Timeline of Tort Reform

Significant Events in Civil Justice Reform Since 1950

1950s
  • Pain and suffering damages rise. Pain and suffering awards take off as a result of efforts by pioneering trial lawyers such as Melvin Belli. See  Melvin M. Belli, The Adequate Award, 39 Cal. L. Rev. 1 (1951). Trial lawyers become adept at increasing awards for pain and suffering. For example, in the 1930s, awards greater than $10,000 were uncommon, but only 20 years later, there were 53 verdicts of $100,000 or more in a single nine-month period—a cumulative impact of more than $5 million. See  Philip  L. Merkel, Pain and Suffering Damages at Mid-Twentieth Century: A Retrospective View of the Problem and the Legal Academy’s First Reponses, 34 Cap. U. L. Rev. 545 (2006).

1960s
  • Strict product liability adopted. Strict product liability is first recognized by the California Supreme Court in Greenman v. Yuba Power Products, 377 P.2d 897 (Cal. 1963), allowing plaintiffs to recover for harms caused by defective products without proving that the manufacturer was negligent. This is followed by the American Law Institute’s adoption of strict liability in Section 402A of the Restatement (Second) of Torts in 1965. Many states begin to adopt strict products liability. “Mass tort” litigation begins soon thereafter, with cases involving the sale of the anti-cholesterol drug MER/29. See  Paul D. Rheingold, The MER/29 Story—An Instance of Successful Mass Disaster Litigation, 56 Cal. L. Rev. 116 (1968); Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832 (2d Cir. 1967).

1966
  • Introduction of federal class actions. A 1966 amendment to Rule 23 of the Federal Rules of Civil Procedure ushers in the modern opt-out class action. One law professor recently observed, “No change to the original Federal Rules has been a greater boon to plaintiffs and a greater burden to the business community.” See  Brian T. Fitzpatrick, The Ironic History of Rule 23, Vanderbilt Law Research Paper No. 17-41 (2017).

1970s
  • Partial no-fault insurance laws adopted. After lawsuits related to automobile accidents became a staple of the plaintiffs’ bar, several states adopt partial no-fault automobile insurance laws. No-fault automobile insurance aimed to save drivers the time and expense of lawsuits from accidents. Partial no-fault automobile insurance law had loopholes, often excluding claims for death, disfigurement, and sometimes serious bodily harm, leaving litigation intact for the most severe cases.

1973
  • Asbestos litigation takes off. The modern history of asbestos litigation may be traced to Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076 (5th Cir. 1973), where the Court found that asbestos insulation manufacturers could be held strictly liable for harms to workers occupationally exposed to their products. Hundreds of thousands of claims are filed over the next four decades and more than 100 companies file bankruptcy due at least in part to asbestos-related liabilities.

1975
  • California adopts MICRA. California responds to a medical malpractice insurance crisis by enacting the Medical Injury Compensation Reform Act (MICRA), which limits noneconomic damages (e.g., pain and suffering) to $250,000 in any action against a health care provider based on professional negligence. More than half of states now place a reasonable limit on damages for pain and suffering in medical liability cases or all personal injury lawsuits.

1980
  • Transnational tort cases begin. Plaintiffs’ lawyers discover the long-dormant Alien Tort Statute (ATS), part of the Judiciary Act of 1789. In Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir. 1980), the ATS is used for the first time to bring a modern human rights claim. ATS claims against corporations for conduct occurring outside the U.S. jumps. Some 150 ATS-related lawsuits are filed between 1980 and 2012.

Mid-1980s
  • State tort reform begins to gain momentum. A significant number of states enact laws to establish outer time limits (statutes of repose) on product liability claims and for improvements to real property, abolish or limit joint and several liability, provide relief to innocent product sellers, and establish punitive damages reforms.

1986
  • National Childhood Vaccine Injury Act. The National Childhood Vaccine Injury Act reduces the financial liability of vaccine makers to ensure a stable market supply. The act creates the National Vaccine Injury Compensation Program, a federal no-fault system for compensating vaccine-related injuries or deaths.

1991
  • Punitive damages “run wild” are corralled. The U.S. Supreme Court expresses concern about punitive damages “run wild” and warns that “unlimited jury discretion—or unlimited judicial discretion for that matter—in the fixing of punitive damages may invite extreme results that jar one’s constitutional sensibilities.” See Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 18 [1991]). The Court requires judicial review of the size of a punitive damage award (see Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415 [1994]); sets guideposts for courts to apply in evaluating whether a punitive damage award is unconstitutionally excessive (see BMW of N. Am., Inc. v. Gore, 517 U.S. 559 [1996]); requires greater proportionality between actual harm and punitive damages (see State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 [2003]); and prevents punishment for harm to nonparties (see Philip Morris USA v. Williams, 549 U.S. 346 [2007]). In Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), the Court limits maritime punitive damages.

1992
  • Third-party litigation funding born in Australia. Third party litigation funding takes off in Australia in the class action context. The practice spreads to the U.K.—and later to the U.S.—and extends beyond class actions to other types of claims.

1993
  • Expert testimony standards strengthened. The U.S. Supreme Court directs federal district court judges to serve as gatekeepers to ensure the reliability of expert evidence and exclude “junk science” expert testimony. See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993); Gen. Elec. Co. v. Joiner, 522 U.S. 136 (1997); Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999); and Fed. R. Evid. 702. All federal courts and about two-thirds of state courts follow this approach today.

1994
  • State attorneys general partner with contingency fee lawyers. Mississippi sues to recover the public costs of treating sick smokers. Mississippi Attorney General Michael Moore hires Richard “Dickie” Scruggs to bring the lawsuit on a contingency fee basis; other states join with such arrangements. In a 1998 Master Settlement Agreement, tobacco companies agree to pay more than $200 billion. Subsequent partnerships between state attorneys general and private contingency fee lawyers target lead paint manufacturers, pharmaceutical companies, and financial services providers, among others.

  • Hot coffee lawsuit. A New Mexico jury awards a woman nearly $3 million in a lawsuit against McDonald’s in which she claimed she was injured after spilling the company’s hot coffee in her lap.

1995
  • Securities litigation reform. Congress overrides President Bill Clinton’s veto and enacts the Private Securities Litigation Reform Act of 1995 (PSLRA) to limit abusive securities lawsuits. Three years later, President Clinton signs the Securities Litigation Uniform Standards Act of 1998, which requires securities class actions involving nationally traded securities based on false or misleading statements to be brought exclusively in federal court under federal law. This law precludes plaintiffs’ attorneys from attempting to circumvent provisions of the PSLRA by filing securities class actions in state courts.

1997
  • Judicial nullification of tort reform. The Illinois Supreme Court in Best v. Taylor Machine Works, 689 N.E.2d 1057 (Ill. 1997) strikes down a comprehensive 1995 tort reform package after holding that some of the law’s provisions violated the state’s constitution. The Ohio Supreme Court invalidates a sweeping 1996 tort reform law in State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 715 N.E.2d 1062 (Ohio 1999). Such rulings exemplify several state courts that have chosen to “nullify,” or strike down on state constitutional grounds, the reasonable exercise of legislative public policymaking in the area of civil justice reform. Most courts have not followed this approach and do not substitute their own views of public policy for those of legislatures.

  • Asbestos litigation reaches “crisis.” The U.S. Supreme Court in Amchem Products, Inc. v. Windsor, 521 U.S. 591, 597 (1997) refers to the asbestos litigation as a “crisis.” In Ortiz v. Fibreboard Corp., 527 U.S. 815, 821 (1999), the Court notes the “elephantine mass” of cases generated by for-profit screening companies in this era of asbestos litigation.

1999
  • Transparency is brought to state attorneys general lawsuits using contingency fee counsel. In 1999, on the heels of the tobacco Master Settlement Agreement, Texas becomes the first state to enact legislation to improve the state’s private attorney selection process. A second wave of enactments began after Florida passed a law in 2010 known as the Transparency in Private Attorney Contract (TiPAC) Act. TiPAC laws generally subject state contracts with private lawyers to public bidding, require posting of contracts on public websites, provide recordkeeping requirements, limit attorneys’ fees to a sliding scale based on the amount of recovery, and mandate complete control and oversight of the litigation by government attorneys. Kentucky and Missouri are the latest states to adopt such laws, joining many others. Appeal bond cap reforms also grew out of enormity of the tobacco litigation and statewide litigation against other industries.

Late 1990s
  • Comprehensive state legal reform. In the late 1990s, 2000s, and 2010s, several states—including Alaska, Florida, Mississippi, Texas, Alabama, Tennessee, Wisconsin, South Carolina, and Oklahoma—adopt comprehensive legal reforms. For example, Mississippi’s 2004 tort reform package includes stricter limits on establishing venue, caps on noneconomic damages, liability protection for “innocent sellers” of products, and lowered caps on punitive damages.

2005
  • Class Action Fairness Act. Congress expands federal court jurisdiction over multistate class and mass actions seeking more than $5 million and prohibits lawyers from receiving lucrative fees when their clients receive only coupon settlements.

  • Silica fraud exposed. U.S. District Court Judge Janis Graham Jack for the Southern District of Texas, the manager of federal silica multidistrict litigation, finds that all but one of 10,000 silica cases aggregated for pretrial purposes are based on “fatally unreliable” diagnoses. Judge Jack states that the claims “were driven by neither health nor justice: they were manufactured for money.” See In re Silica Prods. Liab. Litig., 398 F. Supp. 2d 563, 675 (S.D. Tex. 2005). Commentators describe Judge Jack’s opinion as “a critical turning point in mass tort litigation because for the first time it allowed a comprehensive examination of the mass tort scheme—a look behind the curtain of secrecy that had guarded litigation screening.” See David Maron & Walker W. (Bill) Jones, Taming an Elephant: A Closer Look at Mass Tort Screening and the Impact of Mississippi Tort Reforms, 26 Miss. C. L. Rev. 253, 261 (2007).

2007
  • President George W. Bush signs “Protecting American Taxpayers from Payment of Contingency Fees,” an executive order banning the use of contingency fee attorneys by the federal government. The Executive Order remains in effect. Exec. Order 13433, 72 Fed. Reg. 28,441 (May 18, 2007).

2007-2009
  • Pleading standards raised. The U.S. Supreme Court transforms civil litigation in the federal courts by making it easier for judges to dismiss meritless cases soon after they are filed. In Bell Atlantic v. Twombly, 550 U.S. 554 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Court allowed trial courts to dismiss a complaint if it does not set out a “plausible” claim. These decisions departed from a rule established in Conley v. Gibson, 357 U.S. 41 (1951), which did not allow a court to dismiss a complaint “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”

2011
  • Class certification safeguards reaffirmed. The U.S. Supreme Court rejects the largest putative class action in history, involving approximately 1.5 million past and current Wal-Mart employees who claimed gender discrimination in the company’s pay and promotion policies. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). A unanimous Court finds that such a broad class cannot be certified due to the lack of commonality between the claims.

  • Arbitration of consumer claims found valid. In AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the U.S. Supreme Court overturns a Ninth Circuit Court decision that class action waivers in arbitration agreements are not enforceable under California law. The Supreme Court’s ruling vindicates the primacy of federal arbitration law over inconsistent state laws that attempt to limit the availability of private arbitration as a fast, fair, and efficient alternative to costly litigation in the courts.

2012
  • Ohio enacts landmark asbestos trust transparency law. Ohio requires asbestos plaintiffs to file bankruptcy trust claims before trial and provides for the admissibility of trust claims materials to allow defendants to demonstrate alternative causation for plaintiffs’ injuries. As described by a federal bankruptcy court judge in Garlock Sealing Technologies LLC, 504 B.R. 71, 96 (W.D.N.C. Bankr. 2014), in states without transparency laws, plaintiffs’ attorneys abuse the opaqueness between the trust and tort systems to gain an unfair advantage. Fourteen states now have asbestos trust transparency laws.

2013
  • U.S. Supreme Court curbs Alien Tort Statute (ATS) litigation. In Kiobel v. Royal Dutch Petroleum, 569 U.S. 108 (2013), the Court holds that the ATS does not apply extraterritorially except in limited circumstances. A wave of dismissals follows.

  • Additional class action safeguards. In Comcast Corp. v. Behrend, 569 U.S. 27 (2013), the Court strengthens class certification standards again by rejecting a proposed class action that featured an improper damages model.

  • European Parliament approves alternative dispute resolution. The European Parliament approves legislation supporting increased use of mediation and arbitration for consumer disputes.

  • U.S. Supreme Court upholds alternative dispute resolution. In American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013), the Court reaffirms the right of contracting parties to pursue resolution through arbitration instead of litigation.

  • European Commission recommends that member states regulate collective actions. The European Commission, the executive arm of the European Parliament, which consists of 28 member states, publishes a recommendation that member states allow collective redress litigation for consumers. The European Commission recommends that member states implement safeguards for collective redress and contingency fees, as well as the establishment of an “opt-in” system rather than an “opt-out” system. The recommendation also encourages member states to place safeguards around third-party litigation funding.

  • Lawsuit lending legislation introduced in the states. Oklahoma is the first state to subject lawsuit lenders to state consumer lending laws. Since then, the Colorado Court of Appeals ruled that lawsuit lenders in the state must register under Colorado’s consumer credit laws, and in 2014, Tennessee passed a law implementing meaningful regulations to lawsuit lending.

2014
  • U.S. Supreme Court limits foreign conduct lawsuits. In Daimler AG v. Bauman, 571 U.S. 117 (2014), the Court rules that a German automaker with a U.S. subsidiary cannot be sued in the U.S. for alleged human rights violations involving its separate Argentine subsidiary.

2015
  • Arkansas passes nation’s most aggressive lawsuit lending law. Arkansas subjects lawsuit lenders who give “up-front” cash to individuals in exchange for a share of any settlement or judgment to the state’s constitutional usury limit. The law also requires disclosure of lawsuit lending arrangements to a court, to inform a judge of how a case might be influenced by the presence of a lawsuit lender. Similar legislation has been enacted in Indiana, Oklahoma, Tennessee, and Vermont.

  • United Kingdom passes Consumer Rights Act.  The United Kingdom adopts an opt-out class action system.

  • West Virginia climb begins. Long viewed as having perhaps the worst legal environment for businesses in the nation, West Virginia’s Republican-led legislature begins to adopt significant reforms to bring the state’s liability rules into the mainstream.

  • Federal discovery reforms take effect. Amendments to the Federal Rules of Civil Procedure require discovery to be “proportional to the needs of the case” and authorize courts to enter orders shifting the cost of discovery to the requesting party, among other reforms. States begin to bring state court discovery rules into conformity with (and in some instances improve upon) the amended federal rules.

2016
  • No injury, no lawsuit. In Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the U.S. Supreme Court rules that plaintiffs must allege a concrete injury to have standing to bring a lawsuit. A bare allegation of a statutory violation is inadequate to show injury-in-fact.

2017
  • New Jersey enacts foreign judgment recognition legislation. Businesses receive protection from money judgments entered in countries where courts fail to provide due process. More than 30 states have passed the Uniform Foreign Country Money-Judgments Recognition Act.

  • Progress in Missouri. After a series of liability-expanding court decisions, a flood of product liability lawsuits and consumer class actions, and excessive verdicts, the Republican-led majority and governor strengthen the state’s expert testimony standard, reduce the potential for inflated damage awards, and enact Transparency in Private Attorney Contracts (TIPAC) reform.

  • U.S. Supreme Court curbs forum shopping. Building on the 2014 Bauman decision, the U.S. Supreme Court significantly reduces the ability of plaintiffs’ lawyers to file cases in courts they view as most favorable to them. These decisions come in the context of patent disputes (TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 [2017]), railroad worker injuries (BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549 [2017]), and mass tort litigation (Bristol-Myers Squibb Co. v. Superior. Ct. of Cal., 137 S. Ct. 1773 [2017]). Bristol-Myers Squibb, the most far reaching, generally limits court jurisdiction to a business defendant’s home state (state or incorporation or principal place of business) unless there is a connection between the specific claim and the locale (e.g., the plaintiff was injured in the jurisdiction).

  • Federal courts urged to require disclosure of third party litigation funding. The U.S. Chamber Institute for Legal Reform (ILR), some 30 major business, defense bar, and civil justice reform groups renew a proposal to amend the Federal Rules of Civil Procedure to require the disclosure of third-party litigation funding arrangements in any civil action filed in federal court. The Northern District of California updates its districtwide standing order to mandate third-party litigation financing disclosure in class action.

2018
  • Pioneering Wisconsin law requires disclosure of third party litigation funding. A new, first-in-the-nation Wisconsin law requires parties to disclose “any agreement under which any person . . . has a right to receive compensation that is contingent on and sourced from any proceeds of the civil action, by settlement, judgment or otherwise.”

  • Alien Tort Statute (ATS) restricted. In Jesner v. Arab Bank, 138 S. Ct. 1386 (2018), the U.S. Supreme Court holds that the ATS does not create a private right of action against foreign corporations in U.S. courts for alleged violations of international law that occur overseas.



Updated as of August 16, 2018