Penn State Student Club a Sad Victim of a Much Larger Legal Problem

The outing club can no longer go outside. It seems like a punchline to a bad joke, but in this case it’s the sad reality of the world we live in, and of the environment the productive sector faces every day.

After a risk assessment, Penn State University (PSU) last week severed itself from a student club, the Outing Club, which had organized hiking, canoeing and other outdoor activities at the university for 100 years.

The club’s loss of affiliation with the university, and with it its $1 million in liability coverage, stems not from a sudden rash of student injuries out on the trail or the club announcing it was venturing into riskier activities. Outgoing treasurer of the club, Timothy Hackett, recalled no injuries in the four years he was a member. Instead it seems that PSU is protecting itself and its million dollars from trial lawyers feverishly pushing out the boundaries of tort law. Their manipulation of previously held standards in the law is evident throughout the legal system; from personal injury suits becoming harder to dismiss, to controlling medical and pharmaceutical practices to fleece reimbursement systems, to using public nuisance laws to  as a last resort after other legal avenues failed, to suing energy companies for climate change.

“Our legal system to a large degree has become unbalanced and oppressive,” said David N. Taylor, President and CEO of the PMA. “And the trial lawyers are the only ones who gain. Everyone else pays. We pay in jobs lost, higher costs for goods and services. Even our students are now paying in loss of opportunities to learn and have fun.”

PSU’s decision came about as part of a perfunctory review of 79 student clubs (two others were dumped as well), but it was inadvertently well timed on their end.  On April 3, a decision in Rodriquez v. the City of New York by the New York State Court of Appeals, the highest court in the state, shot down a decades-old standard in tort law where defendants could cite a plaintiff’s role in the injury as a defense. Under the Court of Appeals decision in Rodriquez, comparative negligence comes into play only when assessing damages.

Victor E. Schwartz, head of Public Policy Practice Group at Shook, Hardy & Bacon and one of the nation’s leading business defense experts, said that the ruling will likely result in more defendants settlements knowing it will be harder to get a personal injury case dismissed.

“The result as a practical matter is that in cases where there may be some remote chance of the defendant being negligent and it’s crystal-clear that the plaintiff has been almost totally responsible for his own injury, will still go to a jury,” Schwartz said. “This sets up settlement in cases where plaintiff’s fault has been highly egregious where as before where comparative fault was a defense, a plaintiff’s lawyer would realize that settlement is impossible.”

He added that the New York decision could impact cases across the nation.

“The Court of Appeals is a very highly regarded court,” Schwartz said. “And the courts tend to be like elephants in a circus following one another around in a circle anyway.”

In another case pushing the boundaries of tort law, a federal appellate court has asked the high court in West Virginia to clarify state law with respect to whether a branded drug company may be subject to liability for harms caused by a competitor’s generic drug product.

Other courts around the country have accepted this twisted legal argument of liability for a competitor’s product.  Schwartz said that the driving force behind such acceptance is the fact that the U.S. Supreme Court determined in an earlier case that product liability claims generally cannot be brought against manufacturers of generic drugs because the manufacturer is not free to change the warnings on a generic drug without permission from the federal Food and Drug Administration. The court reached the opposite conclusion with respect to branded drug manufacturers, finding product liability claims can generally be brought because the branded drug manufacturer can change its warnings without prior FDA approval.

“As a result, plaintiffs’ lawyers have sought to make a branded drug manufacturer pay for alleged harm to persons taking a generic drug made by another company,” Schwartz said. “The liability theory is that the branded drug manufacturer being the drug’s innovator should be responsible for any and all liability stemming from the drug, including a generic version of the drug made by one of the branded manufacturer’s direct competitors.”

In yet another example, trial lawyers in cahoots with local governments are citing state nuisance laws in a rash of climate change lawsuits against energy companies.

“Critical to these new lawsuits is a theory that seems to have been borrowed from other areas of tort law,” writes Daniel Fisher of Legal Newsline. “To make the case that oil companies should pay for the flooding and other costs associated with global warming, the cities argue the oil companies knew the risks associated with their products and sold them anyway.”

Curt Schroder, Executive Director of the Pennsylvania Coalition for Civil Justice Reform, said that PSU made its decision about the student clubs mindful that attorneys are always waiting for the chance to strike. 

“It’s not just ‘dear old State’; thanks to abusive lawsuits, entire industries have disappeared in Pennsylvania and the cost of goods and services continue to rise as the explosive costs of litigation are factored in,” Schroder said. “Penn State and its students are just the most recent victims. It begs the question:  Where will the plaintiffs’ attorneys strike next?  Perhaps the Table Tennis Club?”