News

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.

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Equal pay shouldn’t treat employers like the enemy

Equal pay for equal work isn’t just a laudable goal. It’s basic fairness, so Colorado law can certainly require it of employers.

On the other hand, Senate Bill 85, as originally introduced by Sen. Jessie Danielson, D-Wheat Ridge, and Brittany Pettersen, D-Lakewood, didn’t focus on basic fairness. Instead, it contained rigid rules and “gotcha” litigation traps that doom Colorado employers to failure, then punish them with costly lawsuits for violations that have nothing to do with discrimination.

For example, each of the following would have constituted unlawful discrimination under the introduced bill:

  • •A male hotel clerk in Aspen is paid more than a female hotel clerk in Akron – not because one is male and the other female, but due to differences in the cost-of-living.
  • •A female nurse is paid more to work the graveyard shift than a male nurse who works days. That’s because one is paid more to work undesirable hours.
  • •A company has a hard time recruiting employees to work in remote parts of the state, so they pay a male sales representative more to work in Springfield than a female doing the same job in Greeley. Employers sometimes pay more for hard-to-fill positions.

These are all legitimate reasons for paying different salaries and have nothing to do with whether the employee is male or female.

At the bill’s first hearing in Senate Judiciary Committee, some practical concerns raised by Colorado employers were addressed. For example, amendments to the bill clarified that liquidated damages could not be imposed if an employer acts in good faith. Also, pay differentials based on geography would be allowed. But much work remains.

Senate Bill 85 still allows an employee to bring a lawsuit without ever filing a formal complaint with a neutral party, such as the Department of Labor (which typically handles wage disputes) or the Civil Rights Commission (which hears claims of unlawful discrimination).

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Legislative Update

Nearly one month into the 2019 legislative session, CCJL is keeping a close eye on bills that would create new lawsuits or impose new costs on Colorado businesses and the working families who rely on them.

Here’s a look at emerging bills and issues:

Criminal History of Job Applicants – House Bill 1025 (sponsored by Reps. Leslie Herod, D-Denver, and Jovan Melton, D-Aurora) prohibits employers from excluding people with a criminal history from applying for a job opening. It does not say that employers can’t consider someone’s criminal history, only that those applicants cannot be automatically excluded from applying. Commendably, the bills’ sponsors did not create a new “right to sue” (aka private right of action) as the enforcement mechanism, instead relying on a state agency to investigate possible violations. This is a procedure that others should emulate if they truly wish to address a perceived problem rather than create incentives for more litigation.

Homeless Right to Sue – HB 1096 (Rep. Melton) is the latest iteration of the so-called Right-to-Rest Act. The bill targets local government ordinances which regulate when and where people are allowed to sleep or camp on public sidewalks, in parks or on other public property. It also compares such ordinances to “cruel and unusual punishment” and allows for enforcement via lawsuit.

Add District Court Judges – Senate Bill 43 (Sen. Pete Lee, D-Colorado Springs, and Bob Gardner, R-Colorado Springs) adds 15 new district court judges in several judicial districts around the state. Given the increased demands on our state’s court system, CCJL supports this bill as a means of ensuring that legitimate claims can be handled without needless expense or delay.

Pay Disparites – SB 85 (Sen. Jessie Danielson, D-Wheat Ridge, and Brittany Pettersen, D-Lakewood) is advertised as “equal pay for equal work.” That’s a worthy goal, but the text of the bill, as introduced, sets too many “litigation traps” by treating every conceivable pay disparity as evidence of discrimination – and grounds for a lawsuit. For example, the bill doesn’t recognize that an employer with offices in Vail, Colorado Springs and Akron has a legitimate reason to pay a different salary to managers at those locations based on the vastly disparate costs-of-living in those communities. Another serious concern is that the bill completely eliminates the authority of the Department of Labor to investigate and enforce wage discrimination claims and turns that authority over to the civil litigation system with privately-hired attorneys acting on behalf of aggrieved employees. The bill also creates significant, additional burdens for businesses in terms of job posting requirements and record keeping. (more…)

Report: Colorado verging on ‘Judicial Hellhole’ status

Anyone wondering why insurance premiums are on the rise in Colorado need look no further than four recent decisions by the Colorado Supreme Court.  Those rulings expand liability and increase litigation costs, so consumers can expect to pay more for insurance coverage.

After all, insurance companies simply set premiums to cover their anticipated costs.

As a result, a new report by the American Tort Reform Association finds Colorado teetering on the verge of becoming a “Judicial Hellhole.

Liability-expanding decisions by the Colorado Supreme Court coupled with the prospects of a pro-plaintiff legislative agenda has created an unfair and unbalanced environment for those who face lawsuits in the Centennial State. The state appears to be moving in a dangerous direction and if it does not correct course, the Colorado Supreme Court or the state may find itself in unwanted company on next year’s Judicial Hellholes list.

Four Colorado Supreme Court decisions issued in 2018 have exposed insurers to expanded liability, which will lead to higher rates for consumers.

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‘Common Sense’ legislators to be honored by CCJL at Oct. 24 event

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 Wednesday, Oct. 24, at the Denver Four Seasons.

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.

The best news from the 2018 legislative session was the bills that didn’t pass.Late in the legislative session, two bills were introduced to discourage arbitration – an alternative to litigation that often saves time and money.  The alternative to arbitration?  Hiring a lawyer and filing a lawsuit, of course.

Other bills were introduced to address business practices that result in perceived greed or inequity.  The irony, however, is that in each of these bills the remedy to alleged “corporate greed” was to create new incentives for profiteering by personal injury lawyers.

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Supreme Court backs CCJL in judgment interest case

Today, the Colorado Supreme Court ruled unanimously that a claimant is not entitled to interest on damages if no court action is filed.  The opinion written by Justice Brian Boatright supports the position taken by Colorado Civil Justice League in an amicus brief authored by Lee Mickus of Taylor Anderson LLP.

“We hold that, under the plain language of the (statute), an insured is entitled to prejudgment interest only after (1) an action is brought, (2) the plaintiff claims damages and interest in the complaint, (3) there is a finding of damages by a jury or court, and (4) judgment is entered,” wrote Justice Boatright.

In this case, Joel Munoz was injured in a car crash and reached a settlement with his insurer, American Family.  Munoz asked for interest on the claim, but American Family Insurance declined to pay interest because Colorado law requires interest only after a judgment, not after a private settlement.

The high court’s finding upheld an early decision by the Colorado Court of Appeals.

Read the Supreme Court opinion HERE.

Carlos Samour newest Justice on Colorado Supreme Court

Monday, July 09, 2018

Judge Carlos Samour became Colorado’s newest Supreme Court justice earlier this month when he was sworn in to replace retiring Chief Justice Nancy Rice.

Although most widely known for presiding over the trial of James Holmes for the Aurora theater shooting, Samour has served for 11 years as a judge in the 18th Judicial District, where he was most recently Chief Judge.

“Judge Samour complements Colorado’s Supreme Court both professionally and personally. He has presided over some of Colorado’s highest profile cases in recent history and has distinguished himself, without exception, as being fair and impartial regardless of the magnitude of the case,” said Gov. John Hickenlooper, when announcing the appointment.

During his two terms, Governor Hickenlooper has appointed five of the seven justices on the Court.

With Rice’s retirement, Justice Nathan Coats was selected by his colleagues to serve as Chief Justice.Coats was appointed in 2000 by Gov. Bill Owens.

“Judge Samour has earned a reputation as an efficient, fair-minded jurist by those who have practiced in his courtroom,” said CCJL executive director Mark Hillman.“He is considered to be consistent, thoughtful, hard-working and exceptionally knowledgeable.”

Much ado, but little done to reduce lawsuits in 2018

The 2018 legislative session produced much political posturing but resulted in comparatively no meaningful policy accomplishments toward reducing litigation in Colorado.

Most significant legislation to pass was re-authorization of the Colorado Civil Rights Division which was due for the periodic “sunset review” to which all regulatory agencies are subject. Because CCRD is the first stop for all employment-related litigation, it is an important mechanism to filter out frivolous claims against businesses. Ordinarily, sunset bills are fairly mundane and characterized by discussions between the regulators and “the regulated” seeking to accomplish the agencies’ mission without undue burden on either party.
Instead, the CCRD reauthorization measure (House Bill 1256, sponsored by Speaker Crisanta Duran, D-Denver, and Sen. Bob Gardner, R-Colorado Springs) became a vehicle for scoring political points. At the center of this gamesmanship was the Civil Rights Commission’s (CRC) handling of the Masterpiece Cakeshop case which is now before the United States Supreme Court.
Democrats, viewing the Commission as a bulwark against unfair discrimination toward racial and sexual minorities, chided Republicans for, at one point, blocking funding of CCRD. Republicans, conversely, seized upon statements made by individual CRC commissioners in the Masterpiece deliberations which have been described by Justice Anthony Kennedy as “neither tolerant nor respectful.” Republicans were also annoyed that Gov. Hickenlooper, in 2017, had appointed a commissioner to fill one of the seats reserved for representatives of the business community who, in their view, had no business credentials and then reappointed that person, albeit in a different position, after her confirmation was rejected by the Senate.
Ultimately, another compromise was finally adopted only a few hours before mandatory adjournment at midnight on the final legislative day. That change mandates partisan (3D-3R-1UA) balance on the commission, adds a third seat for business representatives, and bars a governor from re-appointing someone who fails Senate confirmation.
Other bills that passed with bipartisan consensus increased the limit on claims brought in county courts (Senate Bill 56) from $15,000 to $25,000 and resolved inconsistencies between case law and statutory provisions that address damages (Senate Bill 98).
LATE BILLS THREATEN LITIGATION TORRENT
As the legislative session entered its final six weeks, a torrent of “message bills” were introduced in the House – all purporting to address perceived greed and inequity practiced by business. The irony, however, is that in each of these bills, the proposed remedy to “corporate greed” was to create new incentives for personal-injury lawyers to file lawsuits against suspect businesses. Seriously, is the best policy remedy to unleash a hoard of profiteering trial lawyers?
Two bills were aimed at discouraging arbitration – a tool for dispute resolution that often saves time and expense for both consumers and businesses. House Bills 1261 and 1262 proposed to make arbitration essentially meaningless and to burden arbitrators with so much regulation as to drive them out of business. These misguided bills would have taken away the choice of consumers and business to opt for arbitration. The alternative to arbitration? Hiring a lawyer and filing a lawsuit, of course.
Fortunately, through the efforts of Colorado Civil Justice League and our allies in the business community, these bills were shown to be impractical and an intrusion into private rights of contract. Both were defeated but are likely candidates for re-introduction in 2019.
Another bill, HB 1378, would have removed the authority of the Department of Labor and Employment to penalize employers that pay women less than men for performing the same job and instead turned enforcement over to lawsuits filed by trial lawyers. It’s companion, HB 1377, sought to make it illegal to merely ask a prospective hire about his or her salary at previous jobs. The bill would have defined this typical step in salary negotiations to be an “unfair labor practice,” tantamount to refusing to hire someone because of their race or gender. HB 1377 also insisted that every business in Colorado follow a new state-mandated procedure to advertise all pending workplace promotions.
At a time when Colorado’s lawsuit climate has fallen into the bottom one-third in the United States and when Denver ranks 8th nationally for the number of trial lawyer commercials on television, it’s hard to imagine that creating even more litigation is the best remedy to any public policy problem.

Exceptionally misguided: HBs 1377, 1378

Two bills introduced late in this legislative session purport to protect employees – specifically female employees – from wage discrimination.  Instead, House Bills 1377 and 1378 paint a target on the Colorado businesses and invite trial lawyers to unleash a new wave of litigation against them.

HB 1377 (sponsored by Reps. James Coleman, D-Denver, and Brittany Petterson, D-Lakewood) would prohibit “seeking” information about a potential employee’s salary history.  But what makes this bill so exceptionally misguided is that it makes asking for that information a violation akin to illegal racial or gender discrimination.

That’s right – the sponsors of this bill believe that merely seeking information about a potential employee’s salary history is tantamount to refusing to hire someone because of their race or gender.

By defining salary history as a discriminatory practice, the bill creates an incentive for trial lawyers to sue employers, seeking a wide range of monetary damages, including punitive damages, and automatically forces employers to pay attorney fees and costs to any prevailing plaintiff.

Prevailing employers aren’t automatically entitled to recover their attorney fees and costs.  Even if a business has done nothing wrong, defending against a baseless lawsuit is costly!

If there was any doubt that these bills are far more about enriching trial lawyers than eliminating any pay disparity, HB 1378 should dispel them.  Sponsored by Rep. Jessie Danielson, D-Wheat Ridge, and Sens. Kerry Donovan, D-Vail, and Rhonda Fields, D-Aurora, this bill removes the authority of the Department of Labor to penalize employers that pay women less than men for performing the same job and instead uses private litigation for enforcement.

And just as with HB 1377, it gets worse!  Next, the bill mandates that every business in Colorado must follow a specific legal procedure before promoting any of its employees.  No matter how many employees and no matter what the job, the proponents of this bill believe the State must micromanage day-to-day operations of private businesses – the economic engine of our state.

If this bill becomes law, an employer couldn’t simply give a promotion to a deserving employee – including a female employee – without first advertising the opportunity for promotion to all existing employees.

In the past year, Colorado has fallen to its worst alltime ranking (36th) by the U.S. Chamber of Commerce Lawsuit Climate Index. Legislation like this shows that it could get worse!

Anti-arbitration bills will cost consumers, enrich trial lawyers

Anti-business extremists at the State Capitol would have Coloradans believe that giving up their “right to sue” in exchange for a more efficient, less adversarial process of dispute resolution is somehow playing into the hands of “big corporations.”

In fact, consumers and businesses alike have often found arbitration to be a better way to resolve disputes than long, drawn out lawsuits in which the only real winners are the lawyers who rack up hundreds of billable hours.

House Bills 1261 (sponsored by Rep. Mike Weissman, D-Aurora) and 1262 (Reps. Dominique Jackson, D-Aurora, and Dylan Roberts, D-Eagle) purport to bring “fairness” and “transparency” to arbitration proceedings.

In reality, they would make Colorado’s arbitration system just as big a mess as our state’s system of civil courts.

 

 

Many business contracts require arbitration as a means to settle disputes, rather that lawsuits. That’s a choice that businesses and consumers deserve to make for themselves – without unnecessary meddling by politicians.

Arbitration can be cheaper and faster for both parties in a dispute, reducing costs for the largest driver of litigation costs – attorney fees. Arbitration can also be more flexible, less complex, more private and less hostile than endless litigation.

Instead, HBs 1261 and 1262 will make arbitration more difficult and more expensive by inviting litigation against arbitrators.

These bills are also likely to erode modest gains made by the Legislature last year to make it easier for homeowners and builders to resolve disputes over home construction problems and to reduce litigation costs that drive up home prices.

HB 1261 creates new standards for “impartiality” in an environment in which the Colorado Uniform Arbitration Act, case law, Colorado Rules of Professional Conduct, and private contractual standards already establish ethical requirements on arbitrators. This isn’t solving a problem. Instead, it’s creating one!

HB 1262 creates disclosure requirements that violate contractual confidentiality provisions that typically benefit both parties in a dispute. The bill also creates a cloud over any contract containing an arbitration clause because, U.S. Supreme Court precedent strongly suggests, it will be preempted by the Federal Arbitration Act.

It is important to note that judges and courts do police arbitrator impartiality by reviewing arbitration awards. A party that believes an arbitrator to be biased can ask a court to vacate the award. Ironically, these protections do not apply for judges who preside over lawsuits.

These bills would harm consumers by making arbitration more expensive, thereby leaving consumers at the mercy of trial lawyers and a costly, over-crowded civil litigation system.