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On bipartisan votes, the Colorado Senate approved two measures to reduce Colorado's outdated laws in order to allow victims to receive fair compensation but without reaping a litigation windfall based upon arbitrary factors that do not reflect actual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

 

Senate bills tackle Colorado's 'lawsuit tax'

Wednesday, March 01, 2017

Colorado consumers frequently ask why premiums for auto and home insurance are rising so much. 

Answer: Colorado's lawsuit tax - obscure laws that drive up the cost of a lawsuit beyond the actual cost of damages.

Fortunately, several bills introduced in the Colorado General Assembly would rein in this lawsuit tax by conforming Colorado law to real-world facts.


Senate Bill 181 (sponsored by Sen. Bob Gardner and Rep. Yeulin Willett) 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 sometimes 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) 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.

 

CCJL takes position on SBs 53, 88 and HB 1173

Wednesday, February 22, 2017

Colorado Civil Justice League, the state's advocate for limiting lawsuit abuse, this week staked out its position on three bills:

Senate Bill 53 - Asbestos Litigation Transparency - SUPPORT

By requiring transparency between health care claims due to asbestos-related illness submitted in state courts and those submitted to asbestos bankruptcy trusts, the bill seeks to prevent "double-recovery" by unscrupulous plaintiffs and helps to assure the solvency of the trusts for those with future claims of asbestos-related illness. This legislation accelerates timelines for court proceedings to the benefit of plaintiffs with legitimate claims. Contrary to testimony in committee, this legislation is good for veterans, and similar legislation in Congress is supported by the American Legion.

Senate Bill 88 - Health Care Network Selection - OPPOSE

House Bill 1173 - Health Care Provider/Carrier Contracts - OPPOSE

CCJL's primary concern with both of these bills are their potential to increase litigation and interference with freedom of contract.

As introduced, SB 88 restricts freedom of contract between insurers and health care providers by creating additional contractual prohibitions in state statute. Further, after writing these provisions into statute, the bill defines these contractual violations as "unfair or deceptive trade practice(s)" - akin to false advertising or knowingly making false statements - inviting new opportunities for litigation. HB 1173 would seem to protect slanderous comments if provided as testimony to a governmental body or as "any other public activity in any forum." After inviting new litigation, the bill provides for one-way recovery of court costs and attorney fees (only for a prevailing plaintiff).

CCJL believes that contractual matters between private parties should be resolved privately and disputes resolved by negotiation rather than litigation.

 

CCJL announces support for bills to address construction litigation costs

Tuesday, February 07, 2017

Supports Senate Bills 45 & 156

Recognizing the importance of addressing Colorado's construction litigation problem, Colorado Civil Justice League is supporting both Senate Bill 45 (sponsored by Sen. Angela Williams, Senate President Kevin Grantham, Rep. Cole Wist and Speaker Crisanta Duran) and Senate Bill 156 (sponsored by Sen. Owen Hill, Rep. Lori Saine and Rep. Cole Wist).

"Both of these bills represent small steps toward resolving known factors that drive up construction costs and make homeownership unaffordable," stated CCJL executive director Mark Hillman.

"Neither bill is a panacea, and both may require amendment. However, it is vitally important to keep all potential solutions moving forward."

CCJL commends the sponsors of these bills for engaging in bipartisan efforts to help homeowners obtain satisfaction when they encounter a legitimate construction defect and to help contractors and subcontractors find relief from runaway litigation costs.


 

 

Colorado Supreme Court called 'point of light' for plausibility decision

Thursday, December 22, 2016

A decision by the Colorado Supreme Court to adopt the federal plausibility pleading standard in civil litigation earned a rare "point-of-light" designation from the American Tort Reform Association in its annual Judicial Hellholes report, which routinely excoriates the worst examples of state courts stretching the law, logic and common sense to advance frivolous lawsuits.

In a 4-3 decision authored by Justice Nathan Coats, the court dismissed a plaintiff's lawsuit for "failure to state a plausible claim for relief." Under the former "notice pleading" standard, plaintiffs were not required to state a plausible claim.

Think about that for a minute. Prior to this decision, a lawsuit could continue even if the plaintiff's claim was not plausible.

"It's regrettable that this common sense decision resulted in a 4-3 split on the high court," stated Mark Hillman, executive director of Colorado Civil Justice League which advocates for "common sense in the courtroom."


Joining Justice Coats in the majority were Chief Justice Nancy Rice and Justices Allison Eid and Brian Boatright. Dissenting were Justices Richard Gabriel, William Hood III and Monica Marquez.

CCJL submitted a friend-of-the-court brief - authored jointly by Jordan Lipp and Geoffrey Klingsporn of Davis Graham & Stubbs and by Evan Stephenson and Thomas Werge of Wheeler Trigg O'Donnell - in support of the plausibility standard.

 

Legislators win CCJL's Common Sense in the Courtroom Awards

Monday, September 19, 2016

DENVER — Colorado Civil Justice League has announced winners of its Common Sense in the Courtroom Awards, given to state legislators who have demonstrated a commitment to curtailing lawsuit abuse.

Awards will be presented at CCJL’s Legislative Awards Luncheon on Tuesday, Oct. 18 at the Denver Four Seasons. Tickets are available at www.CCJL.org.

CCJL is the only organization in Colorado exclusively dedicated to stopping lawsuit abuse while preserving a system of civil justice that fairly compensates legitimate victims.

“Common Sense in the Courtroom requires justice for those who have been wronged, balanced by fairness for those who may be wrongfully accused,” said CCJL executive director Mark Hillman.

While this year’s legislature didn’t advance significant tort reform, a bi-partisan coalition of legislators derailed several bills that would create more litigation, such as enshrining a new right for homeless people to sue for privacy, assigning arbitrarily liability for earthquakes to oil and gas operations, and subjecting employers to costly lawsuits simply for asking typical interview questions.

"At CCJL, we are grateful for the bipartisan support of legislators who understand the importance of an efficient and balanced court system to our state's economy," said Jeff Weist, CCJL legislative director.

Common Sense in the Courtroom Award recipients include:

  • Representatives Jeni Arndt (Fort Collins), Jon Becker (Fort Morgan), J. Paul Brown (Ignacio), Perry Buck (Greeley), Terri Carver (Colorado Springs), Kathleen Conti (Littleton), Don Coram (Montrose), Brian DelGrosso (Loveland), Tim Dore (Elizabeth), Justin Everett (Littleton), Steve Humphrey (Severance), Janak Joshi (Colorado Springs), Tracy Kraft-Tharp (Arvada), Lois Landgraf (Fountain), Polly Lawrence (Douglas County), Tim Leonard (Evergreen), Paul Lundeen (Monument), Clarice Navarro-Ratzlaff (Pueblo West), Patrick Neville (Franktown), Dan Nordberg (Colorado Springs), Dan Pabon (Denver), Kevin Priola (Brighton), Bob Rankin (Carbondale), Kim Ransom (Douglas County), Paul Rosenthal (Denver), Kit Roupe (Colorado Springs), Lori Saine (Firestone), Dan Thurlow (Grand Junction), Kevin Van Winkle (Highlands Ranch), Ed Vigil (Fort Garland), Yeulin Willett (Grand Junction), Angela Williams (Denver), Jim Wilson (Salida), Joann Windholz (Commerce City) and Cole Wist (Centennial).
  • Senators Randy Baumgardner (Hot Sulphur Springs), Bill Cadman (Colorado Springs), John Cooke (Greeley), Larry Crowder (Alamosa), Kerri Donovan (Vail), Leroy Garcia (Pueblo), Kevin Grantham (Canon City), Owen Hill (Colorado Springs), Mary Hodge (Brighton), Chris Holbert (Parker), Cheri Jahn (Wheat Ridge), Kent Lambert (Colorado Springs), Kevin Lundberg (Berthoud), Vicki Marble (Fort Collins), Beth Martinez Humenik (Thornton), Tim Neville (Littleton), Ellen Roberts (Durango), Mark Scheffel (Parker), Ray Scott (Grand Junction), Jerry Sonnenberg (Sterling), Jack Tate (Centennial) and Laura Woods (Arvada).
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    2016 Legislative Review: Balance, no backsliding, but bulls-eye on business again

    Tuesday, May 17, 2016

    While the 2016 session of the Colorado General Assembly produced little news on the civil justice front, the partisan balance of a Democratic-controlled House and a Republican-controlled Senate provided two obvious benefits:

    For legislation to survive both chambers, its sponsors were able to navigate and negotiate. Sponsors from both chambers sought the input of Colorado’s business community both to develop good public policy and to build political support.

    Legislation that ignored business concerns – or, worse yet, put a bulls-eye on business as a target for speculative or unmerited litigation – usually met stiff resistance . . . and not only in the Republican-controlled Senate.

    Colorado Civil Justice League, the state’s only associated devoted primarily to tort reform and curbing lawsuit abuse, opposed eight bills introduced in this year’s session. Of those, six died in the Senate, one died in the House, and one passed after sponsors agreed to eleventh-hour amendments that alleviated concerns about expanding liability.

    CCJL appreciates legislators who opposed such extreme legislation as:

    • Enshrining a right for homeless people to sue for privacy (House Bill 1191),
    • Arbitrarily assigning liability for earthquakes to oil and gas operations (HB 1310),
    • Creating a corporate shaming regime funded by “fees” on business (HB 1435), and
    • Bills that ignore the legitimate business practices of conducting criminal background checks on prospective hires (HB 1388) and discussing a potential employee’s salary history and expectations (HB 1166).

    Importantly, the bipartisan balanced stopped further erosion of Colorado’s business liability climate. Colorado currently ranks 16th on the U.S. Chamber of Commerce State Lawsuit Climate survey, up from 23rd in the previous study but well below the Top 10 status that made Colorado a magnet for growth in the 1990s and early 2000s.

    The past four legislative sessions have yielded an onslaught of 38 bills that arbitrarily attack Colorado employers by making employment law a harvest field for plaintiffs lawyers. Such persistent threats raise enormous red flags to businesses that might consider expanding or relocating in Colorado.

    CCJL backed two pro-active measures this year, as well. Senate President Bill Cadman (R-Colorado Springs) and Majority Leader Mark Scheffel (R-Parker) teamed up with Rep. Yeulin Willet (R-Grand Junction) to sponsor Senate Bill 184 which would update a 40-year-old statute that set the interest rate for litigation claims at 9 percent. SB 184 would have calibrated the rate to float at 2 percent above the Kansas City Federal Reserve discount rate. That bill passed the Senate 20-15, but died in a House committee.

    Rep. Cole Wist (R-Centennial) and Sen. Cheri Jahn (D-Wheat Ridge) sponsored HB 1299, an overdue correction to the attorney fee recovery provision of the Colorado anti-discrimination act. Under this bill, successful employers could recover attorney fees from meritless claims “when no reasonable person” would believe the claim was likely to succeed. The House Judiciary Committee defeated this bill on a party-line vote.

    Two bills demonstrated the ability of legislators of both parties to develop practical solutions to emerging issues. HB 1432, sponsored by Rep. Faith Winter (D-Westminster) and Sen. Andy Kerr (D-Lakewood), provided employees with the opportunity to view the employer’s personnel file without creating a litigation trap for employers. HB 1438, sponsored by Rep. Winter and Sen. Beth Martinez Humenik (R-Adams County) largely applies federal law regarding employers’ responsibility to accommodate pregnant employees.

     

    Senate passes litigation interest rate reform

    Thursday, May 05, 2016

    Colorado State Senate took a long overdue step to update a 40-year-old statute to reflect today's economic reality when it passed Senate Bill 184 today.

    Sponsored by Senate President Bill Cadman and Majority Leader Mark Scheffel, the bill would set interest rates on litigation judgments at 2% above the rate set by the Kansas City Federal Reserve Bank.


    State law requires interest be paid on judgments to compensate the plaintiff for the time value of money that was lost. Colorado Supreme Court has repeatedly ruled that judgment interest is not intended to further punish the person who was at fault but to fairly compensate the person who was wronged.

    The law goes back to the 1970s when inflation jumped from 3.6% in 1973 to 12.2% in 1974, fell below 9% for about three years and then leaped back into double digits from 1979 to 1981, peaking at 14.8%.

    However, for the last 20 years, the Consumer Price Index (which measures inflation) has remained at less than 6%. In fact, CPI has been 3% or less for 181 of those 240 months. Yet Colorado's statutory interest rate remains the same.

    This is fair to both plaintiffs and defendants in civil lawsuits.

     Under the existing 9% rate, plaintiffs and their attorneys (who typically get one-third to 40% of the judgment) have an incentive to drag out proceedings when they have a legitimate claim and when real-world interest rates are low. When real-world rates are above 9%, as was the case regularly in the 1970s and early-1980s, defendants can make more interest by keeping their in the bank than they will be required to pay when judgment day finally arrives.

    As the bill moves to the House, it is sponsored by Rep. Yeulin Willett and is scheduled for a hearing on Monday at 1:30 p.m. in the State, Veterans and Military Affairs Committee.

    Time to Update Lawsuit Interest Rates

    Friday, April 15, 2016

    You’ve heard the dubious advisors that claim to help you invest your money without risking any downturn in the market. Well in Colorado, there’s a legally-sanctioned way to make 9% interest year-after-year, regardless of what happens in the market: File a lawsuit.

    Of course, the lawsuit must make a legitimate claim, but under Colorado law, judgments on lawsuits are guaranteed 9% annual interest from the day the lawsuit is filed until the judgment is rendered.

    State law requires interest be paid on judgments to compensate the plaintiff for the time value of money that was lost. Colorado Supreme Court has repeatedly ruled that judgment interest is not intended to further punish the person who was at fault but to fairly compensate the person who was wronged.

    The law goes back to the 1970s when inflation jumped from 3.6% in 1973 to 12.2% in 1974, fell below 9% for about three years and then leaped back into double digits from 1979 to 1981, peaking at 14.8%.


     

    However, for the last 20 years, the Consumer Price Index (which measures inflation) has remained at less than 6%. In fact, CPI has been 3% or less for 181 of those 240 months. Yet Colorado’s statutory interest rate remains the same.

    Just this week, Colorado Senate President Bill Cadman and Majority Leader Mark Scheffel introduced Senate Bill 184, which would make interest rates on lawsuits reflect the real world. According to the bill, interest would follow the market, “floating” at 2% above the rate charged by the Kansas City Federal Reserve.

    This is fair to both plaintiffs and defendants in civil lawsuits.

    Under the existing 9% rate, plaintiffs and their attorneys (who typically get one-third to 40% of the judgment) have an incentive to drag out proceedings when they have a legitimate claim and when real-world interest rates are low. When real-world rates are above 9%, as was the case regularly in the 1970s and early-1980s, defendants can make more interest by keeping their in the bank than they will be required to pay when judgment day finally arrives.

    It’s time for lawmakers to remove gamesmanship from the courtroom and to restore common sense by passing SB 184.

     

    Employer has a right to know criminal history

    Sunday, March 27, 2016

    Perhaps it’s laudable when a business makes a concerted effort to make a job available to someone with a criminal record. But in typically short-sighted fashion, a new bill at the State Capitol that that gesture in precisely the wrong direction by making it a matter of law that Colorado businesses cannot ask job applicants in their initial application if they have a criminal record. The bill also makes a one-size-fits-all decision for the vast majority of businesses that they cannot decide for themselves which jobs will not be offered to those with a criminal history. 

    House Bill 1388, sponsored by the usually thoughtful and practical Rep. Beth McCann (D-Denver), is particularly ill-advised in light of recent events.

    Just last month, Cedric L. Ford killed three people and wounded 14 others in a violent rampage at Excel Industries, the Hesston, Kansas, factory where he was employed.

    According to KMBC-TV, Ford had felony convictions in two states. His rap sheet included burglary, grand theft, illegally carrying a concealed weapon, domestic violence, felony battery, disorderly conduct, drunken driving, and obstruction of justice.


    In 2008, Ford completed an anger-management class after his conviction for disorderly conduct. About 90 minutes before his attack on his co-workers, he had been served with a restraining order because an ex-girlfriend stated Ford had choked her and she believed he would attack her again.

    It’s not clear whether Ford’s employer knew about his criminal history, but what should be painfully obvious is that the employer had a right to know.

    HB 1388 would, with limited exceptions, make it illegal for employers to ask potential employees about their criminal record on employment applications or from stating that someone with a criminal history cannot apply for a certain position.

    While well-intentioned, the bill is fatally flawed in at least two respects:

    • First, when an employer has a job to offer, it is the employer’s sole prerogative. That job does not belong to a prospective employee and certainly not to Colorado state government. An employee can walk away from the job without notice, and if the business fails, the employee is not financially responsible. Responsibility for the business lies with the employer, whether it succeeds or fails. Thus, the job, by right and by logic, belongs to the employer. 
    • Second, employees reasonably expect that their employer will take reasonable precautions to ensure their safety, whether that means keeping the facility and equipment in good repair or making prudent decisions about people whether potentially dangerous people will be added to the workforce. 

    Because it focuses solely on placing people with a criminal record in a job, HB 1388 ignores the rights and responsibilities of employers to their other employees and for their business.