A fair and balanced state lawsuit environment is an important factor when businesses decide where to expand or invest resources. State legislators know this, and many states have made commendable strides over the past few years to ensure businesses can spend time and money on growing and hiring, not fighting excessive lawsuits.
2023 was a marquee year for legal reform in the states. Here’s a look at a few of the most noteworthy wins.
Florida Enacts the Biggest Legal Reform Bill in Decades
Last March, HB 837 was signed into law by Gov. Ron DeSantis. The law protects consumers and businesses from abusive billboard trial lawyer tactics.
Among the many reforms in the law, a few important ones include:
- Protecting small businesses from paying massive damages when they are not primarily at fault. Under Florida’s old law, trial lawyers could pressure businesses to settle lawsuits even when the plaintiff is 99 percent at fault for an injury.
- Ensuring that criminals are accountable for their actions. Trial lawyers took advantage of Florida’s old laws to force businesses to pay when crimes they couldn’t predict or prevent took place on their property, while making no effort to hold criminals liable for the damage they caused.
- Eliminating most one-way attorney fee shifting, which allowed plaintiffs’ lawyers to recover attorneys’ fees without paying defendants’ costs after filing abusive lawsuits.
- Limiting fee multipliers, which allowed plaintiffs’ lawyers to inflate their costs rather than charge based on the time they actually spent on a case. Under HB 837, plaintiffs can only use these multipliers when an attorney otherwise couldn’t be hired.
Montana Reins in the Third Party Litigation Funding (TPLF) Industry
Also, in 2023, Montana became the first state to require disclosure of TPLF agreements in all civil cases filed in state court, hold funders liable if they support frivolous litigation, and cap the fees funders may charge.
Disclosure will significantly help to reduce conflicts of interest related to possible TPLF schemes, and it will incentivize funders (and attorneys) to behave ethically by bringing the TPLF agreements to light.
New York Gov. Kathy Hochul Vetoes Consent-to-Jurisdiction and Wrongful Death Measures
Gov. Kathy Hochul’s vetoes of liability-expanding legislation are significant wins for businesses and consumers in New York.
The first was a consent-to-jurisdiction bill modeled on a Pennsylvania statute upheld by the U.S. Supreme Court in a case called Mallory v. Norfolk Southern. If enacted, the bill would have subjected every business registered in the state to general personal jurisdiction in New York’s courts. Plaintiffs’ lawyers would have filed cases with absolutely no connection to the state in New York’s courts, clogging them with claims and delaying justice for actual New Yorkers.
The second bill would have expanded the statute authorizing wrongful death claims by broadening the pool of potential plaintiffs and allowing recovery of additional non-economic damages. The Governor rightly explained in her veto message that the legislation would have “significant unintended consequences” and was too ambiguous to provide “certainty for consumers and businesses.”
Utah Becomes the Sixth State to Enact Asbestos Over-Naming Protections
Last year, Utah joined Iowa, West Virginia, North Dakota, Tennessee, and Arizona in enacting “over-naming” legislation. Asbestos lawsuits commonly name dozens of defendants in “boilerplate” complaints, including many businesses with little to no connection to that specific case. Over-naming laws allow defendants to quickly exit an asbestos lawsuit if a plaintiffs’ lawyer can’t establish that the business has some link to the case.
Utah’s new law includes medical criteria requirements and improves an existing law that ensures the same information is given in court cases and in claims with trust funds created by bankrupt asbestos companies. Asbestos is the longest-running mass tort in history and continues to generate claims against new defendants. Protections like Utah’s help reduce substantial and needless expenses that result when companies are improperly named in asbestos lawyers’ boilerplate complaints.
2024 legislative sessions have started around the country, and ILR is continuing its work by advancing legal reform across the country that will create fairer legal climates for all.