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Business Roundtable report on Obama administration

The Business Roundtable, President Obama's closest ally in the business community, has gotten around to realizing that the Obama administration is not a friend of the private sector. This week, it issued a 54-page report to outgoing OMB director Peter Orszag that details the Obama administration's job- and investment-killing initiatives. Page 33 deals with the administration's woeful record on tort reform:

A major area of concern is the lack of meaningful discussion about tort reform. Pending legislation will affect many different industries, significantly add to costs, reduce personal incomes and increase regulations. Yet, in no case has the government included tort reform in the mix. This inaction will worsen a challenging environment for businesses as they try to comply with a large body of new law under the overhanging threat of litigation.

Key areas of concern include (in descending order of importance):

* Medical Liability Reform: The new health care law failed to adequately address medical liability reform. Comprehensive reform must include ensuring appropriate remedies for negligence while limiting damages where there is no negligence; developing alternative mechanisms to resolve claims to so that those harmed by negligence can obtain appropriate relief; and encouraging providers to follow quality standards by supporting the adoption of medical practice guidelines by professional associations, that if followed by a physician, would serve as a complete defense to a malpractice action.

* HR 4115 ("Open Access to Courts Act"): This legislation would resurrect meritless complaints federal district courts could otherwise dismiss under U.S. Supreme Court standards expressed in the Twombly and Iqbal decisions. Those decisions allow the courts to dismiss complaints that allege no support for conclusory allegations and whose allegations are not credible. This bill, by prohibiting courts from dismissing a suit unless a defendant can prove beyond a reasonable doubt that there is no set of facts that would ever entitle the plaintiff to relief, will extend the life of meritless suits and will cost corporations (and therefore consumers) millions of dollars in litigation and discovery costs, diverting resources which could be productively used for investment, job creation and retention and economic growth. This bill should be rejected.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.