The Arkansas Several Liability “catch 22”: The Civil Justice Reform Act Post Johnson
By Scott M. Strauss
The latest constitutional challenge to the Civil Justice Reform Act of 2003, Johnson v. Rockwell Automation, Inc., 2009 Ark 241, 2009 Ark. Lexis 274 (April 30, 2009), produced a conundrum that two years later has yet to be resolved. The Arkansas Supreme Court affirmed the legislative change in substantive law from “joint and several” liability to “several” liability but struck down the procedural law implementing that change as a violation of the separation of powers doctrine. The court ruled the General Assembly’s attempt to supply a procedure by which to implement the change from “joint and several” liability to several liability was unconstitutional because the power to implement procedure is constitutionally vested in the courts, not the legislative body.
The court’s decision leaves unanswered the question of how a defendant, who is a proximate cause of the plaintiff’s damages, but not the sole proximate cause, limits his liability to his own share of fault? Because the court staked its exclusive claim to procedural rule making authority, it must now exercise that authority. It must now create a procedure implementing the substantive change from “joint and several” liability to “several” liability. Otherwise, there has been no change. Stated differently, and with due apologies to Marie Antoinette, in the absence of a procedural change we may have our cake, but we may not eat it.
The Arkansas Civil Justice Reform Act, Act 649 of 2003, incorporated a number of provisions concerning apportionment of both liability and damages. In general terms, Arkansas Code Annotated § 16-55-201 provided for several rather than joint and several liability. The statute, in its entirety, reads as follows:
(a) In any action for personal injury, medical injury, property damage, or wrongful death, the liability of each defendant for compensatory or punitive damages shall be several only and shall not be joint.
(b) (1) Each defendant shall be liable only for the amount of damages allocated to that defendant in direct proportion to that defendant’s percentage of fault.
(2) A separate several judgment shall be rendered against that defendant for that amount.
(c) (1) To determine the amount of judgment to be entered against each defendant, the court shall multiply the total amount of damages recoverable by the plaintiff with regard to each defendant by the percentage of each defendant’s fault.
(2) That amount shall be the maximum recoverable against that defendant.
The next provision, Arkansas Code Annotated § 16-55-202, provided for the apportionment of fault among non-parties and supplied a framework by which to identify those non-parties, the filing of pleadings identifying the non-parties. However, in Johnson v. Rockwell, the court ruled Arkansas Code Annotated § 16-55-202 was an unconstitutional violation of the separation of powers doctrine which reserves to the courts the sole authority to govern pleading, practice, and procedure. In the same opinion, the court went on to state:
Clearly the law modifying joint and several liability, Arkansas Code Annotated ' 16-55-201, defines the right of a party, a defendant, and is substantive.
Stated simply, the Arkansas Supreme Court ruled that the procedure set forth in Arkansas Code Annotated § 16-55-202 by which one identifies and apportions fault to non-parties was an unconstitutional intrusion upon the court’s exclusive authority to govern procedure; but, at the same time, recognized that the change from joint and several liability to several liability set forth in Arkansas Code Annotated § 16-55-201 as a substantive change within the General Assembly’s authority; and, consequently, not in violation of the Arkansas Constitution.
The clear impact of the court’s ruling in Johnson, is to leave in place the General Assembly’s intent that any one defendant not be required to pay more than its share of liability as set forth in Arkansas Code Annotated § 16-55-201. This of course leaves the question, in the absence of the non-party fault process contained in the now stricken ' 16-55-202, of how to instruct a jury to assure that a defendant will pay only its share of fault. In other words, consistent with the ruling of the Arkansas Supreme Court reserving issues of procedure solely to the courts, the courts must now develop a procedure enforcing or enacting the substantive change from joint and several liability to several liability set forth by the General Assembly in Arkansas Code Annotated § 16-55-201.
A Real Conundrum For The Courts
The Arkansas Supreme Court’s decision in Johnson, supra creates a conundrum by deeming the several liability portion of the Civil Justice Reform Act constitutional; but, at the same time, holding the non-party apportionment portion unconstitutional. Specifically, if juries are not allowed to apportion fault to non-parties, what steps must the court take to ensure that a single tortfeasor, with less than 100 percent of any applicable fault, pays only its several share of liability?
This issue may be best illustrated by the following hypothetical: Smith, an employee of Acme, Inc., is injured by the combined fault or negligence of his employer and Zenith, Inc., the manufacturer of a tool used by Smith. As noted by the Arkansas Supreme Court in Land O’Frost, Inc. v. Pledger, 308 Ark. 208, 823 S.W.2d 877 (1992), when a statute has been deemed unconstitutional, the court must treat that statute as if it had never been passed. When one combines this rule of law with the court’s holding in McCoy v. Augusta Fiberglass Coatings, 593 F.3d 737 (8th Cir. 2010) which prevents apportionment of fault to the plaintiff’s employer, one is potentially left with a single defendant on a verdict form, the tool manufacturer, who as set forth in the hypothetical outlined above, is a proximate cause of the plaintiff’s damages; but, not the sole proximate cause.
The same conundrum arises when other potential tortfeasors exist who cannot be made a party defendant. These could include a foreign entity upon which service may not be had, the potential co-defendant who simply vanishes or a potential party which settled in advance of trial. This is amplified by the illustrative instructions and interrogatories found in the Arkansas Model Jury Instructions – Civil. Specifically, when a case is submitted on verdict interrogatories, consistent with the Model Jury Instructions, the jury is required to apportion fault, among those parties in the courtroom, using 100 percent as a cumulative total.
Attention is again drawn to the plain language of Ark. Code Ann. § 16-55-201, which provides that an entity pay only its share of fault. Attention is also drawn to the specific language in the court’s opinion in Johnson holding the non-party apportionment feature unconstitutional. The Supreme Court did not say non-party apportionment was per se unconstitutional. Rather, the court said the manner of apportionment of fault is in and of itself a procedural issue and the Arkansas General Assembly was without constitutional authority to intervene in the process. Stated differently, the court in Johnson clearly indicated the apportionment statute was constitutionally infirm only because the General Assembly attempted to create procedure. It did not state the procedure set out by the General Assembly was itself constitutionally infirm. Rather, the Supreme Court’s holding is limited to a single issue: the fact the General Assembly attempted to create law governing an issue of procedure renders the attempt unconstitutional, without regard to the contents of the statute itself.
Likewise, given that the court in Johnson was not asked to rule upon or decide an issue of procedure created by the lower court, the Supreme Court’s silence on the creation of new procedure is not dispositive. This is clearly evidenced by that body of law standing for the proposition that appellate courts will decide only those issues squarely before them and will not issue advisory opinions. See, e.g., Arkansas Department of Correction v. Williams, 2009 Ark. 523, 2009 Ark. Lexis 676 (2009). Given the Supreme Court’s silence on the proper process to utilize to effectuate the substantive change of joint and several liability to merely several liability, that task falls to the next trial court faced with the issue of several liability and apportionment.
Given that the court in Johnson did not deem the means chosen by the General Assembly to effectuate several liability (non-party apportionment) constitutionally infirm, and in light of the court’s authority to regulate procedure, the courts are themselves free to adopt the same non-party apportionment measure the General Assembly attempted in the now stricken Ark. Code Ann. § 16-55-202. Because it is the court that adopts procedure, and because the procedure set forth in § 16-55-202 was not found to be per se unconstitutional in Johnson, this only makes sense. This claim is further supported by the black letter law that the public policy of the State of Arkansas can be found in its statutes. Clearly, even though the Arkansas General Assembly lacked the constitutional authority (pursuant to the separation of powers doctrine) to create a process enabling the shift to several liability, public policy can be defined by consideration of the non-party fault provisions contained in the now stricken statute. As noted by the Arkansas Supreme Court in Barre v. Hoffman, 2009 Ark. 373, 2009 Ark. Lexis 400 (2009) and Scamardo v. Sparks Regional Medical Center, 375 Ark. 300, 2008 Ark. Lexis 736 (2008), “Public policy is for the General Assembly to decide, not the courts.” Therefore, to the extent the court exercises its rule making authority in furtherance of public policy, that public policy is found in the language of the stricken statute.
One might argue that a defendant seeking to pay only its several share of liability should itself shoulder the burden of asserting crossclaims or even third-party complaints against those whom the original defendant believes also have fault. This argument fails for the simple reason that the several liability statute, § 16-55-202, provides in clear and unequivocal terms that a defendant’s liability shall be several. The statute does not provide that a defendant's liability shall be several if that defendant shoulders the burden of impleading additional defendants. Further, one is left to wonder precisely the nature of a potential third-party claim. Given the advent of several, rather than joint and several liability, it goes to reason there is no longer a cause of action for contribution. Indeed, the plain language of the statute provides a defendant shall only be responsible for its share of fault. By definition, a defendant has no claim for contribution unless and until it has paid more than its share of fault. Consequently, it further stands to reason that a third-party complaint for contribution must necessarily be dismissed for failing to state facts or a claim upon which relief might be granted pursuant to Rule 12(b)(6) of the Arkansas Rules of Civil Procedure.
An alternative process by which the courts could effectuate the implementation of several rather than joint and several liability yet at the same time avoid the hornet’s nest associated with apportionment among non-parties, is the assignment of fault only as to those parties to the lawsuit without regard to the requirement of a cumulative total of 100 percent. As discussed above, the illustrative instructions contained in the Model Jury Instructions require an apportionment of fault among those parties before the court. For example, Illustrative Instruction 5 found on page 673 of the 2010 Edition of the Civil Model Jury Instructions reads as follows:
Using 100 percent to represent the total responsibility for the occurrence and any injuries or damages resulting from it, apportion the responsibility between the parties whom you have found to be responsible.
Again, and utilizing the facts supplied in the hypothetical supra, this instruction requires a jury to apportion total fault at 100 percent even though there are tortfeasors who are not parties. This clearly violates the substantive law of several liability that, again, has been expressly found constitutional, Ark. Code Ann. § 16-55-201.
Another reasonable alternative, satisfying the rule of several liability as well as avoiding the non-party issue, might be an instruction as follows:
Giving due regard to the evidence and testimony presented to you during the course of trial, apportion responsibility for the occurrence and any injuries or damages resulting from it to each of the parties named below. The total of the percentage of fault assigned to each party may not exceed 100 percent; but that percentage is not necessarily required to equal 100 percent. You should assign fault to each party only as determined by your review of the evidence and should you determine that persons or entities that are not parties to the current action share responsibility, then your apportionment as to the parties should, by definition, be less than 100 percent.
In other words, the jury instruction suggested above would require the jury to assign fault only as regard to a party’s share of the blame without regard to the extent of the fault of others. It is the requirement that fault equal 100 percent that violates the rule of several liability.
Irreconcilable Differences
The current state of the law, post Johnson, is at best confusing and can be summed thusly: A defendant in Arkansas is liable only for his portion of fault; though, a jury may not apportion fault to non-parties and an apportionment among parties must equal 100 percent of the total fault. These divergent points simply cannot be reconciled and one is reminded of the novel “Catch 22” by Joseph Heller in which the fictional character Major Major issues an order that his men can see him only when he is not in. Clearly, following the court’s ruling in Johnson, it is incumbent upon the court to craft a procedure carrying forth the substantive law of several liability.
Scott Strauss, a former claims specialist with State Farm Mutual Automobile Insurance Company, leads the Barber Law Firm’s Insurance Coverage Law Practice Group. He can be reached at scotts@barberlawfirm.com.