Vermont Legislature SmartTranscripts:

[Sen. Nader Hashim (Chair)]: We are live. We're back in Senate Judiciary. We have S one fifty one and Adam McCrasson here to testify.

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: Thank you, mister chair, members of the committee. Adam McCrasson, McCrasson Group here for the Vermont Association for Justice. We are familiar to you as kind of keeping an eye on tort law, which is the area of the law where when people are injured and they seek access to justice from the party that hurt them. Appearing on S one fifty one to articulate some grand concerns with the legislation. I will at the top try and summarize and then move through kind of a few few touch points. Who is rights are being impacted in this bill and what's kind of happening now. Talk a little bit about how litigation is a bummer for all parties involved and how discovery works. Really ground the conversation in the anti SLAPP law, which this is a derivative of, and then articulate reasons why it's an odd fit to bridge over into access to insurance for people that have been hurt by a a careless actor. The kind of top line for you on this is this bill is a novel approach with sweeping implications that would result in denying access to corporate entity level insurance, leaving people hurt by carelessness of an actor without a remedy. Point number one, just to address a few key things at the top. When we hear concerns about frivolous litigation, there's no rule 11 is in place now. Judges have authority to dismiss and sanction attorneys that bring frivolous cases. And so we aren't as a state that is among, if not the least litigious in the nation. We do know that judges have rule 11 there to address any frivolous lawsuits. So, all right, some examples, what are we talking about? A car across the center line and hits another car, the people in the car that get hurt now are going to seek access to insurance to cover their lost wages, their medical bills, and so forth. This bill would have it be that if it turns out that vehicle was driven by a volunteer, well intended driver, the victims of the accident would face an insurance company going to court right away saying this case needs to be dismissed because the statute now says on page three, the court shall grant a special motion to strike. This is an immediate dismissal of a case. If the alleged harm was caused by the defendant's gross negligence. Now please understand the victims have really no interest in pursuing the driver, the volunteer. This is not about often we're here talking about corporate accountability and holding wrongdoers accountable. This is not that at all. This is a situation where distracted driving has resulted in people being catastrophically hurt and whether they deserve access to entity level insurance that is there for the purpose of their recovery. My phone blew up yesterday with examples and I know not to wade into the litigation that was brought from the proponents of the bill and kind of go into all of that. I know not to engage these findings that are kind of a little foreign to what we know as how things work in Vermont. I am here with attorneys who have small children who have plunged to catastrophic injury because of at a community event there was not adequate safety and they need access to insurance for a life care plan. So it's a super serious situation in that regard. The novelty of this is really

[Sen. Nader Hashim (Chair)]: worthy of note

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: because the drafting, which I understand was probably brought as an idea to

[Sen. Nader Hashim (Chair)]: go

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: forward, takes this anti SLAPP law, which is really important. It protects free speech and it says, if you've said something in this hearing that offends someone, if they sue you as a public official for what you said, that is intimidation litigation, trying to silence your speech. And so states have these statutes that say, you can go over the judge and say, dismiss this because there's a statute that says in the context of your speech upon governing, legislating, leading a public body, I should not be silenced by the threat of litigation. And so the underlying law, anti SLAP, it's strategic lawsuit against public participation is important and valuable. It's a law that protects individuals and organizations from meritless retaliatory lawsuits intended to silence free speech on matters of public concern. What does that have to do with a car crossing the center line and hitting someone, senator? I

[Sen. Tanya Vyhovsky (Member)]: take your point. Circling back to the sort of public officials there, isn't there also constitutional immunity that protects public officials core legislative function from both lawsuit and in some instances criminal like it's not it's so it's not just the SLAP provisions but the constitution protects our speech on the floor and committee.

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: That's right. Okay. That's right. And I think what the statute, anti SLAP, that's what they're called, it's not me. Laws do is create judicial mechanisms for that constitutional right to be protected and actualized expeditiously. Okay. And that without that statute, there's no structure for that constitutional right to get quick resolution. But we do have a

[Sen. Tanya Vyhovsky (Member)]: level of immunity. Is this proposing a similar level of immunity or an expanded I mean, we don't have immunity from crossing the center line and getting someone to their car. I wanna be clear. Do I'm aware of this. But but we do have some level of immunity and

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: we're not here to quibble that in any way.

[Sen. Tanya Vyhovsky (Member)]: But I guess my question is, is there a way to structure S51 that might provide a board member participating in a board meeting a similar level of immunity without crossing into protecting them from crossing the center line?

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: Well, we're not here to talk about speech. We're here because someone's been seriously hurt and the board member, this is the part where, bear with me. Litigation is a bummer for everyone involved. And let's, so let's just put some air into this because this committee for, like, a hundred and fifty years has resisted this type of legislation, and we're just staying with the least mingling into this space where we're giving saying we're gonna deny access to justice in this way. But the when the person is hurt, here's what happens. You go to an attorney and they say, well, all we know is who hit you. So they're gonna have to bring a suit naming that party and then go into discovery. And this is the part that's hard for everyone because you're a board member of a philanthropic group or you were the volunteer who turned away at the event and didn't guard the precipice that the child ended up falling off. Real case. You're now party that's being dragged into it as litigation goes through discovery to find the right entity to own the liability that has the insurance. And so there are parts of the natural kinks of litigation that are unfair to people. You're just a board member or you were a volunteer, you didn't mean this. Maybe you're a volunteer doctor at the free healthcare clinic. Maybe you didn't miss the diagnosis but there's litigation that dragged you into it. To create immunity from that party experiencing being part of litigation means you have to do this. Just completely deny access to the courthouse at all. This bill says expeditiously the judge will dismiss the case because it's just basic carelessness that caused you to cross the center line and hit the victim. And it's by arbitrary fiat of the statute that they were in service for a nonprofit corporation as a volunteer.

[Eric Fitzpatrick (Legislative Counsel)]: So I'm sorry, go ahead.

[Sen. Tanya Vyhovsky (Member)]: I guess what I'm wondering is if there is a way to narrow the language so it protects the board activity without crossing out of that space. No pun intended.

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: Very much understood. I'm not unfamiliar with this because it does feel like every few years there's this conversation in this committee about nonprofit board members. The entity has insurance that provides litigation defense and recovery for the injured parties. And with Rule 11 in place, Senator, it does not feel that there is unwarranted litigation. I'm trying to articulate that if you're a board member who's dragged into it, it is a bummer. It does feel unfair. It comes with the territory and it's how the justice system works because discovery has to go finding what really happened.

[Sen. Nader Hashim (Chair)]: So, Adam, the I I think I have two questions here. The first being, you know, when I'm looking at page three, line 21, for for example, in response to some of the hypotheticals here, you know, the defendant's acts cause actual injuries to the plaintiff, then the court won't grant special motion to strike. So, you know, car crossing the center line, even if even if they weren't texting and driving,

[Eric Fitzpatrick (Legislative Counsel)]: it was just solar flare or something like that

[Sen. Nader Hashim (Chair)]: and they happen to cross the center line and cause an injury there.

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: The way I would read

[Sen. Nader Hashim (Chair)]: this is that they're still potentially on the hook. That's that's the first question. And I think the second question is, if there is some level of discovery that happens and the plaintiff finds out who the higher entity is, what is to prohibit them from pursuing a sort of vicarious liability strategy in their case?

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: Bear with me, senator. I'm reading a and b as a conjunction. Right? And that it is a two where negligence is Oh, yeah. There's the end. Yeah. Or So it's so it's saying the court shall grant the motion if it was basic negligence and the defendant was hurt. Yep. Okay. I think I cleared that. So in that articulation, we come upon the sweeping nature of this bill and I should say over and over. We really, the agreed party has no real interest in the board members or it is about, I know each of you are thinking of a small community nonprofit and I'm here thinking about large healthcare institutions, major national operations, and or a person who has to get their healthcare at the free healthcare clinic where there are volunteer doctors. And if they missed the cancer diagnosis because you went to a healthcare clinic that was staffed by a volunteer doctor that did not practice, you are out of luck. But if you were going to the QHC where doctors were paid, you'd have access to corporate entity insurance. So it's just there's an inequity in that setting. But I'm here to yellow flag and highlight the sweeping nature of it. It's novel, so we can't find a track record in other places. But if you want us to bring in further witnesses, they'll we have folks who are expert at the intersection of SLAP and injury. I don't

[Sen. Philip Baruth (Member)]: know. Just I feel I have to say I'm puzzled by the SLAP connection. SLAP to me seems like trying to prevent malicious prosecution to chill speech. Here, it seems like we're talking about a liability issue where someone has injured somebody. So I don't I don't those two things seem so radically different to me. I'm not sure why we're talking about. But It's not me senator.

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: It's the bill because of the

[Sen. Philip Baruth (Member)]: The other thing I'm confused. Motion to strike. Understood. Okay. Are you in favor of the bill or against?

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: 100% opposed.

[Sen. Philip Baruth (Member)]: Okay. It is impossible for me to tell. Okay. So you oppose the bill and the reason is it's sweeping nature and that it would so so you do not agree with these findings as they are laid out here?

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: Yes, but I'm disregarding them for

[Sen. Philip Baruth (Member)]: the purpose of testimony because they seem misplaced and I'm just wondering because it begins with the assertion there's been a disturbing increase in meritless lawsuits having the effect of this. I've never heard of an instance of this So I would want to see some data that bears that out. But I also am having a hard time just understanding what it is that the bill wants to do except allow a special motion to strike a class of lawsuits for the reason laid down here. Still confused by the

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: slap. It's the place where this motion to strike exists. This is immediate dismissal. It's an unusual it does not exist in personal injury at all Okay. Anywhere. Yeah. And so the the concept behind this was to take this tool, immediate dismissal before you've done any discovery to and then it drops in. Take that judicial procedure and apply it to personal injury where there's been negligence.

[Sen. Philip Baruth (Member)]: Yeah. That so I don't I don't buy that linkage. I'm I now understand you don't buy anything. Correct. Okay.

[Sen. Tanya Vyhovsky (Member)]: Leave it to the English professor to recognize you failed your to state your thesis at the beginning of your arguments or something.

[Sen. Philip Baruth (Member)]: Well, I I mean Well, I was

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: when I called it unusual sweeping consequences.

[Sen. Philip Baruth (Member)]: And maybe I missed a walk through of the bill where we would hear from the sponsor. We heard

[Sen. Nader Hashim (Chair)]: from the sponsor last year when it was initially bribed, and we heard from an attorney who was in favor of it, Benjamin Brickner. And that was February 10.

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: Okay. Last Tuesday. Yep. Yeah.

[Sen. Nader Hashim (Chair)]: Any other questions while we have this pause? Okay. Feel free to carry on out of the additional information. No.

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: I mean, I aim to be very simple and clear that this is a can of worms that's unprecedented and an odd construct that has sweeping implications for people that are vulnerable and hurt, that deserve access to insurance at this point.

[Sen. Nader Hashim (Chair)]: Thank you. Thank you. Any last questions for Evan? I

[Sen. Tanya Vyhovsky (Member)]: think the friend is filming. Yeah. Yeah. I

[Eric Fitzpatrick (Legislative Counsel)]: I think a lot of what we're about is the policy decision, but it's maybe a couple of things I could add. Just a couple of. Yeah. Yeah. Yeah. If you

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: don't mind. Don't worry.

[Sen. Nader Hashim (Chair)]: Take your time. If you don't mind joining us as we try to figure out what to do with this bill.

[Sen. Philip Baruth (Member)]: Weren't we stripping out Spectrum on this entirety? Yeah. That's basically don't understand. The problem was the solution.

[Sen. Nader Hashim (Chair)]: Think do you have do you

[Eric Fitzpatrick (Legislative Counsel)]: have this? I I may have been in the past.

[Sen. Nader Hashim (Chair)]: That may have been on the day that you were out. So I guess any initial questions for Eric on these policies or provisions before we have a discussion?

[Sen. Philip Baruth (Member)]: Yeah. Show me what this bill does with generic. No. Completely.

[Sen. Nader Hashim (Chair)]: It's on left field again.

[Eric Fitzpatrick (Legislative Counsel)]: In the big picture, it allows a volunteer for a nonprofit organization or government entity, if that person gets sued on the basis of their work with the organization or entity they can immediately file a motion in court that basically halts the proceeding against that. And it halts the proceeding we can do here I remember as I mentioned discovery look at page three, five, four and five. The person files that motion, discovery is immediately held. So there isn't gonna be any more discovery in the action. And then the court, look at line 11 has to

[Sen. Philip Baruth (Member)]: hold a spec has to hold a

[Eric Fitzpatrick (Legislative Counsel)]: hearing on that within thirty days absent good cause. And then sort of somewhat reminiscent of our discussion this morning in the in the context of forensic facilities, the burden is shifted. That sort of may ring a bell with both. The burden is shifted because the court grants the motion unless the plaintiff shows that. So the plaintiff who's filed the suit then has to instead of the defendant showing that they didn't act recklessly or grossing, the plaintiff has to show. And the if the plaintiff fails to make, you see there's sort of an A and B there, it's kind of what the committee was talking about earlier. The plaintiff has to show either defendant was acting outside the scope of their responsibilities as volunteer or the harm was caused by the defendant's recklessness, gross negligence or intentional misconduct. So that means ordinary negligence would be that sort of action would be prohibited by this language, assuming that it caused harmless to be around within 21.

[Sen. Philip Baruth (Member)]: I'm just wondering and maybe I've skipped ahead here but on page four it says if the court denies a special motion to strike and finds the motion is frivolous or is intended solely to cause unnecessary delay. I just can't make my mind work out the connection between this and SLAP laws. Are there people out there that are deliberately targeting non profits in order to use the lawsuit to achieve other ends? Because that's the way I view the SLAP laws as preventing people from using the courts to get a desired result that has nothing to do with the lawsuit, which is they wanna bankrupt. You know, I'm thinking of was it I I forget what the online outlet was, but Peter Thiel sued them, I think, and they went out of business. And that seems to me like what slap laws are designed to protect against is a lawsuit that's designed just to bankrupt you or to silence you. Here, this seems like where there's been an injury and I don't understand how the SLAP applies.

[Eric Fitzpatrick (Legislative Counsel)]: Think it's more of a yeah I understand the question. I think the the nomenclature of the SLAP lawsuit was I would defer that to the to the sponsor.

[Sen. Philip Baruth (Member)]: In other words, it feels to me like it being borrowed as a rhetorical device here, but as a legal matter it doesn't line up with what slap slap laws are designed to prevent if there's no equivalent here or it's hard to imagine somebody using an actual accident to then try to chill the speech on a board or put a board on a business or I don't know.

[Eric Fitzpatrick (Legislative Counsel)]: Yeah. I think the parallel is structural, not substantive. So in other words, it's it's the similar type of proceeding that allows the person to go in, they file a special motion that calls the court proceedings, there can be attorney's fees and so, you know, that sort of thing is a minor detail, but the place that's located in the statute's proposed happens to be also right next to the slab lawsuit. So it's structural similar. I think you're right, but substantively, it's two different types of concerns

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: Yeah.

[Eric Fitzpatrick (Legislative Counsel)]: That are being addressed with a similar structural legal device.

[Sen. Philip Baruth (Member)]: Yeah. I I mean, and not to go too much into that, but it it does feel to me like because periodically, we have attempts to halt lawsuits or to do declare certain sorts of lawsuits frivolous. This feels like that. So it it feels like borrowing the political significance of slap to do something that feels to me as, you know, fully different and not as not as popular or not as I don't know. Anyway.

[Sen. Nader Hashim (Chair)]: Any any you look like you wanna say something.

[Sen. Philip Baruth (Member)]: Yeah. It's not

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: quite sure what I wanna say.

[Sen. Philip Baruth (Member)]: So what does this bill do in the absence of what the slap law is?

[Sen. Nader Hashim (Chair)]: This repetition? I mean, what are No. No.

[Eric Fitzpatrick (Legislative Counsel)]: It's different in the sense of the SLAP law is about lawsuits involving public officials and people related to their activity in that regard. This this is would apply in a different situation, which is a different set of facts entirely, which is that someone has to do

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: with the volunteers work for a volunteer organization.

[Eric Fitzpatrick (Legislative Counsel)]: So it sort of takes a similar court proceeding from the SLAPP arm. Otherwise, it has nothing to do with SLAPP. It takes a similar type of court. It says, oh, we're we're gonna create that court proceeding for a tort action, a personal injury action when someone is someone's conduct as a volunteer for a nonprofit allegedly to have somebody on, allow them to file this type of motion. That's sort of a Slack connection. It's a similar kind of motion, similar kind of court proceeding. But otherwise, it's not. The only other thing I would just wanted to let the committee know I'm sort of disabled for this up. And it's something senator Vyhovsky was asking about this in particular. As it act there is a current subject that does provide some immunity already for nonprofit board directors, officers, trustees. That's in front of 12. So that you're, I think, raising that issue. So there is a statute that provides that currently. It's 12 ESA fifty seven eighty nine. Sure. Yes.

[Sen. Tanya Vyhovsky (Member)]: I mean, and I heard the testimony from a person over two weeks ago now.

[Sen. Nader Hashim (Chair)]: What time? I think last week. It was last week. Yeah.

[Sen. Tanya Vyhovsky (Member)]: Sure. About this and and their concern and why why they think this is important. But from with the statute Eric just named, I guess I'm is the problem we're trying to solve if the board members in fact already have some?

[Sen. Nader Hashim (Chair)]: I think it's more so trying to get at the uncompensated volunteer work. I get your point, but I think it's trying to get the person who's driving people to and from or maybe delivering food or something like that and getting wrapped up in a larger lawsuit, potentially, that is being filed against the larger the organization at large.

[Eric Fitzpatrick (Legislative Counsel)]: I'm not entirely sure. Yeah. I'm not entirely sure here.

[Sen. Nader Hashim (Chair)]: But Okay. It's I think that's what it's getting at. I guess my question is, you know, I know there's an infinite number of variables and hypotheticals, but when when there's a situation that it's an uncompensated volunteer who's being sued, how challenging would it be realistically to find out who the employer or the organization is that's supervising the volunteers so that the injured party can get access to their insurance. And I know that there's that if the motion to strike is filed early on, it cuts off discovery unless there's good cause shown. So can you provide a bit more insight into that if possible?

[Eric Fitzpatrick (Legislative Counsel)]: I think it all sort of depends on how quickly the motion is filed. Right? If if the if it's just a matter of the complaint being filed, then the then the plaintiff may or may not know who the who the entity is that might have insurance. But they might know. Maybe it's something that they they found out sort of anecdotally or as a matter of public knowledge. Maybe you could you could presumably, if you're gonna file a suit, then you know the facts that happened, you know who the what organization the person was volunteering for so perhaps even before you filed the suit

[Sen. Nader Hashim (Chair)]: which does I suppose sort

[Eric Fitzpatrick (Legislative Counsel)]: of beg the question of why the action was filed against the entity in the first place. Maybe maybe it was, you know, filed against both joint tortfeasers kind of situation. But depending on the fact the person may know already, maybe they would, I'm not sure.

[Sen. Nader Hashim (Chair)]: So I guess my question for the committee is not that I'm telepathic, but I'm sensing a general indifference to the bill. I don't know if I'm right or if folks wanna spend more time working on this given we have a week and a half left for crossover or do we have other

[Sen. Philip Baruth (Member)]: priorities that we wanna try to get in on?

[Sen. Tanya Vyhovsky (Member)]: I think that one. I I I don't I I think I I think we have

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: other priorities. I don't because

[Sen. Tanya Vyhovsky (Member)]: I don't know that I would qualify my feelings on the bill as indifferent, but if the question is, should

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: we keep looking on this? No.

[Sen. Robert 'Bob' Norris (Vice Chair)]: If I I agree.

[Sen. Tanya Vyhovsky (Member)]: Look at us, Bob. We're agreeing all over the place.

[Eric Fitzpatrick (Legislative Counsel)]: Yeah. Maybe a general confusion as well. Because that was that was kinda my question I had last week when the gentleman came in.

[Sen. Nader Hashim (Chair)]: I was like, how often does this happen? Mhmm.

[Adam McCrasson (McCrasson Group, Vermont Association for Justice)]: He I don't think it was part of his discovery, if

[Sen. Nader Hashim (Chair)]: you will, for his testimony, but

[Eric Fitzpatrick (Legislative Counsel)]: it I mean, I personally not heard of it. So I also don't know if it's more widespread than that. I

[Sen. Tanya Vyhovsky (Member)]: mean, I've served nonprofit boards and not heard like, I feel like if this was a widespread problem, they'd warn you before you joined any nonprofit board. Yeah. Like

[Eric Fitzpatrick (Legislative Counsel)]: I don't know. I don't know.

[Sen. Nader Hashim (Chair)]: Maybe indifference from going

[Eric Fitzpatrick (Legislative Counsel)]: forward. Skepticism. Enthusiasm. So we may wanna

[Sen. Philip Baruth (Member)]: wait to see what when you talk about other bills to bring a pump of fish to buy this one for a new address department.

[Sen. Tanya Vyhovsky (Member)]: Liked it more, Bob, when you just agreed with me.

[Eric Fitzpatrick (Legislative Counsel)]: Alright. Well,

[Sen. Nader Hashim (Chair)]: we can just put a pause on this for now. And yeah. We'll just put a pause on

[Sen. Philip Baruth (Member)]: it for now. Okay. Thank you, Eric. Thank you, Yeah.

[Eric Fitzpatrick (Legislative Counsel)]: That's it. Alright.

[Sen. Nader Hashim (Chair)]: So committee, we