Weekly Legislative Update
April 3, 2009

Last minute legislative surprise
False claims bill back on the agenda

According to the legislative session calendar, all active legislation must have been introduced, passed out of its policy committee, passed out of its house of origin, moved over to the other chamber, passed out of that chamber’s policy committee and now be in the respective Rules Committee (budget-related bills get a few extra days).  In other words, new legislation is not to be introduced this late in the game. 

But apparently, rules were made to be broken.

Yesterday, a new false claims bill was introduced in the House and is scheduled for a hearing on Tuesday, April 7.  HB 2329 is a broad measure, but it is expected to be replaced with a health care-only false claims bill which allows private citizens to dig through state records looking for potential billing errors.  These so-called bounty hunters would then be financially rewarded.  Proponents of the bill say this proposal will make money for the state.  But similar statutes in other states have proven the exact opposite.  For example, recently the Eli Lilly/Zypreza claims were settled by a majority of states utilizing a team from the National Association of Medicaid Fraud Control Units.  In that settlement, the State of Florida only received $13 million despite having a larger Medicaid population and a Medicaid budget nearly twice that of Washington’s.  By comparison, Washington received $14 million. Because Florida had to pay a fee to the person who brought the complaint, they yielded less in the settlement. 

Consumer Protection Act bills:
One down, one to go

The LRC and its allies were successful in defeating one of the two bills to expand the Consumer Protection Act (CPA), but SB 5531 continues to receive favorable attention from lawmakers at the request of trial lawyers.  The Washington Supreme Court recently ruled that all CPA claims must demonstrate a repetitive act by the defendant, not an isolated incident.  SB 5531 eliminates this requirement, thereby opening the floodgates for one CPA claim after another.  This measure is in the House Rules Committee, where it ought to remain.

HB 1393: Liability insurance required
Problem: None available in Washington

This week, lawmakers heard more public testimony on the bill to increase construction liability/costs.  Among other things, HB 1393 requires builders to provide insured home warranties.  But according to the Office of the Insurance Commissioner (OIC), there are not any admitted insurance companies offering construction warranty products in Washington.  In fact, in 2004 the OIC formed a work group to find a market for condominium construction warranty insurance.  The group eventually disbanded without ever finding an insurer willing to provide this product in the state.  Attached to this week’s Update is a letter from the OIC which explains the flaws in this unreasonable—not to mention unrealistic—requirement. 

Liability cuts into local bonsai collection

This week, the Puget Sound region lost a valuable treasure: Weyerhaeuser’s bonsai collection.  The collection of 60 bonsai was a gift to the state 20 years ago, on Weyerhaeuser’s 100th anniversary.  The garden’s closure is partially due to tough economic times, but according to an article in the Seattle Times, liability costs were a major part of the decision to close the community exhibition.