Senate bills needlessly use litigation as enforcement weapon

Tuesday, April 11, 2017

At Colorado Civil Justice League, we try to keep a consistent focus on unnecessary litigation. That's why you usually won't see us weigh in on bills unless there's a litigation angle.

After all, litigation should be a last resort!

However, two bills in the Colorado Senate needlessly turn to private, personal injury litigation as an enforcement mechanism to advance other policy objectives. The only time private litigation is the proper enforcement tool is when fundamental freedoms are at stake and other avenues of redress are insufficient or unavailable - as when First Amendment rights to freedom of speech or freedom of religion or freedom of association are being abridged by government.

Even then, the answer usually isn't to sue for monetary damages; it's to sue to compel government to honor your constitutional freedoms.

Senate Bill 281 (by Sen. Vicki Marble, R-Fort Collins, and Sen. Tim Neville, R-Littleton) aims to punish local governments that fail to enforce federal immigration law - aka "sanctuary cities."

Senate Bill 284 (by Sen. Kevin Lundberg, R-Berthoud, and Sen. Marble) would require that health care providers present women who are considering an abortion with certain information about their pregnancies and health care options.


Both of those issues are squarely outside CCJL's policy purview - unless the bills use private lawsuits as an enforcement mechanism. That's why CCJL opposes both bills, so long as the personal injury lawsuit provisions remain.

Under SB 281, if a crime is committed by someone determined to be an illegal alien, crime victims would be allowed to sue the local jurisdiction for damages. Ironically, crime victims cannot sue state or local governments for criminal acts committed by legal residents. That is, you cannot sue the police department for failure to prevent a crime.

It's doubtful that a crime victim could prove all of the elements necessary to successfully bring such a lawsuit against a "sanctuary jurisdiction." So, the lawsuit provisions may be an empty threat.

SB 284 includes a "kitchen sink" provision that allows someone who suffers a "loss or injury" due to an abortion provider's failure to provide required information to sue for "damages, punitive damages, treble damages, and such equitable remedies as the court may deem appropriate." Translation: sue for everything your lawyer can dream up!

Government's job is to see that laws are followed, so lawmakers should enforce the law through state agencies, not by unleashing an army of personal injury lawyers to do their bidding.
 
For more background, read CCJL's issue papers on the perils of enforcement through private litigation or about the rational basis for limits on governmental liability.

 

HB 1254: A cynical attack on common-sense lawsuit limits

Monday, March 27, 2017

On Wednesday, March 29, members of the House Judiciary Committee will be presented with a plea to eliminate limits on non-economic damages in lawsuits related to the wrongful death of a minor (under age 21). 

House Bill 1254 (sponsored by House Majority Leader KC Becker, D-Boulder) threatens dissenting lawmakers with the axiom, "If you're explaining, you're losing!" After all, who wants to explain a "heartless" vote to deny parents damages for "emotional stress" or "loss of enjoyment" when a loved one has been taken from them due to the wrongful act of another?

That's tough duty, but in this case, it's the right thing to do.

First, recall that there are no caps in Colorado law for actual (economic) damages.

 


 

Next, keep in mind that non-economic damages address factors that are subjective or unquantifiable, such as "pain and suffering" and "emotional stress." These are damages, to be sure, but there's no matrix by which to objectively evaluate the "value" of those damages. One jury might award $500,000; another hearing the same facts might award $5 million.

The purpose of limits on non-economic damages is to balance the legitimate interests of the family to be compensated for the emotional cost of a tragic loss while preserving the ability of consumers, in general, to afford insurance.

HB 1254 is so broadly written that it even eliminates caps on damages brought against non-profits - like Boy Scouts, Girl Scouts and summer camps - and those brought against city recreation leagues or schools. If this bill passes, the cost of purchasing necessary liability coverage for those activities will be severely affected - and those costs will be passed along to parents.

Worse still, the bill does not merely lift the caps for wrongful death. It stealthily lifts the cap on injuries "recoverable in an action" for wrongful death.

Today, these damages are capped at $436,070 and can be raised to higher levels in particularly egregious cases. These are common-sense limits that should not be raised in this ham-handed manner.

 

Broad support as lawsuit curbs pass Senate

Monday, March 20, 2017

On bipartisan votes, the Colorado Senate approved two measures to reduce Colorado's outdated laws in order to allow victims to receive fair compensation but without reaping a litigation windfall based upon arbitrary factors that do not reflect actual costs.

Senate Bill 181 (sponsored by Sen. Bob Gardner and Rep. Yeulin Willett) tackles "phantom damages" and passed on a vote of 20-15. The bill addresses an obscure law which keeps Colorado juries in the dark when evaluating the amount of reimbursement to which an injured victim is entitled.

Let's say someone injured in an auto accident receives an initial bill for $140,000 for medical costs. The injured party's insurance company settles the bill for a negotiated amount of $40,000. But when the injured party sues the at-fault driver for other damages - like pain and suffering or physical impairment - he will begin by claiming the full $140,000 in damages for medical costs. That's because current law says that juries cannot be told that those bills were actually settled for $40,000.

The $100,000 difference is called "phantom damages" because it represents costs that were never truly owed and never paid. SB 181 would allow the jury to consider both amounts when deciding what reimbursement to award.

Senate Bill 191 (Sen. Jack Tate, Reps. Yeulin Willett & Cole Wist), which passed 22-13, tackles a second anachronism in Colorado law by setting interest rates on judgments at 2% above the federal rate. Under existing law, not only can someone claim phantom damages (as above), but they are entitled to receive 9% interest on those phantom damages.

So why settle a lawsuit and put that money in the bank to earn 1% interest (or less) when you can drag it out and continue to earn 9% interest? On a $140,000 judgment, the difference just in interest in four years' time is $40,000.

So the injured party suffered $40,000 in actual paid medical bills, which over four years at 3% interest, would accumulate to $45,020. But under existing Colorado law, they would be entitled to $197,621 - because the law doesn't reflect the real facts!

Yet, Colorado drivers and homeowners must pay higher insurance premiums to cover these unjustified costs.

SBs 181 and 191 preserve the right of an injured party to be fully and properly compensated for their injuries, while sparing Colorado drivers and homeowners the burden of paying for phantom damages and ridiculous interest rates.
 
This week on Wednesday, the Senate Business, Labor & Technology Committee will consider Senate Bill 204, another bill to curtail abusive litigation and rein in rising insurance premiums.

Sponsored by Sen. Kevin Priola and Rep. Polly Lawrence, SB 204 would prevent lawsuits by third-party vendors that sue insurance companies for payment without authorization of the insured consumer or for work that wasn't covered by the consumer's insurance policy.