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News
January 29, 2009

Provision to Expand Lawsuits in Stimulus Package Will Hurt Economic Recovery, Line Trial Lawyers’ Pockets

The U.S. Chamber Institute for Legal Reform (ILR) today urged the Senate to eliminate from the stimulus package a provision in both the House and Senate proposals that give state attorneys’ general, working with private plaintiffs’ lawyers, broad authority to bring civil lawsuits.

The House-passed stimulus bill authorizes state AGs to bring lawsuits for statutory damages and attorneys fees on behalf of their respective states for violations of the federal Health Insurance Privacy and Accountability Act (HIPAA) statute.  

“While the emergency economic stimulus package is aimed at turning our economy around and getting Americans back to work, the provision slipped into the House version and included in the Senate proposal is nothing more than a gift to the plaintiffs’ lawyers,” said ILR President Lisa A. Rickard.

The provisions give state attorneys general new enforcement authority and enable them to contract with outside contingency fee lawyers to file civil lawsuits in federal court with the full authority of the state AG and federal law.
 
“Far from stimulating the economy and creating jobs, this provision would only serve to increase the size of the plaintiffs’ lawyers’ pocketbooks and siphon badly needed money out of the economy,” said Rickard.

In a letter to the Senate, Rickard urged the Senate not to keep this trial lawyer earmark in the stimulus bill and wrote, “Allowing private law firms to litigate HIPAA enforcement is a recipe for vastly higher costs and increased regulatory complexity.”
 
According to a national poll of voters last election night, nearly 80 percent of those surveyed believe that if Congress expands opportunities to sue, it will have a negative impact on the economy.

ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels. The U.S. Chamber of Commerce is the world’s largest business federation, representing more than 3 million businesses and organizations of every size, sector, and region.

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