Indiana businesses win new protections from lawsuits
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Several new laws pushed by the Indiana Chamber of Commerce will take effect this year to help protect businesses from certain kinds of lawsuits and potentially encourage more settlements.
Such tweaks to tort law were among the chamber’s top priorities, and the organization was successful in persuading the Legislature to forbid foreign entities from funding lawsuits against Indiana businesses, provide more financial incentives for settlements and allow the failure to use seat belts to be considered as a mitigating factor when determining damages in traffic-accident lawsuits.
“We’re beyond pleased with the outcome of this year’s session,” said Adam Berry, an attorney and the Indiana Chamber’s vice president of economic development and technology, who noted that one of the group’s tort priorities had been more than 20 years in the making.
But not everyone was happy with all of the tort-related changes that came out of the Legislature this year.
Another recently-approved law that was not part of the chamber’s agenda protects an entire industry from lawsuits by local governments and is described by some critics as legislative overreach that could lead other industries to seek the same unprecedented privilege.
The new measure effectively kills a long-running lawsuit by the city of Gary that attempted to hold some of the nation’s largest gun manufacturers responsible for what city leaders have described as “reckless business practices” that threaten public safety by contributing to Gary’s criminal gun market.
It also prevents other local governments from suing the gun industry and gives that authority solely to the Indiana attorney general.
The chamber’s successes
While media attention on the gun-lawsuit legislation overshadowed the wider business community’s efforts, the Indiana Chamber Commerce sees its wins as providing long-lasting benefits for the state’s businesses in fighting off what they consider to be frivolous lawsuits or unfair legal standards.
Among the victories for the chamber:
House Enrolled Act 1160, which bars any foreign person or entity from lending money to plaintiffs to sue companies in Indiana. It also prohibits sharing with a lender any sealed proprietary information received during the course of litigation.
Senate Enrolled Act 226, which increases the fees that attorneys making a qualified settlement offer may be awarded if a court’s final judgment is less favorable than the settlement offer. Under the new law, the fee cap rises to $5,000 from $1,000. The chamber sees this move as a way to encourage “more earnest settlement negotiations.”
House Enrolled Act 1090, which will allow juries to know whether the victim of a traffic accident was wearing a seatbelt at the time of a crash. This evidence will be allowed to be considered as a mitigating factor when assessing damages. While the change had broad-based business support, it was a long-time priority of the trucking industry.
Sen. Mike Crider, a Greenfield Republican and co-sponsor of HEA 1090, said was pleased the Legislature was able to address some tort reform issues that had been hanging out there for a while, even in the compressed timeframe of a “short” legislative session that ended .
“I guess it’s a bit unusual in that regard, that we moved two or three things” related to tort law, Crider said.
Crider also authored House Enrolled Act 1162, which included a provision that protects businesses that rent out commercial vehicles from facing civil liability for failing to install optional safety equipment.
During testimony on the Senate floor, Crider said the bill is intended to provide some relief to rental companies that are being hit with lawsuits over the lack of optional safety equipment and have seen their insurance rates double between 2021 and 2023. The companies would still be liable in crashes with vehicles missing required safety equipment, the Indiana Capital Chronicle reported.
Banking industry protections
The banking industry also won new protections in two new laws approved by the Legislature this year.
Senate Enrolled Act 188, authored by Republican Sens. Scott Baldwin of Noblesville and Liz Brown of Fort Wayne, reduces the amount of time that a depositor has to sue a bank once a problem starts accruing. The law reduces the statute of limitations to two years from six years.
House Enrolled Act 1284, authored by Republic Rep. Kyle Pierce of Anderson, is a response to class-action lawsuits in which banks were being sued over their overdraft fees.
According to the Indiana Capital Chronicle, the law overturns two Indiana Supreme Court decisions, Decker v. Star and Land v. IU Credit Union, which ruled that silence or a lack of objection to a change in overdraft fees or other policies did not amount to consent on the part of consumers.
The new law would count silence as consent as long as banks give consumers 30 days notice for the changes.
“We’re definitely worried about the impact on consumers and accountability for financial institutions,” said Erin Macey, director of the Indiana Community Action Poverty Institute. “Really, they have consumers over a barrel.”
Macey said she talked to a couple of attorneys who raised the idea of a possible constitutional challenge to the consent law. She said the challenge could arise from the fact that consumers clearly sign contracts with banks when they open accounts and the new law might constitute an impairment of contract.
Law nixing gun lawsuit sparks outcry
The biggest outcry over a tort-related law came when the Republican-controlled Legislature, with Gov. Eric Holcomb’s blessing, decided earlier this month to nix Gary’s lawsuit against the gun industry.
Gary filed the lawsuit in 1999 alleging that local gun dealers and major firearms manufacturers — Smith & Wesson, Glock and more — have contributed to the city’s high gun violence through negligent business practices, such as not preventing illegal straw purchases.
The defendants in the case and the National Shooting Sports Foundation, their trade organization, have long argued that the legal fight is preventing them from doing business in northwestern Indiana and the lawsuit is nothing more than “a political attack on the firearm industry and Second Amendment.”
House Enrolled Act 1235, authored by Republican Rep. Chris Jeter of Fishers, would effectively kill he lawsuit.
Holcomb, in signing the law, noted that it would not prevent families or businesses from legally challenging gun manufacturers. But he noted that the measure would “bring closure to a long standing statewide legislative debate. This bill brings certainty that only the state, not political subdivisions, can bring forward such a lawsuit in the future.”
Democrats lambasted the new law.
“It is a complete overreach of the legislature into the judicial branch …,” said Sen. Rodney Pol, D-Chesterton. “This is a dangerous precedent of allowing industry to flex influence over lawmakers to dismiss cases of unlawful conduct currently pending before the court. While the 2nd Amendment is celebrated as the right to defend ourselves, our communities are being deprived of the right to defend themselves.”
The Brady Center to Prevent Gun Violence had represented the city in City of Gary v. Smith & Wesson et al., and denounced efforts to kill off what it would called the most consequential legal case against the gun industry in the country.
“This new law in Indiana is a tragedy for Americans everywhere,” said Kris Brown, the Brady organization’s president said in a news release. “Indiana legislators just gave America’s top gun manufacturers a free pass. Every other industry faces accountability in the courts. It should send chills down the spine of every American that the corporate gun industry succeeded in changing the law to stop discovery and being held responsible in court.”
Paul Helmke, a former Republican mayor of Fort Wayne and former CEO of the Brady Center, has even broader concerns, fearing that the new law will encourage other industries to seek similar protections.
“Lose in the courts? Don’t worry,” Helmke wrote in a recent opinion piece. “If you have the clout, ask your legislators to change the rules, retroactively, to save you.”