Bill aimed at reducing lawsuits raises eyebrows

Posted May 20, 2014


— A bill that its sponsor says would protect North Carolina businesses from frivolous litigation is raising questions from lawmakers charged with reviewing it. They said several of the provisions, which appear to stem from model legislation drafted by national business lobbying groups, are confusing and duplicate current rules.

The measure, Senate Bill 648, will be heard again on Thursday, according to Senate Judiciary I Chairman Buck Newton, R-Wilson. A bill summary of the current measure describes five parts to the bill:

  • Making contracts between the attorney general and private lawyers more transparent. It would also cap fees that could be paid to those private lawyers.
  • Creating new rules for companies engaged in asbestos and silica litigation. 
  • Amending laws related to product liability lawsuits, especially when those suits were against the manufacturers of products given government approval. 
  • Prevent patent trolling. That section of the bill is similar to one reviewed by an interim committee earlier this year
  • Determining an "exclusive forum" for shareholder lawsuits.

Committee members ran out of time before they could discuss the last two sections of the bill. However, the first three sections raised questions its backers and sponsor had trouble answering. 

Language in common with ALEC bills 

Sen. Brent Jackson, R-Sampson, the bill's sponsor, said the first part of his bill was to ensure that lawmakers and the public knew which law firms were doing work for the Attorney General's Office. The Department of Justice sometimes hires outside counsel to handle complex or long-running litigation.

"We currently have no clue who is working for the attorney general," Jackson said. 

But as committee members discussed the bill, Sen. Thom Goolsby, R-New Hanover, pointed out the measure would also limit when the state could hire lawyers on contingency basis. That is when a lawyer agrees to work for a share of any potential settlement. The bill, he said, limits lawyers to collecting a smaller portion of any settlement than is standard in private practice.

"I would hate for us to shortchange the state," Goolsby said, noting such a provision would make good lawyers hard to hire.

Julia White, an assistant attorney general, said the Department of Justice doesn't have any lawyers on contingency right now. Given that, Goolsby asked Jackson where the impetus for the measure came from. Jackson repeated that it was simply a transparency bill.

However, the measure is similar to one pushed in several states by the American Legislative Exchange Council. ALEC is a conservative-leaning group that aims to link state lawmakers with businesses interests.

Likewise, at least two other sections of the bill share similarities with language developed by ALEC.

Asked where the ideas for this and two other sections of the bill came from, Jackson said, "They came out of my own head! You don't believe me?"

When pressed on the matter, he said that the measure dealing with the attorney general and provisions on limited liability and silica lawsuits were proposed by the U.S. Chamber of Commerce and the North Carolina Chamber.

"I've had some other businesses independently contact me," he said.

Asked if any of the measures were brought to him by ALEC, Jackson said they were not.

"I've not spoken with anyone with ALEC on any of these," he said. "I don't think we've spoken with ALEC on any of our bills. We've been accused of it, though."

The U.S. Chamber of Commerce has ties to ALEC, and they have issued joint reports on legal reform. Some of the two groups' model legislation is similar.  

Limiting liability suits

Another section of the bill would limit a company's liability if it developed a product under government-approved guidelines. Jackson gave the example of a drug given approval by the FDA. 

Sen. Tamara Barringer, R-Wake, said the FDA instance might be a good example, but she said she believed the bill would apply to any number of products.

"I think the bill is far broader," she said.

Jackson acknowledged it was.

"We did make the bill broad to cover as many industries as possible," he said.

He argued that, if the government oversaw the development and design of a product, a company should not be held liable for abiding to those standards.

"That should grant them some type of immunity from frivolous lawsuits," Jackson said.

Barringer replied, however, that this would also limit lawsuits when there might be a product recall or some instance that the government had not authorized.

"This would also prohibit regular lawsuits – lawsuits that would be meritorious," she said.

Jackson acknowledged the bill could be read as "having that effect" and said that was why it was getting a hearing.

As with the measure affecting lawyers hired by the attorney general, the product liability measure appears to share language in common with a model bill developed by ALEC.

Silica claims limited

As with the other two sections of the bill, a measure aimed at requiring those suing to disclose more information when suing for health issues related to silica or asbestos exposure seems to share similarities with model legislation developed by ALEC.

"I'm just trying to understand why this serves any particular purpose at all," said Sen. Fletcher Hartsell, R-Cabarrus.

Hartsell said that plaintiffs already had to disclose information related to other legal actions in which they may be involved upon request.

Jackson said, in some instances, that disclosure wasn't happening, citing a case known as Garlock Sealing Technologies. 

But that citation raises more questions, since the Garlock case is in federal court. 

"The concern is this is widespread," said Chris Smith, the immediate past president of the North Carolina Association of Defense Attorneys. "Yes, you're required to answer under oath, but it's just not happening."

He called the Garlock case "stunning" and said the state law could give lawyers extra teeth. 

But asked by Hartsell how a state law could affect federal litigation, Smith said he was not an expert on the topic. 

Barringer raised a question about why there were waiting periods in the bill that would require people suing for damages related to asbestos and silica-related diseases to wait 180 days to proceed with their claims.

"Many of these people are gravely ill," she said. "Is there a reason for the 180-day wait?"

Staff attorneys who drafted the bill said they were unsure of the reason, surmising it was to allow for discovery in a case.


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  • mdh67 May 22, 2014

    This bill just tears up the Constitution. If you can't have access to Courts. The NC Constitutions states:

    Sec. 18. Court shall be open.
    All courts shall be open; every person for an injury done him in his lands, goods, person, or reputation shall have remedy by due course of law; and right and justice shall be administered
    without favor, denial, or delay.

  • goldenosprey May 21, 2014

    View quoted thread

    The bill is about corporations, not lawyers. Why do you hate lawyers? Abe Lincoln was a lawyer. Thomas Jefferson, too. You might need a fair trial or access to justice someday if you are wronged.

  • Charlie Watkins May 21, 2014
    user avatar

    If the bill is good for the lawyers then I am against it.

    If the bill is against the lawyers then I am for it.

    What is the bill about anyway?

  • teleman60 May 21, 2014

    View quoted thread

    You don't see any democrats even interviewed for any section of this story. So I would assume this whole thing is engineered by republicans for republicans. Here's where the ALEC boys and the GA are at it again passing MORE QUESTIONABLE laws denying litigation rights to NC citizens and PROTECTING BIG CORPORATE interests!

    Why would a state legislature be creating laws denying citizens' rights to sue corporations?

    Why have a 6 month delay in cases of TERMINAL ILLNESS? Maybe 6 months and they'll be dead and less likely to get that multimillion dollar judgement against a corporation?

  • miseem May 20, 2014

    View quoted thread

    Not necessarily, but I expect they would be the most likely to try to bend the rules.

  • ncprr1 May 20, 2014

    View quoted thread

    Just so I understand, that's only Republican corporate donors, right?

  • goldenosprey May 20, 2014

    They didn't need to talk with ALEC. They can simply copy and paste. NC consumers be aware that the definition of a "frivolous" lawsuit is one that names a corporate donor as a defendant.

  • dubious May 20, 2014

    Once upon a time, it was most important for politicians to be dedicated to their constituents and bring home the bacon. Now all they care pandering to their corporate overlords to underwrite their campaigns until they can collect their taxpayer supported pensions and then slide them into cushy lobbying jobs. All they need to do is cut and paste legislation from the ALEC Field Manual.

  • Jack Jones May 20, 2014
    user avatar

    This bill just doesn't pass the smell test. Any reasonable person could spot it as ALEC. Republicans have been in bed with ALEC for years, and Tillis still refuses to disclose the value of "gifts" he's received through that relationship.