Group’s Model Bill at Heart of South Carolina Lawsuit Limits

South Carolina lawmakers are using language by a conservative, business-funded special interest group as a model for legislation aimed at limiting lawsuits.

Punitive damage limits legislation started out modeled after one by the American Legislative Exchange Council. Legislators in Tennessee, North Carolina and Wisconsin are all pushing variations of what the ALEC label as reforms. Oklahoma Gov. Mary Fallin signed that state’s overhaul into law last week.

The South Carolina House version of the bill says juries can award no more than three times the actual damages caused by a defendant or no more than $350,000, whichever is greater.

But the Senate Judiciary Committee added exceptions to those limits and allows juries to know whether people injured in wrecks wore seat belts. It also required that those who lose lawsuits must pay when a judge decides a plaintiff hasn’t shown enough evidence to allow the case to go to a jury.

Now the big fight in the Senate turns to moving the bill back toward the model ALEC created and away from the exceptions that the Senate Judiciary Committee added.

The South Carolina Fairness in Civil Justice Act no longer jibes with the model bill, which was in line with the group’s goals, said Amy Kjose, director of ALEC’s Civil Justice Task Force.

Senate Judiciary Committee Chairman Glenn McConnell, a Charleston Republican, said the legislation needed to be changed partly because the punitive damage caps needed to be more flexible. He doesn’t want a company to benefit when it knows it has a faulty product, but decides the risks of injury and being sued are worth the opportunity to profit.

“We want to make sure somebody wouldn’t gamble on the cap,” McConnell said.

But Sen. Larry Martin, a Pickens Republican, wants those and other changes scrapped in an effort to bring the bill closer to what the House passed and the sooner the better.

He argues that no cap on punitive damages puts South Carolina at a disadvantage when recruiting business.

“That’s never a good thing when this sort of issue bubbles to the top on an economic development basis,” Martin said.

Martin said he hasn’t spoken with ALEC about the legislation, but wishes he had more input from them about a recent state Supreme Court decision on product liability that has also become a sticking point for the legislation. “I really wish I had brought them in,” Martin said.

ALEC offers a buffet of model bills on topics from telecommunications and health to lawsuit limits and energy. The group’s financing comes from $50 annual membership fees legislators pay and corporations that can have a stake in the legislation.

ALEC spokeswoman Raegan Weber notes the legislative group comes up with model bills based mostly on what states have had success passing.

Since 2007, legislators have reported getting more than $40,800 from ALEC for conferences, travel and education. Weber said South Carolina lawmakers raised that money to cover the spending.