News: Quick Takes

House members file new version of bill to block A.G.’s collusive lawsuit settlements

The House version would block future funding obligations

The N.C. House of Representatives conducts business on June 23, 2020. (Screen shot from N.C. General Assembly video feedl)
The N.C. House of Representatives conducts business on June 23, 2020. (Screen shot from N.C. General Assembly video feedl)

Four N.C. House Republicans have filed a bill that would block the state attorney general from settling lawsuits involving legislative leaders, unless those leaders sign off on the deals.

House Bill 606 arrives roughly three weeks after a similar Senate bill with the same title: Prohibit Collusive Settlements by the AG. A key Senate committee advanced that chamber’s bill Wednesday.

The House version includes a new section. It limits funding for lawsuit settlements.

“In litigation in which the State is interested or is a party, no settlement agreement shall be entered into by the State unless and no settlement agreement shall be binding on the State except to the extent that the State’s entire obligation for the current and for future fiscal years will be satisfied with funds that are available for that purpose for the current fiscal year,” according to the new section in the House bill.

In other words, the state could not enter a financial settlement unless all required settlement money is available at the time of the deal. The settlement could not obligate state government to make unfunded future payments.

“A provision like this would help the state avoid some unexpected long-term spending obligations,” said Joseph Coletti, John Locke Foundation senior fellow in fiscal studies. “It’s one thing for elected lawmakers to commit millions or even billions of their constituents’ dollars on an ongoing basis. They can always change their minds in the future, or voters can object and elect new lawmakers. It’s quite a different story when lawsuit plaintiffs and a friendly attorney general work together to guarantee ongoing taxpayer spending.”

The new section in H.B. 606 ties settlement funding to the state’s Contingency and Emergency Fund. It also creates a new reporting requirement for the governor’s top budget writer. “The Director of the Budget shall report to the appropriation committees of the General Assembly concerning all funds made available during the preceding fiscal year from the Contingency and Emergency Fund for the purpose of carrying out settlement agreements.”

Rep. Allen McNeill, R-Randolph, is primary sponsor of H.B. 606, along with Reps. John Torbett, R-Gaston; John Sauls, R-Lee; and Harry Warren, R-Rowan. Four other House Republicans had signed on to the bill by Wednesday morning.

Outside the funding limitation, the House Bill essentially mirrors Senate Bill 360, filed in late March. Both bills would ensure the House speaker and Senate president pro tem play a role in decisions about settling lawsuits.

The two elected officials would have a say whenever they’re named as defendants in a suit or intervene in a legal dispute. Consent judgments and settlement agreements “shall be jointly approved by the Speaker of the House of Representatives and the President Pro Tempore of the Senate, or by and through counsel of their choice, before the judgment may be entered.”

The Senate’s bill arrived less than a week after a hearing involving a lawsuit settlement targeting election rules. Senators grilled Karen Brinson Bell, executive director of the State Board of Elections, for two hours on March 23. They questioned the elections board’s decision to endorse a settlement worked out by Democratic Attorney General Josh Stein’s attorneys and national Democratic Party election lawyer Marc Elias. The settlement led to election rule changes in November 2020 that mirrored Democratic priorities.

The Senate Redistricting and Election Committee endorsed S.B. 360 on Wednesday.

Sen. Paul Newton, R-Cabarrus, a primary sponsor, co-chairs the Senate Elections Committee.

“Elections Director Karen Brinson Bell and Attorney General Josh Stein behaved so egregiously and improperly that they’ve lost the trust of voters and legislators,” Newton said in a statement about his bill. “Director Brinson Bell wouldn’t even acknowledge that she changed state law last year, a fact that federal judges and reporters have upheld for months.

“This bill is intended to make sure no elections director, whether Ms. Brinson Bell or someone else, ever has the power to secretly execute a mid-election law change via secret settlement with political allies.”

Though neither bill deals specifically with elections, the collusive settlement measure could end up being the most important election law of this legislative session, said Andy Jackson, director of the Civitas Center for Public Integrity at the John Locke Foundation. “That should do away with this kind of collusive lawsuit where you’re cutting the General Assembly out of the picture,” he said.

Both the House and Senate bill would take effect Oct. 1. Both would apply “to disputes, claims, and controversies arising on or after that date.”