RALEIGH -- A second wave of Republican-led restrictions on lawsuits cleared the state House of Representatives on Wednesday, making it harder to sue drug manufacturers among other provisions.
The Tort Reform for Citizens and Businesses bill is one of the key pieces of legislation on the Republican agenda this session. It follows a medical malpractice bill that is in a conference committee of House and Senate members. The changes are based on the goal of reducing insurance, health care and other costs and improving the state's business environment.
Wednesday's bill won support from some of the 52 House Democrats, passing 85 to 32. It goes to the Senate next.
The bill's author agreed to scale back the most controversial part of the bill. It had proposed to protect drug makers from product liability lawsuits so long as the drug had been approved by the Federal Drug Administration, unless fraud or bribery was involved.
That protection was softened with a change that allows plaintiffs to sue if they can prove that the drug was unsafe or ineffective. They would have to prove that by "clear and convincing evidence," a standard of proof that falls between that of criminal cases and most civil cases.
Drug makers would enjoy the presumption that their product was safe. The bill's author, Rep. Jonathan Rhyne, a Republican from Lincoln County, said the thinking was that products approved by the FDA had already been extensively scrutinized.
Originally, Rhyne's bill would have granted immunity from most lawsuits to any product - not just pharmaceuticals - that had been approved by any government regulator.
AG still has concerns
Attorney General Roy Cooper this year told the House committee studying the bill that the drug liability provision would hamper his office's Medicaid fraud and consumer protection divisions from pursuing cases against drug companies. The Attorney General's Office has collected more than $400 million in nationwide Medicaid settlements over the past decade.
Rhyne added an amendment to the bill that specifically says the attorney general isn't prohibited from going after those settlements. But after the House vote Wednesday, Cooper released a statement saying that he still has problems with the toned-down bill and that his staff is reviewing it.
"We continue to be concerned that this law could be a loss for taxpayers and consumers," Cooper said. "It's difficult to understand why the legislature would make it harder for North Carolina to take action against drug companies that hurt patients or deceive the government, especially when other states don't have these obstacles."
Another part of the bill that has generated debate is the requirement that juries be told how much of a plaintiff's medical expenses are covered by insurance. N.C. Advocates for Justice - the mostly plaintiffs attorneys group - said it punishes responsible people who have bought insurance coverage.
"The Republican-led majority has said with this bill that it's OK for people who hurt others to benefit from their victims. And they've extended that privilege to insurance companies," said Todd Barlow of the NCAJ. "This is a bad bill that puts more money in the pocket of insurance companies, taking it from the innocent and the injured."
Punitive damages
A key section of the bill was defeated by a challenge from an unexpected quarter. That section would have limited the amount of punitive damages that plaintiffs can collect to 25 percent of anything over $100,000. The other 75 percent would go to a state civil penalty and forfeiture fund.
But Rep. Stephen LaRoque, a Republican from Kinston, introduced an amendment striking that entire provision, reverting to the current law that allows punitive damages of up to $250,000 or three times the amount of compensatory damages, whichever is higher. LaRoque said the state had no business collecting money from a lawsuit between private parties. His move picked up support from Rep. Tim Moore, a Cleveland County Republican, who said: "If that's not a tax or a taking, I don't know what is." The amendment passed.
Another part of the bill caps attorney fees in smaller-stakes cases. The bill did cap it at $5,000, but that was amended Wednesday to $10,000. In some cases, Rhyne said, attorneys were collecting far higher fees than the amount of money awarded in verdicts.
Several Democrats tried in vain to derail or tone down the bill further but were unsuccessful. In the end, Rep. Bill Faison, a Durham Democrat, said the bill wasn't perfect, but, "This is the best that can be done."
