requires more rigorous scrutiny of experts’ methodology than New Jersey’s prior standard. This new standard will protect New Jersey businesses from meritless litigation based on dubious expert testimony. NJCJI will continue its advocacy on this issue in the courts to ensure the new standard is applied consistently in future cases.
Fight Settlement Trust Fraud
The system that was set up to compensate victims of the asbestos industry is plagued by fraud. Billions of dollars are being held in trust for victims of the asbestos industry, but rather than filing trust claims, unscrupulous attorneys are filing lawsuits against still-viable companies which manufactured equipment that included an asbestos part (like a gasket or brake pads). The plaintiffs in these cases swear the only asbestos they ever came into contact with came from these companies’ products, yet as soon as they get a payout from the company, they file claims with the asbestos trusts alleging other asbestos exposure. These plaintiffs and attorneys are either lying to the courts or to the bankruptcy trusts. No matter which, it is fraud.
New Jersey should adopt legislation that increases transparency and discourages fraud so that solvent defendants are not paying for injuries caused by other parties, and bankruptcy trusts are not drained by people who have already been made whole.
Have you taken XYZ drug and are now suffering from complications? You may be eligible for compensation! The television ads for lawyers seeking drug and medical device clients are never-ending. It’s gotten so bad, lawyers might as well dust off the old “I’m not a real doctor, but I play one on TV” line since patients are starting to pay as much attention to these ads as they are their own doctors.
Let’s leave the regulation of drugs and medical devices to the regulators at the Food and Drug Administration (FDA), by providing that where the federal regulatory process has approved a given product or label, that approval preempts state-level litigation.
Preserving Access to Alternative Dispute Resolution
Most people would rather get a root canal than go to court, yet New Jersey’s lawmakers and jurists seem to be determined to force people to litigate rather than allowing access to other means of dispute resolution. Arbitration is faster, cheaper, and recognized by the court system itself as being just as fair as litigation, yet there have been numerous bills introduced in the New Jersey Legislature to curtail it, and a recent line of cases from the New Jersey Supreme Court very much disfavors arbitration.
New Jersey must stop trying to snuff out arbitration. Whether through legislation or by the courts, any attempt to hold arbitration agreements to a higher standard than other contractual provisions just because they involve arbitration is bad policy. It is also contrary to federal law, and the United States Supreme Court’s interpretation of that law.
High Quality Courts
If we want to improve the quality of our courts, we must ensure independent, capable judges are appointed and retained. To attract such high-qualified jurists, the selection of New Jersey’s judges must be timely and transparent, their compensation just, and their workload reasonable.
New Jersey must also continue to modernize its court system. Experiments like the Complex Business Litigation Program (CBLP) should be applauded, and expanded if successful.
By enacting these reforms, New Jersey can make real strides in improving its legal climate. In the short run, legal reform can send an important pro-economic growth message without the loss of tax receipts or an increase in spending. In the long run, states with improved litigation climates have higher job creation rates, leading to increased revenue collections and lower unemployment.