GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2011

H                                                                                                                                                    3

HOUSE BILL 542

Committee Substitute Favorable 5/10/11
Third Edition Engrossed 6/1/11

Short Title:        Tort Reform for Citizens and Businesses.	(Public)
Sponsors:
Referred to:

March 31, 2011

A BILL TO BE ENTITLED

AN ACT to provide tort reform for North carolina citizens and businesses.

The General Assembly of North Carolina enacts:

PART I. GENERAL REFORMS

SECTION 1.1.  Article 4 of Chapter 8C of the General Statutes is amended by adding a new section to read:

"Rule 414.  Evidence of medical expenses.

Evidence offered to prove past medical expenses shall be limited to evidence of the amounts actually paid to satisfy the bills that have been satisfied, regardless of the source of payment, and evidence of the amounts actually necessary to satisfy the bills that have been incurred but not yet satisfied. This rule does not impose upon any party an affirmative duty to seek a reduction in billed charges to which the party is not contractually entitled. Nothing in this rule modifies current law governing the admissibility of evidence relating to collateral sources of payments."

SECTION 1.2.  G.S. 8-58.1 reads as rewritten:

"§ 8-58.1.  Injured party as witness when medical charges at issue.

(a)        Whenever an issue of hospital, medical, dental, pharmaceutical, or funeral charges arises in any civil proceeding, the injured party or his guardian, administrator, or executor is competent to give evidence regarding the amount paid or required to be paid in full satisfaction of such charges, provided that records or copies of such charges showing the amount paid or required to be paid in full satisfaction of such charges accompany such testimony.

(b)        The testimony of such a person pursuant to subsection (a) of this section establishes a rebuttable presumption of the reasonableness of the amount paid or required to be paid in full satisfaction of the charges.charges. However, testimony given in person before the trier of fact by the provider of hospital, medical, dental, pharmaceutical, or funeral services that a charge that has not yet been satisfied in full can be satisfied for an amount less than the amount charged, or that a charge that has been satisfied in full was satisfied by payment of an amount less than the amount charged, rebuts the presumption and establishes a rebuttable presumption that the lesser satisfaction amount is the reasonable amount of the charges for such hospital, medical, dental, pharmaceutical, or funeral services. For the purposes of this subsection, the word "provider" shall include the agent or employee of a provider of hospital, medical, dental, pharmaceutical or funeral services, or a person with responsibility to pay a provider of hospital, medical, dental, pharmaceutical or funeral services on behalf of an injured party.

(c) The fact that a provider charged for services provided to the injured person establishes a rebuttable presumption that the services were reasonably necessary."

SECTION 1.3.  G.S. 8C-702(a) reads as rewritten:

"(a)       If scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion.opinion, or otherwise if all of the following apply:

(1) The testimony is based upon sufficient facts or data.

(2) The testimony is the product of reliable principles and methods.

(3) The witness has applied the principles and methods reliably to the facts of the case."

PART II. REFORM APPLICABLE TO PRODUCTS LIABILITY ACTIONS

SECTION 2.1.  G.S. 99B-1 reads as rewritten:

"§ 99B-1.  Definitions.

When used in this Chapter, unless the context otherwise requires:

(1)        "Claimant" means a person or other entity asserting a claim and, if said claim is asserted on behalf of an estate, an incompetent or a minor, "claimant" includes plaintiff's decedent, guardian, or guardian ad litem.

(1a) "Government agency" means this State or the United States, or any agency of this State or the United States, or any entity vested with the authority of this State or of the United States to issue rules, regulations, orders, or standards concerning the design, manufacture, packaging, labeling, or advertising of a product or provision of a service.

(2)        "Manufacturer" means a person or entity who designs, assembles, fabricates, produces, constructs or otherwise prepares a product or component part of a product prior to its sale to a user or consumer, including a seller owned in whole or significant part by the manufacturer or a seller owning the manufacturer in whole or significant part.

(3)        "Product liability action" includes any action brought for or on account of personal injury, death or property damage caused by or resulting from the manufacture, construction, design, formulation, development of standards, preparation, processing, assembly, testing, listing, certifying, warning, instructing, marketing, selling, advertising, packaging, or labeling of any product.

(4)        "Seller" includes a retailer, wholesaler, or distributor, and means any individual or entity engaged in the business of selling a product, whether such sale is for resale or for use or consumption. "Seller" also includes a lessor or bailor engaged in the business of leasing or bailment of a product."

SECTION 2.2.  Chapter 99B of the General Statutes is amended by adding the following new section to read:

"§ 99B-12.  Regulatory compliance.

(a) Except as provided in subsection (b) or (c) of this section, in any product liability action against a manufacturer or seller of a drug, if the drug that is alleged to have caused the harm was approved for safety and efficacy by the United States Food and Drug Administration, and the drug and its labeling were in compliance with the United States Food and Drug Administration's approval at the time the drug left the control of the manufacturer or seller, there is a rebuttable presumption that the drug was safe and effective for its approved use, and the manufacturer or seller is not liable. This presumption may be rebutted only by clear and convincing evidence.

(b) This section does not apply if the claimant proves that the manufacturer or seller, at any time before the event that allegedly caused the harm, did any of the following:

(1) Sold the drug in the United States after the effective date of an order of the United States Food and Drug Administration to remove the drug from the market, to withdraw its approval, or to substantially alter the terms of approval in a manner that would have avoided the claimant's alleged injury.

(2) Intentionally, and in violation of applicable regulations as determined by final agency action, withheld from or misrepresented to the United States Food and Drug Administration information material to the approval or maintaining of approval of the drug, and such information is relevant to the harm which the claimant allegedly suffered.

(3) Made an illegal payment to an official or employee of a government agency for the purpose of securing or maintaining approval of the drug.

(c) This section shall not bar an action brought pursuant to Article 51 of Chapter 1 of the General Statutes, if the action is not based upon allegations that the product was not safe or effective or that the manufacturer failed to provide an adequate warning."

PART III. OTHER REFORMS

SECTION 3.1.  G.S. 6-21.1 reads as rewritten:

"§ 6-21.1.  Allowance of counsel fees as part of costs in certain cases.

(a)        In any personal injury or property damage suit, or suit against an insurance company under a policy issued by the defendant insurance company and in which the insured or beneficiary is the plaintiff, instituted in a court of record, upon a findingfindings by the court (i) that there was an unwarranted refusal by the defendant insurance company to negotiate or pay the claim which constitutes the basis of such suit, instituted in a court of record, where  (ii) that the judgment for recovery ofamount of damages recovered is ten thousand dollars ($10,000)twenty thousand dollars ($20,000) or less, and (iii) that the amount of damages recovered exceeded the highest offer made by the defendant no later than 30 days after the deadline for completion of court-ordered mediation, or in cases in which there is no court-ordered mediation, no later than the earlier of either 180 days after the filing of the last responsive pleading or 90 days before the commencement of trial, the presiding judge may, in histhe judge's discretion, allow a reasonable attorney fee attorneys' fees to the duly licensed attorney attorneys representing the litigant obtaining a judgment for damages in said suit, said attorney's fee attorneys' fees to be taxed as a part of the court costs. The attorneys' fees so awarded shall not exceed ten thousand dollars ($10,000).

(b) When the presiding judge determines that an award of attorneys' fees is to be made under this statute, the judge shall issue a written order including findings of fact detailing the factual basis for the finding of an unwarranted refusal to negotiate or pay the claim, and setting forth the amount of the highest offer made 30 days or more prior to the commencement of the trial, and the amount of damages recovered, as well as the factual basis and amount of any such attorneys' fees to be awarded."

SECTION 3.2.  The General Statutes are amended by adding a new Chapter to read:

"Chapter 38B.

"Trespasser Responsibility.

"§ 38B-1.  Title.

This Chapter may be cited as the Trespasser Responsibility Act.

"§ 38B-2.  General rule.

A possessor of land, including an owner, lessee, or other occupant, does not owe a duty of care to a trespasser and is not subject to liability for any injury to a trespasser.

"§ 38B-3.  Exceptions.

Notwithstanding G.S. 38B-2, a possessor of land may be subject to liability for physical injury or death to a trespasser in the following situations:

(1) Intentional harms. - A possessor may be subject to liability if the trespasser's bodily injury or death resulted from the possessor's willful or wanton conduct, or was intentionally caused by the possessor, except that a possessor may use reasonable force to repel a trespasser who has entered the land or a building with the intent to commit a crime.

(2) Harms to trespassing children caused by artificial condition. - A possessor may be subject to liability for bodily injury or death to a child trespasser resulting from an artificial condition on the land if all of the following apply:

a. The possessor knew or had reason to know that children were likely to trespass at the location of the condition.

b. The condition is one the possessor knew or reasonably should have known involved an unreasonable risk of serious bodily injury or death to such children.

c. The injured child did not discover the condition or realize the risk involved in the condition or in coming within the area made dangerous by it.

d The utility to the possessor of maintaining the condition and the burden of eliminating the danger were slight as compared with the risk to the child involved.

e. The possessor failed to exercise reasonable care to eliminate the danger or otherwise protect the injured child.

(3) Position of peril. - A possessor may be subject to liability for physical injury or death to a trespasser if the possessor discovered the trespasser in a position of peril or helplessness on the property and failed to exercise ordinary care not to injure the trespasser.

"§ 38B-4.  Definitions.

The following definitions shall apply in this Chapter:

(1) Child trespasser. - A trespasser who is less than 14 years of age or who has the level of mental development found in a person less than 14 years of age.

(2) Possessor. - A person in lawful possession of land, including an owner, lessee, or other occupant, or a person acting on behalf of such a lawful possessor of land.(3) Trespasser. - A person who enters on the property of another without permission and without an invitation, express or implied."

PART IV. MISCELLANEOUS PROVISIONS

SECTION 4.1.  Severability. - If any provision of this act or its application to any person or circumstance is held invalid, the remainder of this act or the application of the provision to other persons or circumstances is not affected.

SECTION 4.2.  Sections 2.1, 2.2, and 3.2 of this act become effective October 1, 2011, and apply to causes of actions arising on or after that date. The remainder of this act becomes effective October 1, 2011, and applies to actions commenced on or after that date.