Financial cost of proposed New Mexico Civil Rights Act contentious

Feb. 28—As Democratic lawmakers continue to advance a bill they say would protect constitutional rights, government officials across New Mexico are sounding the alarm over what they contend will be a multimillion-dollar price tag that ultimately would be shouldered by taxpayers.

Sponsors of House Bill 4, including Speaker Brian Egolf, D-Santa Fe, say the "sky is falling" assertions that city and county governments will become uninsurable or face financial calamity are based on conjecture and hypothesis.

"They don't get to pull out a cocktail napkin and write the word 'evidence' on it and then give it to the Legislature and expect us to believe it," Egolf said Saturday.

The financial impact of the bill has become a major source of contention. So has the decision to not schedule it for a hearing before an appropriations or finance committee in either the state House of Representatives or Senate.

"There is no question that the fiscal impact will be in the millions of dollars per year, and it should be reviewed and considered by the committee whose job it is to do that," said Grace Philips, general counsel at New Mexico Counties, an association of county governments.

Government accountability

Known as the New Mexico Civil Rights Act, HB 4 would eliminate "qualified immunity" as a legal defense to civil rights complaints filed against government agencies in state court.

Qualified immunity is a legal doctrine created by the U.S. Supreme Court in 1982. It shields government workers from personal liability under federal law when workers violate people's constitutional rights.

To overcome it, an injured person must show the government worker's conduct violated "clearly established" federal statutory or constitutional rights. In layman's terms, government workers can only be held liable for violating someone's rights if those violations are "clearly established" in an earlier case with a nearly identical set of facts, which some say makes it almost impossible to hold police accountable for wrongdoing.

"This doctrine was based on the loony idea that government workers, particularly police, sit around and they read federal court decisions and they look at the facts of these cases and they say, 'Oh, I'm now on notice. I've been told,' " said Lee McGrath, managing attorney for the Institute for Justice, a nonprofit libertarian public interest law firm.

The legislation has drawn the ire of local government officials, who say it would lead to higher costs, which could result in service reductions and unleash a flood of lawsuits.

Santa Fe County said the bill as written would "likely reduce" its insurance coverage for law enforcement and general liability from $10 million to $2 million and negatively impact the availability, cost or coverage of medical malpractice insurance.

"As a result, the county will be forced to divert more resources from essential services for all to claims and attorney fees or run the risk that property taxes will need to be imposed in the event of a devastating judgment," county spokeswoman Carmelina Hart wrote in an email.

According to Hart, the county obtains law enforcement and general liability coverage through the New Mexico County Insurance Authority. The authority informed the county the law would likely cause the authority's reinsurance, which covers claims from $2 million to $5 million, and its umbrella coverage, which covers claims from $5 million to $10 million, to not be renewed.

"NMCIA does not have the resources to fill the resulting gap in coverage. That means that Santa Fe County (and all other counties who are members of NMCIA) will likely have to self-insure claims above $2 million," Hart wrote.

'Objective financial analysis'

During Friday's Senate Health and Public Affairs Committee hearing on the bill, which passed on a party-line vote, government officials raised a long list of concerns, including what some described as financial motivations that would benefit trial attorneys.

"I've testified several times on this bill, and I've listened to a lot of testimony," Farmington police Chief Steven Hebbe said. "I have not heard one single chief or sheriff testify in favor of this bill, and I have not heard one single plaintiff attorney testify against it, and it almost tells you everything you want to know from the start."

The bill has ensnared Egolf, an attorney, in an ethics complaint. A retired judge this month filed a complaint against Egolf, claiming he stands to benefit financially if the bill is passed into law. Attorneys for Egolf filed a motion Friday to dismiss the claim.

Hebbe said the bill fails to address the root causes of many claims against government or how to improve the performance of government workers, especially police.

Another big concern is the financial impact on government agencies, which opponents say the sponsors are refusing to address.

"I don't think there's any question that this is going to expose schools and public entities to significantly more claims and higher damage awards, which will increase the cost of settlements," Marty Esquivel, general counsel for the New Mexico Public Schools Insurance Authority, told the committee.

Esquivel and others requested an "objective financial analysis" on the bill, which didn't go before the House Appropriations and Finance Committee and isn't scheduled to be heard by the Senate Finance Committee, despite efforts by Sen. Bill Sharer, a Farmington Republican.

When a substitute version of the bill was introduced in the Senate, Sharer asked for a third committee referral to the Senate Finance Committee.

During the floor session, Senate Majority Leader Peter Wirth, D-Santa Fe, who makes committee referrals, said the bill didn't include an appropriation.

"An argument can be made one way. An argument can be made the other way," Wirth said at the time. "I think this bill getting the two referrals that it did makes sense, and I don't think it needs to go to Senate Finance."

Wirth did not respond to a request for comment, but a spokesman for Senate Democrats, Chris Nordstrum, said Wirth suggested a review of the Feb. 17 floor session discussion.

During that debate, Sharer made the case for a referral to the Senate Finance Committee, arguing there would be at least a potential financial impact.

"The request to be referred to finance certainly doesn't harm the bill. It just tries to make it so that all of us understand it and feel better about it," he said.

Another sponsor of the bill, Sen. Joe Cervantes, D-Las Cruces, said he didn't see anything in the bill that "implicates anything" in state finances.

"There's nothing in here that involves an appropriation," said Cervantes, who is also an attorney. "There's no tax. No funds. No additional expenses."

'The hell with everybody else'

The chairman of the Senate Finance Committee, Sen. George Muñoz, D-Gallup, said during the floor debate that he trusted Cervantes "to tell us the truth." But he asked Cervantes to let him know if the bill had a "financial implication" after it was heard by the Senate Judiciary Committee, which Cervantes chairs.

"If we get this in Judiciary and I'm persuaded, the committee's persuaded, that there is a demonstrable fiscal impact other than just guessing or speculation, then I'll be certain to discuss that with you and the other leadership," Cervantes said. "Everything we do here has a fiscal impact, but clearly you and your committee did not become engaged in every [bill]."

In a telephone interview Friday, Sharer questioned Cervantes' motivations.

"He doesn't want to send it down any road where it might hit resistance," he said.

Cervantes did not return messages seeking comment.

Muñoz said Friday he will keep a close eye on the bill but that he's taking a wait-and-see approach.

"Let's see what happens in judiciary, see if it gets modified there, and then we may pull it into finance," he said.

Egolf said only bills appropriating money from the general fund are referred to the House Appropriations and Finance Committee. The House speaker noted that Muñoz had also voted Feb. 17 to not send the bill to the Senate Finance Committee.

"I think Miss Philips is barking up the wrong tree on this," he said, referring to the general counsel for the association of counties.

"They talk about the dollars and cents," he added. "They don't ever talk about people's rights, liberties and freedoms secured by the New Mexico Bill of Rights."

Under the proposed law, complaints could be filed in state District Court against government agencies over violations of the state Bill of Rights. Currently, such cases are filed in federal court and cite violations of the U.S. Constitution.

Sharer said he didn't want to offend his colleagues but that politics may be at play in a rushed attempt to pass the law.

"It's always been weird in the House [of Representatives], but this year it's far more political in the Senate than it's been in decades, and that troubles me," Sharer said.

"The Senate used to be the chamber where we sat down together and we talked about stuff and we looked at those details, and this year, it's not like that," he said. "This year it's slam stuff through because we have the votes and the hell with everybody else."

Follow Daniel J. Chacón on Twitter @danieljchacon.

___

(c)2021 The Santa Fe New Mexican (Santa Fe, N.M.)

Visit The Santa Fe New Mexican (Santa Fe, N.M.) at www.santafenewmexican.com

Distributed by Tribune Content Agency, LLC.