Legislation that would allow Oklahoma voters to reinstate a longstanding lawsuit reform narrowly survived a Senate vote.
Senate Joint Resolution 40, by Sen. Julie Daniels, would restore, through a constitutional amendment, caps on noneconomic damages that were in place for roughly nine years before a recent Oklahoma Supreme Court ruling struck them down. The prior $350,000 cap on noneconomic damages was a longtime goal of the Republican Party and business and medical leaders in Oklahoma that was widely hailed when it was enacted.
“SJR 40 proposes to put to our fellow Oklahomans a request that they put in our constitution our nine-year-old lawsuit reform statute, which was struck down last year as having in it a special law,” said Daniels, R-Bartlesville. “This statute was the third attempt since 2003 to put lawsuit reform into our statutes and have it sustained. Each time a different ‘special law’ reason was given for why the statute could not stand, so the Legislature would go back and redefine what they were trying to attempt in the lawsuit reform in order to accommodate what the court has said was unconstitutional. But yet again, this third time, we were not successful, and so we have to ask the people of the state of Oklahoma: Do they want lawsuit reform? Do they want certainty in the area of noneconomic damages? Do they want to protect those with professional liability from being put out of business? Do they want to bring health care providers to our state? Do we want to be attractive to business? Do we want to keep insurance premiums down?”
The legislation would allow voters to place the prior law into the Oklahoma Constitution to erase any alleged constitutional conflict.
The $350,000 cap applies only to vague “pain and suffering” claims, and exceptions are provided even in that area, including instances in which a defendant is shown to have acted in reckless disregard for others or with malice.
Claims for economic losses and medical expenses would continue to have no cap.
“This statute and proposed constitutional amendment absolutely recognize that every economic damage should be covered as fully as is humanly known,” Daniels said. “And therefore that list is long, and it includes future wages, how productive that particular person would have been.”
The legislation was also amended to include a provision that would allow the Legislature to raise the cap on damages in future years to adjust for inflation.
Opponents objected to placing any limit on noneconomic damages, even if litigants are otherwise fully compensated for all measurable losses and allowed to collect an additional $350,000.
Sen. Michael Brooks, D-Oklahoma City, said the legislation was “affixing a subjective amount to prospective damages.”
“There’s no reason to come up with this number,” Brooks said of the $350,000 cap.
Sen. J.J. Dossett, D-Owasso, said the proposal “puts an arbitrary, one-size-fits-all value on the loss of quality of life” and suggested businesses would deliberately ignore potentially harmful products or practices.
“It’s putting public safety at risk,” Dossett said. “It allows business practices to factor in damage limits and decide where they can and can’t cut safety to pay for things later.”
Sen. Kay Floyd, D-Oklahoma City, said the focus on business climate and legal certainty was misplaced.
“This is always framed in a frame of ‘how does it affect business?’” Floyd said. “Please don’t let that cloud your judgment.”
But Daniels said caps on noneconomic damages provide “certainty” by reducing the wild swings of subjective jury awards in that area, which she said can have a dramatic impact “over the entire business community, medical community, small-business community.”
“It’s the whole subjectivity of the noneconomic damage issue that has brought the Legislature and some in other states to think that it would be better overall for you to put a cap on the noneconomic side—but, yes, to provide exceptions, which this statute has done,” Daniels said.
She noted that Texas passed a similar cap in 2003. By 2011, when Oklahoma enacted the cap SJR 40 would restore, medical malpractice insurance rates had dropped 35 percent in Texas, Daniels noted.
“That has a definite effect on the practice of medicine in your state,” Daniels said.
The state of California capped noneconomic damages 44 years ago, she said, which has “proved immensely successful in increasing access to affordable medical care.”
Daniels said SJR 40 will “bring some certainty to the job creators, to the people who employ people in our state.”
While critics cited a range of hypothetical woes that could occur with noneconomic caps, Daniels noted the legislation simply reinstated the same cap that was in place for nine years in Oklahoma. There were no reports of widespread, associated hardship during that time.
“Our decision today,” Daniels said, “is to let the people decide.”
Senate Joint Resolution 40 narrowly passed on a 26-17 vote. A bill requires 25 votes to pass out of the Senate. Republicans hold 38 seats in the chamber while Democrats hold nine.
SJR 40 now proceeds to the Oklahoma House of Representatives.