Subject: Tort Reform

The Prison Litigation Reform Act – A Product Liability Statute in Disguise

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United States prisoners file an inordinate number of often frivolous lawsuits. In federal district courts alone, prisoners filed more than 28,000 last year. With time on their hands, and influenced by plaintiff attorneys’ advertisements and/or sensational media coverage of multimillion-dollar personal injury verdicts, many prisoners pursue baseless product liability actions. Their goal: winning an outsized verdict or, at least, a quick, nuisance-value settlement. They have had little to lose. Yet, defendant pharmaceutical companies are forced to litigate these cases, faced with the attendant costs of often-complicated inmate discovery. Many judges and/or magistrates, perhaps influenced by civil rights concerns, sometimes bend the rules of Civil Procedure for pro se prison plaintiffs. The result: Expensive litigation of often meritless lawsuits with virtually no chance of collecting costs as a prevailing party.

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New Study Shows Link Between Increased Product Liability Litigation And Decreased Technological Innovation

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It’s an argument both manufacturers and the defense bar have been making for years: an increased risk of liability for new products will deter manufacturers from developing new technologies. Yet despite the apparent logic of such an argument, there was scant empirical evidence backing up this claim . . . until last month.

Researchers Alberto Galasso of the University of Toronto and Hong Luo of Harvard Business School recently published a working paper that examines the impact of increased litigation for medical implant manufacturers in the early 1990s. The paper, titled “How Does Product Liability Risk Affect Innovation? Evidence From Medical Implants,” shows how this increase led to a decrease in downstream innovation in medical implants and demonstrates how tort reform—specifically the 1998 Biomaterials Access Assurance Act (BAAA)—subsequently reversed this trend and spurred further innovation for raw material manufacturers.

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