Montana Main Street Blog

Federal Attempts to "Create Jobs"

Over the next ten months Congress and the President will be debating budgets, bills, tax revisions and more to supposedly "create jobs." Thomas Oliver of the Atlanta Journal-Constitution has a great article about the difficulties in this line of thinking. The federal government can make all the new tax credits it wants, but that is not going to create jobs.

I don't know who originally coined the axiom, "First, do no harm," but that is what the government needs to do in order to get us even close to thinking about an economic recovery. As Congress debates and the President presses for sweeping changes in health care, climate change (cap & trade), card check, different tax rates for investors, different rates for income tax payers, death tax revisions, huge financial and banking reforms, and record deficit spending, my question is this - who would want the risk of hiring new people in a time of record uncertainty? And not just economic uncertainty, but uncertainty largely created by government officials and regulators.

It's not an easy time to be a business owner right now, especially a small business owner. I think most are thinking they are safer just treading water than trying to expand, and it's due in large part to many things being debated in Congress right now. If we want to get our people back to work, we must first understand what's been keeping businesses from hiring new people. Tax credits aren't going to get people back to work in any large numbers.

Blaming an Airport For Your Divorce

From the NAM "Focus" Newsletter - Legally Insane Column:

"Stanley G. Hilton blames 37 organizations for the collapse of his marriage and is seeking $15 million from each of them ($555 million total). He alleges the defendants - the city and county of San Francisco, San Francisco International Airport and every airline based there, airline engine manufacturers and the real estate agencies involved in the sale of his house - failed to warn him that the house he purchased was very close to the airport. As a result, he argues, he suffered from noise and air pollution that caused physical and emotional injuries."

I hope the defendants use Rule 11 and get this lawsuit dismissed with sanctions against the plaintiff. Ridiculous.

Is Medical Liability Reform in the Senate Health Bill?

The latest from NAM:

Senate Majority Leader Harry Reid’s manager’s amendment to the Senate health care bill, available here as a .pdf file, proposes actual statutory language for federal grants to states to establish demonstration projects on medical liability, but it's not what you think.

The provisions run from page 344 to 359: "SEC. 399V-4. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO CURRENT MEDICAL TORT LITIGATION." The previous versions of the bill had simple "Sense of the Senate" language that only suggested federal support for demonstration projects.

The new amendment is much more detailed and authorizes $50 million over five years, beginning in Fiscal Year 2011 (Page 358). Many provisions would favor participation in the demonstrations by the plaintiffs' bar, including the targeting of medical errors, which is the gist of AAJ's latest arguments against medical liability reform.

At Overlawyered.com, Walter Olson reports a Capitol Hill source’s insightful analysis of the language, which concludes: “Sen. Reid’s bill spends 50-million taxpayer dollars on a grant program run by trial lawyers for the benefit of trial lawyers. The money will be spent to establish “alternatives to litigation” that are even more lucrative for trial lawyers and costly for doctors than the current broken system.”

Why Tort Reform is Not in the Health Care Reform Mix

So says Howard Dean.

Appeal Reforms Needed for Energy Projects

Rarely do we reprint an article verbatum on the blog, but this latest editorial by Llew Jones (District 27 - Conrad) was an excellent one. It demonstrates the need for appeals reform in order to get more energy projects from the drawing board to on-the-ground operations:

"It has been inferred that there is no need for appeals and litigation reform, thus my HB483, HB529, and HB566 are not necessary.

Rep. Jones

Consider the following:

According to the Department of Environmental Quality (DEQ), there have been six major energy projects over the last eight years or so. All six were appealed, some multiple times. Notice that the level of "gaming" of permits, i.e. the never ending nature of appeals on the last three:

Roundup Power. Three appeals to Board and one court challenge. The Board held for Department in one, which was appealed to district court. District court held for Department. Petitioners appealed to Supreme Court. Supreme Court held in part for petitioners and in part for Department. Board held for petitioners in another case. Third appeal to Board dismissed as moot. In court challenge district court held for Department. Petitioners appealed to Supreme Court. Supreme Court dismissed as moot.

Thompson River Co-Gen (proposed Thompson Falls plant), Appeal to Board. Board held in part for Department, in part for petitioners. Ruling in favor of Department appealed to district court. District court upheld Department. Petitioners have appealed to Supreme Court.

Southern Montana Electric (proposed Great Falls plant). Appeal to Board. Ruling in part for petitioners and in part for Department. Ruling for Department appealed to district court. Ruling for petitioners resulted in Department doing a new Best Available Control Technology (BACT) determination. New BACT determination appealed to Board.

I also would suggest that the reader visit the MEIC website and read about the above projects. Roundup was subject to five appeals alone: http://www.meic.org/energy/power_plants/roundup-power-plant-1.

I would also ask that you consider the celebratory tone taken by these folks. I find it disingenuous to celebrate the destruction of these projects without consideration for the job loss, school funding loss, economic impact and higher cost electricity that were caused.

The legislation I am carrying is not about limiting the right of public input. I am a huge supporter of the extensive Montana Environmental Protection Act (MEPA) process that allows the public input which impacts the state and developer's decision making process, although I do grump about how long it takes at times.

What my bills do is create a more predictable and timely framework after the extensive MEPA and permit process is finished. For investors and developers to consider investing millions, even billions of dollars in Montana there must be a predictable framework that allows legit appeals and litigation while still discouraging delay and deleterious gaming.

On a major project, the whole EIS and permit process seems to take around two years. It would seem reasonable that the subsequent appeals and litigation should be wrapped up one way or another within two years. That is certainly not true today. Maybe it can be tomorrow.

This legislation is not about being partisan. I have worked with the Executive branch and across the aisle with some of the more moderate folks. This legislation is about moving Montana forward."

Creating More Ways to Sue Small Businesses

A bill that would add one more way for a disgruntled employee to sue their employer is back. SB 494 (Sen. Windy Boy) is a repeat of HB 213 from last session, which we posted on here. Under this proposed law, an employee or former employee could sue for a "hostile work environment." 

So on top of wrongful discharge, constructive discharge, infliction of emotional distress claims and more, employers could look forward to one more potential frivolous lawsuit. Unlike larger businesses, small businesses do not have HR directors or lawyers on staff. When a piece of new, significant regulation comes out of Helena, small businesses have to spend a lot of money trying to figure out how to comply with the law.

Although it certainly has good intentions, the proposed bill would be a huge hit to small businesses. Thankfully, the Senate Business and Labor Committee promptly tabled the bill.

More Stimulus for Montana Trial Lawyers

Trial lawyers got a victory in the Senate Judiciary committee when SB 285 (Senator Larry Jent) received a 7-5 vote to send it to the floor. The bill would drive up costs in an already costly work comp system by encouraging the use of lawyers in collecting work comp benefits. The current system was set up specifically to discourage the use of attorneys, and this system has worked for more than 99% of claimants. The old system used attorneys very regularly, and that is one reason the Old Fund went broke.

The bill would also take out the "reasonable" requirement in current law. Right now, a claimant can collect attorney's fees if the denial of medical benefits by the insurer was unreasonable. If this bill becomes law, the reasonableness of the denial will not be a factor, and any claimant would be able to get those fees paid.

We hope the full Senate will recognize the high costs of work comp insurance and not make it worse.

Trial Lawyer Stimulus Bill Advances

Today the House narrowly passed out HB 345 (Ken Peterson), which is one of the trial lawyers' number one priorities. In short, the bill would make Montana the first state in the nation to allow a plaintiff to collect attorney fees in a third party bad faith claim. To see the 52-48 vote, click here.

In the next few days, I will summarize the other three or four bills that are high on the priority list for the plaintiff's bar.

An Economic Stimulus Bill for Trial Lawyers

While the nation deals with a historic economic downturn and Washington debates a bill to recharge the economy and create jobs, a group of people gathered in the Montana Legislature's House Judiciary Committee to hear a bill aimed at stimulating the plaintiff's bar.

The bill is HB 345 (Ken Peterson), and it would change the law in Montana regarding third-party acts of bad faith in insurance claims. Currently, Montana is only one of a few states that allow third parties to sue for bad faith. This bill would make us the first and only state in the nation where attorney fees would be rewarded in these cases. Like any other new law that mandates coverage, increases exposure and risk, this bill is going to add cost.

Statistics show that Montana's extraordinary laws regarding insurance have had a considerable effect on insurance cost for consumers. According to testimony at today's hearing, Montanans can expect to pay between 15-40% more for insurance than our neighbors. In addition, the West Virginia Insurance Commissioner conducted a study on the financial impact of their state's third-party bad faith laws and the results of increased costs were conclusive: these laws increase costs for consumers.

Businesses are huge consumers of insurance, and so when we see something that will increase costs for them, we vigorously oppose. With workers' compensation costs, health care costs, energy costs, taxes, and other expenses already beating down employers, we stand firmly opposed to anything else that will burden them from creating more jobs and running the economy.

I know a lot of sectors of our economy are hurting right now. Apparently the plaintiff's bar is one of them. Despite the pleas for this unprecedented legislation, we hope a majority of the House Judiciary will vote to table the bill.

Legally Insane

This post comes from a NAM newsletter column called "Legally Insane." Enjoy:

"A man serving time in a Colorado jail has been trying to break out of the slammer for years. After an unsuccessful attempt two years ago, he once again tried to rappel down the side of the 85-foot prison wall earlier this year. On this attempt, however, he fell 40 feet and sustained injuries.

After he was asked to pay back $64,000 in medical expenses, the wannabe-fugitive filed a suit in Denver court claiming he had warned prison officials of the prison's lackluster security after his first escape attempt. Because of the prison's failure to effectively secure the prison, he claims that he was given 'an open invitation to escape.' He now alleges that it was this invitation that led to his injuries, and the prison should cover these costs.

Since the suit was filed, the jail has had to invest $1.2 million to improve security. As the convict awaits his day in court, he is serving out his escape conviction sentence at the Colorado State Penitentiary - the most secure facility in the state's prison system."