Make State Agencies Pay When They Lose in Court

Date: December 22, 2015 Last Edit: June 10, 2016

Small Business Challenges in 2016

In 2016, NFIB will be pushing  legislation that
would require state agencies to pay the court costs of a prevailing party when
that state agency loses a lawsuit involving a regulatory issue.

This change would curb the current approach by state
departments and agencies of telling a citizen or business owner that if they
don’t like the “deal” a state agency proposes to resolve an issue they can “take
it to court”. Agencies use this tactic in place of good faith negotiation
because they know that taxpayers and business owners will have to settle
because they do not have the financial ability to fight the state (who has an
almost unlimited supply of taxpayer dollars to spend on litigation) in court.

While state agencies claim that existing law already requires
a state agency to pay the court costs of a prevailing party in a lawsuit, the
way the current language is written results in the state almost never
having to pay.

UPDATE: On 4-28-2016 the legislation was voted out of the Senate Elections and Government Reform Committee to the Senate floor for further action. 

UPDATE: The legislation has passed the Senate and awaits further action in the House
when session resumes in the fall.

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