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Behind the Bill: Liability Reform

Posted April 1, 2011 6:57 p.m. EDT
Updated April 2, 2011 12:27 p.m. EDT

A proposal to relax the state’s liability laws is working its way through the state House. House Bill 542 would ease negligence laws for doctors, cap damages for malpractice, and restrict attorneys’ earnings in some cases. 

Trial lawyers don’t like the bill in general. But they’re especially concerned about the product liability section. It would bar North Carolinians from suing for injuries caused by almost any product regulated by government.

Liability lawyer Janet Ward Black told the Tort Reform committee Wednesday the change would cover everything from drugs to toys to cars.

“Almost every single product whether it’s manufactured in North Carolina, another state, or another country, is affected by this bill, Black testified. “What it does, basically, is provide immunity - amnesty - for manufacturers of products, as long as some agency was regulating them.”

Black says the proposal came from ALEC, the American Legislative Exchange Commission.

ALEC who?

ALEC is a policy group in Washington DC – technically non-partisan, but conservative.

Senior policy director Michael Bowman called it a “unique public-private think tank” where businesses work with lawmakers and experts on model legislation. Those bills – dozens of them, on topics from gun rights to organized labor to voter ID – are introduced in legislatures all over the country.

State lawmakers can join for $50 a year. But big corporations pay thousands or tens of thousands of dollars for memberships. In return, they get access to lawmakers, and influence over how model legislation is written.

ALEC’s private enterprise board includes pharmaceutical makers like GlaxoSmithKline, Bayer, and Pfizer, as well as Koch Industries, Altria, Wal-Mart, and ExxonMobil.

NC House Senior Budget Chairman Harold Brubaker (R-Randolph) is on ALEC’s national board of directors. Brubaker did not respond to requests for comment.

ALEC on Jones St.

ALEC came to Raleigh on March 22nd to hold a “tort reform boot camp.” Speaker Thom Tillis’s spokesman Jordan Shaw said his office didn’t organize the event. Bowman confirms it was paid for by ALEC.

The two-hour meeting was held in the legislative auditorium, but wasn’t publicized or put on the legislative calendar. Shaw said about 20 House and Senate members attended.

The only person allowed to speak at the next day’s Tort Reform committee meeting was ALEC board member John Del Giorno from GlaxoSmithKline.

The draft bill that came out that day had ALEC’s model language in it.

Chris Nichols with NC Advocates for Justice, the trial lawyer’s group, says parts of H542 are “lifted verbatim” from ALEC. “It’s either the world’s biggest coincidence that ALEC language is in this bill, or there was contact outside of the eyes of the citizens of North Carolina.”

He says H542 is “extreme.” adding that if the bill passes, North Carolina would be the only state in the country to ban its people from suing over tainted food or dangerous drugs.

“No other state has even considered this,” Nichols said. “ALEC comes into every state and tries to sell this dangerous legislation. No state has bought it – up until now.”

ALEC’s Michael Bowman says his group paid for the tort reform boot camp. He called the bill “common sense.” “Trial lawyers believe in a litigious society,” he said. “We believe in a judicial system that’s sensible.”

“We do believe that when people have been wronged, they’re entitled to compensation,” Bowman added. “But it should be reasonable and justifiable.”

Rhyne: “A resource”

House Tort Reform chairman and bill sponsor Rep. Johnathan Rhyne confirmed that ALEC had helped write House Bill 542.

“Our intention is to have a balanced bill, and I’m sure coming through the committee, we will,” Rhyne said. “But we’ll take input from all sources, and they’ve done considerable study on the topic of tort reform, and we’ll certainly use them as a resource along with lots of other people.”

Public input is already over, at least for now. March 31st was the only meeting at which Rhyne’s committee was scheduled to take public comments. The bill had been available to the public for 18 hours.  Twelve speakers were allowed, six for it and six against.

“The public is being kept out of this debate,” Nichols said. “We have never had a legislature that has pushed through bills so quickly with so little public input. Eight minutes of presentation on the deadliest liability bill in America is all that we had.”

The House Select tort reform committee will debate amendments to the bill April 7th. It’s likely to pass the committee later this month.