Lawmakers selective on litigation in 2019 session

Monday, May 13, 2019

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.

 

Equal pay shouldn't treat employers like the enemy

Friday, February 22, 2019

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).

An employer’s first notice of an employee’s complaint could be when served with a lawsuit. That's not fair or reasonable. Other bills (HB 1025, limiting job applicant criminal history inquiries) have accomplished their sponsors’ goals without creating new lawsuits.

Forcing both sides to “lawyer up” right out of the gate is unnecessarily adversarial, particularly since it’s common for disgruntled employees to file dubious complaints against former employers. The Colorado Civil Rights Division’s annual report shows that some 95 percent of employment discrimination claims filed with CCRD are found to have “no probable cause.” The administrative procedure provides for a “cooling off” period while a neutral third-party investigates the complaint.

As Senate Bill 85 moves forward, CCJL is counting on sensible legislators of both parties to recognize that Colorado can require basic fairness toward workers without putting employers in a no-win predicament.


BILLS AT A GLANCE (CCJL POSITION)

CCJL positions are primarily determined by potential for expanding liability or whether legislation is likely to increase or decrease frivolous lawsuits. If no position is listed, CCJL is monitoring bill.

HB 1025 - Criminal History of Job Applicants
Sponsors: Rep. Leslie Herod, D-Denver, Rep. Jovan Melton, D-Aurora
Comments: Commendably accomplishes stated policy goal without creating new lawsuits.

HB 1106 - Rental Application Fees
Sponsors: Rep. Brianna Titone, D-Arvada, Rep. Serena Gonzales-Guteirrez, D-Denver; Sen. Brittany Petterson, D-Lakewood.

HB 1170 - Residential Tenants & Landlord Contracts
Sponsors: Rep. Dominique Jackson, D-Aurora; Rep. Mike Weissman, D-Aurora; Sen. Angela Williams, D-Denver; Sen. Jeff Bridges, D-Greenwood Village.
Comments: As introduced, bill creates incentives for unnecessary litigation by allowing tenant to sue for three times actual damages and awards attorney fees and costs only to prevailing tenant, not to prevailing landord.

HB 1183 - Automated Defebrillator Liability
Sponsors: Rep. Dylan Roberts, D-Eagle. Comments: As introduced, bill requires that any "public place" or public school to accept the donation of an automated external defibrillator (AED) but does not extend Colorado's existing Good Samaritan liability protections to those places or persons who may use the AED.

SB 43 - Increase Number of District Court Judges (SUPPORT )
Sponsors: Sen. Pete Lee, D-Colorado Springs; Sen. Bob Gardner, R-Colorado Springs; Rep. Terri Carver, R-Colorado Springs; Rep. Leslie Herod, D-Denver.
Comments: Consistent with CCJL's mission to attract and retain quality judges who can efficiently and capably adjudicate cases.

SB 85 - Pay Disparities (AMEND)
Sponsors: Sen. Brittany Pettersen, D-Lakewood; Sen. Jessie Danielson, D-Wheat Ridge; Rep. Janet Buckner, D-Aurora; Rep. Serena Gonzales-Gutierrez, D-Denver.
Comments: See above.

SB 109 - Increase Limits on Lawsuit Damages (OPPOSE)
Sponsors: Sen. Steve Fenberg, D-Boulder; Rep. Alec Garnett, D-Denver.
Comments: Increasing limits on damages for pain and suffering claims will increase costs to Colorado families and consumers who will see the value their present insurance reduced and be forced to choose between paying more for the same coverage or simply receiving less coverage.

 

Legislative Update

Thursday, February 07, 2019

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.

Increase Lawsuit Damage Caps - SB 109 (Sen. Steve Fenberg, D-Boulder) increases the existing limitations on jury awards for non-economic damages (pain and suffering, emotional stress, loss of enjoyment of life) from the current $468,000 (or $936,000 in extreme cases) by adjusting for inflation. While inflation applies to the cost of goods and services, there’s no way to measure the value of intangibles like “pain and suffering.” There is no doubt that this legislation will increase costs to Colorado families and consumers who will see the value of their present insurance reduced and face the cost of paying higher premiums for additional coverage to keep the same protections today.