In 1997, Congress passed the Amtrak Reform and Accountability Act, which said, in part, "The aggregate allowable awards to all rail passengers, against all defendants, for all claims, including claims for punitive damages, arising from a single accident or incident, shall not exceed $200,000,000." The law had no provisions for inflation, and, in any event, a law like this is only meaningful if there is an occasion where someone's damages are limited. Sure enough, there was a 2008 rail accident in Chatsworth, California. A passenger train engineer missed a stop signal because he was texting someone; he paid the price with his own life when he collided with a freight train. The laws of physics being what they are, the passenger train took the brunt of the collision, killing 24 and injuring 100 according to Cohen (other reports have slightly different figures). A California judge recently held that total damages were $264 million, but that means that $64 million won't be paid.
The Atlantic's Andrew Cohen has a breathless and intellectually disingenuous piece claiming that this incident damns all tort reform. You'd think a fellow landsman named Cohen would be less careless throwing around analogies with Nazi Germany, but he uses the phrase "Sophie's Choice" three times to describe the horrible horrible situation where plaintiffs receive an average of $1.61M in compensation instead of $2.13M in compensation.
First, Cohen is using bad logic. If Grover Norquist were to point to a single dumb tax and say that this means no one should ever pass any tax ever, he would be rightly laughed at. So why does Cohen smear all tort reform with one 1997 law that has had consequences once?
Second, ARAA has very little to do with tort reform. No reformer I know proposes per-accident caps or economics damages caps. The policy debates today are not about per-accident caps or economics damages caps. So it's especially appalling to try to smear legitimate tort reforms that are good public policy with a per-accident cap law—the same dishonesty that the movie "Hot Coffee" engages in. Certainly legislators pass such laws from time to time, but they don't do so because of the tort reform movement; they're pure subsidies. The "per-accident" and "per-incident" language of ARAA is telling: it's meant to permit rail operators to have certainty about how much insurance they need to purchase and reduce their costs.
Third, if you're going to complain about a law that subsidizes the rail industry, you should look at the benefits in addition to the costs. You can't simultaneously complain that Congress passed a law that subsidizes the rail industry and complain that the US doesn't have the passenger rail system of Europe or Japan. Without the ability to control insurance costs, the passenger rail industry might not even exist. Now, perhaps the price of awarding rail victims in a single accident $1.61M on average instead of $2.13M once in fifteen years is too high a price to pay to have a passenger rail industry at all, but then make that argument rather than the argument that all tort reform is evil. Of course, passenger rail is considerably safer than many alternative means of transportation: the damages limitations of ARAA has probably saved dozens of lives and untold carbon emissions. That may or may not be worth a Chatsworth damages cap, but Cohen doesn't trust his readers to decide for themselves.
Fourth, Cohen misrepresents the facts of the case, falsely claiming that the engineer's employer was recklessly aware of the engineer's texting proclivities. His own link shows that this simply isn't so: the NTSB did not find Veolia had acted improperly, and the engineer was using a personal cell phone that employment laws would not permit Veolia to investigate, so Veolia did not know about the engineer's texting; union rules prohibited Veolia from disciplining the engineer for earlier infractions. Perhaps we could repeal those employment and labor laws imposing liability on employers for such investigations and discipline when public safety is involved? Ah, but that would be a tort reform, and we know from Cohen that all tort reforms are bad.
Fifth, what the heck? A $200 million cap would mean an average of over $4M for every fatality and over $1M for every injury, using Cohen's 24 dead and 100 injured figure (and remember, not all of the injuries are serious). Why on earth would that not be sufficient? How many people carry $4M life insurance in case they're killed by a judgment-proof mugger or drunk driver? Would it make that much difference if the figure was $5.3M and $1.3M? (Returning to the European passenger rail system, one notes that it has killed hundreds of people in accidents this century, and I assure you that those victims are not collecting millions in compensation.)
Sixth, Cohen leaves out the real reason $200 million is not enough—the trial-lawyer cartel is almost certainly charging the full 40% contingency fee in this case, even though the existence of the cap has permitted the rail operator to concede liability and walk away to let the parties fight over the $200 million pot. (Without the cap, the case would still be litigated, because trial lawyers wouldn't be satisfied with $264 million, and would have been seeking billions of dollars of unjustified punitive damages from the deep pocket, and none of the passengers would have been paid yet.) If the trial lawyers agreed to accept only a generous $42 million for their sure-thing litigation, then the passengers would be getting a full $158 million—or 60% of $264 million, the damages that Cohen thinks they deserve. And even then, both the lawyers and many passengers would be getting a windfall. It's trial lawyer greed more than anything else that is keeping Chatsworth victims from being fully compensated to the extent we think those victims are undercompensated. But we never hear that from Cohen.
(Can I propose Frank's Second Law? Never expect fruitful discussion from anyone who uses scare quotes for the words "tort reform.")
Update, July 27: I was too generous to Andrew Cohen.