Iowa Tort Reform Bill Goes to Governor
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A landmark law in Iowa limiting jury awards to $5 million in accident lawsuits against commercial vehicles was sent to the desk of Gov. Kim Reynolds for enactment.
The bill would impose the cap on noneconomic damages, which include pain and suffering, mental anguish, and depriving family for the loss of a spouse, parent or child. The law also would set limits on the extent to which trucking companies could be held liable in their hiring practices, noted Brenda Neville, president and CEO of the Iowa Motor Truck Association.
“Over the last several years unfair litigation tactics have destabilized the tort system transforming commercial vehicle accident lawsuits into a profit center for plaintiff attorneys,” Neville said. “If a commercial vehicle acts wrongfully and causes a crash or injury, it should and will be held accountable and those injured should be compensated.”
She added, “This was never an attempt to give a pass to the industry — anyone in this industry accepts responsibility when they are at fault. But we needed to level the playing field, and this legislation provides trucking companies with predictability, certainty and frankly, bankruptcy protection.”
Reynolds
She also touted the portion of the measure aimed at hiring practices.
“This legislation also protects trucking companies against charges of negligent hiring of a driver. The bill states, ‘There shall not be civil liability for an employer’s hiring of an employee.’ Supporters of the bill believe this to be a significant improvement to the current legal landscape, where trial lawyers often accuse trucking companies of failing to uncover information on their new hires,” Neville said.
She added that IMTA designated tort reform as a top priority four years ago.
ATA Chairman Dan Van Alstine, who also serves as COO of Ruan Transportation and chaired the IMTA board when the issue rose to prominence, also praised the bill.
“This is important legislation that is truly based on fairness and common sense, and it is the result of many years of hard work and ultimately determined negotiations by all parties involved with this legislation,” he said. “Most importantly, this legislation, created in Iowa, will become the architecture upon which all states can build laws that protect with balanced impartiality.”
The legislation, which advanced through the state Senate by a vote of 31-19 on April 17, is headed to Reynolds’ desk.
“This is a reasonable result of a lot of compromise. Frankly, it brought together parties to the table that I had never thought I would see coming together to the table and hammering out an agreement,” remarked state Rep. Bill Gustoff (R), during a March 28 state House of Representatives hearing on the bill. Gustoff introduced the House version of the bill, which went through multiple amendments before moving to the Senate.
“It’s not perfect, I get that,” he remarked. “As much as some [legislators] in this room would like to see more on certain things, I thought there were things that I wouldn’t want to see in this bill. I’m happy to run the bill as a compromise — as a good piece of legislation — to resolve a long-standing dispute.” .
Gustoff noted that the legislation provides exceptions to the $5 million limit, such as drunk driving, excessive speed or using a commercial motor vehicle in a felony. The bill also allows for inflation adjustments and designates that 100% of punitive damages be awarded to a plaintiff.
State Rep. Jon Dunwell (R) stressed the importance of ensuring victims and their families are cared for in legitimate cases.
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“I recognize the importance and value of the tort system, but I also want to make sure it has some boundaries on it because of the expense for American families,” he said. “The reality is only about 53% of the dollars end up in a claimant’s pocket. The rest is just for supporting the system.”
Dunwell noted that in 2020 the tort system was responsible for $443 billion of U.S. Gross Domestic Product, or about 2.1% overall.
“That really concerns me, as well,” he said. “It costs every family in America $3,600 a year. I’d like to bring those costs down for Americans.”
The findings came from a November study by the U.S. Chamber of Commerce called Tort Costs in America: An Empirical Analysis of Costs and Compensation of the U.S. Tort System.
State Sen. Adrian Dickey (R), president of Dickey Transport and 2023 board chairman of IMTA, said Iowa’s legislation sets a national example. “This legislation will be looked at as the pillar for all tort legislation to come,” Dickey said. “Not just commercial motor vehicle tort legislation, but all tort legislation.”
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