The Palmetto Insider

The blog of the South Carolina Policy Council

Tort Reform Needs Attention from Statehouse

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In a Policy Council article released yesterday, we look at how tort reform could reduce health care costs as well as provide access to care for the uninsured. With everyone waiting breathlessly for the federal government to do something about health care, we want to emphasize here that tort reform is primarily a state issue.

This point is validated by a 2004 Cato Institute study that argues that, although the federal government could undertake two reforms that would facilitate tort reform, the rest should be left to the states. These two reforms are:

     1) Long-arm Jurisdiction – Businesses can be sued in states even if they do not hold an office or officially conduct operations in that state. Federal statutes could offer protection to businesses in these instances.

     2) Choice-of-law Rules – Federal guidelines are necessary when disputes involve parties from more than one state. Federal intervention, as dictated by the Commerce Clause, can help prevent states from impeding the free flow of trade in such cases.

Reason magazine delved further into this issue in 2005, discussing the need for citizens to be able to vote with their feet. The beauty of federalism is the ability to allow states to experiment and compete with one another. But if the federal government begins taking the lead too often, it can lead to unforeseen problems. What is good for one state, may be bad for another.

A Heritage Foundation blog last month explored why states should individually address their own tort issues:

“In 2005, over 400 malpractice reform measures were introduced in 48 state legislatures, and 27 legislatures enacted some kind of malpractice reform. Over the past few years, a number of states – including Texas, Mississippi, Missouri, and Georgia – have passed major tort reform overhauls. Every state has some kind of medical malpractice reform in place.

“As states work to amend and improve their malpractice systems, a heavy-handed federal approach is both unwise and unnecessary. Simply put, the malpractice problem calls for using a scalpel, not a sledgehammer. Each state should address its most critical needs in a political climate that respects traditional federal and state authority.”

When Congress began talking about a stimulus in January, it seemingly grinded private business innovation to a halt. Everybody simply kicked back, put their feet up, and waited for the cavalry from Washington to arrive. Tort reform may experience a similar problem, if states stall their own reforms in the hope that federal legislation is passed. States have been consistently reforming their tort laws – and should continue to do so, regardless of what the federal government does to health care.


Written by Geoff Pallay

September 17, 2009 at 12:26 pm

Posted in Federalism, Healthcare, Insurance

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One Response

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  1. Yes, the Heritage Foundation talking out of two sides of their mouth as does the Chamber of Commerce. They both supported the Reigel v. Medtronic ruling taking states rights away. It is funny because I thought Republicans believed in federalism but they do not. It is about money and power.

    Mark Baird

    September 17, 2009 at 9:00 pm

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