Local Governments
Litigation Forecast: Cost increases are coming!
Looking for what to do next? Find out at the end of this article.
Local government officials have enough to worry about without having to deal with the nasty effects of abusive lawsuits. But city and county officials are frequently forced to defend themselves and their city governments in court, both against legitimate and frivolous suits, at the expense of other duties. It often takes more than three years for a case that goes to trial to be completed. Imagine being tied up for that long with draining legal battle. Elected officials and civil servants, as well as the taxpaying citizens, would benefit from reforms in the civil justice system that would improve fairness and predictability.
Plaintiffs and their attorneys often see local governments as easy marks with deep pockets. The most frequent “injury” that cities are sued for, though, is actually “emotional distress,” according to Jury Verdict Research Series, which conducted a study in 1999. Roughly one-fourth of the total number of plaintiff verdicts are for emotional distress.
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A woman rollerblading in Newport Beach, Calif., tripped over the sidewalk and fell. She said the fall caused an increased risk of breast cancer as a result of her injury and she filed a claim against the city for $30,210 – $210 was for medical bills and $30,000 was for the pain and suffering she supposedly endured worrying about developing breast cancer.
- In San Diego, a man who attended a concert at Jack Murphy Stadium sued the city for $5.4 million. His claim: He suffered emotional distress because he had to hold his urge for roughly four hours after finding that women were using the men’s restroom because there was a long line for the ladies’ room.
Crack Map – One Wrong Step and It’s Lawsuit Time!
Other reasons plaintiffs sue local governments include sidewalk and street problems, and, quite simply, attempts to get rich quick.
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A man once filed a claim against the city of Escondido, Calif., for $1.5 million. His case was based on injuries to him and his 50-pound Labrador mix after the dog was allegedly attacked by the 10-pound library cat. The legal climate encouraged him to turn a $38 charge from his chiropractor and a $46.49 veterinary bill into an excessive lawsuit.
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A man sued the city of Lodi, Calif., for damages when a dump truck backed into his car. He filed the claim despite the fact that he was the city employee driving the dump truck. Though he eventually admitted the accident was his fault, he wanted $3,600 for the damages he caused to his car.
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The New York State Trial Lawyers Association formed the “Big Apple Sidewalk and Pothole Protection Committee” in 1982 to chart every sidewalk crack and pothole in New York City. The committee sent city officials maps showing where each could be found. In 2001, it listed 700,000 cracks/potholes, putting the city on notice should an accident happen at one of those locations. Just by receiving the maps, the city became liable if someone is injured by tripping over the crack or driving over the pothole.
- Two years earlier, the city paid out $57 million for 2,800 sidewalk slips. From 2000 to 2002, it paid more than $189 million in damages in cases linked to sidewalk defects and falls on snow and ice.
All of the money used to pay off the cases came out of the taxpayers’ pockets.
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When two brothers in their late 20s recklessly dove off a 10-foot high, fenced pier at Coney Island in 1992, breaking their necks, somebody saw that tragedy as an opportunity. For their injuries, they were awarded $104 million, $75 million of which was for pain and suffering. The awards were later reduced, but New York City still had to pay them $19 million each – after getting the money from city’s taxpayers.
- In 2003, the cost of all tort suits filed against New York City cost the taxpayers more than $500 million. That’s $500 million that could have been used to pay for services that would have benefited the citizens.
In these cases, as in all excessive and frivolous suits, city officials’ time and energy was diverted to unproductive activities. Time they should have spent improving public safety and municipal services was instead expended on preparing a legal defense. Counties
Like cities, counties are also considered to be fonts of easy money. The costs can be staggering and place an undue strain on you if, as an elected official, you are trying to allocate scarce resources. In California, for one example, counties spent $97.7 million in fiscal 2006 on litigation.
According to San Diego Citizens Against Lawsuit Abuse, that was enough money to:
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Hire more than 73 workers for Los Angeles County at an average cost of $1 million each to be the city’s first responders in case of a natural disaster.
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Hire 196 emergency management employees in Orange County, at a cost of $61,075 per employee, to lead, promote, facilitate and support operational area efforts to mitigate, prepare for, respond to and recover from disaster.
- Place in-car cameras in Sacramento County police cars to increase officer safety as well as improve the community’s understanding of law enforcement activities.
Solutions – How to Manage the Local Government “Lawsuit Tax”
Lawmakers need to place limits on litigation without stripping the rights of the legitimately injured to seek justice in the courts.
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One way to do this would be to establish courts where municipal suits would be heard much like the courts that hear suits against some states. In these courts, a specialized judge hears the case. The State of New York, for example, has a Court of Claims and paid out only $32.6 million in total tort costs in 2003, less than 7 percent of the total New York City paid out in the same year.
- Reforming the joint and several liability rule is a key to this crisis. In joint and several liability, plaintiffs can recover full damages from multiple defendants, meaning those who are responsible for only a small part of a plaintiff’s injuries have to pay the same as the parties responsible for nearly all. Liability needs to be assigned equally based on the defendants’ proportion of responsibility.
Lawmakers should also reform the collateral source offset rule, which prohibits evidence that the plaintiff has recovered damages from another party – a collateral source – in the dispute to be introduced into court. This rule allows plaintiffs to recover the full amount of damages twice.
City Corporate Counsel Michael Cardozo has said that reform of the collateral source offset rule would save New York City $130 million per year in litigation costs.
New York City Has Become “Sue York”
As is the case with local governments across the nation, New York City is target number one for lawsuits. Mayor Michael Bloomberg recently said, “Court settlements are killing us.” Here’s why:
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In fiscal year 2009 so far, New York City has paid $554 million to pay off lawsuits; in 2008, that figure was $568 million – more than double what the city paid 15 years ago, and 20 times more than paid out 30 years ago.
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More than 90 percent of the more than 6,000 lawsuits filed against New York City were personal injury lawsuits. One city official says, “We are basically a big target for lawsuits, with deep pockets.” As reported in a recent report from FFCJ Partner, Pacific Research Institute, that’s more than $800 for every New Yorker each year.
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City Councilman James Oddo recently wrote, “The truth is that the ‘tort tax’ contributes to the high tax burdens borne by homeowners and businesses, makes less money available to properly repave our streets, makes us less likely to have the funds available to hire more police officers to protect our citizens, and hurts our schoolchildren when classroom budget cuts are made.”
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According to reports, the huge increases in tort-related lawsuit costs traces back to the 1970s, when New York adopted the “comparative negligence” standard for personal injury lawsuits. Under this standard, if the city is found by a jury to be even 1 percent at fault, the city can liable for huge damages.
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In New York state, citizens can sue local governments in jury trials rather than state claims courts, which tend to assess more reasonable damage awards.
- There is no cap on non-economic damages, including so-called “pain and suffering.” Under New York law, juries are not allowed to hear evidence about other compensation that plaintiffs may received, like disability insurance and worker’s compensation.
Source: “Call it ‘Sue York” as city loses over $500 million in lawsuits,” The Staten Island Advance, Oct. 3, 2009.
California Drowning in Lawsuit Costs
Eight of California’s largest cities and nine of its largest counties spent $504.1 million to deal with lawsuits in fiscal years 2007 and 2008, according to a report released in November 2009 by California Citizens Against Lawsuit Abuse (CALA). The report examined verdicts, settlements and outside legal counsel costs for Alameda, Fresno, Kern, Los Angeles, Orange, Sacramento, San Diego, San Francisco, and Santa Clara counties plus the cities of Anaheim, Bakersfield, Fresno, Los Angeles, Oakland, Sacramento, San Diego, and San Jose.
Devastating budget cuts across the state reflect the imperative nature of litigation reform. For example, the money spent by Orange County in just one year could have more than paid for both the county’s Domestic Violence program and Emergency Medical Services. In Anaheim, one year of litigation costs could have maintained 146 acres of park and 105 sports fields for the same year.
According to CALA, budget shortfalls don’t just affect those who might lose their jobs or services they rely on, the effects ripple to the entire community and beyond. As a result, CALA and legal reformers across the nation are calling for greater disclosure, more public oversight and adoption of aggressive risk management procedures to protect local government coffers from becoming targets of lawsuits.
Now What Do We Do?
Foundation for Fair Civil Justice (FFCJ) exists to bring empowering programs and education to consumers.
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Learn more about the bread-and-butter, common sense need for legal reform and how lawsuit abuse affects local government officials by listening to our “Let’s Be Fair” radio commentaries, hosted by FFCJ Senior Fellow Bob Dorigo Jones by clicking here.
Bob is a bestselling author and founder of the nationally profiled “Wacky Warning Label Contest,” which annually picks the wackiest warning labels on products to underscore the absurd lengths to which American business has to go in response to the threat of lawsuits.
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