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Taxpayer impact of civil rights bill sparks debate

Copyright © 2021 Albuquerque Journal

SANTA FE – New Mexico counties are warning that they will lose some of their insurance coverage if state lawmakers pass a proposed Civil Rights Act – a move they say would increase the risk of taxpayers having to cover the tab for hefty legal claims.

The county testimony comes as the civil rights legislation, House Bill 4, emerges as one of the most fiercely debated bills in the first weeks of the 60-day legislative session.

The proposal grew out of the summertime protests against racism and police brutality, and it was endorsed by the majority of the state’s nine-member Civil Rights Commission last year.

But Grace Philips, general counsel at the New Mexico Association of Counties, said counties have already been warned by their reinsurance provider that they will lose their “law enforcement reinsurance” coverage if the bill is signed into law. Reinsurance is an extra set of insurance, akin to insurance for an insurer.

For Bernalillo, Santa Fe and Doña Ana counties, Philips said, the loss of extra coverage would mean they have just $2 million to respond to law enforcement and detention claims, down from $10 million now.

“It reduces monies available to compensate people who are harmed,” she said, “and when counties don’t have insurance coverage to pay claims, the money to pay claims comes directly from the county budget.”

Legal judgments could also be assessed on property taxes, she said.

House Speaker Brian Egolf, a Santa Fe Democrat and co-sponsor of the bill, said he expects lawmakers to consider amendments to address some of the financial concerns, including the possibility of a cap on damages to protect small local governments.

But the public shouldn’t lose sight, he said, of the opportunity to better hold public officials accountable for civil rights violations.

“I think this is going to provide a lot of New Mexicans with greater access to justice,” Egolf said. “The dollars-and-cents issue will be sorted out.”

He described the insurance concerns as overblown. Government agencies already face civil rights claims in federal court, he said, but they’re still able to obtain insurance.

House Bill 4 would establish a New Mexico Civil Rights Act. It would allow plaintiffs to file a lawsuit in state court against a public body – or someone working on the public’s behalf – to recover damages for violations of their rights under the state Constitution.

Public bodies already can be sued in federal court for violating the U.S. Constitution, and plaintiffs can recover monetary damages if they’re successful. But New Mexico doesn’t have a similar state law allowing the victims of state constitutional violations to recover damages in state court.

The New Mexico Constitution may also offer broader protections or cover rights that don’t exist under federal law, according to legislative analysts.

The proposed law also would bar the use of qualified immunity as a defense in cases filed under the state Civil Rights Act. Qualified immunity offers legal protection if officials can show their conduct didn’t violate clearly established constitutional rights about which a reasonable person would know. It is allowed as a defense in federal court.

Supporters of the bill have shared testimony about the need to hold government agencies accountable after a wrongful arrest, abuse of a foster child or fatal shooting by a law enforcement officer.

But cities and counties contend the proposal would cost taxpayers money without preventing civil rights violations.

City and county representatives say they can already be held accountable in state court for law enforcement misconduct. Plaintiffs can file under the state tort claims act for violations of the state constitution, though damages are capped at a little over $1 million.

The Association of Counties and Municipal League say the proposed Civil Rights Act would allow suits without a cap on damages and provide for the recovery of attorney fees.

“You can already sue law enforcement,” Philips said. “All it does is make those cases more expensive and more profitable for attorneys who would be allowed to collect their fees on top of whatever the lawyer got for their client.”

The state Association of Counties – which helps insure 29 of 33 county governments in New Mexico – estimates the cost of litigating and setting civil rights claims would jump 66%, or $13 million a year.

AJ Forte, executive director of the Municipal League and a former risk management director for the state, said the claims could be enormous. He noted New Mexico’s largest-ever jury award – in a wrongful death case involving the FedEx shipping company – totaled $165 million.

“If a jury decides that a constitutional violation is worth, say, $165 million, as they did in the FedEx case,” Forte said, “we’ll no longer be talking about cost to insure; there just won’t be any money left. There is no liability fund in the state that has such a balance.”

House Bill 4 cleared its first hurdle this week – the House State Government, Elections and Indian Affairs Committee – and heads next to the House Judiciary Committee, potentially its last stop before reaching the House floor.

If passed by the House, it would also have to win approval in the Senate – including any committees it is assigned to in that chamber – before reaching Gov. Michelle Lujan Grisham.

Egolf, for his part, said he expects the House to consider a variety of amendments to the bill, including to address insurance concerns. But the proposal, he said, holds meaning beyond the finances of local governments.

“Opponents of the bill are driving a message of dollars and cents,” Egolf said, “because they can’t talk about the real people who are involved in these cases.”


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