January 15, 2010

We’re off and rolling
The legislative session begins

On Monday, the 2010 Legislative Session convened and so far there is already a bill to massively expand the state’s wrongful death statute (SB 6508) and a bill to create a costly, unnecessary state False Claims Act (SB 5144).  Senate Bill 6508 is similar to the 2008 wrongful death bill aggressively lobbied by the trial lawyers.  Two years ago, an actuarial firm concluded that that proposal would cost state taxpayers at least $19 million per biennium.  Considering that the state is currently in a $2.6 billion hole, it’s unfathomable how lawmakers could even consider this taxpayer-costly bill.

Lawmakers have also decided to recycle another failed proposal, SB 5144.  This measure creates a state False Claims Act (FCA).  The proposed substitute obligates the state attorney general to investigate allegations of fraud brought by private citizens—such as bounty hunters and contingent fee attorneys—who have a clear interest in maximizing recovery, provided there are adequate resources for attorney general (AG) to do so.  If there are not adequate resources for the AG to investigate an allegation of a false claim, a private citizen may file a lawsuit independently, on behalf of the state, without the state’s consent.  In addition, FCAs have proven time and again to actually cost a state money.  Read below for an example of how FCA statutes do not work. 

But there is good news this year.  The session is scheduled to last only 60 days. 

For a complete list of active liability bills so far this session, check out the LRC bill tracker. 

FCAs: good for bounty-hunters, costly for states
Case study:  New York

In the 2005 settlement of alleged national Medicaid fraud, New York recovered $80 million, 50% of the $160 million the New York Medicaid program lost due to the alleged fraud.  Because New York had no state FCA, it recovered $80 million and did not pay a bounty to the relator (bounty hunter).  The relator recovered a bounty only from the federal recovery.  If New York had a state FCA in place, they would have recovered $96 million (60% of $160 million) and would owe the relator a bounty.  With the average bounty of 20% of the recovery, or $19.2 million, New York would only recover $76.8 million.  Obviously, for New York $80 million is better than $76.8 million.

Long hair lawsuit
Texas toddler may sue school

The battle over kids’ hair length has moved to a new level: litigation.  After a Texas school board disciplined a child for violating school policy by wearing his hair too long, his parents have threatened a lawsuit.

Liability Reform Coalition
Committed to Ending Lawsuit Abuse.

Dana Childers, Executive Director
2033 Sixth Avenue, Suite 1100
Seattle, WA 98121
www.walrc.org