THE PHRASE, "You can't fight city hall" has been swept aside by a new legal term, the "D.D.P." It refers to city and town governments as "Defendants with Deep Pockets," easily sued and beaten in court.
Municipalities, once protected against citizens' lawsuits by their "sovereign immunity," are being sued by an increasingly litigious public at an alarming rate. This is occurring in situations in which such jurisdictions were rarely sued before and in new realms of liability, such as those involving environmental pollution from toxic waste sites. The awards from jury verdicts in these cases have also soared. The liability insurance industry, shaken by huge settlements, has raised the price of the premiums it charges by as much as 840 percent.
Inordinately large jury awards, frivolous lawsuits, liability insurance companies that either get out of the business or charge enormous premiums, cities and towns that can't afford the insurance or cannot even find a company willing to insure them -- all these are the results of the problem. Consider the case of Sykesville, Md., where officials learned that their liability insurance would not be renewed this year; unable to face the possible consequences, the mayor and town council simply quit.
Few would complain about cases involving citizens injured because of city-government negligence. But when a man injures himself while diving into the surf, as one did in Newport Beach, Calif., and then sues the city and wins $6 million, questions have to be raised. In 1977, Milo Stephens threw himself in front of a train intending to kill himself. Mr. Stephens sued after surviving the attempt and got a $650,000 settlement from the New York Transit Authority.
In 1962, there was only one municipal liability case in the country in which the jury awarded $1 million. In 1982, there were 251 cases involving jury awards of at least $1 million. The number of lawsuits filed against public officials rose 50 percent in the last three years.
Some 28 states have acted to put a cap on jury awards, and lawyers' fees (frequently one-third or more of a settlement) have been capped at 20 to 25 percent. The Maryland Municipal League, representing 155 cities and towns, wants the state legislature to do the same. Some insurance companies must now pool their resources to protect themselves from major settlements and offer more coverage. Larger jurisdictions have resorted to insuring themselves, thereby avoiding high premium payments, but their situation might be disastrous if they face a large jury award in a liability case. It is more difficult for smaller cities and towns. Those municipalities can only be helped by reasonable liability standards, which don't exist now.