A newly formed lobbying group backed by Indiana’s major business organizations is pressing lawmakers to pass a civil justice bill that would cap non-economic damages, restrict public nuisance lawsuits and shield businesses from certain liability claims.
Democrats have already criticized the bill as solving problems Indiana does not have while limiting the rights of injured Hoosiers.
The Indiana Alliance for Legal Reform, announced late last month, is endorsing House Bill 1417, filed last week by Rep. Matt Lehman, R-Berne.
Lehman said he authored the bill after identifying what he views as weaknesses in Indiana’s civil justice system that expose businesses and property owners to liability even when they’re not negligent.
“It’s just trying to find the areas of our judicial system that I think are in some cases being abused, and trying to put some parameters on,” Lehman told the Indiana Capital Chronicle. “We don’t want to call into question the courts. At the same time, we’ve got to restrict some of the people that are getting dragged into the courts that have no negligence.”
The bill bundles several proposals aligned with the alliance’s goal of curbing what the group describes as frivolous lawsuits and excessive jury awards against Hoosier businesses.
The alliance counts the Indiana Chamber of Commerce, Indiana Manufacturers Association, National Federation of Independent Business, Indiana Motor Truck Association and Indiana Bankers Association among its supporters, said executive director Stephen Wolff. Former Senate President Pro Tem David Long has been retained to assist with government and media outreach.
Wolff said the group formed amid growing concern among business leaders about national litigation trends and a desire for what he has described as “common-sense reform” of Indiana’s civil code that would balance the system while preserving the state’s business climate.
“The Alliance’s goal is to ensure that Indiana has a legal environment that is fair to business and provides the predictability they need to invest in Indiana,” Wolff said. “The business associations and companies that comprise the Alliance recognize that the goal will be accomplished over multiple years and are committed to seeing it through. HB 1417 moves us one step closer to that goal.”
But Rep. Ed DeLaney, D-Indianapolis, a longtime attorney, said the proposal reflects a misunderstanding of Indiana’s legal system.
“I practiced in Indiana, where we have generally fairly cautious juries,” DeLaney said. “We have higher courts which would turn back any excessive awards. So, I don’t think we have the problem that other states may have.”
Limits on civil cases
House Bill 1417 was referred to the House Judiciary Committee on Thursday but has yet to get a hearing date.
The proposal would cap non-economic damages — such as pain and suffering — at $1 million in all civil cases. Judges and juries would still calculate non-economic damages without regard to the cap, but courts would be required to reduce awards exceeding $1 million and allocate the capped damages proportionally among defendants based on fault.
Current Indiana law does not impose a general cap on compensatory damages in civil cases against private businesses.
Limits do exist for punitive damages, however — capped at three times compensatory damages or $50,000, whichever is greater — as well as in medical malpractice cases and lawsuits against government entities.
The bill would also substantially narrow public nuisance claims.
Language in the measure defines a public nuisance as an “ongoing and unlawful condition” that interferes with an “established public right” and is expressly prohibited by state or federal law. Activities permitted by law, ordinance or court order could not be considered public nuisances.
We don't want Indiana to become a magnet for litigation but rather want to provide Hoosier businesses and those looking to locate in Indiana with the kind of stable environment they need.Stephen Wolff, executive director of the Indiana Alliance for Legal Reform
Government entities would be limited to seeking court orders to stop or fix an unlawful condition and would be barred from recovering monetary damages or costs tied to potential future harm. Private individuals could still seek compensation, but only under more limited circumstances.
Another provision would prohibit lawsuits against property owners, business owners or third-party business operators for criminal acts committed by someone else on their property or premises. The bill would also bar claims brought by individuals who committed the criminal act themselves.
The bill would additionally prohibit transportation network company riders — such as users of ride-hailing services like Uber or Lyft — from bringing claims against the company, or TNC, for injuries caused by a driver or occurring during a ride.
A legislative fiscal analysis estimates the changes could reduce court caseloads and lower state and local expenditures tied to civil litigation, while also decreasing court fee revenue if fewer cases were filed.
Indiana has enacted several business-friendly tort reforms in recent years, including new transparency requirements for third-party litigation funding and limits on how lenders can interact with attorneys and medical providers.
State lawmakers tightened the rules last year with House Bill 1160, also authored by Lehman, which bars lawsuit lenders from paying referral fees to lawyers or medical providers, forbids steering plaintiffs to specific providers and requires disclosure of third-party litigation financing, while also restricting some foreign investment in Indiana lawsuits.
Need ‘more to sue a business’
Wolff said the alliance is focused on limiting what it views as expansions of liability that go beyond illegal conduct and expose businesses to unpredictable and substantial legal risks.
“When we are talking about frivolous cases, we are talking about things like public nuisance actions, which are traditionally brought to resolve conditions that are illegal by ordinance, and adversely impact the public or create a condition that undermines public health and safety,” Wolff said. “Lately, these cases have been extended to legal activities.”
He cited lawsuits targeting manufacturers over products that criminals find easy to misuse.
Court actions against automakers such as Hyundai and Kia have become a frequent example cited by tort reform advocates.
Cities, including Indianapolis, joined a federal lawsuit alleging the companies should be held liable for vehicle thefts because certain models lacked industry-standard anti-theft technology, even though the vehicles complied with existing federal safety and manufacturing requirements at the time they were sold. The lawsuit was eventually settled last fall.
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Other reforms lobbied for by the alliance are aimed at lawsuits involving criminal activity on private property.
“Other frivolous lawsuits involve cases brought by criminals injured during the conduct of illegal behavior that sue the owner of the premises where the criminal’s illegal activity took place,” Wolff said. “That’s untenable, and there needs to be language added requiring more to sue a business in such a situation.”
On damages, Wolff emphasized the alliance is not targeting compensation for medical bills or lost wages.
“We are not talking about set costs, such as medical bills or lost wages, which are compensatory,” he said. “We are talking about undefined damages.”
The alliance also says it wants to ensure Indiana does not become a haven for litigation. Wolff pointed to a high-profile “nuclear verdict” involving Indiana-based Wabash Trailer Manufacturing Co., though that case was decided by a Missouri jury.
“It shows what can happen with an imbalanced and unpredictable legal system,” Wolff said. “We don’t want Indiana to become a magnet for litigation but rather want to provide Hoosier businesses and those looking to locate in Indiana with the kind of stable environment they need.”
Pushback from Democrats
DeLaney said he believes the bill addresses problems Indiana does not have — while undermining the core principles of tort law. He was particularly critical of the non-economic damages cap.
“You can completely destroy my life, put me on a pump for the rest of my life, make it so I’m a quadriplegic and I can only get my medical bills paid,” he said. “I can’t get non-economic damages. I can’t for the pain, the suffering, the misery imposed upon me and my family.”
He also questioned the provision shielding transportation network companies from liability.
“If the Uber company is aware that the driver that they’ve contracted with has got all kinds of problems, has a criminal record and so forth, and then injures me, they’re not liable,” DeLaney said. “I cannot think that that’s in the public interest.”
DeLaney added that Indiana courts already have tools to address lawsuits involving crimes on private property and to limit excessive verdicts.
“We already have both common law and statutory law in this state that covers these issues,” he said. “This is what I call a lobbyist bill.”
Still, DeLaney said he doubts the bill will advance far in a short legislative session.
“I don’t think this should go anywhere,” he said. “This cannot be a high priority for anybody.”
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.
