A selection of the need-to-know civil justice news for the week of February 15-21, 2014.
A selection of the need-to-know civil justice news for the week of February 15-21, 2014.
A selection of the need-to-know civil justice news for the week of January 25-31, 2014.
Jon Bramnick|The Record
As Americans, we believe in giving people a “second chance.” The proposed “Ban the Box” legislation is not the answer to the problem of a job applicant with a criminal history.
Imagine you are looking to hire someone to care for your elderly mother. That person will be alone with her and will have access to her home and her possessions.
After receiving applications for the job, you discover that one of the applicants has a criminal history of assault and theft. One would presumably be concerned about hiring that person to assist your mother.
You may not have a choice if “Ban the Box” legislation is enacted.
A selection of the need-to-know civil justice news for the week of January 18-24, 2014.
How to Sue Over the Christie Bridge Scandal and Win
John Culhane | Slate
As New Jersey Gov. Chris Christie tries to recover from the fallout for his administration’s participation in the vindictive decision to close lanes and snarl traffic on the George Washington Bridge for five days, he will get no help from lawsuits brought by angry citizens stuck in the mess. The first suit has already dropped. These claims will surely breed others. They could keep the story alive for years. And they could even result, unusually, in personal liability for the officials involved, including, perhaps, the governor himself.
You can’t turn on the news, open a paper, or scroll through your Twitter feed these days without being inundated with stories about the George Washington Bridge lane closing scandal. While most stories focus on the political fallout, there are real legal implications that deserve attention as well.
Here's Who's Behind The Huge Civil Lawsuit From The Chris Christie Bridge Scandal
Brett LoGiurato | Business Insider
Four-hour delays. Late for work. Lost wages. Late for crucial doctor's appointments.
Some of these alleged hardships are at the heart of a proposed class-action complaint in the burgeoning George Washington Bridge scandal. The complaint was filed last Thursday, the day after new revelations tying the administration of New Jersey Gov. Chris Christie to the lane closures.
Chris Christie hires law firm to review administration's role in 'Bridgegate'
By Statehouse Bureau | Asbury Park Press
A former federal prosecutor will head up an internal review by the administration of Gov. Chris Christie of his staff’s involvement with the politically motivated lane closings on the George Washington Bridge in September 2013.
The administration this morning announced the hiring of the Gibson, Dunn & Crutcher law firm and specifically Randy Mastro to assist both with the review and an investigation by the U.S. Attorney’s office into the closings, which snarled traffic for four days in Fort Lee.
Bridge scandal: Chris Christie's Nominees Delayed
By Jenna Portnoy | The Star-Ledger
The ongoing scandal over George Washington Bridge lane closures is having more ripple effects through Gov. Chris Christie’s administration.
The Republican governor has put on hold his plan to nominate John Hoffman, his acting attorney general, to the state Superior Court. The move comes as the nomination of Christie’s chief of staff, Kevin O’Dowd, is also in a holding pattern.
Governor Christie formally nominated Board of Public Utilities director Robert Hanna and Monmouth County Superior Court Judge David Bauman to the state’s highest court. While calling it a compromise, the announcement is “not part of a deal with Senate President Steve Sweeney,” according to a Star-Ledger report.
Hanna was appointed to the BPU by Governor Christie last year and is an unaffiliated voter. Bauman, a registered Republican, is a Monmouth County Superior Court judge but was appointed to that role by then-Governor Jon Corzine, a Democrat.
The announcement follows a Rutgers-Eagleton survey in which 91 percent of the state’s small business owners indicated they want the impasse between the Governor and Senate President Stephen Sweeney resolved. There are currently two vacancies on the Supreme Court, which creates a degree of economic uncertainty for small businesses which operate in New Jersey.
With movement on pension and education reform, legal reform and medical liability reform may rise on the Governor’s agenda. The need for legal reform has grown more apparent in recent months as studies confirmed that New Jersey will face a shortage of physicians by the end of the decade. The State Senate unanimously passed legislation authorizing DHSS to convene a summit to analyze the shortage’s implications for New Jersey residents; its Assembly counterpart, A-1828, awaits action by the Assembly Health and Senior Services Committee.
In the criminal court system, it’s often said that justice delayed is justice denied.
But for the civil court system in Union County, justice is suspended.
A political stalemate over judicial vacancies is contributing to a shortage of judges available to hear civil cases, according to a report in the Star-Ledger. A nearly 40 percent vacancy rate among judges, a backlog of over 800 cases, and four recall justices on vacation beginning July 1st means that the Union County Courthouse will not hear any civil cases during the months of July and August, a spokesperson said. Civil cases include everything from child custody disputes and divorces to the resource-draining “I-drove-drunk-and-hurt-myself-time-to-sue-the-bar” cases for which New Jersey has become infamous.
New Jerseyans from all walks of life need access to our civil courts. Union County taxpayers are no exception. Once the political stalemates are resolved, the Legislature needs to get serious about keeping frivolous lawsuits of our civil courts, which take scarce time, money, and resources away from disputes which need judicial intervention.
To the dismay of taxpayers and Americans with actual disabilities everywhere, unfortunately, it appears that the answer is “wrong.”
A University of Texas professor mused in an op-ed in the New York Times last year that affirmative-action like programs for the “ugly” should be in order, giving self-described “ugly” Americans grounds for a lawsuit under the Americans with Disabilities Act (ADA).
Lacking a high school diploma, the Department of Justice warned, may also count as a disability under the expanded definition of the ADA, should a potential employer reject an applicant because of it.
The Washington Times points out that the expanded definition of “disability” is consistent with a 2008 Congressional amendment to the Act, following concerns that courts were interpreting the definition too narrowly. The tide seems to have been reversed and then some, with ADA claims rising by 90 percent in the past five years. “The flood includes more frivolous claims than ever,” writes Luke Rosiak for the Washington Times. “Despite the broadened law, the EEOC [Equal Employment Opportunity Commission] saw the highest percentage yet deemed ‘no reasonable cause’ last year.”
Alas, even with the expanded definition on the plaintiffs’ side, ADA attorneys are still finding ways to te$t the bounds of our taxpayer-funded court system.
Some say it's a done deal: Bruce Harris, Mayor of Chatham and Governor Christie's Supreme Court nominee, won't be approved by the Senate Judiciary Committee tomorrow.
The Star-Ledger reported this last week (Spoto, 5/22), and others have weighed in since. Here is a sampling:
"Before a second of testimony has been heard or a single question has been asked, once again Democrats are disrespecting the nomination process and rushing to judgment to kill another qualified man’s nomination before he even sits in the committee room."- Kevin Roberts, spokesman for Governor Christie
"The nomination of Mr. Harris sends the wrong message, that we can only achieve diversity on the Supreme Court through lowering the bar for qualifications. In a state with many distinguished African-American lawyers and judges, nothing could be further from the truth." – Senator Ronald Rice, leader of the NJ Black Legislative Caucus
"I don’t think it’s going to be an extremely long hearing because there’s just not a lot of experience to question him on," Senator Nick Scutari, Senate Judiciary Chair
(and of course)
"It's interesting that someone like Nick Scutari, with his educational background [found Harris unqualified]" - Governor Christie
Advocates of lawsuit reform are touting the possibility of significant bills to reform the state's laws governing class action and consumer fraud cases, signaling what may become the biggest opening for changes since the 1990s.
A pair of bills introduced this session would limit the cost to post bonds for corporations that are appealing judgments, and would allow the subjects of class-action lawsuits to directly appeal the determination that a "class" exists.
The state's most prominent lawsuit reform advocate may be Marcus Rayner, executive director of the New Jersey Lawsuit Reform Alliance, which launched in 2007 to bolster lobbying on tort reform and related issues.
Rayner said the political climate is shaping up to be good for the bills.
"I think the business community has been impressed with this legislative leadership's interest with helping," along with that of Gov. Chris Christie, Rayner said.
Rayner said tort reforms in other states — including North Carolina, Wisconsin, Tennessee and Texas — increased pressure on New Jersey.
"A climate of excess litigation drives up the costs for everybody, from the business owner to the consumer," he said.
Governor Christie’s budget address will take place at 2 p.m. today. While lawsuit reform measures are typically devoid of budgetary line-items, changes that NJLRA seeks would add much-needed business investment to the state’s economy.
You can listen the Governor’s budget address live on the Legislature’s homepage, linked here.
A-3304, which NJLRA opposes, is scheduled for consideration by the full Assembly today. If enacted, this legislation would make the 2008 False Claims Act retroactively applicable to alleged offenses occurring up to 14 years ago, from March 1998.
A lot can happen in nearly 14 years. Companies change. Employees change. Exonerating evidence is harder to come by.
But this bill doesn’t take any of that into consideration. Instead, a company – no matter how big or small, equipped with a legal department or not – may be forced to defend itself against a False Claims lawsuit without the benefit of time-sensitive exonerating material.
More importantly, A-3304’s retroactive application of the False Claims Act is unconstitutional, and puts companies that do business in the State of New Jersey in serious danger of unfair and unjust litigation abuse.
The so-called “lame duck” session of the Legislature – the period between Election Day and the start of the next legislative session in January – is traditionally a period of frenetic lawmaking activity. For outgoing legislators who may be retiring or have not been reelected, it is the very last chance they have to shepherd bills through the democratic process.
NJLRA has five bills which it hopes will advance:
A-2473/S-480, which would apply the $50 million appeal bond cap enjoyed by tobacco companies to all businesses in New Jersey, so they do not have to prepay in order to appeal a judicial decision.
A-3333/S-2855, which would limit causes of actions under the New Jersey Consumer Fraud Act to consumers who suffer an ascertainable loss (as opposed to businesses), and make the Act applicable only to transactions which occur in New Jersey.
A-4228/S-3028, the “New Jersey Licensed Alcoholic Beverage Server Fair Liability Act.” This bill would prevent drunken motorists, convicted of DUI, from suing licensed beverage servers who served them in the event they drive drunk and cause themselves injury. (Yes, thanks to the New Jersey Supreme Court, we need legislation to clarify that drunk drivers cannot legally profit from their irresponsibility).
A-4135, which would allow defendants the right to immediately appeal a class action certification.
A-1982/S-760, which would address skyrocketing medical malpractice premiums and a consequential physician shortage in certain specialties by: protecting volunteer physicians acting in good faith from liability; prevent insurance companies from immediately imposing an increase on doctors who are named in a malpractice suit; require physicians providing expert testimony to be licensed in New Jersey and board certified in the appropriate specialty; and reverse the New Jersey Supreme Court’s decision in Ryan v. Renny, which gutted the Affidavit of Merit Statute enacted in 2004.
LRW will keep you abreast should any of the aforementioned bills advanced. For the most up-to-date legislative calendar, click here to visit the Legislature’s website.
One thing is clear: NJ's hospitality industry could be severely impacted by Voss v. Tranquilino.
"As much as we try to help new businesses establish, hire people and flourish, we need to devote the same sort of efforts to making sure existing businesses and industries flourish. We all know that tort reform goes a long way to removing the obstacles that exist and actually prevent businesses and industries from growing.
"We've got to be able to give businesses and physicians and those who are impacted by what we [legislators] do some stability and some certainty in the marketplace. And hopefully together we can do that."
Cryan told the audience about his personal experience with lawsuit abuse in Middlesex County. His family-operated establishment was the third and largest of three establishments visited by an intoxicated patron. The patron, who was refused service by Cryan's establishment, fled as an employee attempted to call him cab and caused a fatal automobile accident. Cryan's establishment - the only establishment to refuse him service - ended up paying out half a million dollars in claims.
"I look at this recent Voss decision, for example, and the Supreme Court is going to potentially take down the whole hospitality industry... Have we kind of lost our way a little bit in terms of who's responsible for what?
The case refers to the New Jersey Supreme Court's decision in Voss v. Tranquilino earlier this year, which permitted an Ocean County motorcyclist to sue the establishment which served him for bodily injuries he sustained while driving under the influence.
"Tort reform isn't a Republican or Democrat issue - it's an economic issue," said Marcus Rayner, NJLRA’s executive director.
"That's why it's important to urge the legislature to support measures like A-3333/S-2855, which would help protect honest businesses from frivolous litigation," Rayner said.
We get a lot of questions about tort reform efforts pre-NJLRA, particularly with respect to medical malpractice reform. Here is a roundup of what occurred in New Jersey, 2002-2003. Note: Since this effort predates NJLRA’s founding, please chime in with anything else that should be included.
If you’re a small business entrepreneur and manage to sneak some time away this summer (or just a concerned citizen wanting to learn more about how your local government works), you might want to pick up a copy of Assemblywoman Amy Handlin’s latest book, Government Grief: How to Help Your Small Business Survive Mindless Regulation, Political Corruption, and Red Tape.
Handlin, who represents the 13th Legislative District, offers practical advice for engaging with local government officials. There are also extensive glossaries designed to make navigating the multitude of government bureaucracies easier, as well interesting commentary on what Handlin calls the “corruption tax.”
Perhaps best of all, the book is straightforward, down-to-earth, and actually helpful; it’s not filled with the generalities and hyperboles we’ve come to associate with elected officials. She stresses that the advice offered in her book (which is rooted in her extensive backgrounds in marketing and public service) is applicable to every state and local jurisdiction.
You can check it out here. Happy reading - hope you enjoy it as much as we did!
In case you missed it, Kimberley A. Strassel details trial lawyers’ attempts to use a controversial case to block mandatory arbitration clauses (The Senate’s Lawsuit Factory, The Wall Street Journal, 7/22/11). Some how-to highlights:
1) Identify a law or regulation that prevents trial lawyers from cashing in.
2) Identify a "victim" of this law or regulation.
3) Get congressional allies to turn said victim into a cause célèbre.
4) Use ensuing moral outrage to get the law or regulation changed.
5) Buy a yacht.
Even the plaintiff’s lawyer thinks it’s crazy.
A state jury recently hit Warren Township, NJ (Somerset County) with a $2.5 million judgment over its handling of a municipal judge who came to work after consuming alcohol and prescription drugs.
The judge, Richard Sasso, was reported to Warren’s town council by Michele D’Onofrio, who was Warren’s municipal prosecutor. The Council chose not to take action, so D’Onofrio reported Sasso to the state Supreme Court’s Advisory Committee on Judicial Behavior. He was barred from serving as a municipal court judge for life. And she was dismissed.
D’Onofrio sued and won. The award breaks down as $552,000 in economic damages; $824,000 in punitive damages; and D’Onofrio’s attorney’s $1.2 million request for legal fees.
“We would have settled for a fraction of that,” Bob Braun quotes D’Onofrio’s attorney, Nancy Erica Smith as saying.
Municipal insurance doesn’t cover punitive damages, so for a town with a $16 million budget, the $2.5 million judgment is a hefty price for taxpayers to foot – especially when the Township had the opportunity to address it before it reached the Supreme Court’s Advisory Committee.
The bad behavior of Sasso - who earned $200,000 a year by racking up part-time gigs in Warren, Bridgewater, Watchung, and Bound Brook – is a lesson on how taxpayers end up paying for the actions (or in this case, inactions) of others. (See Braun’s piece in the Star-Ledger, “Warren Township melodrama highlights suburban mismanagement,” 7/18/11).
Warren Township is appealing the decision. Unless New Jersey acknowledges the need to reform its civil justice system, a single lawsuit – even a meritorious one – will have the power to influence a municipality’s budgetary priorities for years to come.
Patterson will assume the seat being vacated by Justice Roberto Rivera-Soto this fall.
In case you missed it, Edwin Stern, who was temporarily appointed to the New Jersey Supreme Court by Chief Justice Stuart Rabner following the Justice Wallace controversy, retired last week after reaching the mandatory retirement age of 70.
Justice Rabner has temporarily appointed Judge Dorothea O’C Wefing from the Appellate Division to serve on state’s the high court.
Nominee received bipartisan support from Senate Panel
Citing her temperament and diversity of experience, the Senate Judiciary Committee approved the nomination of Anne Patterson to the New Jersey Supreme Court.
Patterson declined to speak in-depth about ongoing matters before the Court, but said she fully appreciated the distinct roles of an activist and a judge.
"Clearly you have the requisite skills to serve in this position," said Senator Nicholas Scutari (D-Union), who chairs the committee.
Senator Raymond Lesniak (D-Union), who previously cited concerns about the Court's lack of racial diversity, voted against Patterson’s nomination.
Patterson, 52, was originally nominated in May 2010 by Governor Chris Christie to fill the vacancy left by Justice John Wallace, whom he did not renominate for tenure. She was ultimately nominated to fill the anticipated vacancy left by Justice Roberto Rivera-Soto, who announced that he will not seek tenure.
Senator Nicholas Scutari (D-Union), who chairs the Judiciary Committee, told the Star-Ledger that the panel would be “looking for her [Patterson’s] philosophical views and thoughts on certain “facts and circumstances.” He plans to ask how she would feel if she were not reappointed to the bench after seven years “for the same reasons Wallace was not reappointed.”
It’s time to recognize the role that municipal lawsuits play in the crushing burden of New Jersey’s property tax.
In New Jersey, the arrival of spring doesn’t just mean warmer weather and the smell of fresh flowers, it’s also the time of year when our state’s 566 municipalities draw up their budgets. And most of us, busy with daily life, fail to take note of our own council’s agenda – until we see the increase on our next property tax bill.
Read NJLRA’s op-ed in NJ Spotlight.
The cost of healthcare is a hot topic in New Jersey. States that enacted non-economic malpractice caps saw a 3 – 4 percent decrease in healthcare costs over the last few years, according to the Agency for Healthcare Quality and Research.
Why does tort reform reduce the cost of healthcare? For starters, it lessens the needs for defensive medicine. Unnecessary tests can be both costly and time-consuming, and the patient isn’t any healthier for it.
With a looming physician shortage, perhaps it’s time for New Jersey to take a look at these cost-cutting measures. A poll conducted by the American College of Emergency Physicians (ACEP) recently found that more than half of emergency room doctors cite their fear of being sued as the primary reason for ordering unnecessary tests in the ER. Emergency room doctors may be particularly vulnerable to lawsuits, because patients are generally sicker and they often don’t have access to patients’ medical histories.
Post-reform, Texas emergency rooms have undergone the second biggest improvement in wait times in the nation. And that’s not it for the Lone Star State. Texans -who faced a physician shortage not unlike the one New Jersey will likely face- have added at least one emergency room physician in 33 rural counties, 24 of which previously had none.
That’s not just stopping the hemorrhaging: it’s a reversal. One that New Jersey patients could benefit from, too – expanding access to care is a welcome consequence of enacting tort reform.
You can listen to the hearing live on the Legislature’s homepage.
A-3433 would prohibit consumer contracts from requiring that arbitration take place outside of New Jersey. NJLRA maintains that arbitration offers a meaningful and effective forum for resolving disputes without litigation.
The Assembly was also scheduled to consider A-3434, which would require a review of a consumer contract for unconscionability and set the standard for review. The Assembly adopted amendments to specify that the bill would not apply to arbitrations conducted or administered by a self-regulatory organization; however, the bill was held. It may also be in conflict with the U.S. Supreme Court’s April 27, 2011 decision in AT&T vs. Concepcion.
Assemblyman Dominick DiCicco praised the decision to hold “bad business bills” A-3433 and A-3434, which he called the “first step in getting [the Legislature’s] priorities straight.”
The path Anne Patterson is taking to the State’s highest Court can be confusing to most non-judicial scholars. Let’s recap:
The New Jersey Supreme Court is made up of 7 justices, compared to 9 on the U.S. Supreme Court. Justices are initially nominated by the Governor and are referred to the Senate Judiciary Committee for consideration. Once the State Senate bestows its blessing on the nominee, the Justice serves for an initial term of seven years.
Following the seven year term, the Governor decides whether to nominate the Justice for tenure. All justices must retire by age 70, if not sooner.
Tradition calls for three justices of each party to occupy the bench, with the seventh justice to be of the Governor’s party.
Approximately one year ago this week, Governor Christie bucked tradition by choosing not to appoint Justice John Wallace for lifetime tenure – a tenure that would last two years, until he reached the mandatory retirement age. Governors have traditionally nominated Justices for lifetime appointment despite the Justice’s party affiliation, which some argue is necessary so Justices aren’t pressured to take political conditions into their decisions on the Court. Others argue that it is the Governor’s right to base lifetime tenure on ideology as well as moral integrity. Governor Christie then announced his intention to appoint Anne Patterson, a Republican, to the Supreme Court.
This is where Patterson’s path to the high court becomes unique. In response to the bucking of tradition, Senate President Steve Sweeney declared that the Democratically-controlled legislature would not hold a hearing on Anne Patterson’s nomination until Wallace’s lifetime term would have ended in 2012. The Governor did not budge on his decision not to nominate Wallace.
This left a vacant seat on the court. In keeping with precedent, Chief Justice Stuart Rabner appointed appellate judge Edward Stern as a temporary justice. Chief Justices have traditionally nominated the senior appellate judge to temporarily fill a vacancy on the high court when one occurs.
Not everyone was happy. Justice Roberto Rivera-Soto declared in December, via a Court decision, that he would abstain from the Court’s decisions in protest because he did not believe Rabner did not have the authority to appoint a temporary justice. Rivera-Soto later modified his stance, saying he would indeed vote on cases where Stern's vote did not affect the outcome. Calls for Rivera-Soto’s immediate resignation grew louder from Senate Democrats and newspaper editorial boards. A few weeks later, he informed Governor Christie that he would not seek renomination when his term ends this September.
Fast-forward to this week. With the possibility of two vacancies on the Supreme Court this fall looming, Governor Christie and Senate President Sweeney announced that they reached an agreement: The Senate Judiciary Committee would consider Anne Patterson’s nomination by the end of May – to the seat about to be vacated by Justice Rivera-Soto, not Justice Wallace.
Approval by the Senate Judiciary Committee is the next step in this process. The Committee, headed by Senator Nick Scutari (D-Union) is made up of a total of eight Democrats. There are five Republicans on the Committee.
LRW will keep you informed as the hearing unfolds.
NJLRA issued the following statement after the announcement that Governor Christie and Senate President Sweeney agreed to hold a hearing on the nomination of Anne Patterson to the seat being vacated by Justice Roberto Rivera-Soto on the State Supreme Court:
"We applaud Governor Christie and Senate President Sweeney for coming together to advance Anne Patterson's nomination and we look forward to a thoughtful hearing on her well-qualified candidacy.
“A strong and fully-constituted Supreme Court is vital to New Jersey's business community, as important issues decided by the Court directly impact New Jersey’s economic competitiveness.
One of the most appealing aspects about tort reform is that it has the power to spur economic growth while being budget-neutral.
That said, the legislative “budget break” – which is the period between the end of March and June when the Legislature is in recess while the Assembly and Senate Budget Committees meet to finalize the next fiscal year’s budget – can seemingly push tort reform to the back burner.
Fortunately, there are some things tort reformers can do:
Take a look at your municipal budget. How much money is your town or city spending on litigation costs? It’s probably much higher than you think. Could some endangered local government service be spared if its litigation tab weren’t so high? Perhaps it’s worth mentioning at your next town council meeting, especially if a lot of cases are referred to expensive private firms. You’ll be happy you spoke up when your next property tax bill is due.
Review tort reform measures that were recently introduced. Senators Jennifer Beck (R-Monmouth) and Loretta Weinberg (D-Bergen) recently introduced S-2800, which adds an additional protection for doctors to two of the proposals in S-760/A-1982. The new bill addresses protecting a doctor from having his or her name linked to a malpractice suit prematurely. It also provides protections for volunteer physicians acting and good faith and prevents doctors’ insurance premiums from automatically increasing when a lawsuit is filed.
Assemblyman John Burzichelli (D-Gloucester) also introduced several bills in late 2010 which would protect local governments from liability in certain instances where whether is to blame. The bills were endorsed by the New Jersey League of Municipalities, which you can read about here.
See where redistricting has left you. Are you in a new legislative district? Use this as an opportunity to educate your new legislators on the importance of a business-friendly climate in New Jersey. Unless they live under a rock, they’ve heard this before. But they might not have thought about tort reform as a means to achieving economic growth. You can check the new legislative map here to see if your municipality has been moved to a different district.
In sum, the budget break is a great time for tort reformers to connect the dots between economic growth in Trenton and municipal and family budgets at home. It’s a great way to keep up the momentum and learn more about your community at the same time.
“If we had more women of either party, we’d get a lot of these things through,” Senator Allen said.
An extensive hearing of the bipartisan, bi-cameral Women’s Legislative Caucus last year underscored the declining number of OB/GYNs and subsequent impact on women’s access to care. After months of languish, the Assembly version of the bill passed favorably from the Assembly Health and Senior Services Committee, but was later second-referenced to the Assembly Judiciary Committee.
You can read the full Star-Ledger piece here.
As most LRW readers already know, New Jersey’s new legislative district map has arrived. Changes weren’t as drastic as some anticipated, and what this means for tort reform over the next decade remains to be seen. LehighValleyLive.com has the before and after photos:
Last month, we underscored Governor Christie’s pitch to attract Illinois businesses in an op-ed. New Jersey’s “well-educated, diverse talent pool” and “innovative financing, incentive, and assistance programs” for new businesses is ideal for entrepreneurship – especially to a state which raised its corporate tax rate from 4.8 to 7 percent.
The CEO of one business, however, recently told Illinois Governor Pat Quinn that his business would stay – but that the state’s business climate needs to change.
Doug Oberhelman, CEO of Caterpillar Inc., which manufactures heavy equipment in the Peoria area, employs 23,000 people. Governor Quinn reportedly acknowledged that the state’s business image is in need of an overhaul.
Illinois ranked eighth in the region in job growth as a percentage of its population last year, according to Chicago Business. To the chagrin of Caterpillar’s overseas representatives, personal income tax also rose, from 3 percent to 5 percent. They expressed concern about the company’s ability to attract engineers, and reiterated that even if Governor Quinn’s call for a 30 percent reduction in businesses’ liability for workers compensation is enacted, Illinois would still have the 2nd highest rates in the nation. Illinois businesses also want to see a cap on civil liability.
Governor Quinn also told Oberhelman that he plans to invest in Illinois’s infrastructure and help manufacturing companies improve their ability to export. Let’s hope that that Illinois trial lawyers don’t take it as a green light to invest in workers compensation lawsuits in the meantime.
By Marcus Rayner | March 29, 2011
“From a college student suing a Chinese restaurant for soup she spilled on herself (Somerset County), to a drunken motorcyclist who drives into a parked car and sues a restaurant (Ocean County), lawsuit abuse has an economic impact on businesses in every corner of the state. Every dollar spent fighting nonsense lawsuits is a dollar not spent on innovation or job creation, and it doesn't need to be this way.”
Several hundred miles from here, Illinois business owners are learning about a place with an abundant supply of workplace talent and a high-quality lifestyle sure to make any entrepreneur envious. Weary from crippling tax hikes, a labor shortage and a shrinking consumer base, Illinois business owners can only dream about this land of milk and honey: New Jersey.
"Well-educated, diverse talent pool," reads the ad, placed by New Jersey Gov. Chris Christie. Want to start a business? "Innovative financing, incentive and assistance programs. Exceptional quality of life."
The catch? Here in New Jersey, businesses are vulnerable to lawsuit abuse. Everything the ad says about New Jersey is true. Christie's efforts to improve the business climate in New Jersey, combined with our state's existing assets make New Jersey fertile grounds for entrepreneurship. His outreach to the national business community is both constructive and sorely needed as we seek to reclaim our economic footing here in New Jersey. And business retention as well as recruitment will be critical to our economic growth over the next decade, a point that leaders in both political parties have made.
We’ve mentioned in previous posts that New Jersey’s pharmaceutical companies shed 7 percent of their workforce last year, according to a report published by the Healthcare Institute of New Jersey.
As the Senate Budget Committee began its budgetary hearings for 2012 today, Senator Paul Sarlo asked Legislative Budget Officer David Rosen why, “despite ambitious pro-business policies touted by the governor,” the Garden State’s unemployment rate continues to exceed 9 percent.
“The fact that N.J.’s high end job market has largely been telecomm and pharmaceuticals – [those are] two industries that have been transformed largely beyond our control,” Rosen replied.
Of course, a third job field may have had an impact on the previous two: litigation tourism.
A cost-free way to stop the hemorrhaging of high end jobs is to enact changes to New Jersey’s Consumer Fraud Act, which has become one of the most abused laws of its kind. Assemblyman John McKeon has introduced legislation, A-3333, which would make the law less hostile for high-end industries in New Jersey.
Politicker NJ’s Darryl Isherwood has additional commentary on Monday’s budget hearing.
A-1982 takes steps to rectify the New Jersey Supreme Court’s 2010 decision in Ryan v. Renny, which gutted the affidavit of merit statute. It also protects volunteer physicians from medical malpractice liability and prevents insurance companies from immediately imposing an increase on doctors who are named in a malpractice suit.
Several committee members, including Assemblywomen Celeste Riley and Elease Evans, spoke of the impact New Jersey’s doctor crisis will have on women’s access to healthcare. New Jersey already has a 12% gap between the number of New Jersey’s patients and doctors available to treat them. This number is expected to widen by another 3,000 doctors by the end of the decade if changes are not made, and higher-risk specialties like obstetrics will be hit hardest.
Nearly every state in the country is grappling with rising Medicaid costs. New York, however, bears the distinction of having the highest Medicaid costs in the nation, and also leads among avoidable hospital use and costs. On a per capita basis, it runs about twice the cost of the national average.
To help his “functionally bankrupt” state cleanse its Medicaid program of inefficiencies and waste, Governor Andrew Cuomo convened a Medicaid Redesign task force to “redesign and restructure” the program.
The task force consisted of 30 stakeholders – doctors, hospitals, nursing homes, the Greater New York Hospital Association, and other patient care providers you would expect. The objective, according to the Syracuse Post-Standard, is to move nearly all of the state’s 4.7 million Medicaid recipients to managed care within the next three years in order to stop the use of hospital emergency rooms for preventative and routine care. Its expected savings could exceed $1.1 billion. The task force issued 79 recommendations last Thursday for the approval of the Governor and Legislature. And they include a $250,000 cap on noneconomic damages – which would save hospitals hundreds of millions of dollars in insurance premiums alone.
Now enter the trial lawyers. They’re throwing a fit over aforementioned recommendation. Not because it saves taxpayers’ money, but because their interests weren’t represented on the task force. New York Times blogger Nicholas Confessore has noted their frustrations in detail.
New York State faces a $10 billion deficit, and Governor Cuomo has said he needs to cut Medicaid spending by $2.85 billion and limit it to 4 percent annual increases thereafter if he has any chance of plugging it. Josh Vlasto, a spokesperson for Governor Cuomo, called the interest group opposing this recommendation a “mouthpiece for the trial lawyers.”
I suppose the task force could have recommended cuts in patient spending instead of a cap on litigation and insurance spending. As a patient, however, wouldn’t you rather have a $250,000 cap on noneconomic damages instead of a reduction in care? It seems nonsensical and transparent for trial lawyers to insist that the only way Medicaid recipients can receive more efficient care is to make sure the lawyers’ thirst for uncapped noneconomic medical damages remains quenched.
You can listen to Governor Christie’s budget address live via NJN.
Assemblywoman Alison Littell McHose (R-Sussex) signed on as a cosponsor of A-3333, increasing the total number of sponsors and cosponsors to seven. She joins primary sponsors Assemblymen John McKeon (D-Essex), Ralph Caputo (D-Essex), and Domenick DiCicco (R-Glouster), and cosponsors Assemblywomen Amy Handlin (R-Monmouth), Mila Jasey (D-Essex), and Elease Evans (D-Passaic).
A-3333 calls for reforms to New Jersey’s oft-abused Consumer Fraud Act (CFA). If enacted, A-3333 would do the following:
More information about New Jersey’s CFA is available on NJLRA’s website.
Sherman “Tiger” Joyce, president of the American Tort Reform Association (ATRA), had the following to say about New Jersey’s prospects for civil justice reform in The Metropolitan Corporate Council publication:
“Of course, the litigation industry also remains strong throughout New Jersey, home to once-and-future judicial hellholes, and ATRA expects it to again push an expansion of wrongful death liability while actively opposing consumer fraud reform. But tort reformers, backed by Governor Chris Christie, have some momentum. They support three affirmative reform bills already filed during the current legislative session. One seeks to limit appeal bonds to the total value of the monetary judgment or $50 million, whichever is less. Another would revise the individual's cause of action under the Consumer Fraud Act and make other revisions regarding applicability (see trial lawyers' opposition noted earlier). The third pertains to liability, standards of care and insurance coverage for medical malpractice actions.”
The measure is sponsored by Senators Gill, Lesniak, and Scutari. The Assembly could also impeach the embattled Justice, who has announced his decision not to seek reappointment when his term ends in the fall, and vows to abstain from court decisions until then.
New Jersey Supreme Court Justice Roberto Rivera-Soto, who infamously declared last month that he would abstain from rulings while a temporary justice fills the vacant seat of former Justice John Wallace Jr., announced to Governor Christie that he will not pursue his own renomination.
Justice Rivera-Soto’s term ends in September. Senate President Steve Sweeney has vowed not to hold a confirmation hearing on Anne Patterson, whom Governor Christie nominated to succeed Justice Wallace, until 2012, when Justice Wallace would have reached New Jersey’s mandatory retirement age. Governor Christie, for his part, has vowed not to nominate a replacement for Justice Rivera-Soto until a hearing on Patterson is held.
It remains to be seen whether the Governor will appoint Anne Patterson to fill Justice Rivera-Soto’s anticipated vacancy, or if New Jersey will have two vacancies on its Supreme Court instead.
Supreme Court Justices serve a 7-year term and are then eligible for tenure until the mandatory retirement age of 70. The Star-Ledger published the following New Jersey Supreme Court timeline in today’s edition:
Twenty-three counties lacked an E.R. doctor. Ten counties lacked an OB-GYN. No, this is not a third world country: it was Texas, prior to tort reform.
The Wall Street Journal calls the pre-reformed Texas a “holy place on the tort bar pilgrimage,” that has now morphed into a “Mecca for doctors.” Incentives didn’t hurt, either, and Texas now leads the country in job creation. Product liability, class-action certification, and noneconomic damage caps were reformed in 2003 and 2005. Now, according to the Journal, Texas Governor Rick Perry wants to extend his state’s tort reform successes – British style. It’s a thinly-veiled deterrent to filing frivolous lawsuits, which drive up business costs and drive down economic growth.
The “loser pays” concept isn’t a new one. The purest-form version of “loser pays” is that the losing party picks up the attorney’s tab. The proposed caveat would impose a penalty on the losing firm which files the case, forcing trial lawyers to think twice before filing questionable claims.
Governor Perry is also calling for “new legal channels” to expedite claims below $100,000, but details about this proposal aren’t readily available.
It sounds like Texas might be headed in the right direction. It begs the question: if Texas can entice doctors, why can’t New Jersey?
NJLRA's executive director, Marcus Rayner (2nd from left), with NJBIA Vice-President Christine Stearns, New Jersey Petroleum Council President Jim Benton, and Scott Ross, also of the New Jersey Petroleum Council.
Litigation abuse drives up business costs and inhibits job growth, according to the New Jersey Society for Environmental, Economic Development (NJ SEED). The organization, which is a broad coalition of New Jersey’s business and labor leaders, say that a vibrant life science industry is key to growing New Jersey’s economy.
In its 2010-2011 State Issues Briefing book, “Mapping Our Way to Prosperity,” NJ SEED argues that preserving New Jersey’s status as the “medicine chest of the world” is critical, and tort reform – particularly cracking down on litigation tourism – is sorely needed by the $30 billion life science industry. While New Jersey remains a key location for 24 of the world’s 30 largest pharmaceutical giants, weak civil justice laws have helped give momentum to Massachusetts, North Carolina, Texas, California, and Indiana, which threaten to outpace the Garden State’s industry growth.
A decline in the life sciences industry would pose a significant strain on New Jersey’s economy. According to the report, New Jersey’s life sciences currently do the following:
A copy of NJ SEED’s briefing book is typically shared with the Governor, members of the Legislature, and other policy leaders in New Jersey. Let’s hope they heed the call for civil justice reform on page 46.
In previous posts, we’ve emphasized the hidden cost of lawsuit abuse to New Jersey’s taxpayers, embedded in municipal and even school budgets. Now, legislation to expose these costs to the light of day is on the Governor’s desk.
S-1248, sponsored by Senators Ronald Rice (D-Essex) and Jennifer Beck (R-Monmouth), would prohibit the Division of Local Government Services, which is housed in the Department of Community Affairs, from approving the budget of a municipality or local authority until the municipality reports their involvement in lawsuits in which they have spent or are expected to spend more than $50,000 in legal fees.
Local governments’ annual budgets must be approved by the State. However, legal fees are often added to the budget after its approval, which can sometimes mask the true state of municipality’s budget.
S-1248 also tackles outside law firms’ billing practices, which deters potential pay-to-play activity. It’s harder for firms to bilk the taxpayer when municipalities are required to report the names of attorneys performing work and an explanation of their billing practices.
In addition to reporting the names of attorneys performing work and an explanation of their billing practices, the number of lawsuits settled out-of-court and the amount for which they were settled must also be included. Outstanding lawsuits and an explanation must be included as well, unless costs are expected to be covered by a liability insurer.
Senator Rice acknowledged that the bill is largely aimed at alerting state official to large contracts awarded to outside firms. “New Jersey taxpayers are paying enough for local governments and authorities without over-the-top legal contracts to political cronies,” he said in a statement. “This bill is about making sure that local officials publicly report any legal contract in which the municipality is expected to spend more than $50,000, so that State regulators, lawmakers, and the governor can step in if necessary on behalf of the local taxpayers.”
Assemblyman Peter Barnes III will replace Senator-elect Linda Greenstein as chair of the Assembly Judiciary Committee. Assemblyman Barnes served as vice-chair of the committee during the 2008 – 2009 Legislative Session.
Senator-elect Greenstein, who chaired the committee for nearly a decade, won a special election to fill the remaining term of Senator Bill Baroni, who left for a position with the Port Authority of New York and New Jersey earlier this year. Barnes and Greenstein, both Democrats representing parts of Middlesex County, will assume their new roles next month.
The Senate and Assembly are wrapping up their final voting session before Thanksgiving. Among the more tort-inspired bills considered is A-2975, which requires that a person destroy (or arrange for the destruction of) all records store on a digital copy machine. This is in response to a legitimate public concern, since many copy machines have an internal hard drive capable of storing every document have the ability to retain images of everything ever scanned, printed, or faxed with it.
Things get trickier, however, when you get to section 4 of the bill, especially since it doesn’t contain the words “willfully” or knowingly,” as does section 3:
3. Any person that willfully or knowingly violates the provisions of this act shall be liable to a penalty of not more than $10,000 for the first offense and not more than $20,000 for the second and each subsequent offense to be collected in a summary proceeding pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). The Attorney General shall enforce the provisions of this act.
4. A person damaged in business or property as a result of a violation of this act may sue the actor therefor in the Superior Court and may recover compensatory and punitive damages and the cost of the suit including a reasonable attorney's fee, costs of investigation and litigation.
Democratic Assemblywoman Linda Greenstein, representing the 14th district (parts of Mercer and Middlesex counties) was elected to the State Senate earlier this month to fill the unexpired term of former Senator Bill Baroni, a Republican. As a result, her departure creates a vacancy for the chair of the Assembly Judiciary Committee. Published reports indicate that current vice-chair of the Judiciary Committee, Assemblywoman Annette Quijano (D-Union), and former Judiciary vice-chair Assemblyman Reed Gusciora (D-Mercer) are interested in the chairmanship. Assemblyman Peter Barnes III (D-Middlesex) has also been mentioned.