Weekly Legislative Update
February 6, 2009

Taxpayers on the hook
for another liability bill

State lawmakers are faced with plugging a budget deficit of over $6 billion and yet they are considering expanding liability which will cost taxpayers $7.3 million in the next biennium, according to the Office of Financial Management. Senate Bill 5144 is a measure which allows private citizens to bring lawsuits against vendors or contractors suspected of making a “false claim” against a government agency. Hopefully the enormous cost to state taxpayers—not to mention to local government taxpayers—will deter legislators from enacting this costly and unnecessary bill. Unfortunately, it appears the trial lawyers and their legislative advocates are considering hoisting this bill on the already-burdened state budget. The measure is up for a hearing in the Senate Judiciary Committee on Friday, Feb. 13 at 3:30 p.m.

There is some good news to report, however. Trial lawyers have abandoned their efforts to expand the state’s wrongful death statutes which would increase the number of beneficiaries and the payout amounts of wrongful death claims. A legislative change such as this would have cost the state over $19 million per biennium which proved to be too tall of a hill to get over given the state’s financial situation.

The downside to this is that the trial lawyers are putting even more energy into expanding the state’s Consumer Protection Act (CPA). Yesterday, there was a hearing on SB 5531 which increases the damage awards cap from $10,000 to $75,000 and makes it much easier to file a CPA claim for isolated instances rather than a pattern of violations, as it was intended. Under SB 5531, a plaintiff is only required to prove that the defendant “had the capacity to injure another person.” In other words, a plaintiff could argue that even though a practice has ceased and no other person was injured, there was a possibility that another person could have been harmed and that’s enough to trigger a CPA lawsuit.

A similar measure, HB 1683, will be heard in the House Judiciary Committee on Feb. 9 and is up for executive session Feb. 12.

In addition, the LRC is continuing to keep track of all the bills that create a new private right of action under the CPA and the count is up to 34, six more than last week.

For more information on all liability bills, check out the LRC’s bill tracker.