By Curt Schroder

The Commonwealth of Pennsylvania’s long-standing law granting sovereign and official immunity for the state, its officials, and its employees – as well as caps on damages for these entities – has been a focus in legal circles recently. You may or may not be aware of what is going on, but you should. A case before the Pennsylvania Supreme Court is a direct threat to the ability of the Commonwealth to limit its exposure to liability through the enactment of damages caps.

The policy behind sovereign immunity aims to protect the state and its entities from excessive liability and financial burden, thus allowing them to fulfill their governmental functions effectively. But one important aspect in these debates that doesn’t get enough attention, however, is why the law is necessary for taxpayer protection.

Pennsylvania law grants the commonwealth, its officials, and its employees sovereign and official immunity, except when waived. In other words, the state gives permission for it to be sued when it waives immunity in certain situations. Along with this permission structure comes the right to limit its liability exposure.

Uncapped liability verdicts could bankrupt state or local governments. Because all governments are funded by taxpayers, all it would take is one nuclear verdict (a verdict in excess of $10 million) to wipe out funds set aside for critical government services. Jackpot jury verdicts will mean less money for social services, housing and child welfare programs, fire and police departments, public schools, and more. A huge verdict against Pennsylvania or one of our local governments would inevitably lead to higher taxes asked of taxpayers to cover the costs.

It's important to note that the state’s Legislative Budget and Finance Committee issued a report on this topic and found that more than 99% of the claims fall within the current caps. In other words, more than 99% of injured victims find justice under the current limits that protect taxpayers.

Caps on damages in cases against the state or a political subdivision (city, county, township, or school district) were put in place to protect taxpayers from those seeking jackpot paydays. The fight to overturn the law is being advanced by well-known personal injury attorney Tom Kline. Kline has embarked on a self-described “22-year odyssey” to remove taxpayer protection caps in suits against state and local governments.¹ In a petition to the Pennsylvania Supreme Court urging that the Commonwealth Court be bypassed from considering his Freilich v SEPTA case, Kline made the argument that caps are unconstitutional. If his theory prevails and the Supreme Court strikes down the caps, taxpayers will face unlimited liability exposure.

The American Tort Reform Association reports that trial lawyers in Pennsylvania spent $162 million on 1.43 million advertisements in 2023. If personal injury attorneys can dedicate this exorbitant amount of money on just advertising, it’s reasonable to assume they could just as easily reduce their fees (which help to pay for these ads) so victims take home more of their awards for their injuries. Rather than call for weaker taxpayer protections, why isn’t there a bigger outcry to reduce contingency fees so injured victims actually take home more money, rather than personal injury attorneys siphoning off a large portion? By addressing contingency fees, both taxpayers and injured parties would be protected.

It is easy to get swept up in the emotional messaging pushed by many personal injury attorneys. It’s designed to tug at the heartstrings. But it’s important to remember that sovereign immunity and caps on damages were put in place to protect you, the taxpayer. Personal injury attorneys shouldn’t be able to line their pockets at the expense of victims and government entities. Sovereign immunity is an important taxpayer protection and should remain in place.

¹ See Legal Intelligencer, Aug. 11, 2022.

Curt Schroder is executive director of the Pennsylvania Coalition for Civil Justice Reform in Harrisburg, Pa. He can be reached at curt@pccjr.org.

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