Washington State: Haven for Special Interests

March 30, 2008
It is my impression that Washington, more than perhaps any other state, is led by special interests. My impression is based in part at least on my law practice which focuses on real estate and business, so my awareness of this influence is pretty much confined to those areas.Let me give you a few examples of what has given me the impression that special interests are more influential here than most other places.
Perhaps my most shocking moment practicing law occurred when, during oral argument before the State Supreme Court, a representative of the insurance industry pointed to the justices and told them that his people were closely looking at how each one of them voted on this case and the insurance industry would be heard from come election time. (I am paraphrasing here but this message was loud and clear.) I thought that this was a truly shocking insult to the integrity of the court, but the justices said nothing.
In the area of construction law Washington is I believe the most repressive with respect to consumer rights. Did you know that if a building or bridge collapses six years after it is permitted, there is absolutely no recourse against anyone in the construction industry, including builders, suppliers, architects, engineers, even surveyors and anyone one else claiming to be in the industry? Condominium owners have no recourse if their building collapses four years after it was permitted (although this is a little murky). In Washington, at least with respect to being able to enforce warranties and representations, all the talk about the useful life of structures is bogus. After six years (four for condos) no one is responsible.This is the result of Washington’s statute of repose, which is jokingly said to have received that name named because people had to be asleep for the legislature to get the law through.
Other states have statutes of repose. These were pushed through state legislatures by an unprecedented lobbying effort on the part of the insurance and building industries in the 1960’s. Washington’s four year statute for condos and six years for absolutely everything else is extremely rare among the states and may be the shortest of any state. If you buy a new condo you should know that you are stuck if anything (however disastrous) goes wrong four years after the permit was granted, which is ofter about two or so years after it is filled.
To give you a sense of the influence of the building lobby, in Washington say a school building collapses six years after completion and kills a child whose watch stops for no good reason. There would be no recourse against anyone in the construction industry but the parents could sue the watch manufacturer for the cost of the watch. Personal property here has a twelve year (or the useful life of the product) statute of repose.
Perhaps the best indicator of the exalted state of special interests here is that when three sitting justices of our State Supreme Court announced last week that they were seeking reelection, the newspaper interviewed not a law professor or someone who practices before the court, but a representative of B.I.A.W., the building industry lobby.

Restitution and the Statute of Repose

February 1, 2008

HB 3235 was introduced this week by no fewer than 17 state representatives. It requires that a criminal court in a sentencing hearing provide for appropriate restitution to the crime victim. This is now discretionary. This I think is appropriate but its utility is limited by the defendant’s ability to pay and there may be a conflict between the defendants ability to pay restitution and sentencing the defendant to incarceration.

What interests me particularly though is when our legislature feels it appropriate that victims ought to get restitution. If a condominium falls on someone four years after it was built, the legislature believes there should be no restitution. If a school or bridge collapses 6 years after completion, our legislature believes the the victims should not receive any restitution. These are the results of the legislature’s granting of immunity to absolutely everyone in the construction industry through the statute of repose.

In Washington, I guess, you’d be better off if you were shot than if you were hurt in a collapsing buiding, bridge or any other constructed thing. You’d have a better chance of the responsible person covering your medical bills if that person were in prison than you would have if the person was a member of the construction industry.

Statute of Repose: A Vehicle for Fraud

January 19, 2008

Washington’s construction statute of repose gives immunity to responsible people for damages that do not accrue until 6 years after the project — whether a bridge, a highrise, earthquake retrofitting or anything other than a condominium, which is 4 years — is put into the stream of commerce. This puts the burden of catastrophes on the victims.

Statutes of repose have been attacked constitutionally in a number of states. The result has usually been that the state legislature — at the behest of the building and insurance lobbies — passes a new law meeting, or appearing to meet, the unconstitutional aspects of the overturned law. Over the last several years the use of the statute of repose to avoid liability has increased. Increasingly we are hearing outcries about the injustice of its application.

In Minnesota a bridge failed killing many people. The local government had paid for a one hundred year bridge but when it failed after fewer than 20 years because of a design defect, the responsible people were render immune from suit by that state’s 10 year statute of repose. Only this summer — after the disaster — did legal professionals express outrage at the injustice of being unable to enforce warranties and representations that were a material part of the purchase price of the bridge.

In New Jersey the Supreme Court is considering a case in which a condominium developer made express representations to consumers knowing that they would rely on them. When these representation turned out to be false, the developer hid behind the statute of repose.

It is terribly hard to find a reasonable justification for Washington’s 6 year statute of repose, particularly when a new building is usually given a useful life of around forty years. Projections, pricing and even tax depreciation are based on the useful life of the building, bridge or other improvement. Despite all this we give immunity to everyone in the construction industry after 4 or 6 years.

The excuse — and it is a transparent excuse — for the law is that it would be too hard to determine the cause of a catastrophe after 4 years in the case of a condomium and 6 years with all other construction. The 4 year condominium law was passed however only because the responsible parties could be identified with certainty and there is absolutely no engineering difficulty determining causation that occurs after 6 years. Furthermore, the burden is on the plaintiff to prove causation so if it can’t be proven the suit fails. It is said sometimes that there might be intervening causes but this too is something that the system is supposed to address anyway before a judgment can be entered.

Immunity for Causing Bridge Collapse

January 15, 2008

There’s a great controversy right now (obscured somewhat by the campaigning) about whether telephone companies ought to receive retroactive immunity for cooperating with the federal government in illegal wiretaps. (There would be no need for immunity without liability; if the telephone companies were not liable to their customers, there would be nothing for them to be immune from.) Meanwhile, other legislative immunities go unexamined.

For example in Minnesota it was determined that last year’s bridge collapse that killed thirteen people was due to a design defect. In Washington State the construction industry as a whole has absolute statutory immunity from claims arising from any disaster that occurs more than six years after completion of the project. The full weight of the disater falls on the victims. You may say “Well at least they could recover from the insurance companies” but no, the insurers of the responsible parties are released if their customer has no liability. So in Washington no matter what the scope of the disaster there is simply no recourse for the victims of construction-related calamities. Except of course with respect to condominia, where there is immunity for any disaster arising only 4 years from completion.

Before Washington’s Statute of Repose

January 4, 2008

On January 3, 1923 the Allen Street Bridge in Kelso, Washington collapsed. More than 35 people were originally estimated to have been killed although the actual number may have been less than that. Shortly after that a bridge in Issaquah collapsed due to a design defect. In each instance lawsuits were brought by the injured and on behalf of the deceased and the Washington State Supreme Court, finding rather substantial negligence, allowed recovery.

Recovery for injury, death and damage caused by design defects or construction defects was possible at that time, but would not now be possible, no matter how many people were killed or injured. In the late 1960’s the Washington legislature passed a construction statute of repose which barred any action whatsoever related to construction if the claim arose six years or more after the completion of the construction. If a school or bridge collapses more than six years after completion there is no recourse in Washington for construction or design defects.

In the 1990’s there was a great deal of difficulty arising from condominium construction, often in connection with defective materials. The Washington legislature’s response to that was to pass a construction statute of repose that barred any lawsuits related to defective condominium construction — whether negligent orĀ  even involvingmintentional violations of the law — arising more than 4 years after completion of the condominium project.