Lawmakers selective on litigation in 2019 session

Although legislators passed several bills that will increase the costs and risks of lawsuits, they also served notice that they won’t automatically support every legislative whim that will expand unnecessary litigation.

Even before the General Assembly convened in January, the stability of Colorado’s lawsuit climate was at a perilous point, ranked 35th among the 50 states – an all-time low.  Other national groups worried about the growing unpredictability of our courts.

Numerous bills sought to create new opportunities for lawsuits, but many of those were subsequently modified.  A few others failed when legislative support withered.

Consequently, Colorado Civil Justice League grades the legislature at a “C” for its 2019 session.

“We were encouraged that lawmakers grew to recognize that litigation should be a last resort because it’s very costly to everyone involved,” said CCJL executive director Mark Hillman.  “Many also acknowledged that sometimes parties that benefit from a lawsuit will inflate claims beyond what is justified.”

Legislators killed two bills that would have dramatically increased the threat of litigation:

  • Senate Bill 237 (sponsored by Sen. Robert Rodriguez, D-Denver) would have made Colorado a magnet for consumer-related class actions – the kind where wronged consumers get nickels and dimes while class action attorneys collect enormous cash fees.Colorado’s Consumer Protection Act entrusts the Attorney General and district attorneys to protect consumers as a whole because, unlike plaintiffs’ attorneys, those officials don’t have a personal financial interest in the outcome.Although this bill passed the Senate, it failed in the House where Representatives expressed concerns about the lack of input from affected parties.
  • Senate Bill 217 (Sen. Jack Tate, R-Centennial, and Sen. Mike Foote, D-Lafayette) began as a bill that would let medical lien companies set their own prices for medical services.Keep in mind that medical lien companies make their money from “the spread” between the amount billed for medical services and the much lower amount that is ultimately paid to the doctor or specialist.  The more this bill was discussed, the more legislators realized that lien companies shouldn’t get to set prices for medical care (because they’re lien companies, not doctors) nor should they be allowed to go after injured parties for payment of any outstanding amounts.

In House Bill 1289 (Rep. Mike Weissman, D-Aurora), the Consumer Protection Act was expanded, unnecessarily in our view, by lowering the bar for anyone to bring a claim.  This expansion included relaxing the standard of culpability from “knowingly” to “recklessly,” modifying the public impact test, and creating a new vaguely-defined “catch-all” provision.  Lawmakers contained some of the damage by confining the public impact exemption to the Attorney General and district attorneys.

Perhaps the most significant development in HB 1289 came in its first committee when legislators voted to delete a section to nullify private contract provisions related to arbitration and another which could have created a torrent of litigation by people working as independent contractors who later claim they should have been classified as employees.

Legislators also trimmed the sails on House Bill 1283 (Rep. Dylan Roberts, D-Avon), which originally would have required an insurance agent to provide customers’ policy coverage information to someone who might sue them but included no privacy protections.  This is akin to someone who might join a card game demanding to know first what cards the other players have.After amendments, the bill more closely resembles more modest disclosure requirements in other states with protection for policyholder privacy.

Lawmakers made no changes to Senate Bill 109 (Sen. Steve Fenberg, D-Boulder) which increased limits on lawsuit damages for non-economic claims, like pain and suffering and emotional stress.  Proponents argued that an adjustment for inflation was necessary, although non-economic claims are intangible and therefore subjective, unlike documentable costs for medical care or property damage.  Unfortunately, the bill will result in all insurance policyholders facing the choice of either paying higher premiums to protect themselves against these higher limits or seeing their coverage simply eroded by an act of the legislature.

Employment bills

Employment-related legislation caused the considerable consternation to businesses for which new litigation risks is a disincentive to job creation.  In some cases, lawmakers agreed to guardrails against lawsuit abuse.

A laudable example of accomplishing a policy objective without litigation came in House Bill 1025 (Rep. Leslie Herod, D-Denver, and Rep. Jovan Melton, D-Aurora), creating limits on job applicant criminal history inquiries.  This bill specifically disallowed litigation as an enforcement tool.

Although the family medical leave bill (SB 188, Sen. Faith Winter, D-Westminster, and Sen. Angela Williams, D-Denver) was ultimately turned into a study to address doubts about the program’s solvency, legislators had agreed to make litigation available only after all other remedies were exhausted.

The most troubling employment bill was Senate Bill 85 (Sen. Brittany Pettersen, D-Lakewood, and Sen. Jessie Danielson, D-Wheat Ridge), not because of its stated goal – to prohibited gender-based wage discrimination – but because legislators rejected a provision to allow employers who were defending against a claim of discrimination to present facts to a jury to show that a wage disparity was due to a legitimate factor other than gender.  As it stands, the only factors that don’t trigger litigation for pay disparity are the ones legislators could foresee.  Also disappointing, legislators refused to require an opportunity to remedy a disparity prior to an employee bringing a lawsuit, so an employer’s first notice that an employee has a complaint could be when served with a lawsuit.

Common sense reforms

Legislators did enact some common sense reforms:

  • SB 201 (Sens. Pettersen and Tate) follows successful programs in other states that help to successfully resolve problems between a patient and doctor or other health care provider after an “adverse health care incident” without litigation.
  • HB 1324 (Rep. Shannon Bird, D-Westminster, and Rep. Lisa Cutter, D-Littleton) provided an expedited court process for a defendant in a lawsuit to file a motion to dismiss when the basis for the lawsuit is the defendant’s exercise of their constitutional right to freedom of speech or to petition government.

At CCJL, we look forward to working with legislators to find solutions to public policy issues – without resorting to litigation.  We believe in justice for those who have been wronged, balanced by fairness to those who may be wrongfully accused.  Lawsuits are costly both to plaintiffs and defendants, so they should always be a last resort.