NFIB

NFIB News Tip: Ohio Supreme Court Hears Oral Arguments on Ohio's Recent Tort Reform Initiative
05/02/2007

CONTACT: Melissa Sharp, (202) 314-2068, or Mandy Minick, (614) 221-4107 

Columbus, Ohio--On Tuesday, May 1, the Ohio Supreme Court heard oral arguments to determine whether a landmark piece of legislation that limits punitive damages awards recoverable from small businesses or individuals, is constitutional. 

In 2004, the Ohio General Assembly passed a major multi-subject lawsuit abuse reform bill, SB 80, which directly tackled the sky rocketing damages awards that are so problematic with modern-day lawsuits.  The new law limits the amount of punitive damages recoverable from small employers or individuals to the lesser of two times compensatory damages, 10 percent of the employer's or individual's net worth, or $350,000.  Punitive damage lawsuits are of acute concern for small-business owners, as they cannot purchase insurance to cover these damages placing the owner's home and other personal assets at risk.  As a result, personal injury lawyers use the fear of punitive damages to leverage increases in other damage awards. 

"Senate Bill 80 has brought a much-need level of consistency and stability to our legal system that is necessary for continued business operations in our state," said Ty Pine, NFIB/OH Legislative Director.

The National Federation of Independent Business Legal Foundation filed an amicus brief in support of the legislation arguing that the law is constitutional and should be upheld. 

America's out-of-control legal system imposes a staggering economic cost of over $865 billion every year according to a new study released in March by the Pacific Research Institute. Small businesses are crushed by these lawsuits and need reasonable relief from excessive punitive damages awards.

"Ohio recently moved from 41st to 4^th in lawsuit abuse reform efforts, in part due to the passage of this bill. Repealing the law would be a major-step backwards for Ohio businesses. We urge the Ohio Supreme Court to validate this law and keep Ohio moving in the right direction in terms of improving the state's business conditions," said Karen Harned, executive director of NFIB's Legal Foundation.

The case at issues is Arbino v. Johnson & Johnson.

The NFIB Legal Foundation is a 501(c)(3) organization created to protect the rights of America's small-business owners by providing advisory material on legal issues and by ensuring that the voice of small business is heard in the nation's courts. The National Federation of Independent Business is the nation's leading small-business advocacy association, with offices in Washington, D.C., and all 50 state capitals.