New York Law Journal: If Sent To Her Desk, Gov. Hochul Should Veto Costly Lawsuit Damages Bill, Again

By: Mark Behrens

Earlier this year, Gov. Kathy Hochul vetoed controversial legislation that would have dramatically increased liability in the Empire State, undermining access to healthcare and driving up the cost of goods and services for all New Yorkers.

The bill would have completely overhauled New York’s wrongful death law by expanding who can sue, the types of damages that can be paid, and how long someone has to file suit. In vetoing the bill, Hochul said that, as drafted, the proposal would “drive up already-high health insurance premiums, adding significant costs for many sectors of our economy . . . including public hospitals that serve disadvantaged communities.”

The governor was correct. An actuarial analysis by Milliman, Inc. estimates that the legislation would have increased general and automobile policy premiums by 11% (an estimated $2.14 billion) for New York residents and businesses. Medical professional liability costs could have risen by 40% or more, according to the estimate.

The cost of the vetoed bill would have been enormous. And, just like any other costs to businesses, such as fuel, rent or labor, lawsuit costs are ultimately passed through to consumers in the form of higher prices. Businesses that cannot pass along those costs are forced to close or relocate.

An allegedly updated version of the legislation is now moving through both houses of the New York State Legislature, but A.6698/S.6636 has the same major flaws as the vetoed bill. Rather than remove the most extreme aspects of the bill and work cooperatively with Hochul, the legislature seems to be doubling down in an uncompromising effort to try to force an extreme bill on the governor.

First, just like the bill the governor vetoed last year, A.6698/S.6636 would dramatically expand recoverable damages in wrongful death cases to include various types of noneconomic damages, including “grief or anguish,” “loss of love, society, protection, comfort, companionship, and consortium,” and “loss of nurture, guidance, counsel, advice, training, and education.”

Noneconomic damages are highly subjective and are awarded in addition to economic damages, which compensate a plaintiff for financial harm such as lost wages or medical expenses.

Awards for grief are particularly controversial in wrongful death cases. Even the progressive-minded American Law Institute shies away from endorsing this scope of recovery in its forthcoming treatise on remedies.

As the pending Restatement of Torts, Third: Remedies recognizes, “most states do not compensate grief or emotional distress” for wrongful death. Many of the jurisdictions that do allow this form of recovery have guardrails built into the law to limit noneconomic damages, at least in medical liability cases. New York, on the other hand, has no damage cap and awards are already higher than other states.

Further, asking juries to award damages for amorphous categories of recovery including grief, loss of love, comfort, and companionship, and loss of nurture creates the obvious potential for overlapping, duplicative awards. New York jurors will find it difficult to distinguish and separately value these substantially similar forms of damages.

Second, just like the bill the governor vetoed last year, A.6698/S.6636 would expand the category of persons entitled to seek wrongful death damages to “surviving close family members.” A.6698/S.6636 provides a bit more clarity as to who qualifies as a “close family member,” but the scope of potential plaintiffs has been expanded to expressly include remote family members and ultimately leaves the decision of who can recover to the jury.

Third, just like the bill the governor vetoed last year, A.6698/S.6636 would dramatically extend the statute of limitations to give plaintiffs more time to sue. The vetoed bill would have extended the limitations period from the current two years to three and a half years. A.6698/S.6636 gives plaintiffs three years, which would still be one of the longest wrongful death limitation periods in the nation.

Fourth, just like the bill the governor vetoed last year, A.6698/S.6636 would apply to lawsuits against healthcare providers. Hochul specifically said in her veto message that she wanted the legislature to exempt medical malpractice claims from the bill.

In sum, A.6698/S.6636 still does all of the things Hochul said were problematic in the bill she vetoed just a few months ago: “It would dramatically expand beneficiaries, categories of damages, and the statute of limitations.”

The last thing New York needs in an environment of rising inflation and economic head-winds is a new law that would increase the costs of medical care, raise insurance premiums for homeowners, motorists and businesses of all sizes, and add costs to infrastructure construction and other development projects throughout the state.

Lawsuit damages in New York are already among the highest in the nation. A national study of personal injury and wrongful death cases performed by the U.S. Chamber of Commerce Institute for Legal Reform found that New York had the third most “nuclear verdicts” (verdicts of $10 million or more) of any state between 2010 and 2019, and the second most on a “per capita” basis. A.6698/S.6636 would push the state further in that direction.

New York is also home to the most medical malpractice lawsuits in the nation. A.6698/S.6636 will encourage more such lawsuits.

It is possible that legislators fully appreciate that A.6698S.6636 is a bad bill, but do not want to say no to wealthy billboard and TV lawyer donors. Members of the New York State Legislature seem intent on setting up Hochul to be a foil. She should accept the role, again.

Hochul should veto A.6698/S.6636 if it is presented to her as drafted. The legislation will hurt, not help, the Empire State. If legislators send this bill to the governor’s desk, she should refuse to sign it, protect the pocketbooks of New Yorkers, and send a message that she will not be bullied into owning bad policy.

Mark A. Behrens co-chairs Shook, Hardy & Bacon L.L.P.’s Washington, DC-based Public Policy Group.