A pair of bills to enact major tort reforms in Montana won preliminary votes in the House on Wednesday, proposing changes to medical damages awarded in personal injury lawsuits, limits on medical malpractice claims, legal immunities for gun manufacturers and penalties for nonprofits that sue the government.
Senate Bill 278 won praise from Republicans and criticism from Democrats over a wide range of proposed changes to civil actions in the state.
For lawsuits over medical malpractice resulting in someone’s death, the bill would deduct “consumption” from damages awarded for lost future earnings. That means that the estimated amount of money that person spent on rent, food and other basic necessities would not be included in the money paid out to the plaintiffs.
Gun manufacturers would be immune to lawsuits other than those related to defects. The measure would also prohibit people injured while committing a felony from filing personal injury lawsuits for those injuries.
A provision that generated substantial debate came in the form of an amendment from Rep. Ed Buttrey, R-Great Falls, to penalize nonprofit organizations that sue over government actions.
Passed by the Republican majority on party lines, the amendment states that legal fees and costs incurred by nonprofits in those lawsuits are not tax-exempt. Buttrey said the provision would have the effect of requiring the nonprofits to identify their donors who contributed $50 or more, unless the lawsuit is related to the nonprofit's property, contract or license.
“It makes the process transparent, so that we know who is actually directing and funding this challenge to government action,” Buttrey said.
Rep. Tom France, a Missoula Democrat and former regional executive director of the National Wildlife Federation, called the bill an “assault on corporate free speech” that would go well beyond impacting environmental groups, which he suggested were the intended targets.
“This bill would say to that group that they can’t go into court to protect their religious freedom without incurring tax liabilities, and that would affect the biggest churches in Montana and the smallest churches in Montana,” France said. “… It will inhibit and affect every nonprofit in this state, whether a liberal group or a conservative group.”
SB 278 passed second reading on a mostly party-line vote, 65-35.
Another tort reform proposal, Senate Bill 251, also passed second reading along party lines.
Business and hospital groups in Montana had previously lined up behind Senate Bill 251, which would change the way medical damages can be awarded in personal injury lawsuits.
The bill aims to eliminate so-called “phantom damages,” in which an injured party can sue for damages including the full amount they were billed for medical damages, regardless of how much their insurance paid.
During a House Business and Labor Committee hearing in March, Lt. Gov. Kristin Juras, representing Republican Gov. Greg Gianforte, had joined hospitals and related medical associations in support of the bill, aside from a provision that was subsequently stripped out by the committee.
Carrying the bill on the House floor, Rep. Neil Durham, R-Eureka, echoed arguments made previously by Juras and the Montana Chamber of Commerce — mainly that it will lower the financial burden on businesses operating in Montana.
“This bill would allow for the proper determination of the damages based on the actual medical costs,” Durham said. “To allow the claimant to recover more than what the doctors and hospitals were actually paid for would permit a windfall recovery.”
Democrats and other opponents to the bill have argued that the current system is working. After a jury awards damages based in part on the full medical bill, a judge subsequently takes into account “collateral sources” of payment, and adjusts the award based on what was covered by those sources, including insurance.
The bill passed without any Democratic support, 65-35.
Because both bills were amended in the House, they will need to head back to the Senate if they pass third reading.