Senator Steele has introduced SB 40 concerning allocation of fault in a civil case when a nonparty is immune from liability. It says that a defendant may not assert a nonparty defense if an Indiana statute grants the nonparty immunity from liability.
First, a bit of background. Indiana is a modified comparative fault state. In the bad old days of tort law, if the plaintiff was even a little bit at fault for the accident, his or her recovery from the defendant was barred. People came to see this as a little bit harsh, and so we moved to a system where damages would be paid in proportion to one’s fault for the accident. So, if a plaintiff was injured in the amount of $100,000, and the Plaintiff was 40% at fault for the accident, while the Defendant was 60% at fault, then the Defendant should pay for $60,000 of the loss. (60% * $100,000). It’s “modified” because our system provides that if the plaintiff is more than 50% at fault, he or she can’t recover. So, if the Plaintiff is 51% at fault and the Defendant is 49% at fault, the Plaintiff gets nothing.
But, sometimes, you have more than two people involved in an accident. And, maybe the Plaintiff doesn’t sue the third or fourth or fifth person responsible for the accident. Maybe the Plaintiff doesn’t want to: consider a case where the Plaintiff is 10% at fault, Mr. Moneybags is 15% at fault, and Joe Poverty is 75% at fault. If the case is simply Plaintiff v. Moneybags, then maybe Plaintiff gets an award for 60% (the ratio of fault as between 10% and 15%) of his or her damages. But, if you throw Joe Poverty into the mix, Plaintiff gets a judgment for 90% of his or her damages, but only the 15% allocated to Moneybags is actually collectible. Poverty has no income or assets to apply to the judgment. So, it’s a better deal for Plaintiff if you can keep the indigent tortfeasor out of the mix.
Of course, if Moneybags gets sued, he is going to rightfully be indignant about having to pick up most of the tab when someone else was much more at fault. So, the law gives him the opportunity to plead a “nonparty” defense. It basically says, “the Plaintiff doesn’t have to sue this person, but the jury should allocate fault to this person.” Plaintiff, at that point, has the opportunity to add the nonparty to the suit or not.
Sen. Steele’s bill addresses the issue of when the nonparty has immunity. There are a variety of immunities granted to various people; in effect saying, “even if you negligently cause damage, you will not be liable for paying for that damage.” (See IC 34-40 for examples of immunities). That does create a bit of a conundrum. It would do Plaintiff no good to add the immune person as a party because if the jury allocates fault to that person, the plaintiff can’t collect. On the other hand, it is arguably unfair to ask the other defendant(s) to pay in excess of their share of the fault because the other party happened to be immune. (But, perhaps not any more unfair than it already is to the plaintiff to bear the cost of that immunity).
A significant problem with this bill, however, is that it says that a defendant cannot assert the nonparty defense where a statute is granted immunity. At times, it is very difficult to determine whether immunity applies. That can be the subject of extensive litigation; and sometimes courts don’t rule on that immunity until the litigants are deep into the process. Sometimes the applicability of immunity is going to hinge on the creativeness of the plaintiff in fighting that immunity.
It’s one of those ideas that sounds fairly simple but which probably has any number of unintended consequences.
Not that that should matter, of course. When it’s only money at stake (i.e. not jail time, not a criminal trial, etc.), actual liability is irrelevant. Equalization should be the only purpose and goal. Whether Mark Cuban actually engaged in insider trading or not, the jury should have found him liable and he should have been required to pay the SEC because the people could use that money for more socially-valuable purposes than he would–because the people are entitled to it more than he is.