GEORGIA

Comprehensive Tort Reform Bill Clears Georgia Legislature; Expected to be Made Law

The Georgia House of Representatives and Senate have passed a bipartisan, comprehensive tort reform bill. Governor Brian Kemp is expected to sign it into law. The bill aims to ensure that compensatory damage awards are grounded in evidence and rationally connected to the facts. If signed into law, it allows a personal injury defendant to demand the trier of fact divide trial into three phases:

1. liability;
2. compensatory damages, and
3. punitive damages/attorney fee claims.

This would not apply in sexual battery/assault cases or if the amount in controversy is less than $150k.

The bill prohibits counsel from arguing the worth or monetary value of noneconomic damages (pain and suffering), leaving noneconomic damages to the jury’s conscience. It prohibits counsel from arguing the value of non-economic damages in a closing argument unless counsel addresses it in an opening statement. Counsel is further prohibited from arguing a different non-economic damages figure in closing arguments than stated in its opening.

Georgia property owners would immediately benefit. The bill overhauls the legal standard for negligent security claims. It substantially increases the notice required to a premises owner before liability will be imposed and focuses on the reasonableness of the owner’s security measures. The right to a trifurcated trial would take immediate effect upon the Governor’s approval. The overhaul of negligent security claims would apply to claims arising on or after the bill’s effective date. Proposed Legislation.

Law360 recently published Cozen O'Connor's Global Insurance Department Vice-Chair Alycen Moss’ comments on the bill.

TEXAS

Proposed Bill To Cap Emotional Distress Damages Advancing

A proposed bill targeting outsized judgments and nuclear verdicts is advancing in the Texas Legislature. The bill requires awards for emotional distress to be based on evidence and a rational connection between the injury and fair, reasonable compensation. If enacted, it would cap emotional distress damages in personal injury actions at $1 million for an event primarily causing emotional injury to the claimant and $250,000 for an event primarily causing bodily injury to the claimant. Whether an injury is primarily caused by emotional versus bodily injury appears to be a question for the courts. It prohibits emotional distress awards from being used as punitive damages.

The bill requires disclosure where a personal injury attorney referred the claimant to a medical provider. If so, the attorney must also disclose an anonymized list of persons that the attorney has referred to that provider in the preceding two years and any financial relationship between the attorney and the provider. The proposed bill has been referred to the House Judiciary & Civil Jurisprudence Committee. A companion bill is pending in the Texas Senate. If enacted, it will apply to personal injury actions filed on or after September 1, 2025. Proposed Legislation.

NEW YORK

After Irritating Singles, New York Now Requires Auto Insurers to Provide Supplemental Spousal Liability Coverage to Married People Only

In 2024, the New York Legislature enacted legislation requiring auto insurers to include Supplemental Spousal Liability (SSL) coverage in all auto liability policies unless the insured opts out in writing. Automatically being charged for SSL coverage irked single/widowed/divorced persons. Commercial and industrial businesses typically lacked a spouse and wanted out also. The statute required policyholders to provide a signed opt-out form to remove the additional premium. After substantial outcry, the Legislature narrowed the law’s application. Effective March 26, 2025, auto insurers must include SSL insurance in non-commercial vehicle liability policies if the insured has indicated that they have a spouse on the insurance application. SSL insurance is not automatically required in umbrella or for-hire motor vehicle liability policies. Circular Letter.

ALASKA

Pollution Exclusion Does Not Apply to Carbon Monoxide Exposure, Says Alaska Supreme Court

The Ninth Circuit Court of Appeals certified the following question to the Alaska Supreme Court: “Does a total pollution exclusion in a homeowners insurance policy exclude coverage of claims arising from carbon monoxide exposure?” Many jurisdictions have considered the issue but reached different conclusions. The Alaska Supreme Court accepted the question and determined that an insured would reasonably expect coverage for liability for poisoning by carbon monoxide from a defectively installed water heater. It reasoned that carbon monoxide is not a pollutant because it is present in homes in trace amounts and “causes no harm absent a defect or failure.” The Alaska Supreme Court declined to stray beyond the certified question to address whether coverage exists. The case proceeds in the trial court. Decision.

NEW JERSEY

Knowledge of Falsity Exclusion Barred Tortious Interference Claim

A surgeon, Dr. Hole, reported concerns about another surgeon (plaintiff) to the hospital where they practiced. The plaintiff sued for defamation and tortious inference. Dr. Hole’s business liability insurer defended Dr. Hole under a reservation of rights. After the court dismissed the defamation claim, the insurer filed a declaratory judgment action and moved for summary judgment. It contended it had no duty to continue defending or indemnifying Dr. Hole against the tortious interference claim because of the exclusion for oral or written publication of material with knowledge of falsity (Knowledge of Falsity Exclusion). The complaint alleged Dr. Hole's fabricated allegations caused the plaintiff damages with knowledge his acts would do so. After comparing the allegations with the exclusion, the trial and appellate courts concluded that the Known Falsity Exclusion barred coverage for the tortious interference claim. Decision.