In a significant blow to New York's personal injury bar, Governor Hochul earlier this week finally vetoed the Grieving Families Act (GFA), which, if signed, would have greatly increased allowable damages in wrongful death cases and the class of persons who could recover for them.
Any sense of consolation felt by insurers and business interests operating in New York may not last long, however. In her pre-veto message published in one of New York City's tabloids, the governor hinted at her general acceptance of the changes embodied in the GFA, but she expressed concern about the proposed law's impact on business costs and insurance premiums. She invited the state legislature to revise the GFA and resubmit it for consideration later this year.
Expect that to happen during the upcoming legislative year.
Provisions of the Proposed Act
By amending New York's Estates, Power & Trusts Law, the GFA would have greatly expanded the class of plaintiffs entitled to recover for wrongful death, including (but not limited to) anyone deemed by the fact-finder to have a "close" relationship with the decedent regardless of whether the person was an actual distributee of the decedent's estate. As written, this expansion was aimed at including non-traditional family members such as same-sex partners, step-parents and others besides close blood relatives. In addition, the GFA would have allowed claimants to recover not just for economic damages (per current law) but also for non-pecuniary damages such as grief, sympathy and loss of consortium. Finally, the GFA, as drafted and sent to the governor, would have applied retroactively to all pending wrongful death lawsuits in the state and would have extended the statute of limitations for wrongful death cases from two years to three and a half years.
The GFA passed both chambers of the New York Legislature by wide margins and was sent to the governor for consideration in late December, thereby starting the clock on her decision to sign it or veto it. Proponents argued that the GFA was a much-needed reform to New York's existing and archaic wrongful death statute that was initially enacted in the mid-1800s. If enacted, they argued, the GFA would simply recognize a right of recovery to grandparents, domestic partners, same-sex partners and others who did not rely on the decedent for economic support, but were nonetheless directly impacted by the loss of their loved one's emotional support, love, advice and guidance. Part of the GFA's "justification" language, in fact, noted that 41 other states already compensate plaintiffs for emotional loss in wrongful death cases. Without the reform, according to the same language, New York would continue to merely "measure the worth of loved family members solely by their value as wage earners" – in so doing, unfairly treating children, seniors, women, people of color and people with disabilities.
Analysis
Opponents of the GFA, led by the Defense Association of New York and medical industry representatives such as the Greater New York Hospital Association, cited the legislation's potential impact on insurance premiums, including a likely 40 percent rate increase paid by hospitals, physicians and other health care providers. They estimated an increase of $6 billion in loss reserve set-asides by insurers and self-insured groups in order to pay for the newly recoverable emotional damages. They also decried the retroactive application of the proposed statute as blatantly unconstitutional.
Legislative attempts to amend New York's wrongful death statute had been tried many times before. This latest attempt passed both chambers of the New York Legislature by wide margins in 2022 and speculation quickly swirled as to what the governor would do once the legislation was sent to her desk in late December for consideration. Facing particular pressure after her nominee for the State's Chief Judge position stalled in committee a few weeks ago, some thought that the governor would have little choice but to appease her political left by signing the GFA.
Governor Hochul appears to have been swayed by other arguments, however. In her statement preceding the veto, she expressed her support for the general concept of expanding wrongful death damages; however, she expressed reservations as to the GFA's impact on "already-high insurance premiums, adding significant costs for many sectors of our economy, particularly hospitals...." Also citing the legislation's potential impact on small businesses, she urged the state legislature to amend the GFA, citing an exemption for medical malpractice claims as one way of making it more palatable for eventual signature.
Most predict that a legislative override of the governor's veto is unlikely. Instead, we predict that the legislative sponsors of the GFA will take up the governor's invitation and resubmit the GFA in some form later this year, but with modifications that assuage her stated concerns. For example, the exemption for medical malpractice claims – or some other way of protecting the state's hospitals and health care providers – is likely to be inserted in any revised legislation. Also, the GFA's retroactive application might be deleted and the reformulated legislation might contain a narrower definition of what constitutes a "close" relative.
In the end, the apparent victory for New York's defense bar, insurers doing business in the state and other corporate interests may be a short-lived one. We'll continue to watch developments in this area and report to our clients about the prospects for this important legislative change.
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