News release from Tennesseans for Fair Taxation:
Nashville, Tennessee – Like most state tax systems, Tennessee takes a much larger share from middle- and low-income families than from wealthy families, according to the fourth edition of Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, released today by the Washington-based Institute on Taxation and Economic Policy (ITEP) and Tennesseans for Fair Taxation (TFT).
Combining all of the state and local income, property, sales and excise taxes Tennessee residents pay, the average overall effective tax rates by income group are 11.2 percent for the bottom 20 percent, 8.8 percent for the middle 20 percent and 2.8 percent for the top one percent. Nationally, those figures are 11.1 percent for the bottom 20 percent, 9.4 percent for the middle 20 percent and 5.6 percent for the top one percent. The full report is online at www.whopays.org.
Lawmakers have given final approval to legislation that would penalize people who file lawsuits that are later dismissed as baseless, reports The Tennessean. They would have to pay up to $10,000 to cover court costs and their opponent’s attorney fees. The legislation is the latest in a series of GOP efforts over the past year aimed at reducing a business’ exposure in civil lawsuits. Legislation approved last year capped non-economic damages at $750,000 and punitive damages at $500,000, with some exceptions.
Backers say the new legislation, HB 3124, will cut down on unfounded lawsuits and would apply only to a small number of cases.
“It is a very limited loser-pays bill,” said Rep. Vance Dennis, R-Savannah, the bill’s House sponsor. “It goes to purely frivolous lawsuits, lawsuits that don’t have any merit.”
But Democratic opponents argue the legislation will restrict access to the courts only to the state’s wealthiest residents.
Rep. Mike Stewart, D-Nashville, said it would make the state’s legal system more like Europe’s, where in many countries the losers of lawsuits must pay costs. The bill would have a “huge chilling effect” on average residents seeking attorneys willing to take on their cases, he said.
“The plumber who got run over by a car. The student who was walking to school and got hit by a bus,” Stewart said during House debate Tuesday. “Those are who will be the people who will be kept out of court by this law.”
The legislation would require plaintiffs to pay up to $10,000 when the court dismisses a lawsuit because there is no basis in law for the claim.
It would not apply to actions against the state or other governmental agencies or plaintiffs representing themselves, except where the court determines the person acted unreasonably or refused to voluntarily withdraw a dismissed claim. The legislation also would not apply to lawsuits expressly aimed at changing existing law or legal precedent.
The House approved the bill 58-38 on Tuesday and rebuffed efforts by Stewart to amend the legislation to apply to a defendant who loses a motion to dismiss. The Senate gave its approval in a 17-12 vote. If signed by the governor, it would apply to lawsuits filed on or after July 1.
After more than two hours of debate, the House voted 58-38 Tuesday for a “loser pays” lawsuit system that Democrats contended will intimidate average citizens from going to court against big corporations.
Under HB3124, if a judge grants a defendant’s motion to dismiss a lawsuit as having “no basis in fact or law,” the plaintiff who brought the lawsuit would have to pay the defendant’s attorney fees of up to $10,000.
Sponsor Rep. Vance Dennis, R-Savannah, said the bill would help “small businessmen and farmers trying to defend against frivolous, bogus lawsuits” and who otherwise would have to pay their own lawyers “thousands of dollars.”
Critics such as Rep. Mike Stewart, D-Nashville, said the real effect would be to make people of modest means fearful of going to court when there was any chance of losing. Stewart said the “chilling effect” of a $10,000 penalty on average citizens would, in contrast, be inconsequential to wealthy corporations and insurance companies.
Unsatisfied with landmark tort reform legislation that Gov. Bill Haslam and Republican lawmakers successfully enacted last year, business, insurance and health-care interests continue to push for laws that will reduce their exposure to civil lawsuits.
So reports The Tennessean: Proponents of the laws say they will help prevent the filing of junk lawsuits and improve Tennessee’s business climate. Opponents say they would improperly shield wrongdoers and close the courthouse doors to all but the very wealthy.
Last year’s legislation capped non-economic damages such as pain and sufferring at $750,000 and punitive damages at $500,000, with some exceptions for cases involving “catastrophic” losses or intentional misconduct, records destruction, or conduct under influence of drugs or alcohol. It also restricted claims that can be brought under the Tennessee Consumer Protection Act.
The Tennessee Civil Justice Act of 2011, as it was called, was enacted over the objection of trial lawyers and consumer advocates.
This year, the same coalition of businesspeople that helped sell the governor’s tort reform package, Tennesseans for Economic Growth, wants more limitations imposed in civil lawsuits, including a handful of bills targeting the losing side in civil cases and litigants who refuse to settle lawsuits.
One bill would require a party who loses a motion to dismiss to pay the litigation costs of the opposing party.
“Loser pays on motions to dismiss is designed to prevent frivolous lawsuits,” said Lee Barfield, a lawyer at Bass, Berry & Sims and lobbyist for the business coalition.
Another bill would require a plaintiff to pay the litigation costs of a defendant if the plaintiff refused a settlement offer from the defendant only to win less than 75 percent of the settlement offer at trial. The law would similarly punish defendants who refuse a settlement offer if the plaintiff wins more than 125 percent of their settlement offer at trial.
….Gary Zelizer, director of governmental affairs at the Tennessee Medical Association, said his organization will continue to push for a bill that would prevent emergency room patients from suing hospitals and doctors for negligence unless they can show “gross negligence.” When mistakes occur, Zelizer said it’s unfair to hold emergency room physicians to the same standard as doctors who know, and have a history with, a patient.
House Speaker Pro Tempore Judd Matheny told a Doctors Town Hall audience at Lipscomb University in Nashville on Saturday that he hopes this year’s tort reform legislation is only “the first step of several steps in issues we hope to deal with in regard to tort reform,” reports Mike Morrow. During a break in the formal discussion, Matheny elaborated on those plans and pointed to a so-called “loser pays” effort that could be the next measure in tort liability in Tennessee.
“I just know the General Assembly is very interested in additional tort reform,” Matheny said.
“‘Loser-pays’-type scenarios are ones we will look at, especially with regard to what would be perceived as malicious lawsuits.”
Matheny said potential legislation would address situations where there are possibly second or third appeals in cases.
“A case in point would be if somebody filed a third appeal and the answer was the same as the first two, whether both are in the negative or both in the positive. That person would be responsible for the legal fees,” he said.
The approach would be to confront those who are seen as abusing the system. It would follow a tort reform measure passed this year and spearheaded by Haslam that put caps on non-economic damages in civil cases at $750,000, although the law creates exceptions in cases that involve intentional misconduct, destruction of records or activity under the influence of drugs or alcohol.
(Note: Sen. Stacey Campfield has been actively promoting the idea of ‘loser pays’ legislation on his blog and otherwise lately. He’s talked of following a California law, As explained in a recent post: In California if an offer (to settle a lawsuit) is made that is NOT accepted by the opposing side and the court finds the offer was reasonable (within 10% of the final award) then the person not accepting the offer has to pay the other sides legal fees.