United States: The Federalist Society's 2019 Civil Justice Update

This paper reviews key civil justice issues and changes in 2019. Part I focuses on broad trends, Part II discusses pending amendments to federal court rules, Part III summarizes liability law changes at the state level in 2019, and Part IV highlights key cases that addressed the constitutionality of state civil justice reforms.

I. Legal Reform Trends in 2019

A number of states adopted reforms on issues that have been trending in recent years, including closer alignment of state court discovery rules with 2015 amendments to the Federal Rules of Civil Procedure and asbestos litigation reform to prevent gamesmanship by plaintiffs' lawyers with respect to asbestos trust claim filings. New state legislative proposals with traction reject the American Law Institute's Restatement of the Law, Liability Insurance; and regulate deceptive mass tort lawsuit advertisements. Looking ahead, business and civil justice groups are seeking rules for multidistrict litigation cases, such as to allow early vetting of claims. Some states may explore laws to address a novel theory known as "innovator liability," which imposes failure to warn liability on manufacturers of branded pharmaceuticals for competitors' copycat products.

The plaintiffs' bar is working to ban or restrict pre-dispute arbitration agreements and nondisclosure agreements, especially with regard to sexual harassment and sexual assault claims. Many states extended statutes of limitations for childhood sexual abuse claims in 2019, including some that "revived" time-barred claims and provided claimants with a specified window of time to file suit.

A. Defense-Oriented Issues

1. Civil Discovery Reform

State legislatures and courts are taking steps to better align their state court discovery rules with changes to the Federal Rules of Civil Procedure that took effect in December 2015.¹ The amended federal rules redefine the scope of discovery from a broad standard of any information "reasonably calculated to lead to the discovery of admissible evidence" to discovery that is "proportional to the needs of the case."² The amended federal rules also permit court-issued protective orders to shift the costs of discovery to limit overly burdensome discovery requests³ and establish a uniform standard for sanctions and curative measures where electronically stored information has not been properly preserved,⁴ among other changes.

Since 2015, at least 14 states and the District of Columbia have brought their state court civil discovery rules into closer conformity with the amended federal rules, including Missouri (by legislation) and Delaware and Michigan (by court rule) in 2019.⁵

Looking ahead, the Ohio Supreme Court is considering changes to the Ohio Rules of Practice and Procedure that would, among other changes, adopt the federal concept of proportionality; provide for potential cost-shifting for unreasonably burdensome requests; require a scheduling order for discovery and other pre-trial matters; and require parties to hold a discovery conference, file a discovery plan with the court, and disclose certain information without any request for discovery.⁶

The Hawaii State Judiciary is considering similar changes based on the recommendations of a Task Force on Civil Improvements established by Hawaii Supreme Court Chief Justice Mark Recktenwald.⁷ The Task Force proposes "rightsizing" discovery by adopting the federal proportionality concept and establishing a "tiering system to align discovery and the trial date with the needs of the case."⁸ The Task Force also proposes early scheduling conference/order requirements patterned after Federal Rule of Civil Procedure 16(b) and mandatory initial disclosures and expert disclosures similar to Federal Rule of Civil Procedure 26.

2. Rejection of Restatement of Law, Liability Insurance

The American Law Institute's (ALI) Restatement of the Law, Liability Insurance (RLLI), published in 2019, is one of the most controversial restatements in the ALI's nearly 100-year history. The controversy stems from the RLLI's inclusion of novel rules that could reshape the liability insurance law landscape to disadvantage insurers.⁹

For example, the RLLI recommends subjecting insurers to liability for negligent selection of defense counsel.¹⁰ The RLLI also proposes a rule that would subject insurers to liability for the negligence of selected defense counsel when the insurer exercised too much control over the selected counsel's professional judgment.¹¹ In addition, the RLLI narrows the circumstances in which an insurer may properly deny a duty to defend an insured and withdraw a defense that has been undertaken.¹²

In 2018, Ohio and Michigan adopted laws stating that the RLLI does not constitute the public policy of the state and should not be relied upon by courts.¹³ In 2019, North Dakota and Arkansas enacted similar laws.¹⁴ A new Texas law broadly proclaims that ALI Restatements are not controlling.¹⁵ Other states have passed resolutions to discourage courts from following the RLLI, including Indiana and Louisiana in 2019.¹⁶ The National Conference of Insurance Legislators adopted model legislation on the issue in 2019.¹⁷

3. Regulation of Deceptive Mass Tort Advertisements

Plaintiffs' law firms and lead generators spend hundreds of millions of dollars annually on lawsuit advertising.¹⁸ The ads often incorporate flashing words like "medical alert" or "health alert," or they use images of government agency logos that make the ads look like public service announcements.¹⁹ Advertisements for lawsuits against prescription drug manufacturers typically do not advise viewers to speak with a doctor before discontinuing or reducing use of a medication. In addition, most lawsuit ads conclude with fine print that is too small and too briefly shown to alert viewers that the ad is sponsored by a company that specializes in generating leads for law firms and that any legal work may be handled by other attorneys.

These advertisements have substantial public health effects.²⁰ One in four people who take prescription drugs have reported they would stop taking their medication immediately, without consulting a doctor, if they saw a lawsuit ad involving the drug.²¹ A survey of psychiatrists who treat patients for schizophrenia and bipolar disorder found that more than half of the patients who stopped taking their medication or reduced their dosages without consulting their psychiatrist first did so because of lawsuit ads.²² Reports filed with the Food and Drug Administration indicate that some patients have even died as a result of fearmongering lawsuit ads.²³ Recently, the Federal Trade Commission sent warning letters to several law firms and lead generators expressing concern about mass tort lawsuit ads on television that mislead the public.²⁴

Footnotes

1 For a summary the December 2015 amendments, see Thomson Reuters Practical Law, Overview of December 2015 Amendments to the Federal Rules of Civil Procedure, https:// content.next.westlaw.com/ D ocument/ I60de982874de11e 598dc8b09b4f043e0/ View/ FullText. html?contextData=(sc.Default)&transitionType=Default&firstPage=true &bhcp=1.

2 Fed. R. Civ. P. 26(b)(1).

3 See Fed. R. Civ. P. 26(c)(1)(B).

4 See Fed. R. Civ. P. Rule 37(e).

See Kan. S.B. 120 (2017) (codified at Kan. Stat. Ann. §§ 60-102, 60-226, 60-234, 60-237); Okla. H.B. 1570 (2017) (codified at 12 Okla. Stat. §§ 3225-3226, § 3234, § 3237); Wis. A.B. 773 (2018) (Act 235); Mo. S.B. 224 (2019); Ala. R. Civ. P. 26(b)(1), 26(b)(2), 26(c), and 37(g) (effective Dec. 21, 2018), available at http://judicial. alabama.gov/docs/rules/ARCP_Rules_26b2_26b3_26c_and_37g.pdf; Ariz. S. Ct., Various Arizona Rules of Civil Procedure, No. R-17-0010 (amending Ariz. R. Civ. P. 5.1, 8, 8.1, 11, 16, 26, 26.1, 26.2, 29, 30, 33-37, 38.1, 45, and 84) (effective July 1, 2018), available at http:// www.azcourts.gov/Portals/20/2017%20Rules/17-0010.pdf; Colo. S. Ct., Rule Change 2015(05) (amending Colo. R. Civ. P. 1, 12, 16, 16.1, 26, 30-34, 37, 54, and 121) (effective July 1, 2015), available at https:// www.courts.state.co.us/ userfiles/ file/ Court_Probation/ Supreme_ Court/ Committees/ Civil_Rules_Committee/ 2015(05)% 20clean%20 Final.pdf; Del. Ch. Ct., Amendment to Court of Chancery Rules to Amend Section I, Rule 1, and Section V, Rules 26, 34, and 37 (effective July 1, 2019), available at https://courts.delaware.gov/rules/pdf/OrderImplementing-Amendments-to-Rules-1-26-34-and-37-redline.pdf; Del. Super. Ct., Order Amending Rules 1, 26(b)(1) and (c), 34(b) and 37(a)(2) of the Superior Court Rules of Civil Procedure (effective Aug. 1, 2019), available at https://courts.delaware.gov/forms/download. aspx?id=114458; D.C. Super. Ct., Rule Promulgation Order 17-02 (amending Super. Ct. Civ. R. 1 to 86-I) (effective June 1, 2017), available at https:// www.dccourts.gov /sites/ default/ files/Rule-PromulgationOrder%2017-02-AmendingCivilRules1to86-I.pdf; Ind. S. Ct., In re Ind. Commercial Courts, No. 19S-MS-295 (adopting Commercial Ct. R. 1-6) (effective May 16, 2019), available at https://www.in.gov/judiciary/ files/order-other-2019-19S-MS-295.pdf; Mich. S. Ct., ADM File No. 2018-19 (amending Mich. Ct. R. 1.105, 2.301, 2.302, 2.305, 2.306, 2.307, 2.309, 2.310, 2.312, 2.313, 2,314, 2.316, 2.401, 2.411, 2.506, 3.201, 3.206, 3.922, 3.973, 3.976, 3.977, and 5.131 and addition of Rule 3.229) (effective Jan. 1, 2020), available at https:// courts.michigan. gov/ Courts/ MichiganSupremeCourt/rules/court-rules-admin-matters/ Adopted/2018-19_2019-06-19_FormattedOrder_ AmendtOfDiscovery Rules.pdf; Minn. S. Ct., ADM File No. 04-8001 (amending Minn. R. Civ. P. 3-4, 10, 14, 23, 26, 30, 34, 37, 56, 63, and 67) (effective Mar. 13, 2018), available at https://mn.gov/law-library-stat/archive/supct/2018/ ORADM048001-031318.pdf; Nev. S. Ct., Creating a Committee to Update and Revise the Nevada Rules of Civil Procedure, No. ADKT 0522 (amending Nev. R. Civ. P. 1 to 86) (effective Mar. 1, 2019), available at https://nvcourts.gov/AOC/Committees_and_Commissions/ NRCP/ Adopted_ Rules_and_Redlines/; Vt. S. Ct., Order Promulgating Amendments of the Vermont Rules of Civil Procedure (amending Vt. R. Civ. P. 1, 26, 34, 37, and 55) (effective Sept. 18, 2017), available at https://www.vermontjudiciary.org/sites/ default/files/ documents/ PRO MULGATEDVRCP1_26_34%28b%29_37%28f%29_55%28c%29DiscoveryRules_0.pdf; Wyo. S. Ct., Repeal of the Existing Wyoming Rules of Civil Procedure and the Adoption of the Proposed Wyoming Rules of Civil Procedure (repealing and readopting amended Wyo. R. Civ. P. 1 to 86) (effective Mar. 1, 2017), available at https://www.courts. state.wy.us/ wp-content/ uploads/2017/05/ civpro_ 2017020200.pdf.

6 See Ohio Supreme Court, Amendments to the Ohio Rules of Practice and Procedure, First Publication for Public Comment (Oct. 7, 2019), available at http://www.supremecourtofohio.gov/ruleamendments/ documents/ONLINE%20PACKET.pdf.

7 See Final Report of the Task Force on Civil Justice Improvements, Submitted to the Chief Justice of the Supreme Court of the State of Hawai'i on July 24, 2019, available at https://www.courts.state.hi.us/ final-report-of-the-task-force-on-civil-justice-improvement.

8 Id. at 7.

9 See Mark Behrens & Christopher Appel, New ALI Restatement on Liability Insurance Draws Criticism, Int'l Ass'n of Def. Counsel, Civil Justice Response Comm. and Ins. and Reins. Comm. Newsletter (Nov. 2019), available at https:// www.iadclaw.org/ securedocument. aspx? file=1/ 19/ Civil_Justice_Response_November_2019_-_Joint_with_ REINSURANCE.pdf.

10 See Restatement of the Law, Liab. Ins. § 12(1) (2019).

11 See id. at § 12(2).

12 See id. at §§ 13, 18.

13 See Ohio S.B. 239 (2018) (codified at Ohio Rev. Code § 3901.82); Mich. H.B. 6520 (2018) (codified at Mich. Comp. Laws § 500.3032 (effective Jan. 1, 2020)).

14 See North Dakota H.B. 1142 (2019) (codified at N.D. Cent. Code § 26.1-02-34); Ark. S.B. 565 (2019) (codified at Ark. Code Ann. § 23-60-112).

15 See Tex. H.B. 2757 (2019) (codified at Tex. Civ. Prac. & Rem. § 5.001).

16 See Ind. H. Res. 62 (2019); La. Sen. Res. 149 (2019).

17 See Nat'l Conf. of Ins. Legislators, NCOIL Adopts Model Act Concerning Interpretation of State Insurance Laws (July 25, 2019), http://ncoil. org/2019/07/25/ncoil-adopts-model-act-concerning-interpretation-ofstate-insurance-laws/.

18 See Mark Behrens & Ashley Garry, Deceptive Plaintiff Lawyer Advertising is Harmful to Public Health . . . and States Are Taking Action, HarrisMartin's Drugs & Medical Devices (Nov. 4, 2019), available at https://www.iadclaw.org/ securedocument.aspx? file=1/7/ Deceptive_ Plaintiff_Lawyer_Advertising_is_Harmful_to_Public_Health_-_ HarrisMartin _-_Mark_Behrens_and_Ashley_Garry_-_11.4.2019.pdf.

19 See Cary Silverman, Bad for your Health: Lawsuit Advertising Implications and Solutions, U.S. Chamber Inst. for Legal Reform (Oct. 2017).

20 See Am. Med. Ass'n, Resolution 222 (2019) (finding misleading lawsuit advertising targeting medications has become "pervasive" and new research and physician experience indicates that "actual patient harm is occurring").

21 See Lisa Rickard, Warning: Lawsuit Ads May Be Harmful to the Health of Americans, The Hill, June 23, 2017, https:// thehill.com/ blogs/ congressblog/judicial/339057-warning-lawsuit-ads-may-be-harmful-to-thehealth-of-americans.

22 See Silverman, supra note 19, at 3.

23 See Mohamed Mohamoud et al., Discontinuation of Direct Oral Anticoagulants in Response to Attorney Advertisements: Data From the FDA Adverse Event Reporting System, Annals of Pharmacotherapy, vol. 53, no. 9 (Sept. 2019).

24 See Federal Trade Commission, FTC Flags Potentially Unlawful TV Ads for Prescription Drug Lawsuits (Sept. 24, 2019), https://www.ftc.gov/ news-events/press-releases/2019/09/ftc-flags-potentially-unlawful-tvads-prescription-drug-lawsuits; Cary Silverman & Frank Cruz-Alvarez, FTC Sends Warning to Mass Tort Lawyers and Lead Generators, The Legal Pulse (Wash. Legal Found. Sept. 27, 2019), https://www.wlf. org/2019/09/27/wlf-legal-pulse/ftc-sends-warning-to-mass-tort-lawyersand-lead-generators/.

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