A measure to stop certain lawsuits by public officials against companies that engaged in no illegal acts passed the Indiana House of Representatives Monday.
A 61-37 vote on HB 1416 sends the legislation to the state Senate which, like the House, is heavily Republican. Much of the bill’s original version was intended to help the ride-share industry with litigation, but House Judiciary Committee chair Chris Jeter announced it had been narrowed at a meeting last week.
One of the goals that remained is reforming lawsuits filed under a theory of “public nuisance,” which has been used by cities, counties and states to score billions of dollars in settlements over products like cigarettes and opioids.
For years, critics have been concerned with how the legal claim has been expanded by government officials and the private lawyers they hire on contingency fees. Indiana could become the second state to declare a company can’t be sued by a government for public nuisance over lawful actions.
The effects of the opioid crisis were called a public nuisance in the countless lawsuits filed against manufacturers, distributors, pharmacies and pharmacy benefit managers. But the hearing repeatedly mentioned Indiana cities’ lawsuit against Kia and Hyundai that said their cars were too easy to steal, creating a public nuisance even though third-party criminals could be considered the real problem.
“It will limit you as a municipality to use the public nuisance statute to only go after those things of which are in your vein,” Lehman said last week. “It will take out your ability to use public nuisance to make public policy.”
The new version of the bill would keep public nuisance to actions concerning public air, land or water. Montana passed something similar last year, and other states are considering legislation this year.
Local governments would still be free to file claims for negligence or products liability.
The second part of the new bill has a broader effect than how one legal claim is used by governments. It would increase a cap on penalties on litigants in certain situations.
When a plaintiff rejects a settlement offer, then proceeds to trial and either loses or is not awarded as much as the offer was, they would be on the hook for paying up to $100,000 of the other side’s legal bills. Currently, that cap is only $5,000.
