Pocketbook Justice

By Peggy Venable
On the evening of March 7, 1993, Maria Resendez’s husband drove her to the HEB supermarket in San Benito to purchase groceries. While in the produce section she slipped on a grape, injuring her knee. She sued HEB and was awarded $134,000. However, in March of this year, the Texas Supreme Court overturned the verdict and said HEB was not to blame for Resendez’s injury. While at first glance it may not seem like it, the Supreme Court’s decision was a big victory for Texas consumers.

Unwarranted jury awards are commonplace. This year a woman who received a slight burn on her hand from an airbag deployed during an accident was awarded $58 million from Daimler Chrysler.

Trial lawyers and so-called consumer groups claim that these are victories for the “little people” against big business and have railed against legislation and court decisions that limit these excessive awards.

An examination of the facts, however, reveals the harm that runaway lawsuits have caused Texas consumers and the benefits they would receive from tort reform.

The grape on which Resendez slipped was alleged to have come from an open display from which customers could sample grapes. HEB, very aware of the potential of loose grapes on the floor, had taken every reasonable precaution to safeguard its customers’ well being.

The sampling bowl was level, sitting on ice, about five inches below the display table’s surface, which itself had a three-inch railing. The floor of the entire produce section was a nonskid surface, with floor mats and warning cones in place around the table. Additionally, the compensation of HEB store managers is tied to their safety record, and each store has in place safety procedures that seek to identify and remove hazardous situations as soon as possible.

Despite all of these precautions, the trial court found that “mere display of produce for customer sampling constituted an unreasonable risk of harm to customers.”

Had the Supreme Court upheld that decision, Wallace Jefferson, a San Antonio appellate specialist and HEB’s lawyer, says that food displays would have been effectively placed in the same liability category as dynamite. Every customer who walked into any grocery store would have had to pay higher prices because of increased insurance rates, since grocery stores would have been held strictly liable for anything that happened to their customers.

Even with the Supreme Court’s favorable ruling, Texans still pay an insurance premium or “lawsuit tax” on every item they purchase in stores. For instance, while the average true cost of an 8-foot aluminum ladder is $94, the average retail price is actually $119 - the lawsuit tax is $25. For a two-day maternity stay, it’s $500.

According to a 1998 study by the Public Policy Institute of New York, the average Texan pays a lawsuit tax of $635 per year - that’s over $2,500 for a family of four.

However, money is not the only cost that consumers bear from lawsuits. Product innovation is stifled by potential liability, so that consumers are denied more choices in the products they buy -- products that could be higher in quality, lower in price and, yes, even safer.

An editorial in USA Today on March 8 noted that a top maker of spa pools has decided not to offer a spa alarm – designed to alert parents when their child enters the spa -- out of fear of lawsuits in the event of failure of the alarm.

Groups representing patients whose lives depend on pacemakers, heart valves, hips joints, and other medical devices are worried because the suppliers of biomedical materials from which these devices are made are withdrawing from the market because of liability concerns.

These concerns affect all consumers. A survey by the Conference Board found that fear of product liability lawsuits had caused 47 percent of small businesses to withdraw products from the marketplace, while 39 percent had decided not to bring a new product to the market.

Texas Supreme Court rulings like the HEB case have made a significant impact in reducing frivolous lawsuits. For instance, trial lawyers are saying that they will now screen food slippage cases much more carefully before filing them.

Editor's Note: The Texas lawsuit tax has probably been lessened due to the passage of a series of lawsuit reforms in 1995.

Venable, based in Austin, is director of Texas Citizens For A Sound Economy

Citizens Against Lawsuit Abuse

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