Potential Conflicts Pose Ticklish Issue for Lawyer-Lawmakers

CONFLICT? Critics say that lawyer-lawmakers should have abstained from voting on HB 1136

Now sitting on Gov. John Hickenlooper’s desk is legislation that critics in the business community and the legislature say will unleash a torrent of groundless discrimination lawsuits against Colorado employers—and create a potential windfall for plaintiffs and their attorneys.

Those same critics are also accusing some of the lawmakers behind the measure of a conflict of interest: As personal-injury lawyers, they stand to gain financially if the governor signs House Bill 1136 into law.

The bill, which passed the Colorado General Assembly last week, would make a significant change in the way Colorado addresses employment-discrimination claims. People who believe an employer was motivated by discrimination in denying them a job, a raise or a promotion, or in otherwise mistreating them, would be able for the first time under state law to seek wide-ranging compensatory damages, like pain and suffering, as well as punitive damages. At present, Colorado statute allows those claiming discrimination to seek back pay, projected future pay, interest on back pay, reinstatement, compelled hiring or other equitable relief.

While HB 1136′s remedies already are available under federal law for complaints filed against employers with 15 or more employees, the Colorado bill would make those remedies available under state law for complaints filed against employers of any size, however small. It also would recognize claims of employment discrimination on the basis of age for those 70 or older as well as sexual orientation. The bill would strip employers’ ability to recover attorney fees when they win but would let winning employees recover their attorney fees.

The net effect would be to substantially increase the size of potential damages awards to plaintiffs and to ratchet up the pressure on employers to settle. As a result, the bill’s opponents point out, it would lead to a much bigger payday for the personal-injury lawyers who represent those plaintiffs.

That’s where some business-community voices and dissenting members of the legislature cry foul. They note three of the four prime sponsors on the bill—Rep. Joseph Salazar (D-Thornton), Rep. Claire Levy (D-Boulder), and Senate Majority Leader Morgan Carroll (D-Aurora) —are themselves attorneys, and two of them could derive a personal benefit from the legislation. Salazar’s law firm  Smith, Shellenberger and Salazar represents plaintiffs in employment-discrimination cases as does Carroll’s firm Bachus & Schanker.

The critics say these lawyer-lawmakers should have abstained from voting on HB 1136 and shouldn’t even have sponsored it in the first place.

Carroll, who has discussed the legislation in the past with Colorado Public Advocate, was not immediately available for comment. Salazar refused to discuss the bill when approached at the Capitol by a Colorado Public Advocate videographer (SEE VIDEO), ducking into the members-only, main entrance to the Senate chamber when asked for an interview.

For their part, business-community advocates have been reluctant to go on the record with their concerns about a conflict of interest because they say they fear alienating lawmakers they must work with on assorted issues. “None of us wants to face their wrath,” said one, requesting anonymity.

One voice of the state’s business community who did speak up stressed the need for lawmakers to maintain a wall of separation between their own financial interests and the policy-making process in order to maintain public confidence.

“I do not want to accuse anyone of a conflict of interest. However, in our business perception is reality,” said Tony Gagliardi, state director for the National Federation of Independent Business in Colorado. “The key word we hear is transparency. Policy makers are under a microscope. I’ve seen legislators go to the microphone and abstain from a vote.”

Legislative rules require senators and representatives to disclose a personal or financial interest in pending legislation and abstain from voting on it. As a practical matter, however, lawmakers exercise considerable leeway in determining what constitutes a personal or financial interest.

Former Democratic House Speaker Terrance Carroll, a corporate attorney with the Denver office of law firm Greenberg Traurig, said he would abstain from a vote if the legislation in question, “is something that would impact a matter I was working on. It has to be much more than just affecting  my professsion.”

“Just because you’re a lawyer and something impacts your practice area doesn’t necessarily mean you have a conflict,” Carroll said.

Yet, some other past and present state lawmakers say it can come down a matter of degree.

“There are many bills in which members have a general personal or financial interest that would not require them to abstain from voting,” said Rep. Bob Gardner (R-Colorado Springs), an attorney who handles contract cases.  “But when the member’s entire business, like a law practice, is related to a particular bill and will benefit the member, then I believe the member should disclose their interest and abstain from voting on the matter.”

Mark Hillman, a Burlington Republican who served as both state Senate majority leader and minority leader, said times—and standards—seem to have changed since he left the legislature in 2005.

“Not that long ago, legislators erred on the side of avoiding even the perception of a conflict,” said Hillman, who now heads the tort-reform group Colorado Civil Justice League.

“They voluntarily set this high standard for the integrity of the legislative process.  For example, former Sen. Stan Matsunaka’s law practice included workers-compensation cases, and he abstained from voting on workers-compensation bills,” he said. “Now, there seems to be a tendency to ‘lawyer up’ and rationalize away conflicts of interest that would probably bother voters if they knew about them.”

Hillman added, “If you told voters that a lawmaker who is also a personal injury lawyer, who gets a percentage of the money his clients receive in court, voted for a bill to allow them to sue for an extra $300,000, I think voters would think that smells like feathering  that lawmaker’s own nest—plus it’s an obvious payback to campaign contributors who are also personal-injury lawyers.”

The clout of the trial lawyers’ lobby in the legislature troubles critics almost as much as concerns about conflicts of interest among lawyer-lawmakers that lobby supports.

The Colorado Trial Lawyers Association and an affiliated employee group gave about $109,000 in campaign contributions to Colorado candidates and causes from 2004 to 2012, according to the nonpartisan FollowTheMoney.org, which tracks political spending. That’s not counting individual contributions and fund-raising efforts by the state’s power lawyers and law firms on behalf of favored candidates.

More to the point, critics say, such interests can loom large in specific legislative races where individual contributions are capped by law and most contributions amount to a few hundred dollars or less. A small-donor arm of the trial lawyers association, for example, gave Morgan Carroll more than $2,000 for her 2012 Senate campaign and as such was among her four biggest contributors. The same entity gave Salazar, a legislative freshman, $2,000 in his 2012 campaign, his fifth-largest.

Carroll also is a member of the state trial lawyers association, which is backing HB 1136, and has served on its board.

If she and Salazar had chosen to abstain from voting on HB 1136, ruling Democrats arguably would have had enough remaining votes to pass the measure anyway. There is only a handful of employment/personal-injury lawyers serving in the General Assembly out of a total of 14 licensed attorneys, so there likely would have been no other abstentions.

Rep. Mike McLachlan, D-Durango—one of few other lawyers in the legislature whose practice includes personal-injury cases—was one of only two Democrats to vote against HB 1136; the other was Wheat Ridge Sen. Cheri Jahn. McLachlan did not return a call seeking comment.

All Republicans in both chambers opposed the measure.

The Governor’s Office has been mum on whether Hickenlooper will sign or veto the bill. In February, he called for compromise on the contentious legislation but has offered no public indication of his leanings since then.

Contacted for comment earlier this week, Hickenlooper spokeswoman Megan Castle said in an email she was “checking” on the governor’s position on the bill, but neither she nor the governor’s communications chief, Eric Brown, have followed up so far on subsequent calls and emails from the Colorado Public Advocate.

Video of Representative Salazar (D-Denver) refusing to discuss the bill is embedded below.

The Colorado Public Advocate is an independent, nonpartisan news service covering issues of public interest throughout the state

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