ATRA Sounds Alarm on Colorado’s 'Lawsuit Inferno' in New Report

ATRA Sounds Alarm on Colorado’s ‘Lawsuit Inferno’ in New Report

Press Releases | July 31, 2024

ATRA Declares State a ‘Lawsuit Inferno’ Amid Liability Onslaught

Today, the American Tort Reform Association announced that Colorado is a “Lawsuit Inferno” in its new Legislative HeatCheck report.

Colorado’s Democratic-controlled legislature pursued a flood of liability-expanding legislation this year, despite opposition from the business community and Governor Polis’ vetoes of a few egregious bills. The state is now among some of the worst state legislative bodies in the country that are expanding liability in their states.

“Colorado is becoming a trial lawyer’s paradise where abusive litigation is allowed to run rampant due to the legislature’s creation of new avenues to sue,” Tiger Joyce, ATRA president said. “The ambush of liability-expanding bills advanced this session exemplifies lawmakers’ capitulation to the personal injury bar’s agenda at the expense of their constituents. Residents will continue paying a crushing ‘tort tax’ that makes everything from insurance to groceries more expensive.”

Coloradoans pay the sixth-highest “tort tax” in the nation due to excessive tort costs — $1,874 per person, annually — along with a loss of nearly 100,000 jobs statewide each year.

Many of the problematic bills this session relied on the threat of litigation as an enforcement mechanism and created new private rights of action.

A top concern was House Bill 1472, which drastically increased limits on noneconomic damages in liability cases. Ultimately, the bill more than doubles the noneconomic damages limit to $1.5 million in general liability suits and $2.125 million in wrongful death cases, while tripling the medical malpractice limit to $857,000. While a compromise to avert eliminating limits entirely, the bill’s drastic increases likely will lead to more excessive, unpredictable verdicts.

Gov. Jared Polis (D) provided a check by vetoing two other liability expansions sent to his desk by lawmakers:

House Bill 1008, sponsored by Rep. Monica Duran (D), which would have made contractors liable for subcontractors’ unpaid wages, creating misaligned incentives; and,
House Bill 1260, sponsored by Rep. Monica Duran (D), which would have prohibited employers from requiring political/religious meeting attendance, enabling employee lawsuits.

“While we commend Governor Polis for vetoing a pair of egregious liability expansions, lawmakers still enacted an array of bills that will generate excessive litigation by empowering the trial bar through new private rights of action and expansive consumer protection claims,” Joyce said. “This litigation-friendly approach exemplifies Colorado’s deteriorating legal climate and willingness to prioritize personal injury lawyers’ interests over responsible policymaking that balances consumer protection with allowing businesses to operate.”

Other problematic bills signed into law this year include:

House Bill 1175, sponsored by Rep. Andrew Boesenecker (D), creating a right of first refusal for local governments on multifamily rental property sales, allowing penalties up to $100,000 against sellers; and,
Senate Bill 205, sponsored by Sen. Robert Rodriguez (D), exposing businesses using AI systems to deceptive trade practice claims for consequential decisions like employment and lending.

“This barrage of bills threatens to create a litigation free-for-all that could bankrupt companies over minor violations while lining the pockets of trial lawyers,” Joyce said.

Colorado’s legal climate has progressively worsened, and the state has been included on the American Tort Reform Foundation’s Judicial Hellholes® “Watch List” in recent years.

ATRA’s Legislative HeatCheck report evaluates a select group of states’ progress — or lack thereof — in enacting meaningful tort reform measures during their most recent legislative sessions.

Colorado’s legislature was named a “Lawsuit Inferno” alongside state lawmakers in Maryland, Missouri, New Hampshire and New York. The full Legislative HeatCheck report is available at heatcheck.atra.org.