House Insurance Committee
January 29, 2025
Representative John Maddox [00:00:00] 1159, 1177 and 1193 are not going to run today. I guess the way I'm going to try to do it, members, is if it's on the regular agenda, we just need to be prepared to hear it. Of course, as of yesterday, I started getting some text messages that certain members didn't want to run bills and it was late in the day. So that's the only way I know to do it.
We just have to prepare for what's on the agenda. If I learn fairly early that something's not going to be, I'll try to let the members know. I will say just if there's something that's extremely contentious and there's a lot of issues, I'm going to want to make certain that the public and everyone has notice of that. And I don't want anything just to be run through and someone says they didn't know it was going to happen. So with that, I think we should be fairly quick today. We have a few bills and I believe we could start with Representative Warren. You have two bills. 1271.
Representative Les Warren [00:01:21] Thank you, Mr. Chairman. Committee members, Les Warren, District 84.
Wes Lessaigne [00:01:29] Good morning. My name is Wes Lessaigne. I'm a representative of the Arkansas Land Title Association.
Representative John Maddox [00:01:36] Thank you. You may present your bill.
Representative Les Warren [00:01:40] So. House Bill 1271 is addressing an issue for lenders when it comes to new construction and any add ons secured by a new mortgage. Currently in Arkansas, if someone begins construction on a real estate project before the mortgage is filed, every person who does work and provides materials are placed in a position of priority when it comes to the status with the courts.
That means everyone from start to finish is ahead of the lender who loaned the person the money to build the house or whatever. The lender is in last place. What this bill will do is limit the liability or inferiority of claims to only those who did work prior to the mortgage being filed. Once the mortgage is filed. Nobody else has priority over the lender at that point. So right now, if construction starts before the mortgage is filed, every single person who does work or provides materials is superior to the bank who made the loan for that project. So what we're trying to do is stop the bleed.
Once the mortgage is filed, no one else has priority over the bank or the lending institution from that point forward. But Arkansas law right now has it where everybody, regardless of when the mortgage is filed, if construction started before the mortgage was filed, is ahead of the bank or lending institution.
Representative John Maddox [00:03:36] Thank you, Representative Warren. Would your guest like to speak?
Wes Lessaigne [00:03:43] I'll be happy to. Thank you, Chair. As Representative Warren explained, this bill really covers two things. One, it has a component for the recordation of an affidavit of non commencement. What that affidavit of non commencement would do would establish priority for the lending institution, assuming that an inspector hired by the lender-- so there's no lift for the contractors. It doesn't increase any burden on the contractors.
If they inspect and file this affidavit of non commencement either four days before or four days after recordation of the construction mortgage, that construction lender would be deemed to have priority over any mechanics or material that they may be filed in the future. That affidavit can be contested. And in the instance of actual fraud being proven by a potential lying claim, then they would of course jump ahead and have priority if they commenced construction prior to the recordation of the construction mortgage.
The other component, which Representative Warren was testifying about, deals with the doctrine of relation back. So if construction commences today, construction mortgage is filed tomorrow, even the last person who comes to screw in a light bulb at the very end of the project six months from now, their property relates back to the commencement of construction and they have priority over that construction lender. What this bill seeks to do is remove the doctrine of relation back only as to construction lenders and contractors, material suppliers, etc., that provide labor or materials for a project.
And so the idea is to get this where the construction loan can close so that the borrower has funding to pay those contractors, materials, suppliers, etc. And with removing the doctrine of relation back as to construction lenders, then that creates a smaller set of people who have supplied labor materials prior to recordation of that construction mortgage. That group of potential lien claimants, because no lien will have been filed at this point, ca
n be dealt with to make sure that they've been paid, secure lien waivers for what they have done, and then allow the construction loan to go ahead and close and fund and put that lender in a first priority position.
Representative John Maddox [00:06:32] Thank you for your testimony. It appears we have a couple of questions from members. Representative Allen, you're recognized for a question.
Representative Fred Allen [00:06:39] Thank you, Mr. Chairman, and thank you all for bringing this bill. But I do have a question. But you're saying that if ABZ company goes out and started dirt work on a job prior to the construction mortgage being filed, that person will no longer be a top priority in the lien process. What you're doing now, you're saying that the mortgage company will have the first. Is that correct?
Wes Lessaigne [00:07:16] No, sir. Because only if there had been an affidavit of non commencement filed would that construction lender jump ahead of that particular contractor. If that contractor actually did work prior to recordation of the construction mortgage, they would still have priority.
But the painter who comes in and paints the interior of the house or whatever the building may be months from now, would not jump ahead of that construction lender. That excavator or person doing the dirt work would still be in a priority position and then the construction lender and their borrower could work with that particular contractor to make sure that they're paid and waive their lien rights for that work that was done.
Representative Fred Allen [00:08:01] Okay. So you are primarily talking about secondary subs.
Wes Lessaigne [00:08:05] Secondary subs, but even a general could commence construction prior to recordation of the construction mortgage. But the general would not have the ability to waive lien rights for their subs and suppliers. Each of them stand on their own rights.
Representative Fred Allen [00:08:20] Okay. Thank you.
Representative John Maddox [00:08:24] Thank you. Representative McGrew, you're recognized for a question.
Representative Richard McGrew [00:08:28] Thank you. And you may have already answered this bit. And I come from construction, so knowing most and almost always the loan and everything is secured before they start the construction.So tell me how, And I have used liens to collect money on a project that couldn't be paid before.
If the bank goes in front of me on a mechanic's lien, electrical contractor, plumbing contractor, whatever, and for whatever reason they decided not to pay me, the lien was a very good device for me to get paid. Now, if the bank decides that they don't want to pay me and the owner don't want to pay me for whatever reason, does it not relinquish my ability to collect that money?
Wes Lessaigne [00:09:16] You will still have your lien rights. Even today, if it happens as it should, the borrower secures their construction financing, records their construction mortgage before anything is done with respect to that project, you or any other potential lien claimant would be inferior to the construction mortgage.
So what this is attempting to do is if somebody does anything that would be construed as commencement of construction, and there's a whole laundry list of things, you know, any dirt work, establishing temporary electric poles even in one Arkansas case, could be construed as commencement of construction. If something happens that construed as commencement of construction, those who provided labor or material prior to recordation of the construction mortgage still have priority over it. That lender and their borrower could then work with those potential lien claimants.
And I hope at that early stage of the process it's not a contentious relationship and they're just like, Hey, we got started a little early, let me catch up with you and pay all of our bills so that we remove any lien rights for labor or material that were supplied before. Those who then come in later in the project are going to be in the same position that they were as if the borrower got the construction loan established and recorded before commencement ever occurred. So it doesn't diminish your lien rights.
Representative Richard McGrew [00:10:55] Follow up. And this would be more for you, Les, so with that lien, if I applied a lien, and I didn't get paid for whatever reason, the lending agency decided not to follow up with it and that property started to change hands through the title company, would that lien be picked up and taken care of in that process?
Representative Les Warren [00:11:15] Okay. So make sure we're clear. Any liens prior to the mortgage being filed are still going to be still active.
Wes Lessaigne [00:11:28] As underwriting counsel for Les' company, I would say yes, sir. Your recorded lien would be picked up if that owner were going to sell that property and we would require a satisfaction or release of that lien to insure without exception to that. And let I'll add one more thing. Before we close, do a final construction to perm, that bank is going to want sign off on everything having been paid, all work done on that property. And we're going to have people signing off that they've been paid.
Representative John Maddox [00:12:08] Thank you. Representative Wooten, you're recognized for a question.
Representative Jim Wooten [00:12:11] Thank you, Mr. Chairman. I just want to be sure that I understand what you're trying to do. And you touched on it by saying that at the end and when it's filed and when it's closed, that the bank will have a signature that all bills have been paid, all outstanding debts have been paid. Is it required that up front that the bank ask the lender or ask the one who's borrowing the money, Do you have any outstanding debts that you have not paid or do you have any liens against you property? Is there any requirement that requires a lender to find out his standing beforehand?
Wes Lessaigne [00:13:06] Most, if not all, lenders require that their mortgage interest be insured with a policy of title insurance. And as part of underwriting a transaction to issue a title insurance policy for a lender, we would have the borrower sign off on an affidavit and attest to there being no one who is owed money with respect to any construction that had taken place. Either they're outside the lien period or still within the lien period. All of those contractors and suppliers have been paid in full. So we would have the borrower attest to that in order to issue the loan policy for the purchasers.
Representative Jim Wooten [00:13:52] You would be sure as the title reviewer that there's nothing that's outstanding debt due that has not been paid.
Wes Lessaigne [00:14:02] We would have the borrower's word for that and obviously we would search the records to make sure that no liens have been recorded.
Representative Jim Wooten [00:14:10] No liens. All right. Thank you.
Representative John Maddox [00:14:12] Thank you. Are there any further questions from the committee? Seeing none, is there anyone in the audience who would like to speak against this bill? Seeing none, Representative Warren you're recognized.
Representative Les Warren [00:14:31] This has been an issue in the industry for a long time. We're trying to clean it up. We're not trying to get away with taking care of any claims filed before construction, but we're trying to make it where lending institutions no longer worry once their mortgage is filed. They know that they're in a first position once they take care of any previous work done. And so this is just making it where we're on the same page and we begin work as it should be, not having to worry about everything that's done from beginning to end. So I would appreciate a good vote.
Representative John Maddox [00:15:15] We have a motion do pass by Representative Dalby. Is there any discussion on that motion? That is a proper motion. All in favor of motion do pass on HB 1271, say aye. Any opposed, nay. Congratulations, your bill is passed. And Representative Warren, since you're there, if you would like to proceed on 1273.
Representative Les Warren [00:15:47] Yes, sir. Thank you, Mr. Chairman. This bill is just providing language where there is none for the state of Arkansas. This language is mirroring what is currently in place with the IRS. When someone purchases a piece of real estate with any level of investment cash that is in it and secures a loan for the balance owed, the resulting loan is considered a purchase money mortgage.
DFA is acknowledging that any lien they have is inferior to this mortgage. It will now be in Arkansas statute. DFA is aware of this bill and is in support of it. If you'd like them to come and testify to that. But we're just trying to get this in statute to mirror what's happening at the federal level.
Representative Les Warren [00:16:45] Thank you, Representative. Questions about the committee? Seeing none, is there anyone in the audience who would like to speak against this bill? Seeing none, Representative Warren, are you ready to close for your bill?
Representative Les Warren [00:16:57] We're just trying to get in line with the federal level and this will do it. So I would appreciate a good vote.
Representative John Maddox [00:17:05] Okay. I have a motion do pass fromRepresentative Eubanks. That is a proper motion. Any discussion on the motion? Seeing none, all in favor of motion do pass, say aye. Any opposed, say no. Congratulations, you have passed the bill, Representative Warren.
Representative Les Warren [00:17:22] Thank you, Committee. Thank you all.
Representative John Maddox [00:17:28] Committee members, We are not going to hear 1184 today. I believe that there might be an amendment coming on that one. So we're going to move back up to the top. Representative Bentley. You would be next if you like to come to the table. Members, we are going to hear an amendment first on this bill. And the amendment is being circulated by staff right now. So Representative Bentley, you are recognized to proceed on your amendment.
Representative Mary Bentley [00:18:03] Thank you, Chairman. Thank you, committee. This amendment that you're going to be receiving now is a very simply adding the acronym ISO and IEC back into the bill. That's all the amendment does. And I'd appreciate a good vote on the amendment.
Representative John Maddox [00:18:16] And we have a motion to adopt the amendment. All in favor, say aye. Now Representative Bentley, the amendment is passed and you're recognized to present your bill as amended.
Representative Mary Bentley [00:18:28] Thank you, colleagues. Thank you for having me to the committee this morning. This bill, I put it under the category of who knew. So I had no idea that we only had one committee that folks could get their accreditation from to do some inspections for sinks and plumbing, things that go into modular homes.
So I've been asked to run a bill to add another entity that these folks can get their accreditation from to allow some manufacturers to get their units here into Arkansas. It's really simply all the bill does. We've jumped through some hoops to make sure everybody's got their questions answered. So the fire marshals, the health department and the manufacturer housing associations are all on board. I have no opposition to the bill whatsoever. I'm happy to take some questions if we have some questions.
Representative John Maddox [00:19:11] Representative Dalby, you're recognized for a question.
Representative Carol Dalby [00:19:12] Thank you, Mr. Chair. Representative Bentley, it's my understanding, and I just didn't hear this, but they're still going to be held to the standard of the ISO or whatever that group is, correct?
Representative Mary Bentley [00:19:23] They must be accredited. It must be approved, yes.
Representative Carol Dalby [00:19:25] So they're going to be held to a high standard?
Representative Mary Bentley [00:19:27] Yes.
Representative Carol Dalby [00:19:27] Okay. Thank you. That's what I understood.
Representative John Maddox [00:19:32] Thank you. Any further questions about the committee? Seeing none, is there anyone in the audience would like to speak against this bill? Seeing none, Representative Lundstrum, you are recognized for a motion. We have a motion do pass as amended by Representative Lundstrum. That is a proper motion. All in favor say aye. Any opposed say no. Congratulations, Representative Bentley, you have passed your bill.
Representative Mary Bentley [00:19:59] Thank you, Chairman. Thank you, Committee. I appreciate your time today.
Representative John Maddox [00:20:04] We are going to wait on 1237 until the end of the meeting. So Representative Cavenaugh, would you like to present HB 1238?
Representative Frances Cavenaugh [00:20:22] Thank you, Mr. Chair. Frank Cavenaugh, District 30. This is a simple bill. If you see it, it's really not very long. This is a constituent driven bill. So actually, when they were going through a strict foreclosure, it was discovered that if the judge wanted to award the landowner, the people making the payments on the mortgage, attorney fees, that could not happen because it was not in statute. And this just simply adds permissive words, may award attorney fees. And that's all it does. And I can take any questions.
Representative John Maddox [00:20:58] Thank you, Representative Cavenaugh. Are there questions by the committee? Seeing none, is there anyone in the audience who would like to speak against this bill? Seeing none, Representative Cavenaugh, would you like to close for your bill?
Representative Frances Cavenaugh [00:21:11] I'm closed for the bill, and I'd appreciate a good vote.
Representative John Maddox [00:21:14] Representative Richardson, you're recognized. Motion do pass on this bill. All in favor, say aye. Opposed, say no. Congratulations, you passed your bill.
Representative Frances Cavenaugh [00:21:28] Thank you, Members.
Representative John Maddox [00:21:34] Representative Richardson, are you ready on HB 1237?
Representative Jay Richardson [00:21:55] Good morning to J. Richardson, District 49, Fort Smith.
William Buckley [00:21:59] Good morning. My name is William Buckley and I'm a lawyer from Fort Smith, Arkansas.
Representative Jay Richardson [00:22:05] Good morning, members. HB 1237 is is entitled The Act to Prohibit Medical Professionals From Soliciting Injured Individuals. This came to me through a constituent that I had a couple of years ago where he actually was in an accident. Before he got home, he had people knocking on his door and calling his house, trying to get him in to see different medical professionals. And it scared his wife, threw him off.
So I just happened to speak with my counselor friend here, Mr. Buckley, to see what are the options and what's out there that we can do to help protect some of these guys from this type of issue that I'm seeing in my community. After I spoke with Mr. Buckley, he kind of gave me some ideas and kind of helped me work through the wording of HB 1237. And I've got him here to kind of talk through that process of how we came to where we are now.
William Buckley [00:23:09] My wife and I, we are small business owners in Fort Smith, and we almost exclusively represent people who have been injured in car wrecks. And recently, we've noticed a troubling trend. We've always noticed it, but it's begun to get worse and worse.
And that trend is, we'll have a client who comes in and sees us a couple of days after a car wreck. And by the time they've gotten to us, they've received multiple phone calls, they've had multiple visits at their house from people claiming that they're from an insurance company. And these people tell them, we're from an insurance company. If you want to be compensated from your wreck, you need to go to this provider. So they get into the provider.
And typically, the way it goes is those bills accumulate very quickly, much more quickly than they would if you went in to see your primary care physician or if you went into the doctor who you normally go see. So by the time they get to us, they've come in, they're in a vulnerable position because they've been in a car wreck. They've had someone come to their door not knowing who it is. They've been told that they have to go or the insurance company won't pay their bills. And by the time they get to us, those bills are higher than they can ever pay.
And what we find out as we've started working some of these cases is that there's no win. Because then when I file a lawsuit on their behalf, we go to trial or go to court, and the defense attorney finds out how my client got to this chiropractor. And there's not a jury in this state that likes the idea of someone getting to their medical doctor because they showed up on their doorstep.
It's the same way with attorneys. And that's why we attorneys have rules in place that prevent that from happening. We're not allowed to show up at a doorstep. We're not allowed to make a phone call. We can't solicit clients. And that's essentially what this bill will do. It says that for the 30 days following the collision, that no medical provider can reach out to someone who's been involved in a collision or other sort of disaster.
It protects people who need to be protected when they're at their most vulnerable. But more than that, it also has some teeth to it. It provides a mechanism so that injured victims, if they are taken for a ride where they get these high medical bills that said they're not owed and that they can get reimbursed for any money that's been paid toward them. And then on top of that, it also allows them to get their attorney's fees because they're going to have to have someone represent them in that part of the case because they're going to be in a lot of debt through no fault of their own.
There's also a mechanism that allows a prosecutor to get involved because there's usually fraud in these sorts of cases and they can prosecute for the case. And then finally, and I think most importantly, there's a mechanism that allows a private cause of action. So the person can take this statute and say A, B and C happened to me, I have a claim, I can sue this provider for the wrong that they've done.
And I think what this will do is a couple of things. One, it's going to stop this running from happening. And most importantly, it's going to protect people when they're in the worst part of a wreck or another disaster that's occurred during the days following it. After day 30, if doctors or anyone else wants to reach out, they can do that. But it protects innocent victims immediately following a car wreck or other sort of danger.
Representative Jay Richardson [00:27:00] And that's the bill. We'll take questions.
Representative John Maddox [00:27:04] Thank you for the presentation. There are a couple questions. Representative Eaves, you're recognized.
Representative Les Eaves [00:27:11] Thank you, Mr. Chairman. Let me go through the part again about if someone goes to a health care provider for treatment, are you saying that they wouldn't get paid, the health care provider would not get paid for the services they rendered?
William Buckley [00:27:25] According to this bill? If they violated the law, what would happen is if they received payment, they would have to reimburse it because they got the patient by violating this law.
Representative Les Eaves [00:27:35] And how are you going to prove they violated the law?
William Buckley [00:27:39] Well, I think it would be proven like any other statute when it's broken. It'd be based on, a lot of times there's a phone record of it. I mean, they're calling people. And if this goes into place, they're not allowed to actually call. If they're visiting in person, I know of clients of mine who have Ring doorbells and it'll show that person being on the doorstep. So it'll have to be proven like any other case in a court of law. It's not an automatic that someone can just say this and the medical providers in trouble. It'll go through the legal process like any other case.
Representative Les Eaves [00:28:08] So what are your thoughts on preventing health care providers, chiropractors, whatever, for advertising their services to these folks that have been injured?
William Buckley [00:28:20] No, it still allows them. There's a mechanism that still allows them to advertise.
Representative Les Eaves [00:28:24] 30 days later.
William Buckley [00:28:25] No, they can do it in other forms. What they can't do is go to the doorstep. They can't contact through phone call or text message, but they can send letters. They can promote themselves on Google, billboards.
Representative Les Eaves [00:28:39] So at your door or phone calls or text is the only thing you're trying to prevent?
William Buckley [00:28:44] I think it's worded to where it would include phone calls, texts, instant message, any sort of direct electronic communication that's occurring live. But anything that's a letter or referral or if there's an exception, if they know someone previously and they reach out to them, those are still all on the table.
Representative Les Eaves [00:29:03] What about a mailer or, just in general, we offer these services?
William Buckley [00:29:07] That would be fine. They can send a mailer.
Representative Les Eaves [00:29:11] I'm having trouble figuring how you're going to separate the two. I mean, I guess if I get a mailer from a chiropractor three days after I had a wreck and I go to that chiropractor, I violate the law? Or does it have to be addressed directly to me? We heard you had a wreck, blah, blah, blah.
William Buckley [00:29:27] You cannot violate the law through a mailer at all. There's no way you can violate through a mailer because the difference is the position it puts the vulnerable person in. If I receive a piece of mail, it's not live contact where I'm having to answer you immediately. I can look at it. I can talk to my family. I can reach out to other people. You're not in my face. So any sort of mailing under this is perfectly acceptable. It's just that live contact of showing up on the doorstep or of having a live conversation with the person to where they're having to give you answers immediately.
Representative John Maddox [00:30:04] Thank you. Representative Tosh, you're recognized.
Representative Dwight Tosh [00:30:13] Thank you, Mr. Chair. Reading this bill, it says that prohibits medical professionals from soliciting injured individuals. However, in your testimony you said this would prohibit insurance companies from soliciting. That's what you just testified to. So I'm just curious, are we talking about prohibiting medical professionals? Are we talking about, based on your testimony, prohibiting insurance companies? Which is it?
William Buckley [00:30:44] If I said it prohibits insurance companies, then I misspoke.
Representative John Maddox [00:30:51] Either that or I misunderstood?
William Buckley [00:30:52] No, it does not. It does not apply to insurance companies. Now, it could if one of the medical facilities uses an insurance company as its agent. But that's usually not happening. So, no, it does not apply to the insurance companies. In fact, I've spoken to people who are involved in the insurance industry and represent some insurance companies. And they like this, too, because it's not frivolously running up medical bills that the insurance companies are ultimately having to pay.
Representative Dwight Tosh [00:31:25] So has there been a problem with actually people in the medical profession contacting individuals? I've never heard of anybody have that.
Representative Jay Richardson [00:31:33] Absolutely. That's what I was saying to begin with. Representative Tosh, I've had that issue in my community. Yeah, I've had that in my community.
Representative Dwight Tosh [00:31:42] Okay. Well, I just wasn't aware of that. And I've got to ask this question. And I could have sworn I heard you say a while ago that medical professionals, this was different from attorneys, that they didn't solicit people involved in automobile accidents. Did I hear that?
William Buckley [00:32:01] I told you we would be holding them to the same standard.
Representative Dwight Tosh [00:32:04] Okay. I just wanted to be clear that up because I thought surely I didn't hear.
William Buckley [00:32:09] No, no. We do not solicit. Well, and there are rules for us.
Representative Dwight Tosh [00:32:15] You don't solicit?
William Buckley [00:32:17] Unless it's by letter. We can go into the rules of professional conduct. But this basically makes it the same for our medical providers and attorneys. They would be following the same set of rules.
Representative Dwight Tosh [00:32:27] Okay. I just want to make sure of that. I couldn't believe that.
Representative John Maddox [00:32:34] Representative Johnson, you're recognized for a question.
Representative Lee Johnson [00:32:36] Thank you, Mr. Chairman. So in my day to day work in the emergency department, periodically, actually with some regularity, I will have patients come into the emergency department. Why are you here? I had a car wreck today. What's bothering you? Nothing's bothered me. Someone called me and said I needed to go get checked out.
And I'm asking them, what's hurting you? Is anything bothering you? No, I just need some x rays. Somebody told me to come get x rays. Or I was hurting a little bit. I felt fine. But somebody called me. Is this the type of thing that you're trying to prevent with this law?
William Buckley [00:33:14] Yeah, I think that's an example of what we're trying to prevent. Because these runners, that's what they're called in the legal community, they're going to the doorstep and they're doing a lot of things when they get there. They're practicing law. They're practicing medicine. And frankly, they're just giving bad advice. But yes, that's an example of one of the things we're trying to stop.
Representative Lee Johnson [00:33:38] So if this law were to pass, the misunderstanding that I perceive that happens between individuals in a car wreck and whoever they're talking to around and the need to seek care they may not even want, that would potentially reduce some of this increased cost burden that we see where a patient is getting an ER bill, maybe getting, you're having this issue with me while I'm trying to explain, you don't need an X-ray, and this sort of waste of health resources. I'm not saying someone was telling them to come to the ER, but could you see how someone could misunderstand a conversation and interpret that to mean, I've got to go get care now?
William Buckley [00:34:16] Sure. I think that's an example of one of the things that it would cause to decrease. And I think it would also cause even more than that. A lot of times when they're going to chiropractic facilities and they're running up bills of $5,000 plus in just a couple of weeks. So I think both of those things would decrease.
Representative Lee Johnson [00:34:35] Thank you.
Representative John Maddox [00:34:37] Thank you,Representative Johnson. Representative Gramlich, you are recognized.
Representative Zack Gramlich [00:34:40] Yeah. So I think I just need a bit of clarity here. So you did say insurance, but you said they were acting like insurance. So are these chiropractors or representative of chiropractors who say they're an insurance agency saying that you need to go and get checked out? Like people acting as though they're misrepresenting who they are?
William Buckley [00:34:58] Correct. So it's not usually someone from the actual insurance company because insurance companies don't want this to happen. But they know that if they pretend they're someone from the insurance company, it gives them some credibility with the person who's been victimized. So they wear that hat to say, I'm with the insurance company and you need to make sure you do X.
Representative Zack Gramlich [00:35:19] Okay. Yeah. I think that's where there's some confusion with Representative Tosh is like these people are lying to the victims of these accidents. Right. Okay. Thank you.
Representative John Maddox [00:35:31] Thank you. Representative McCollum, you're recognized.
Representative Austin McCollum [00:35:34] Thank you, Mr. Chair. I guess for me, maybe my most basic just logic of what the bill says, why wouldn't I want a licensed medical professional to be able to reach out to a victim of an accident in the first 30 days in a digital manner? I guess I'm trying to understand what's so much more intrusive about like a text or like a targeted ad compared to like a letter.
William Buckley [00:36:03] I think the difference that I see is when you receive something like a letter that is sent, because that letter by its nature, if they send that the day of the wreck, it's not going to get there for 2 or 3 days. There's that time element of being able to think about things following the collision. Whereas these runners, they are showing up at the doorsteps within hours.
They are finding my client's phone numbers and calling them. And we're talking sometimes on the scene of a collision, or not the scene, but shortly after the scene of a collision. They're calling and telling them, you need to get in here, the insurance company says this. And there's also more accountability with a letter. If a letter is sent and they say we're with the insurance company and they're not, that's a great case in court and it's a whole lot easier to prove from that standpoint. But there are ways you can disadvantage the victims with in-person visits and live communication that you just can't do with fliers and written materials.
Representative Austin McCollum [00:37:07] I hear what you're saying about the examples of these things that are going on. I guess I'm just looking at the language of the bill and specific to, you know, the definition on the digital. And I'm having a hard time of understanding why that is always a problem if a medical professional wanted to utilize some targeted means to help within that 30 days.
William Buckley [00:37:35] And I don't think it prohibits the targeting as far as mail or just sending out.
Representative Austin McCollum [00:37:40] I'm talking about targeted digital ad of some sort.
William Buckley [00:37:46] Directed to someone who's been involved in a collision?
Representative Austin McCollum [00:37:50] Someone who needs help.
William Buckley [00:37:51] Yeah. And typically, I've seen a lot of these cases. I've seen probably hundreds of them. And the way it normally works is when a person's hurt, they go and seek out a doctor or a medical professional. There's no other context in which medical professionals are clamoring to get to patients, not like this. And this is the only time when that occurs. So I just think there's a distinction when there's a car wreck involved because you've got the insurance component and, not for all, but for some it's an easy payday.
Representative Austin McCollum [00:38:25] So, I guess the thought is if someone already has a provider, this is like, the theory is this is someone cutting in line.
William Buckley [00:38:33] And I don't even see it as cutting the line.
Representative Jay Richardson [00:38:37] You're fine. No, I think the bill even describes, if you've already got a provider or a doctor that you already use, you can go directly to them the day of.
Representative Austin McCollum [00:38:45] Sure.
Representative Jay Richardson [00:38:46] This is trying to protect those individuals like the constituent that I had who somebody is knocking on his door and his wife is there and he has not gotten home yet. And he had an accident. So it's trying to protect those guys.
William Buckley [00:38:56] And that doctor, too, if they have a previous relationship with the patient, so they've already treated them, they can go to the doorstep if they're involved in a wreck because there's an exception carved out for that, too. This is just the medical providers who have no connection whatsoever to this victim showing up within hours of the collision that's occurred.
Representative John Maddox [00:39:19] Thank you. Richard Lundstrum, you're recognized.
Representative Robin Lundstrum [00:39:21] I'm a little confused. I get it. But these sound like predatory folks, and I get that. But there's when you go door to door on anything, whether you're the Fuller Brush man or selling cookies, you don't have to answer the door and you don't have to buy it. I'm just wondering why we're stepping up in this individual basis and saying, close the door.
Representative Jay Richardson [00:39:44] No, I don't think we are. I don't think it's the same as somebody going door to door trying to sell pest control. I think this is something where they've identified an individual who has been in an accident and they stop what they're doing and they go to their house or they send them a text message, You need to go see this person for whatever reason.
Representative Robin Lundstrum [00:40:01] I mean, they've taken it to a whole new level of creepy. There's no argument there. I just I'm not sure that-- we can't stop everybody from going to somebody's door or stop somebody from doing something stupid or even-- I am just confused at. This is an ambulance chaser, plain and simple. They've been around. They're going to be around. I'm just wondering if this is going to stop that completely. I don't think so.
William Buckley [00:40:33] Well, other states have passed it. And I was speaking to a lawyer in Ohio a couple of weeks ago about it, and he says it's decreased dramatically. Now, it's not going to stop it completely. I get that. I'm not naive. And I know that it's still going to occur to an extent. But the other states, Tennessee's done it, Kentucky's done it, Ohio's done it. And there's been a drop. I'm sure it still happens there, but it helps. And that's what we're trying to do, is help these people who are in those positions.
Representative Robin Lundstrum [00:41:03] Okay. Thank you.
Representative John Maddox [00:41:05] Thank you, Representative Johnson. Representative Eaves, you're next in the queue.
Representative Les Eaves [00:41:13] Thank you, Mr. Chairman. I think I know where you're going with this, but I've had a car wreck before. And very soon after that wreck, I got inundated with attorneys letters and mailers. You know, they can sue somebody on my behalf. I think I agree with you on preventing the door to door stuff, but it's the digital or the mail or whatever that I think you're trying to prevent that I'm having a little harder time swallowing.
So can you explain why I get inundated by attorneys wanting to sue someone on my behalf after a wreck? How that's different from having a medical professional do the same thing? You've had a wreck, and you may have been injured and you probably need to get checked out. I've also had health care professionals refer someone close to me to an attorney because they had a wreck. So help me walk through that.
William Buckley [00:42:07] To the first point, it's the same standards that attorneys have to follow. So they'll still be able to send you mailers. They can bombard you with mail in any sort of written materials that they want to. The same thing that attorneys are allowed to do. So it's in line with the same rules.
Representative Les Eaves [00:42:25] Text messaging, those kind of things.
William Buckley [00:42:26] No, attorneys can't do that. And it's the same thing for them. They would not be allowed to text message. They would not be allowed to make a phone call because attorneys can't do that same things.
Representative Les Eaves [00:42:35] You can only do stuff via mail.
William Buckley [00:42:37] We can send letters. And of course, the same rules, like if I have a previous client, for example, who I represented in a car wreck five years ago and I find out they're in a car wreck tomorrow, I can call them up and say, Come and see me. Because I have that previous relationship. And this is the same way. It pretty much tracks with the same rules and responsibilities that apply to attorneys, and we're putting them on medical providers.
Representative Les Eaves [00:43:01] The only way I was getting contacted by attorneys that I didn't know that wanted to sue on my behalf was mail?
William Buckley [00:43:07] I would have to look at the rules. But I think you can send mailers, online, you can have a Facebook page, you can have a website. And I'm sure you could go look that up.
Representative Les Eaves [00:43:19] Can you contact me via my Facebook page?
William Buckley [00:43:22] No, I cannot. So if you're in a wreck and I see that as an attorney, I can't reach out to you and say, hey--
Representative Les Eaves [00:43:27] Ever?
William Buckley [00:43:28] Ever. Well, I'm not going to say ever, because if you were a previous client, I could reach out to you by your Facebook page and I could say, Hey, remember me? I represented you three years ago. I want to do it again. But if I didn't know you, we had no other type of relationship and you were in a car wreck, no, I am not allowed pursuant to the Arkansas Rules of Ethics to reach out to you by Facebook Messenger.
Representative Les Eaves [00:43:51] Okay. Again, I understand that. And I totally agree with you on having some stranger show up at my doorstep, some whatever, I don't need it. I'm just a little concerned about preventing whatever health care professional it is from using, I guess, mail or a letter or something within 30 days of that accident.
Representative Jay Richardson [00:44:16] They can still contact you by mail.
William Buckley [00:44:19] Yes.
Representative Les Eaves [00:44:19] Within that 30 days? Okay. But you can't?
William Buckley [00:44:23] No, lawyers can too.
Representative Les Eaves [00:44:25] What was the 30 day thing?
William Buckley [00:44:27] So this bill says for the first 30 days that medical providers cannot reach out to you in person, by phone, by text. But as far as attorneys go, no, attorneys can never call clients and say, I want to represent you. Attorneys can never get on Facebook and say, I want to represent you. Attorneys can never send text messages and say--
Representative Les Eaves [00:44:49] You can send me a mailer the day after I wreck?
William Buckley [00:44:50] I can.
Representative Les Eaves [00:44:53] And so can these people.
Representative John Maddox [00:44:58] Representative Perry, you're recognized.
Representative Mark Perry [00:45:00] Thank you, Mr. Chairman. You know, I've been in the insurance business for 39 years, and I've fought this for years. I no longer do the auto and homeowner's insurance. But this is a really great bill. I have an actual case. One of our employees at one of the companies we own, she was involved in an accident on August 23rd at 1:00.
On August 24th, at 7:57 a.m., she gets the first phone call from Bonnie. I'll leave the name of the companies out. And at 8:24, at 8:30 a.m., she gets Drew. And he said that he was with the third party that works with her insurance company. So now she's thinking, he's legit. So at 8:24. At 1:02 p.m., I got Garrett now. Garrett, he represents the insurance company as well. And then at 9:57 a.m. on the 26th, Marlena called and she's the patient advocate.
And then here's a text message that Drew followed back up with and told where she needed to go for her visit, gave her the address, phone number. Feel free to reach out to the clinic any time. And then Marlena also sent her a text message and said, Here's the information, schedule your appointment necessary. And then even Marlena work for a procurer. And here's a copy of her card from a company out of Searcy that she worked for, that she was a runner, as I say. She filed the police reports and tracked it all down. But, you know, this lady was understandable enough to where she didn't fall for it. But I have a lot of clients that are maturing. And when they get these phone calls, they don't know the difference.
I've actually had a client call me in the doctor's office called, Hey, my company said I need to come here. And I said, no, you need to get in your car and leave. He said, well, I wondered because nothing's wrong with me. So trust me, and actually that gentleman passed away yesterday. So my question was, this is what this would help prevent?
Representative Jay Richardson [00:47:34] Yes.
William Buckley [00:47:35] And to go to your point, I actually had an attorney fall for it who I was representing, and he didn't know what was happening. So I think if someone who's sophisticated enough to know the law really well falls for it, it shows you what people who are even more unfamiliar would be able to fall for.
Representative John Maddox [00:47:54] Thank you. Representative Wooten, you're recognized.
Representative Jim Wooten [00:47:57] Thank you, Mr. Chairman. So if I understand and following Representative Eaves' question the attorneys, these people then would be on the same footing that attorneys are relative to the call?
William Buckley [00:48:14] That's correct.
Representative Jim Wooten [00:48:15] Okay. Follow up from a statement you made about mail service 2 to 3 days. Let's add in there if they ever get it. Okay. But my follow up question is-- that's just an editorial comment. My follow up question is, do you have any indication or have you had any indication that those that make these early contacts and are contacting these accident victims, have you had any indication that they're inflating their prices whenever they bill for them?
William Buckley [00:48:52] Yes, they are. And the best answer I can give you is I've compared some of the facilities who are contacting versus some of the ones who are not. And I had a recent bill recently. It was a chiropractor who had reached out. And I think the first visit was $1,500. And I talked to a couple other chiropractors who said that visit should be around $200 to $300. So the answer is a resounding yes. They are inflating those bills.
Representative Jim Wooten [00:49:20] So this would help from the standpoint of the insurance premiums relative to the outgo for an accident.
William Buckley [00:49:30] I would think it would have to.
Representative Jim Wooten [00:49:32] Help to drive it down. Okay. Thank you. Thank you, Mr. Chairman.
Representative John Maddox [00:49:36] Representative Tosh, you're recognized.
Representative Dwight Tosh [00:49:39] Thank you, Mr. Chairman. I'm sure it's in the bill. What's the penalty for someone in the medical profession that would violate this if this becomes law?
William Buckley [00:49:49] From a criminal or a civil standpoint or both?
Representative Dwight Tosh [00:49:52] Both.
William Buckley [00:49:52] I think if it's a criminal violation, it's a D felony. D as in dog.
Representative Dwight Tosh [00:49:58] A D felony?
William Buckley [00:50:00] D as in dog. So it's the smallest of the felonies.
Representative Dwight Tosh [00:50:03] Yes, the lesser.
William Buckley [00:50:04] And if it's a civil violation, then at that point it allows, there are a couple of punishments. One, the money that the provider wrongfully took, once they're proven to be in violation of it, they have to pay that back. They have to pay for the attorney's fees for the person to recoup that money. And then there's also a private cause of action because each of these cases is a little different. And maybe the individual has damages that others don't, so they can collect that as well.
Representative Dwight Tosh [00:50:31] Okay. And what's the penalty for an attorney that would violate this similar law. What's the penalty compared to one from the other?
William Buckley [00:50:42] I know if I contacted clients, I would probably be afraid I'd lose my license, to be honest with you. I think that would be my penalty. But I don't know that there's a private-- it would be a malpractice cause of action, I would think that they would be able to bring against us.
Representative Dwight Tosh [00:51:00] That's on the civil side. What about on the criminal side? You can kind of see where I'm going.
William Buckley [00:51:06] I do.
Representative Dwight Tosh [00:51:06] On the penalties, medical, attorneys, both are contacting or if they did how the penalties compare, Are we being on the same playing field, level playing field for the medical people versus the attorneys? I'm just curious.
William Buckley [00:51:24] And the issue is going to be I think that the attorney's conduct has to be regulated by the Arkansas Supreme Court. So there's not a statute in place because I think historically speaking, the General Assembly hasn't been able to regulate attorney conduct. But I can assure you that if I were caught, that would be a big problem.
Representative Dwight Tosh [00:51:47] And one last question, and I understand that. I know you've got your code of ethics. I understand all that. I'm just trying to, in my mind, understand why we are imposing this law on medical professionals and holding them to a different standard as lawyers contacting individuals from the General Assembly than we are for attorneys. I'm just trying to understand why we're doing that.
William Buckley [00:52:13] Because I think the problem at this juncture is not with attorneys. I think it's with those medical providers. That's why people are showing up at the doorsteps. That's why bills are inflated and that's why vulnerable people are being contacted.
Representative John Maddox [00:52:32] Representative McCollum. Thank you, Mr. Chair. I guess where I'm at right now, and I'd love any framework to kind of rethink what solicitation should and shouldn't be, like I also would not like someone coming to my door or someone in my family after, constituents for that matter. I just kind of take it back to the digital examples and reaching out. I think you just said like electronic communication. I don't see how that is solicitation, but I'm open to understanding why that should be considered. I'm just one guy in the committee. I haven't even talked to anyone else. That's just kind of where I'm at right now.
Representative Jay Richardson [00:53:14] I know there was an example where, and even like Representative Perry just said, where the lady who work for him had been contacted through text message through two different people trying to get them to go and visit a certain location. That's, again, what we're trying to avoid right here. That's the electronic piece that we've identified. Now in the bill itself, when you go down it tells you what is not covered. So in line 20, it says in page 2, this section does not prohibit the solicitation for targeted direct mail, advertising and other forms of written, radio, television ad providing the advertising does not involve coercion, duress or harassment or is not false, deceptive or misleading.
Representative John Maddox [00:54:04] Thank you, Mr. Wooten.
Representative Jim Wooten [00:54:14] Do you find that there are certain people, and I'm not saying this in a demeaning way, but they get confused. If that have had an accident, that's pressure, a stress of that. And for anyone to jump in within hours, as Representative Perry pointed out, seems to be unnecessary in some cases, particularly if they say, well, I'm not hurt, I'm not feeling any pain. And, you know, it may come about three days later, I've always been told, captain, from having an accident with the state police car. But it was an emergency run I was on, so I got hit. But it just seems to me that it's undue pressure being brought. Is that correct? Is that what y'all are saying?
Representative Jay Richardson [00:55:20] Yes, sir.
William Buckley [00:55:21] I think you make a great point because I think anyone who practices this type of law, they can tell you it's really intimidating to a client when they come into your office because maybe they're hurt and they're confused and they don't want more than what they're entitled to, what they should be compensated for. But they're afraid if they don't follow this mysterious phone call and the directions on the other end of that, that they're going to lose everything because they weren't doing what the insurance company told them to do. So if it gets to where it's 30 days, at that point, they've had time to consult people of their own choosing, not people who have contacted them a couple hours somehow after the wreck. So I think your point is right on this.
Representative John Maddox [00:56:07] Thank you, Representative Johnson.
Representative Lee Johnson [00:56:09] So the goal of stopping the communication, whether it's door to door, knocking, a phone call, a text message, an email. The goal is to stop inappropriate solicitation, deceptive practices and coercion, correct?
Representative Jay Richardson [00:56:28] Correct. Yes.
Representative Lee Johnson [00:56:29] And so I guess for me, when I think of door to door, I can make a choice to not answer the door. But when I get a phone call, it's harder to make that choice not to answer a voicemail. But I could. When I get a text message, that is an intrusive process, wouldn't you agree, where I'm sent something and I'm going to look at it and read it and I can't really refuse that.
To me, when we're looking at the difference between face to face communication versus electronic, for me, electronic is I can't refuse that. I've seen it now. I've read it. And now I have to discern, is this a real communication from someone with my insurance company where if I don't take care of this, I'm going to lose my coverage, or is it not. I think that to me is the difference a little bit. Wouldn't you agree?
William Buckley [00:57:25] Yeah, I think that's a great point.
Representative John Maddox [00:57:30] Thank you. Representative Steimel, you're recognized.
Representative Trey Steimel [00:57:33] Thank you, Mr. Chair. This references line 18 and 19 on page 2 about the reasonable attorney fees incurred when collecting a refund described in subdivision 3A of this section. Why is it necessary to add this language to the bill? Is a client potentially, if they are in violation of this, are they not allowed to retain you on their own accord without having to put this into the bill?
William Buckley [00:58:00] They can retain me. But what that does is it guarantees that the prevailing party gets attorney's fees on it. Because otherwise they're going to be out the money that they have to pay an attorney to hold this medical provider responsible for following the law it should have followed in the first place. That's why that's in there, so that there's a mechanism where they can recoup that.
Representative Trey Steimel [00:58:19] Could a judge not make that judgment for you?
William Buckley [00:58:23] Well, not if it's not in the statute, because in Arkansas, typically attorney's fees, there has to be some sort of provision that allows you to get them. It's not a common law thing that you're just going to get attorney's fees on a claim.
Representative Trey Steimel [00:58:37] Okay. Thank you, Mr. Chair.
Representative John Maddox [00:58:41] Okay. Thank you, committee. Seeing no further questions, I have been noticed there is someone or some people who do want to testify against this bill. So if there's anyone at this time who would like to come up and testify against the bill, I'd ask that you make your way. If you would identify yourself, who you're with, and you may proceed with your testimony.
Robbie Wills [00:59:13] Thank you, Mr. Chairman. My name is Robbie Wills. I'm with WCG Consulting and we represent several clients that are opposed to this bill, among them a organization called Public Information Advocates. I will explain their interest in just a second. And also the Arkansas Chiropractic Society.
I'm here today, hopefully, to provide some some history and some institutional information. And that's a polite way of saying I've been around too long and have seen this issue quite a bit, both as a legislator and as a lobbyist. And the bottom line on this is this has been a problem in the past. Our organizations have been working diligently on this for over 15 years. We worked very closely with the General Assembly in 2013 to pass Act 515, which regulates the activity of marketing a health care practice through the use of procurers. What is it procurer? Procurer is a salesperson. A procurer is somebody whose job it is to communicate with potential patients of a medical practice.
A lot of this gets directed at chiropractors, but frankly, there are a number of what we would consider health care providers who have used services like this, not just here in Arkansas, but throughout the country. Osteopaths, physical therapists, things like that. The challenge that we have had here in Arkansas is that the Board of Chiropractic Examiners in 1999 actually passed a rule very similar to the one described to you that lawyers have to abide by.
That rule was almost identical to the operating clause you see in this bill. You can't talk to anybody for 30 days after they're in an accident. There was an immediate court challenge, and that case went to the Arkansas Supreme Court and was overturned on the basis of well-established case law at the United States Supreme Court under the doctrine established in the Central Hudson versus PSC case in 1980. That basically says you have a First Amendment protected right to speak for your business.
It's commercial speech is the term. You have a First Amendment right to do that as long as you're not being deceptive or dishonest or lying. So that's why the rule that was proposed by the Chiropractic Board was overturned. And we've been struggling almost every two years when the legislature comes into session to find a solution to this. There was a longtime parliamentarian, many of you knew Tim Massanelli. Tim always said, you know, not every aggravation warrants an act of the General Assembly. It is aggravating when somebody knocks on your door, whether they're selling fuller brushes like Representative Lundstrum said, or they're selling magazine subscriptions or if you've been in an accident and they want to make you aware that there's a health care provider standing by to treat your condition. It's aggravating.
However, as long as that person knocking on the door doesn't say I'm from your insurance company and you have to go to Doctor Smith, as long as they don't say that, they're not breaking the law. Act 515 of 2013 regulated the registration of these people. They have to be registered to do that. We have to know who they are. We have to know who they work for. And the proof is in the pudding. The complaint for solicitation by chiropractors prior to 2013 was in the neighborhood of 15 to 20 complaints a year filed with the board. Since that act has been in effect, it's been in the single digits. I think we're still asking for some information on the past couple of years, but as of the last General Assembly, it was down to 1 or 2 a year.
Now, the number should be zero, but to inconvenience 1 or 2 or to address the aggravation of the 1 or 2 people that complained while making dozens, if not several hundred, gainfully employed Arkansans criminals because they have knocked on the door to ask for someone's business I think is a bridge too far. So we had some suggestions in the past. In fact, Representative Perry ran a substantially similar bill, I think, in 2019. And it came at the very end of the session, I think in the last couple of days of the session.
We were trying to work with you on an amendment that would strengthen Act 515 of 2013 that would make the violation of that act by a health care provider a incident that will result in license revocation. There are ways to strengthen the law that we have on the books to better address the situation. So just to sum up in conclusion, the two objections that we have to the bill as it currently stands, is under the Central Hudson standard. There is a government interest at work here. And I appreciate and applaud it. And we've worked very hard to address the government interest.
But our argument is it's not substantial enough of a government interest to warrant criminalizing otherwise lawful activity. And the second point is because it criminalizes an otherwise lawful activity that people are engaged in and have invested their business resources in. It's not a narrowly tailored solution. And without a government interest and a narrowly tailored solution, you know, frankly, the bill as written will suffer the same fate as the rule the Chiropractic Board tried to put in in 2001.
So with respect to my good friend Representative Richardson, my request would be if we could have just a little bit of time to work with him on an amendment, I think we could hopefully address his concerns and strengthen the laws that we have on the books, identify any bad actors that are out there and put them out of business without putting people out of work. I'm happy to answer any questions.
Representative John Maddox [01:05:06] Thank you for your testimony. There are a couple questions. Representative Johnson, you're recognized.
Representative Lee Johnson [01:05:10] Correct me if I'm wrong about this, but I don't think this bill is creating criminals out of people that have a viable business. It just changes their business model, correct? I mean, they can still carry out the activities of their business. They just have to wait 30 days. Well, there's just a waiting period. So, I take a little issue with that comment because I don't really think that's truly reflective of what the bill does. We're not taking away a business model. We're not creating criminals. We're just creating a parameter under which a person can operate their business unless I'm missing something.
Robbie Wills [01:05:42] Well, a Class D felony is making a criminal out of someone. And if I knock on someone's door today and say, I'm with Dr. Johnson's office and he'd be happy to-- Sorry about your accident, we'd be happy to treat you. That's legal. I'm not a criminal. If this bill passes, I'm a criminal if I do that.
Representative Lee Johnson [01:05:59] Only if you do it within 30 days. If you do it outside of 30 days, it's not a crime, correct?
Robbie Wills [01:06:05] Well, according to this, yeah, outside of 30 days, according to this bill. But I have a constitutional right within those 30 days to speak about my business to potential customers as long as I'm not lying and saying that I am from the insurance company and you have to do this or. We have the Deceptive Trade Practices Act that makes that illegal and Act 515 makes that illegal.
Representative Lee Johnson [01:06:26] Another question then I'm going to stop. What's the attorney's constitutional right? I mean, I think they're limited to this same time frame. Do they not also have a constitutional right to it, if that's the argument? I'm trying to say if it's good for one entity, was it not good for the other? Where does that constitutional right change?
Robbie Wills [01:06:44] Well, Arkansas hasn't overturned that regulation. Other states have. Lawyers operate under the rules of the Supreme Court in Arkansas. My argument to you today is if a lawyer were to stand up and file suit against that regulation, that it would not withstand court challenge. And I just don't see how it could.
Representative John Maddox [01:07:08] Thank you. Representative Wooten, you're recognized.
Representative Jim Wooten [01:07:16] Thank you, Mr. Chairman. Did you say that you worked on this for 15 years and it keeps coming back? Does that not tell you something?
Robbie Wills [01:07:27] What it tells me, Representative Wooten, two things. About every two years, something like this comes up. It always seems to come out of Fort Smith. No offense to anyone here. My understanding, the story I was told when I was a legislator, is that years ago there was one lawyer who thought he had a client, and then that client got contacted by a chiropractic runner who was affiliated with another lawyer and ended up referring that person to this other lawyer. So this lawyer got mad at that lawyer. So that's where the no solicitation rule came from with the chiropractic board. And, you know, like I said, every two years. Yes, sir.
Representative Jim Wooten [01:08:07] Okay. But you're talking about lawyers. We're talking about medical professionals. We're talking about people here that if they have been injured, they're not in a condition to make a decision on the front door steps, are they?
Robbie Wills [01:08:23] Well, I would say some probably are in that category. Others that have contacted us over the years have said, I appreciate knowing that I have options, that I have somebody that'll treat me. I have somebody that's willing to help me. So it's not a one size fits all solution, which is what this bill is.
Representative Jim Wooten [01:08:37] You said that we shouldn't, as legislators, look for protective measures for our constituency. Are you saying that Representative Richardson, because he just had one-- he indicated he had several people. And I venture to say that there's hardly any on this committee that haven't had the same complaint. I know I have of people. So are you saying that it's not our responsibility to protect the public?
Robbie Wills [01:09:15] It is your responsibility to protect the public, Representative Wooten, particularly their constitutional rights. And there should be a very high bar that has to be cleared before we take a constitutional right away from someone. And the First Amendment is very clear. As long as I'm telling you the truth, I knock on your door, that's not illegal. That's protected by law.
Representative Jim Wooten [01:09:33] I'll be honest with you. I get tired of people coming before us and telling us that something is unconstitutional because they don't know whether it is or not until the judge makes a statement or a court says it's unconstitutional. Is that not correct?
Robbie Wills [01:09:51] That's correct. And the United States Supreme Court has done just that, Representative Wooten.
Representative Jim Wooten [01:09:55] Well, you don't know for sure if this is unconstitutional.
Robbie Wills [01:09:58] I plead guilty to being a lawyer. So when the Supreme Court says something is unconstitutional, and this looks like a duck and walks like a duck, I'm going to call it a duck. Yes, sir.
Representative Jim Wooten [01:10:08] Okay. So you feel like with these people that there's a strong indication that they inflate costs. And then it's costing insurance companies and ultimately costs every citizen of this state who has insurance, maybe a higher premium because of the increased cost inflated by these early arrivals on your doorstep.
Robbie Wills [01:10:33] Yes, sir. I'm saying that would be bad if true, but I've not seen evidence to back up that claim that was made at the table.
Representative Jim Wooten [01:10:39] We have another piece of legislation that says it is true. And it was given a do pass yesterday by the judiciary. Is that not correct?
Robbie Wills [01:10:47] I'm not familiar with what you're referring to, Representative Wooten.
Representative Jim Wooten [01:10:51] Okay. Thank you. Thank you, Mr. Chairman.
Representative John Maddox [01:10:54] Representative Johnson.
Representative Lee Johnson [01:10:55] So I'm not a lawyer, but I want to understand better. I think I understand there are two ways in which laws get made. One is through case law, right? Where a court rules on a case and we say, okay, this is precedence now and this is case law. One is through statute where we pass laws. And until that statute challenge, the statute is the law. The Supreme Court case in which you're referencing, was it directed around this particular statute that we're proposing to pass, or is it a different law?
Robbie Wills [01:11:22] Language very similar to this.
Representative Lee Johnson [01:11:24] So I'm not saying similar. This law, if it were to pass, would become the law until challenged and a court said something different. And whatever a court might or might not do around this law is speculation.
Robbie Wills [01:11:38] Yes, sir. But my argument to the committee is if we're trying to fix the problem, let's craft a bill that will survive the inevitable legal challenge. If we want to run this bill as is, it will be challenged. There's really no way. I mean, I'm not a judge. I can't say that. I would be shocked to my core if this survives a temporary restraining order hearing. So I'm asking if we could pull the bill down, give me a week.
And there's several other lobbyists working on this. I'm not going to name any names, but if you give us just a little bit of time, we've got an amendment that I think will narrowly tailor the bill to target the activity that we want to outlaw without creating all the unintended consequences that my clients fear that this bill has. And I would hope that, you know, the deliberative process will produce a better outcome, something that will actually accomplish the goal. That's all I'm saying.
Representative John Maddox [01:12:38] Representative Wooten, you're recognized.
Representative Jim Wooten [01:12:38] Thank you, Mr. Chairman. Follow up to the comment. Do you have any proof, solid proof, that this will be contested in court if it's passed?
Robbie Wills [01:12:53] Yes, sir, I do.
Representative Jim Wooten [01:12:56] Well, do you feel like relative to the amendment that it's a committee duty or is it not the author of the bill to add an amendment? Have you contacted him?
Robbie Wills [01:13:12] Yes, sir. I have.
Representative Jim Wooten [01:13:12] And what has he said?
Robbie Wills [01:13:15] As of the day he filed the bill, he said he was open to an amendment and I was working on it. And, you know, I respect the member's right to run a bill whenever he wants. I'm not saying anything untoward happened there, but we do have language that we would love to present that we think will accomplish the goal that this bill is trying to accomplish. And again, we agree with the goal. We want to eliminate illegal activity. We want to eliminate people who are fraudulent. We want to eliminate deceptive trade practices within the medical profession. That's all we're trying to do, representative.
Representative Jim Wooten [01:13:47] Thank you. Thank you. Mr. Chair.
Representative John Maddox [01:13:52] Reprepresentative McCollum.
Representative Austin McCollum [01:13:55] Thank you, Mr. Chair. And actually I think it's essentially been addressed. I would like to see, you know, how something could be more narrowly tailored. But, you know, ultimately I think that's up to the bill sponsor. And to your point, that's up to him.
Representative John Maddox [01:14:07] Okay. Thank you. Seeing no further questions from the committee, is there anyone in the audience who would like to speak for the bill? Seeing no one, is there anyone else in the audience who would like to speak against the bill? Seeing no one, Representative Richardson, you are recognized.
William Buckley [01:14:45] I would just like to make a comment on the constitutionality of this, because I know that was an issue that came up, and I'd like to be able to rebut that if I could. I did not just throw this bill together and give it to Representative Richardson without thoroughly researching whether it was constitutional. It's not going to do us any good for you to put something up there that's not going to survive judicial scrutiny. And this is what I do.
The case that's being cited from the Supreme Courts from the 1980s. The law evolves and changes during the decades following that. Similar statutes have been upheld by, I think, the Sixth Circuit, by other courts. And it's not that they're overturning the previous Supreme Court decision, but they're more narrowly tailoring this statute.
Now, it's been the contention has been made that this statute is similar to the one that Arkansas has held unconstitutional. And that's just not true. The one that was held unconstitutional, there were two big differences. And actually, the Arkansas Supreme Court noted it in the opinion. They said two of the things that could have been done.
One is put a time limitation on it. We have that. There's a 30 day time limitation. The second one was you've got to limit the class of victims. You can't just say you can't solicit all people. You've got to define who the victims are. And we've done that in this statute because it talks about you just can't go after accident victims, people who have been involved in disasters.
So I'm confident that this is going to survive judicial scrutiny because the Arkansas Supreme Court has indicated that it can. And there are other Supreme Courts and court of appeals who've said it does. So if nothing else, it's not as clear cut is some might make it seem to be. So I think that we let our Supreme Court rule, and I'm confident that it will withstand that scrutiny.
Representative John Maddox [01:16:36] Thank you, members. Any further questions from either the bill sponsor or the other presenter at the table? Okay. I apologize. Represent Wooten.
Representative Jim Wooten [01:16:48] I have a motion at the proper time, Mr. Chairman.
Representative John Maddox [01:16:53] Any further questions? Okay. Seeing none, Representative Wooten, you're recognized.
Representative Jim Wooten [01:16:59] I recommend a do pass.
Representative John Maddox [01:17:02] Representative Wooten has recommended do pass. And that's a proper motion. Members, is there discussion on the motion? Seeing none, we have a motion do pass. All in favor say aye. Opposed, say no. The ayes have it. You've passed your bill. Members, I believe we have a couple of bills that can go fairly quickly if we'll be patient. Representative Steimel, would you like to go to the end of the table? SB 76. This is a Senate bill. Members, SB 76.
Representative Trey Steimel [01:17:51] Yes, Mr. Chair, Thank you. Senate Bill 76. This is a bill that will take a rule that has been in place for ten plus years and codified. This bill has the ability to create a more competitive surplus lines market that is needed in Arkansas. Not that we compare ourselves to the Senate, but this did pass 35-0 over there. And with that, I'll leave it there. Take any questions.
Representative John Maddox [01:18:17] Questions from the committee? Seeing none, is there anyone in the audience who'd like to speak against this bill? Do you have anyone else to speak for this bill?
Representative Trey Steimel [01:18:26] No.
Representative John Maddox [01:18:29] Representative Steimel, you are recognized to close for your bill.
Representative Trey Steimel [01:18:29] I'm closed for the bill.
Representative John Maddox [01:18:31] I'm sorry. Representative Lundstrum.
Representative Robin Lundstrum [01:18:33] Do pass at the proper time.
Representative John Maddox [01:18:35] We have a do pass motion by Representative Lundstrum. That's a proper motion. All in favor, say aye. All right. All opposed. Congratulations. You passed your bill. Committee, one last bill. Senate Bill 70, Representative Lundstrum. You may present your bill.
Representative Robin Lundstrum [01:19:16] Ladies and gentlemen, it's no secret that the insurance rates are going up, sometimes 25% or more. Right now, your agent gets a 30 day notice that insurance rates are going up and you get a 10 day notice. That is if it gets there in the mail. This bill simply says the insurance agent will get a 60 day notice and you will get a 30 day notice. And it'll give our customers, including myself, more time to shop from insurance, which I know is such a joy but so important. With that, I'll take questions.
Representative John Maddox [01:19:47] Thank you, Representative Lundstrum. Questions from the committee? Seeing none, is there anyone in the audience who would like to speak against this bill? Representative Lundstrum, you're recognized to close for your bill.
Representative Robin Lundstrum [01:20:00] It's a pretty straightforward bill. I would recommend do pass and thank you.
Representative John Maddox [01:20:04] We have a proper motion of do pass by Representative Lundstrum. All in favor, say aye. And opposed no. Bill passes. Congratulations. Members, that is it for today. Appreciate your patience and we are adjourned.
