Lawsuit Inferno – Colorado – Legislative HeatCheck

Colorado

Colorado lawmakers stoked the flames of a “Lawsuit Inferno” in 2024, pursuing several problematic pieces of legislation that threatened to significantly expand liability in the state.

While Governor Jared Polis's vetoes of two of the more concerning bills helped contain the blaze for now, the legislature's persistent efforts to fan the flames of litigation are still alarming.

The legislature’s attempts to expand liability landed it among some of the worst state legislative bodies in the country who are responsible for expanding liability in their states.

Wage Claims Against Construction Industry

H.B. 1008: Sponsored by Rep. Monica Duran (D)

Co-Sponsored by Rep. Meg Froelich (D),

Sen. Chris Kolker (D) & Sen. Jessie Danielson (D)

Local Government Right to Property Affordable Housing

H.B. 1175: Sponsored by Rep. Andrew Boesenecker (D)

Co-Sponsored by Rep. Emily Sirota (D), Sen. Sonya Jaquez Lewis (D) & Sen. Faith Winter (D)

Prohibition Against Employee Discipline

H.B. 1260: Sponsored by Rep. Monica Duran (D)

Co-Sponsored by Rep. Tim Hernandez (D) & Sen. Jessie Danielson (D)

Raise Damage Limits in Tort Actions

H.B. 1472: Sponsored by Sen. Kyle Brown (D)

Co-Sponsored by Rep. Rose Pugliese (R),

Sen. Kyle Mullica (D) & Sen. Bob Gardner (R)

Consumer Protections for Artificial Intelligence

S.B. 205: Sponsored by Sen. Robert Rodriguez (D)

Co-Sponsored by Reps. Manny Rutinel (D) & Brianna Titone (D)

2024 Legislative Session Adjourned:

May 8, 2024

Economic Impacts

of excessive tort costs

in Colorado annually

Tort Tax

$1,874

Per Person

*6th highest tort tax in the U.S.

99,622

jobs

lost

$10,944

Million

GDP Loss

SENATE

HOUSE

HISTORY

2021-2022: Judicial Hellholes® Watch List

2020-2021: Judicial Hellholes® Watch List

2019-2020: Judicial Hellholes® Watch List

2018-2019: Judicial Hellholes® Watch List

Raise Damage Limits in Tort Actions

H.B. 1472 was signed into law by Gov. Jared Polis (D) on June 3, 2024.

While H.B. 1472 was passed, in part, as an effort to avoid a more drastic ballot initiative, it still significantly expands liability in Colorado through increased limits on damages:

General Liability: Limit more than doubles from $729,000 to $1.5 million

Sponsored by

Rep. Kyle Brown (D)

Co-Sponsored by

Rep. Rose Pugliese (R)

Co-Sponsored by

Sen. Kyle Mullica (D)

Co-Sponsored by

Sen. Bob Gardner (R)

Medical Malpractice: Limit nearly triples from $300,000 to $857,000 over five years

Wrongful Death: New separate limits of $2.125 million for general liability and $1.575 million for medical malpractice

H.B. 1472 averts the immediate threat of eliminating damage caps entirely, but there may still be long-term implications of such substantial increases in liability exposure. This legislation could make Colorado a more attractive venue for litigation, potentially leading to an increase in lawsuits and higher costs for businesses and healthcare providers.

The overwhelming bipartisan support for this bill (55-6 in the House, 35-0 in the Senate) is noteworthy but misleading, as it primarily reflects a strategic compromise to avoid an even more extreme ballot initiative rather than genuine enthusiasm for expanding liability.

Wage Claims Against Construction Industry

H.B. 1008 was vetoed by

Gov. Jared Polis (D) on May 17, 2024.

While Governor Polis vetoed H.B. 1008, the bill still represents a significant concern for expanding liability in Colorado's construction sector.

H.B. 1008 aimed to make contractors directly liable for unpaid wages owed by their subcontractors. This means that workers could bypass the subcontractor and go directly to the contractor to claim unpaid wages. Allowing workers to bypass subcontractors and directly pursue claims against contractors could lead to an increase in litigation, further straining the legal system and increasing costs for contractors.

Governor Polis's veto of H.B. 1008 was a crucial intervention to prevent the immediate implementation of these expanded liabilities.

Sponsored by

Rep. Monica Duran (D)

Co-Sponsored by

Sen. Chris Kolker (D)

Co-Sponsored by

Sen. Jessie Danielson (D)

Co-Sponsored by

Rep. Meg Froelich (D)

Sponsored by

Rep. Andrew Boesenecker (D)

Co-Sponsored by

Sen. Sonya Jaquez Lewis (D)

Co-Sponsored by

Sen. Faith Winter (D)

Co-Sponsored by

Rep. Emily Sirota (D)

Local Government Right to Property Affordable Housing

H.B. 1175 was signed into law by

Gov. Jared Polis (D) on June 3, 2024.

H.B. 1175, signed by Gov. Polis, introduces new restrictions and potential liabilities for owners of multifamily rental properties in Colorado.

Right of First Refusal:

Grants local governments a right of first refusal on multifamily rental properties with five or more units that are considered affordable housing.
This means property owners must offer to sell to the local government before accepting other offers.

Burdensome Process:

Creates a time-consuming and potentially complex process for property sales, which could significantly slow down transactions.
This may interfere with property owners' ability to conduct quick, private sales of their properties.

Severe Penalties:

Imposes harsh financial penalties on property owners who violate the right of first refusal:
$10,000 for a first offense
Up to $100,000 for subsequent offenses

H.B. 1175 creates new liabilities for property owners. The significant penalties and potential for litigation could have a chilling effect on the real estate market, potentially leading to unintended consequences that could actually reduce the availability of affordable housing in the long term.

Sponsored by

Rep. Monica Duran (D)

Co-Sponsored by

Rep. Tim Hernandez (D)

Co-Sponsored by

Sen. Jessie Danielson (D)

Prohibition Against Employee Discipline

H.B. 1260 was vetoed by

Gov. Jared Polis (D) on May 17, 2024.

H.B. 1260, ultimately vetoed by Gov. Polis, aimed to prohibit employers from requiring employees to attend meetings, listen to speeches, or view communications concerning religious or political matters. Some additional components of the bill included:

Private Right of Action:

Employees would have been given the right to sue their employers if they felt they were disciplined for not attending such meetings or listening to such communications. This right

of action would allow employees to seek lost wages, costs, and attorney fees.

One-Way Fee-Shifting:

The bill included a one-way fee-shifting provision, meaning that if an employee won a lawsuit against their employer, the employer would be required to pay the employee's legal fees. However, if the employer won, they would not be able to recover their legal fees from the employee.

By creating a private right of action, the bill could have led to a surge in lawsuits against employers. Employees could sue for perceived violations, leading to increased legal costs and potential financial liabilities for businesses.

The one-way fee-shifting provision could encourage frivolous claims, as employees would have little to lose in bringing a lawsuit. Employers, on the other hand, would face the risk of paying substantial legal fees even if they successfully defended against the claims.

Gov. Polis's veto was necessary to prevent increased litigation and the encouragement of frivolous claims.

Sponsored by

Sen. Robert Rodriguez (D)

Co-Sponsored by

Rep. Brianna Titone (D)

Co-Sponsored by

Rep. Manny Rutinel (D)

Consumer Protections for Artificial Intelligence

S.B. 205 was signed into law by

Gov. Jared Polis (D) on May 17, 2024.

S.B. 205 introduces new regulations and potential liabilities for businesses that use artificial intelligence in Colorado, including:

New Deceptive Trade Practice:

Creates a new category of deceptive trade practice specifically for business users of AI.

This expands the scope of what can be considered a deceptive trade practice, potentially increasing liability for businesses.

Broad Definition of "Deployers":

Defines "deployers" as entities using AI as a substantial factor in making consequential decisions.
This includes decisions related to employment, lending, housing, legal services, health care, and insurance.
The broad definition could encompass many businesses across various industries.

Potential for Litigation:

Creates new grounds for lawsuits against businesses that use AI in their decision-making processes.
This could lead to an increase in consumer protection litigation.

The law's creation of a new deceptive trade practice category specifically for AI use could open the floodgates for lawsuits, even in cases where businesses are making good-faith efforts to use AI responsibly.

Colorado could see its business environment and technological competitiveness suffer, while potentially witnessing a surge in litigation.

Senate Votes

Voted Against Expanding Liability

Voted to

Expand Liability

Excused