\I ni t.cd St.itt,cvi General Accounting _.__-.--____-- _”,l...ll- “_-_l_-_“..__--____---_------ Office Iiqmr’t, t,o Congressional Requesters PRODUCT LIABILITY Verdicts in Massachusetts for 1983-85 ._.. _ ..^..__.__^..-I._-..._._....,._ ..-.-.-.- -...--.----_- I united states GAO General Accounting Office Wmhington, D.C. 20648 HumanResolucesDivlsion B-240764 October 26,199O The Honorable Richard H. Bryan Chairman, Subcommittee on Consumer Committee on Commerce, Science, and Transportation united states senate The Honorable Doug Walgren Chairman, Subcommittee on Commerce, Consumer Protection, and Competitiveness Committee on Energy and Commerce House of Representatives In the mid-19SOs, businesses and other organizations reported problems obtaining adequate, affordable liability insurance. In response, nation- wide attention was focused on the role of litigation, especially trends in the frequency and size of damage awards in court cases, in contributing to problems concerning the cost and availability of liability insurance. At the same time, the Congress and state legislatures debated whether reforming the tort system (the legal rules and judicial procedures for compensating injured parties) would remedy the insurance problems. Last year, GAO issued Product Liability: Verdicts and Case Resolution in Five States (G~o/HRDs999, Sept. 1989) to assist the Congress in its delib- erations on uniform product liability law at the federal 1evel.l Currently, however, each state establishes its own legal standards for product lia- bility cases. Reform advocates, therefore, have focused much of their efforts on changing state laws. The resultant activity in the states has been widespread, but has varied considerably from state to state. In general, policymakers and researchers have noted a persistent lack of information, especially at the state level, on awards and the bases of liability. This lack of information makes both congressional and state deliberations about needed reforms difficult. To facilitate these delibera- tions, for four of the five states reviewed in our earlier report2 we are providing detailed state-level information on verdicts in product liability ‘Manufalzhmx3 involved in i&x&ate commerwhaveamtendedthatasarcsultofvariationsinstate laws, they am hell held to diffemnt liabibyrules in different states, huther compkating estima- tionofriskforhurance purposw. We fouml that federal reforms, if sufficiently clear, would make theapplicatlonofp~~liabilitylawmcaeuniforminthe5ostates~Theimpactofsuchfederal nzfonus wuuld depend, however, on the specifb of the legMath enacted. 2Wearenotissuiugasepamtereportforoneofthestates,NorthDakota,becauseofthesmall numberofax3esinthatstate. P8ge 1 GAO/BRD-9l+SRoductLbbWtyinlbbmachusetta B2407M , cases. We are addressing these reports to you because the Subcommit- tees you chair have recently held hearings and full Committees have reported favorably the proposed legislation to establish uniform product liability law~.~ In this report, we present information for Massachusetts. Generally, proposed reforms have been designed to remedy alleged - Background problems in the tort system, including increasingly large awards and high litigation costs. Defendants have also claimed that the basis of lia- bility has shifted from liability based on intent or negligence toward a de facto no-fault liability system financed entirely by manufacturers. Data limitations have fueled debate on (1) the magnitude of these problems and (2) whether reforms would alleviate them. In our earlier report on product liability, we analyzed data on (1) the frequency and size of awards and payments, (2) liability standards used to decide cases, (3) posttrial activities and adjustments to awards, (4) time and cost of litigation, and (5) potential effects of federal reform measures. We collected these data for cases in Arizona, Massachusetts, Missouri, North Dakota, and South Carolinaq4 Not surprisingly, we found significant differences from state to state. We concluded that, in general, (1) damage awards in the five states were strongly associated with severity of the injury and, presumably, the underlying economic loss and (2) liability was still based largely on neg- ligence. We found that appeals and posttrial settlement negotiations reduced the size of the majority of awards over $1 million. Appellate courts also eliminated many punitive damage awards (which are designed to punish flagrant or intentional wrongdoing and to deter others from similar conduct or both). These activities, however, added to the substantial cost and time required to resolve claims. 31nMay 1990, the Committee on Commerce, Science, and Transportation reported favorably to the Senate S. 1400, the Product Liability Reform Act of 1989. In June 1988, the Committee on Energy and Commerce reported favorably to the House H.R. 1116, the Uniform Product Safety Act of 1988. In December 1987, the Subcommittee on Commerce, Consumer Protection, and Competitiveness had approved that bill. 4We based our selection of states on (1) whether product liability cases could be identified without manually searching thousands of case fifes, (2) the amount of information already published on product liability litigation in the jurisdictions, and (3) the relative costs associated with obtaining the information. The five states offer a mix in terms of region of the country, degree of urbanization, numbers of manufacturers and manufacturing employees, and tort laws (see Product Liability: Ver- dicts and Case Resolution in Five States, pp. 76-77). Page 2 GAO/HRBSM Product Liability in Massachusetts B-240764 Product Liability in Tort reform advocates do not consider Massachusetts to be a problem Massachusetts state in terms of excessive damage awards and inappropriate bases of liability; little effort, therefore, has been expended to reform product liability law in that state. No comprehensive product liability reform bill has been proposed. There have been some efforts, however, to change tort law in Massachu- setts, which would affect product liability cases. Since 1986, several bills to reform tort law have been proposed, but none have been enacted. GAO'S findings in Massachusetts were distinct from those in the other four states in several respects. First, in Massachusetts, the rate at which defendants were found liable was lower than the rates in the other four states. Defendants were found liable in 33 percent of Massachusetts’s cases as opposed to 48 percent of cases in the other four states com- bined. In Massachusetts, there were no awards of punitive damages, which are given to punish flagrant or intentional wrongdoing or to deter similar conduct. Punitive damages were awarded in each of the other four states and, for two states, in 25 percent of cases in which defend- ants had been found liable. This difference, at least to some extent, occurred because Massachusetts’s law limits punitive damage awards to cases of death. But laws in the other four states do not limit the type of injury for which punitive damages can be awarded. Finally, in Massachusetts, cases took longer to reach verdict than in the other states. Massachusetts cases took over 3-l/2 years to reach verdict as compared with a combined average of just over 2 years in the other four states. Ironically, Massachusetts is one of the two states GAO reviewed that requires prejudgment interest on awards, which is designed, in part, to create the incentive for a quick resolution of cases. Prejudgment interest accrues from the date the complaint is filed to the date of the judgment. Because of the considerable time required to reach verdict, on the average, one-third of the amount awarded at judgment in Massachusetts’s cases was prejudgment interest. In this report we provide information for 66 cases that were resolved Scopeand through verdicts for 1983-85 in Massachusetts’s 14 state superior courts Methodology and in the US. District Court (federal court) in Massachusetts. Of the 66 cases we studied, 22 were heard in the state courts. We describe Y . the accidents giving rise to product liability cases, the parties to the cases, the allegations and demands contained in plaintiffs’ complaints, I3240754 and the amount of time spent on the cases at each stage - from the accidents to final court actions (see app.1); l the percentage of cases in which defendants were found liable, the bases of liability, the amount of compensatory and punitive damages awarded, and deductions for comparative negligence (see app. II); and . the frequency of posttrial adjustments to awards and actual payments made to plaintiffs after verdicts (see app. III). For a discussion of the methodology used to identify cases and collect data, see appendix IV. GAO is sending copies of this report to Members of Congress, state legis- lators and officials, and other interested parties. The report is also avail- able on request. If you have any questions, please call me on (202) 2756193. Other major contributors are listed in appendix V. Joseph F. Delfico Director, Income Security Issues Page 4 Page I5 GAO/HID918 Product Liability in Masaachwetta Letter ~- 1 Appendix I 8 CasesThat Went to Verdict: Accidents, Parties, Demands, and ProcessingTime Appendix II 13 Verdicts: Rate and Size of Awards Appendix III 16 Payments: Effects of Statutes and Posttrial Activities Appendix IV 18 Methodology Appendix V 20 Major Contributors to This Report Tables Table I. 1: Majority of Accidents Involved Machinery 8 Table 1.2: Majority of Injured Parties Suffered Personal 8 wury Table 1.3: Typical Injured Party an Adult Male, Married, 9 and Working Table 1.4: Majority of Plaintiffs Who Went to Verdict 10 Were Those Harmed by Products Table 1.6: Majority of Defendants Who Went to Verdict 10 Were Manufacturers Table 1.6: Most Plaintiffs Resided in Massachusetts and 11 Most Defendants Were Headquartered in Other States Page 6 GAO/HRD91-8 Product Liabiltty in Mamachuaetts contenta Table 1.7: Monetary Demands Increased With Injury 11 Severity Table 1.8: Negligence the Predominant Basis of Liability 12 Claimed by Plaintiffs Table II. 1: Defendants Found Liable in One-third of Cases 13 Table 11.2:Liability Rates for Key Defendant Types the 13 Same Table 11.3:Extremely Large Awards Accounted for 13 Majority of Total Amount Awarded Table 11.4:Awards Varied by Type and Severity of Injury 14 Table 11.5:Negligence a Basis of Liability in Three of 14 Every Four Cases in Which Defendants Found Liable Table 11.6:Comparative Negligence Has Small Effect on 15 Total Amount Awarded Table III. 1: Defendants’ Payments to Plaintiffs May Differ 16 From the Initial Awards as a Result of Statutory Limits and Posttrial Activities Table 111.2:Total Amount Awarded Increased 16 Substantially With the Addition of Prejudgment Interest Table 111.3:Appeals More Frequent in Cases Plaintiffs 17 Won Than Those Won by Defendants Table 111.4:Net Effect of All Posttrial Actions Reduced 17 Payments by 23 Percent - Figure Figure 1.1: On Average, Cases Took 3-l/2 Years to Reach 12 Verdict and Appeals Took Over 1 Year to Resolve Page 7 GAO/HRD91-9 Product Liability in Maseachusetta I Appendix I CasesThat Went to Verdict: Accidents,Parties, ’ Demands,and ProcessingTime Table 1.1: Majority of Accidents Involved Machinery Product type Number Percent Machinery 38 58 Chemical substances 6 9 Vehicles 5 8 Drugs 5 8 Othera 11 17 Not specified 1 2 Total 66 102b aThis category includes a variety of products, such as medical devices, ladders, and appliances. bThe percentages total more than 100 because of rounding. Table 1.2: Majority of Injured Parties Suffered Personal Injury lniurv tvpe Number Percent Personal injury: Permanent partial disability 45 68 Permanent total disability 5 8 Temporary partial disability 4 6 Temporary total disability 2 3 Not soecified 3 5 All personal iniurv 59 908 Death 4 6 Property Damage 4 6 Total 67b 101b ‘Percentages for the five subcategories of personal injury add to more than 69 because of rounding bBecause 1 case involved both personal injury and death, (1) the number of injuries is more than 66, the total number of cases, and (2) the percentages total more than 100. Page 0 GAO/HRD91-9 Product Liability in Massachuaettti Appendix I Cama That Went k, Verdict: Accidents, Parties, Demands, and Prowwing Time Table 1.3:Typical Injured Party an Adult Male, Married, and Working Characteristic Number Percenr Sex Male 47 67 Female 20 29 Not applicable (businesses) 3 4 Total iniured oarties 70 100 Age categoryb Children (l-l 7 years old) 10 14 Adults (18+ years old) 56 80 Not applicable (businesses) 3 4 Not specified 1 1 Total injured parties 70 99 Marital status (adults only) Married 28 50 Sinale 7 13 Divorced, separated, or widowed 3 5 Not specified 18 32 Total adult injured parties 56 100 E~DlOV~ent status (adults onIvY Employed full-time 42 75 Employed part-time 4 7 Not working 2 4 Not sbecified 8 14 Total adult injured parties 56 100 aPercentages may not acid to 100 percent because of rounding. bOn the basis of data for 73 percent of the injured parties who were not businesses, the average age was 33 years old. % 47 percent of the cases, the injuries occurred on the job. Page 9 GAO/HRD-91-9 Product Liability in Massachusetts Appendix I Case8 That Went to Verdictz Accldente, Parties, Demands, and Processing Time Table 1.4: Majority of Plalntlffr Who Went to Verdict Were Those Harmed by Plaintiff type Number Percent Products Injured parties (includes estates) 64 67 Spouses 24 - 25 Parents 5 5 Children 2 2 Total 95. 99b aA total of 145 plaintiffs were named in the complaints in the 66 cases. In just under 90 percent of the cases, all plaintiffs named in the complaints went to verdict. One case, which had 43 plaintiffs at filing and 2 at verdict, accounted for the majority of the reduction in the number of plaintiffs from filing to verdict. In this case, plaintiffs had filed the case as a class action, but were denied that status and tried separately. bPercentages do not add to 100 because of rounding. Table 1.5: Majority of Defendant8 Who Went to Verdict Were Manufacturers Defendant type Number Percent Manufacturersa 75 73 17 16 -Sellers/distributorsb OtherC 10 10 Not specified 1 1 Total 1036 100 aln this category, 67 manufactured the finished product and 8, a component part. bin 18 of the cases (27 percent), product sellers were named in the complaints. When the cases went to verdict, 17 sellers remained, a drop-out rate of 6 percent, which is lower than the 32-percent drop-out rate for other types of defendants (see footnote d). CThis category includes a variety of types of defendants, including government agencies and employers. dA total of 145 defendants were named in the complaints in the 66 cases; 32 percent of defendants did not go to verdict. In about 85 percent of the cases, all defendants named in the complaints went to verdict. For 1 case, 29 defendants were named in the complaint and 6 went to verdict; in another, 11 defendants were named in the complaints and 1 went to verdict. These 2 cases accounted for the majority of the reduction in the number of defendants from filing to verdict. Page 10 GAO/HID-91-9 Product Liabiltty in Massachusetts Appendix I Cures That Went to Verd& Accidents, Parties, Demands, and Proceming Time Table 1.6: Moat Plaintiff8 Reaided in Ma88achuaette and Mo8t Defendant@ state Number Percent Were Headquartered in Other State8 Plaintiff reridence Massachusetts 91 96 Other states 3 3 Not sbecified 1 1 TOtsi 95 100 Defendant headquarters Massachusetts 17 16 Other states 81 79 Not specified 5 5 Total 103 100 Table 1.7:Monetary Demand8 inCrea8ed With InJury Severity Dollars in thousands Demand $1 million or more TVDCBof iniurv Number’ Averaao Median Iin oercenb Wrongful death 3 $1,322 $1,500 67 Personal injury: Permanent 47 1,537 750 47 Temborarv 7 471 350 14 All personal injury 55b 1,376 800 42 Property damage 4 704 400 25 All cases 62c 1.330 800 42 Note: In all cases, plaintiffs requested compensatory damages; in 7 cases, compensatory and punitive damages. Compensatory damages are paid to plaintiffs to replace the losses caused by injury. They consist of economic damages, which cover the actual out-of-pocket expenses incurred by plaintiffs, and noneconomic damages, which cover intangible injuries such as pain and suffering. Punitive damages are given to punish intentional or flagrant wrongdoing and deter others from similar conduct. Qata were unavailable for 4 cases; 3 cases involved personal injury and 1 case, personal injury and wrongful death. blncludes 1 case in which the severity of injury was unspecified. CDemands ranged from $15,000 to $11 million. Page 11 GAO/IilUMU4I Product Liability in Massachusetts Appendix I Ceselr That Went to Verdicts Accidenta, Parties, Demands, and Promssing Time Table 1.8: Negligence the Predomlnant Bad8 of Liability Clalmed by Plaintiffs Basis of liability Number Percent Negligence, breach of warranty, and strict liability 31 47 Negligence and breach of warranty 24 36 Negligence only 6 9 Negligence and strict liability 2 3 Breach of warranty and strict liability 2 3 Breach of warranty only 1 2 Total 66 100 Note: In Massachusetts, plaintiffs can allege that defendants are liable for different reasons. Most preva- lent among these are negligence and breach of warranty. Under negligence, defendants are liable if they did not exercise due care and this lack of care caused the injury. Under breach of warranty, defendants are liable if a product failed to work as expressly or implicitly warranted or promised. Massa- chusetts has not adopted the standard of strict liability per se, under which many states allow plaintiffs to plead their cases. Under strict liability, defendants are liable if a product was defective and this defect made the product unreasonably dangerous and caused an injury. The plaintiff in a strict liability action need not prove that the manufacturer or seller failed to exercise due care, as is required in a negligence action. Massachusetts’s courts have indicated that in the state, breach of warranty covers the same circumstances in which defendants can be held strictly liable in other states. Our data indi- cate that plaintiffs in 35 cases alleged strict liability, although such allegations are not recognized under Massachusetts law. Figure 1.1:On Average, Cases Took 3-l/2 Year8 to Reach Verdict and Appeals Took Over 1 Year to Resolve In Months 21.4 42.8 4.5 13.4 Incident Filing Appeal Resolved Trial Starts .5 ‘Time between verdict and filing of appeal primarily reflects the time required to resolve parties’ motions (requests) to the trial judge (for example, a motion for a new trial or a motion for a reduction in the award). During this time, parties submit briefs (arguments) in support of their positions on the motion(s) and the judge considers and rules on them. Page 12 GAO/HRD9143 Product Liability in Maseachusetta Appendix II Verdicts: Rate and Sizeof Awards Table 11.1:Defendants Found Liable in One-third of Cases Cases Reaching Defendants Type of injury verdict found liable Wrongful death 4 3 Property damage 4 2 Personal iniurv 58 17 Total 66 22 Table 11.2:Liability Rates for Key Defendant Types the Same Defendants Reaching Found liable -Type of defendant verdict Number Percent Manufacturers 75 22 29 Sellers/distributors 17 5 29 --~___ Othera 11 5 50 All cases 103 32 31 ‘Includes 1 defendant for whom type was unavailable Table 11.3:Extremely Large Awards Accounted for Majority of Total Amount Dollars in thousands Awarded Awards Percent of total Size of award Cases Average Median awarded Gs than $100.000 12 $50 $50 5 $100,000 to $999,999 4 187 124 7 $1 million and over 6 1,616 1,346 .- 87 -.------ All cases 22a 505 88 99b Note: Awards exclude prejudgment interest (see table 111.2). aAwards ranged from $15,000 to $3.1 million and totaled $11 ,l million. All awards were for compensatory damages. Because Massachusetts only allows punitive damages in wrongful death cases, only the 3 wrongful death cases in which defendants were found liable would have qualified for awards of punitive damages. bPercentages do not add to 100 because of rounding. Page 13 GAO/HRD-918 Product Liability in Massachusetts Appendix II Verdict-a Rate and Size of Awards Table 11.4:Awards Varied by Type and Severity of Injury Dollars in thousands Awards Wry type Cases Average Median Expected. Wrongful death 3b $1,756 $1,800 $1,317 Personal injuryC 17 337 82 99 Property damaged 2b 50 50 25 All cases 22 505 88 168 aExpected award is the average award across all cases, including those won by defendants. Of the three ways of describing the typical award, the expected award is the best indicator of what plaintiffs received across all cases that went to verdict. bThe average, median, and expected award can be extremely unreliable when only a few cases are considered. CAmong personal injury cases, larger awards were given for permanent disability than for temporary disability. In the 15 cases involving permanent disability in which defendants were found liable, the average award was $376,000 and the median award, $92,000. Awards in the 2 cases involving tempo- rary disability were $47,000 and $50,000. dThe 3 awards in wrongful death cases were for $402,000, $1.8 million, and $3.1 million, The 2 awards in property damage cases were for $15,000 and $85,000. Table 11.5:Negligence a Barrla of Liability In Three of Every Four Cases In Which Basis of liability Number Percent Defendants Found Liable Negligence onlya 9 41 Negligence and breach of warrantyb 8 36 Breach of warranty only 2 9 Not specified 3 14 Total 22 100 BUnder negligence, defendants are liable if they did not exercise due care and this lack of care caused the injury. bUnder breach of warranty, defendants are liable if the product failed to work as expressly or implicitly warranted or promised. Page 14 GAO/HRLI-918 Product Liability in Massachusetts Table 11.6:Comparative Negligence Ha8 Small Effect on Total Amount Awarded Dollars in millions Comparative nealhence Reduction in total Effect on award Cases Award before Award after award (in percent) Cof;fn;:tive negligence Award unchangedb 5 $1.6 $1.6 0 Award reducedC 7 1.7 1.4 18 All cases 66 11.4 11.1 3 Note: In Massachusetts, if the defendant’s liability is based solely on negligence, the award is reduced by the degree to which the plaintiff’s negligence was responsible for the injury (that is, comparative negligence). If the plaintiff’s negligence exceeds that for all defendants combined, the plaintiff is not entitled to recover any damages. ‘Awards were unchanged because, in addition to negligence, defendants’ liability was also based on breach of warranty, to which the principles of comparative negligence did not apply. bFor the 7 cases, the average percentage reduction was 48 percent. In 2 cases, because plaintiffs’ negligence was more than 50 percent responsible for the injury, they could not recover damages. Page 16 GAO/JSRDBl-fl Product Liability in Massachusetts Payments:Effects of Statutesand Posttrial Activities Table 111.1:Defendanta’ Payments to Plalntiffs May Differ From the Initial Awards as a Result of Statutory Limits and Posttrlal Activities Mechanism - .._-___.- Deflnltlonldescrlotlon Possible effect on award Statute Statutes (1) limiting the amount that can be recovered May decrease award if statute sets limit (for example, from defendants (for example, requiring that awards under the law, prejudgment settlements with be reduced by the amount of prejudgment settlements defendants who did not go to verdict would be with other defendants) or (2) specifying that interest deducted from the award) or increase award if statute be added to the award requires payment of interest (for example, prejudgment interest is paid from the date the case was filed) Subrogation The right of a person who is secondarily liable to Does not change total amount plaintiff receives; succeed to the right of the person he or she paid; for subrogation decreases the amount the defendant example, if an insurer pays the injured under an pays to the plaintiff; the defendant pays the insurance policy, the company can then recover the subrogated amount to the person secondarily liable .” _-.--- amount paid from any subsequent award to the injured Motion (req&st) to trial Request to the trial judge to either change the verdict Trial judge may (1) decrease award (remittitur); judge or grant a new trial (2) increase award (additur); (3) partially or completely overturn the verdict, thereby eliminating some or all awards; or (4) grant a new trial Appeal Request that an appellate court determine whether Appellate court may (1) decrease award; (2) increase (1) sufficient evidence exists to support the verdict or award; (3) partially or completely overturn the verdict, (2) the trial judge made any major errors in ruling on thereby eliminating some or all awards; or (4) set aside specific matters the verdict in whole or in part and remand the case to the trial court for further proceedings Settlement Negotiated agreement between parties specifying May increase the payment so that it is more than the how the case will be resolved award, decrease the payment so that it is less than the award, or specify a payment schedule for the original award Table 111.2:Total Amount Awarded Increased Substantially With the Dollars in thousands Addition of Prejudgment Interest Awards Staae Cases Average Median Total awarded At verdict 22 $505 $88 $11,100 At judgments 736 178 % each of 5 cases, the trial court judge adjusted the initial award. The net effect of these adjustments was to reduce the number of cases in which awards were made to 21 and the total amounts awarded by less than 2 percent. In 3 of the cases, the judge granted motions made by one of the parties: in 1 case, the judge increased the award amount; in 2 cases, the judge reduced the award amount. In the other 2 cases, because of a statutory requirement, the trial judge reduced the initial award by the amount agreed to in settlements with defendants who had not gone to verdict. Massachusetts’s statute requires that the trial court judge add prejudgment interest to the final award amount. Such interest accrues from the date the complaint is filed to the date of the judgment and is designed to (1) create the incentive for a quick resolution of the claim and (2) compensate the plaintiff for having to sustain the loss while the case is being litigated. The applicable rates of interest for the cases we studied were 12-percent simple interest for personal injury and property damage and 6-per- cent simple interest for wrongful death. In the 20 cases for which we have data on prejudgment interest, plaintiffs were awarded a total of $4.6 million in interest and such interest averaged 33 percent of the amount awarded per case. For 1 case with an award of $1 million, data on prejudgment interest were unavailable. Page 16 GAO/I-IRDOl+? Product Liability in Mamachwetta . Appendix Ill Payments: Effects of Statutes and Poettrial Activities Table 111.3:Appeals More Frequent in Cases Plaintlff s Won Than Those Won by Appealed Defendants Winning party Cases Number Percent -.__ Plaintiff* 22 14 64 Defendant 44 13 30 All cases 66 27b 41 ‘The rate of appeals for cases in which the awards were greater than $100,000 was not greater than the appeals rate for cases in which the awards were less than $100,000. This was unlike the findings in the other four states we studied. bFor 26 cases, we obtained data on the resolution of appeals. In 7 cases, at the request of both parties, the appeal was dismissed prior to an appellate court ruling. In the 19 cases in which appellate courts rendered decisions, the courts affirmed the verdicts in 6 of 10 cases won by defendants and 4 of 9 cases won by plaintiffs. Among reversed cases, appellate courts remanded 2 cases won by defendants and 2 cases won by plaintiffs to the trial court level for further action. Table 111.4:Net Effect of All Posttrial Action8 Reduced Payments by 23 Dollars in thousands Percent Ratio of Cases Average Pw;;a;r Posttrial action Number Percent Award Pavment a Plaintiff verdicts ________ Reduced 6b 13 $1,390 !1,045 .75c Unchanaed 6 13 113 113 1 Defendant verdicts d Unchanged 31 69 0 0 Increased 2 4 0 13 d _---. All cases 4tP 99’ $200 $155 .77 Note: For purposes of this study, payments were defined as all moneys paid to plaintiffs by defendants who went to verdict, excluding payments for postjudgment interest, legal fees, liens, and pretrial settlements. ‘Consistent with previous research, this is the ratio of payments to awards for a group and not the average of ratios for individual cases. bin 1 case, the payment was reduced as a result of a posttrial settlement. In 2 cases, appellate courts reduced the award amounts. In 3 cases, the reasons for the reductions were unspecified. CA reduced payment in 1 case accounted for much of the reduction across all cases. The case had an initial award of over $1 million and a payment of $116,000, a reduction of more than 90 percent. Excluding this case, the payment-to-award ratio for the remaining 5 cases with reduced awards was .92 as compared with .75, including the outlier. Considering both cases won by plaintiffs and those won by defendants, the ratio of amount paid to awarded was .93, excluding the outlier. dThe ratio is undefined because the base, average awards, is 0. ‘?n the survey of attorneys used to collect this information, we obtained responses for 45 of the 66 cases (see app. IV). ‘The percentages do not add to 100 because of rounding Page 17 GAO/HID-91-9 Product Liability in Massachusetts Appendix IV < Methodology I We gathered data on product liability cases resolved in 1983-86 by a Selection of Cases judge or jury verdict. To ensure a sufficient number of cases for our analyses, we examined those that went to verdict during a %-year period; that is, we treat the 3 years as one period, not three consecutive periods. Since appeals can take years to resolve, we estimated that cases closed in 1986 were the most recent for which we could reasonably expect all appeals to have been resolved. We examined cases that were resolved in Massachusetts’s 14 state supe- rior courts and the U.S. District Court (that is, federal court) for Massa- chusetts.1 From the Office of the Chief Administrative Justice, we obtained a listing of product liability cases that had been tried in state superior courts.2 We supplemented this information from the Adminis- trative Office of the Massachusetts Court of Appeals on cases appealed since 1983. In total, we found 22 cases that went to verdict in state court. We obtained a listing of cases that were resolved in federal court from the Administrative Office of the U.S. Courts.3 The listing indicated that 44 cases went to verdict in 1983-86. From the case files maintained by the courts, we obtained background Data Collection information including descriptions of accidents and parties to the law- suits; the disposition of the cases against each defendant; the amount of compensatory and punitive damages demanded and awarded; and dates of various stages of case processing, from the date of the accident to final disposition. We also recorded information on posttrial activities, including appeals and settlement negotiations, as well as, when avail- able, their outcomes. To supplement information on appeals, we searched appellate court records, when available, and a computer database that included information on appealed cases nationwide (WESTLAW). To gather information not consistently available from court files, we sent copies of a questionnaire to plaintiff and defendant attorneys who represented the parties in the cases. Attorneys were asked to report the ‘Cases involving state law can be heard in federal court if (1) all defendants are citizens of states different from all plaintiffs and (2) in 1983-86, at least $10,000 was claimed in damages. Since April 1989, to be heard in federal court, the amount in controversy must be at least $60,000. 2Superior courts do not have jurisdication over cases involving claims under $7,600, which can be tried in state district court, municipal court, or housing court. 3The Administrative Office’s data are generally considered to be the best source for information on product liability cases. Page 18 GAO/HUD-918 Product Liability in Massachusetts * Appendix N Methodology status of the cases, payments made to date, and how the amounts were determined. For questions concerning payments, the questionnaire was designed so that a response from only one side in the dispute provided complete case data. We obtained complete payment data for 45 cases, 68 percent of the 66 cases. Page 19 GAO/I-JRD-91-8 Product Liability in Massachusetts Appendix V Major Contrtributorsto This Report / Cynthia A. Bascetta, Assistant Director, (202) 2750020 Human Resources Susan E. Arnold, Assignment Manager Division, Laurel H. Rabin, Reports Analyst Washington, DC. (106666) Page 20 GAO/HlUh91-8 Product Liability in Bbssachueetts 1i.S. Gtmt~ral Accounting Office f’.O. f3ox 6015 (hit htmhorg, MI) 201377 I- i First-Class Mail Postag!e PL Fees Paid GAO Permit No. GlOO
Product Liability: Verdicts in Massachusetts for 1983-85
Published by the Government Accountability Office on 1990-10-26.
Below is a raw (and likely hideous) rendition of the original report. (PDF)