A MODEST TORT PROPOSAL

" LOTTO JUSTICE" has struck again. Last month, a Los Angeles jury required General Motors to pay a badly burned family of five and their traveling companion $ 4.9 billion -- the largest personal injury award in history. That's enough money to place all six of the plaintiffs and their contingency fee lawyers near the top of any list of the world's richest people. The tragic fire ignited when a drunk driver rammed their 14-year-old Malibu from behind at close to 70 miles per hour as the family drove home from church.

While legal commentators expect that this award, like most of its size, will fail to withstand the test of appellate review, the Los Angeles verdict is a billboard-sized reminder that our tort law system has run amok. After all, despite the burns suffered by the plaintiffs, the supposedly defective Malibu was designed so sturdily that all six of its occupants survived the enormous impact of the crash. Nevertheless, the jury awarded damages that are far greater than General Motors's profits for all of last year. The jurors clearly focused on the plaintiffs' injuries. But did they also consider the lives of the hundreds of thousands of General Motors employees that would be devastated if the company were to go out of business or have to curtail its operations? And what about the loss of competitiveness and tax revenues that will result if General Motors has to pay billions of tax-free dollars to the plaintiffs instead of investing that same money in safety research or new vehicle plants?

While it may be tempting to blame the outcome of this trial on yet another out-of-control California jury, jurors do not operate in a vacuum. Most significantly, they react to the evidence the judge lets them see, and they ignore the evidence they cannot see. In this case, by admitting into evidence a series of documents that most other courts have deemed irrelevant and inadmissible, the trial judge allowed the plaintiffs' lawyers to weave a fictitious but enticing conspiracy theory. The plaintiffs contended that General Motors could have designed a safer fuel tank for the Malibu at a marginal cost of only $ 8.59 per vehicle, but chose not to do so because it had a corporate policy of not spending more than $ 2.40 per vehicle to improve fuel system design. The plaintiffs pursued this fiction despite the absence of a single witness to confirm it and even though some of the documents on which they relied proved that General Motors had tested the plaintiffs' alternative design and considered it less safe.

Equally important was the evidence the judge prevented General Motors from presenting in court. For example, the judge refused to let the jury know either that the driver of the car that crashed into the Malibu had a blood alcohol level of two-and-one-half times the legal limit or that a passenger in the Malibu who blocked exit from the vehicle after the crash also was intoxicated and tested positive for cocaine. The court also barred any statistical evidence of the safety history of the Malibu, even though the Malibu compared favorably with similar models. The judge even prohibited General Motors from showing the jury that the alternative fuel system design suggested by the plaintiffs was actually used on a production vehicle that failed a government safety test. Thus, the judge not only permitted the plaintiffs to manufacture a case based on innuendo instead of hard evidence, but then deprived General Motors of the opportunity to defend the vehicle that was under attack.

While these rulings by the judge certainly influenced the jury's verdict, this case also demonstrates two structural problems with product liability law today. First, the verdict was the result of a legal system that regularly forces companies to defend products that meet federally mandated safety standards. This is a form of double jeopardy. Second, the case reflects the advantage plaintiffs have when they sue in their own state courts an out-of-state company, because jurors see the plaintiffs as members of their own community, while they view a large out-of-state company as a rich stranger to whom they feel no connection.

Tort reformers hope that the enormity of this verdict will reinvigorate their agenda just as the Littleton massacre has precipitated calls for tough new gun-control measures. But no lobby, the NRA included, is more powerful today than the trial lawyers -- who are investing their tobacco-litigation fortunes in political campaigns to maintain their positions of power. If tort reform is to have a chance, its advocates will have to stop pursuing pie-in-the-sky proposals such as banning contingency fees and requiring the losing party to pay his opponent's legal fees, and instead target more moderate goals. Two proposals in particular -- one to eliminate the double jeopardy aspect of lawsuits over regulated products, and the other to reduce the typical plaintiff's home court advantage -- merit serious consideration.

* Safe harbors for products that comply with federal safety standards: Agencies like the Food and Drug Administration, the Federal Aviation Administration, and the National Highway Traffic Safety Administration (NHTSA) have enormous power to regulate their respective industries, including the power to ban the sale of certain products, order product recalls, and levy fines. And these agencies do not hesitate to wield their power. For example, from 1990 to 1999, NHTSA ordered hundreds of recalls of motor vehicles based on determinations that those vehicles were not safe. With such heavy government oversight and regulation, there is no reason to expose manufacturers to rearguard attacks against products that comply with government safety standards. A modest reform would be a law mandating that courts apply a heavy presumption that any product in compliance with applicable safety standards is not defective, and that in any event, manufacturers of such products may not be found liable for punitive damages.

* Expanded access to federal courts. Today, a plaintiff can sue a manufacturer in a state court almost anywhere it conducts business, but a defendant can only remove a case to federal court if no other defendant is a citizen of the same state as a plaintiff. To keep corporate defendants out of federal court, plaintiffs often add defendants to a lawsuit solely because these nominal defendants reside in the same state as the plaintiff. Because lifetime tenure makes federal judges immune to the hometown pressures of reelection campaigns, federal courts usually are more predictable forums than state courts for the resolution of product liability lawsuits. A second modest reform would be to permit the defendant to remove to federal court any case in which more than $ 1 million in damages is sought.

Both of these proposals would promote predictability in product liability litigation, while at the same time preserving plaintiffs' rights. For example, if a product really were defective in the sense that it did not work as intended or did not comply with federal safety standards, a large damages award would remain a possibility. Only if a manufacturer complied with a specific government safety standard would the manufacturer be insulated from the threat of punitive damages, and perhaps from any liability. Likewise, while expanding access to federal courts would help level the playing field on which law-suits are fought, it would not bar the courthouse door to a single plaintiff.

Perhaps the Los Angeles verdict will spark a public outcry for tort reform. If it does, and if the reformers want a reasonable chance of passing serious reforms, these two proposals are a good place to start.

Jay Lefkowitz is a commercial and appellate lawyer in Washington, D.C. Although he was not involved in the recently completed Los Angeles trial, he represents General Motors in numerous cases.