There has been a lot of political talk about fairness lately, with the notion that businesses and consumers are often on opposite sides.  Really?  There are steps Missouri lawmakers can take that would be fair and beneficial to both, and maybe a boost to the faltering state economy.

In its effort to change the business climate in Missouri, the Missouri Chamber of Commerce and Industry has identified three broad policy initiatives for the current legislative session. According to Chamber president Daniel Mehan:

“Among the list are issues left unresolved last legislative session that will be advocatied (sic) by Missouri’s top business associations and employers: workers’ compensation reform, employment law, and tort reform,” Mehan says.

Within the context of these broader policy initiatives, the following topics are among the most important issues the Chamber addressed. As briefly discussed below, each deserves careful consideration as a reform measure that can foster economic growth in Missouri.

1. Making Missouri employment discrimination law consistent with federal law. Businesses face confusing and parallel obligations under federal and state laws. Making Missouri law consistent with federal law reduces confusion and lowers compliance costs for businesses, which in turn lowers the cost of doing business in Missouri. Consumers and businesses then share the benefits of lower costs.
2. Capping damages in employment discrimination cases. Caps make future business costs more certain and predictable. Although the plaintiffs’ bar does not favor this idea, no one is closing the doors to the courthouse. Policymakers should carefully weigh the benefits and costs and make the decision that best advances business competitiveness and the administration of justice.
3. Exempting co-employees from liability for injuries sustained in workers’ compensation cases. Currently, employees injured by co-employees at work may sue the latter for damages outside the workers’ compensation system. This gives rise to costly disputes among employees, disruptions in the workplace, and an increase in employer costs (not always monetary). Also, multiple lawsuits for the same injury may occur as the injured employee sues both his employer in workers’ comp and his co-employee in circuit court. Time, money, and effort may be economized by requiring injured employees to maintain a single suit in a workers’ comp venue.

Again, these are but a sample of current issues impacting the business climate in Missouri. These issues are important in that each imposes additional costs on businesses in Missouri. As a result, consumers and households may suffer because they will face higher prices, fewer goods, and lower employment. Remember, we are all in this together, despite what some others may say or imply. Isn’t it possible that sometimes what is good for business is good for the people?

The Missouri Supreme Court recently heard oral arguments in American Federation of Teachers v. Ledbetter. At issue is whether a public school district has a legal “duty” to collectively bargain in “good faith” with a teachers’ union. Currently, districts typically recognize and meet with their teachers’ designated representative, but are under no legal obligation to agree to specific proposals that the union proffers.

In its opinion leading to the supreme court hearing, the intermediate court of appeals noted the following:

. . . no Missouri court has expressly interpreted Article I, section 29 [of the Missouri Constitution] to contain a duty of good faith . . .

If the Court, in a fit of judicial activism, writes a “duty to bargain in good faith” standard into the state constitution, school districts, once vested with substantial discretion from the legislature to manage their affairs, will suffer tremendously. For example, rejections of union proposals will now spawn threats of lawsuits. Districts will hire attorneys to assess the liability risks of decisions once left to the discretion of the districts’ officials. Good faith, in this context, is an invitation to litigate. And litigation diverts scarce resources and money from the districts’ core mission: to educate our children.

Interestingly, the Missouri Legislature has rejected five attempts to statutorily adopt a good faith standard (see footnote 4 in court’s decision). Haven’t the people spoken through their elected representatives? The Court should heed this message and reject a duty to bargain in good faith standard for Missouri’s public school districts.

The Show-Me Institute has been one of the leaders in urging Missouri’s attorney general, Chris Koster, to join the lawsuit against the health care reform bill, so we are pleased to note that he finally took action this morning. Better late than never. But regrettably, the amicus brief that Koster filed in the multistate lawsuit only goes halfway.

Although Koster says that the individual mandate is unconstitutional, he also says that it’s severable from the rest of the law. In other words, Koster believes that the federal health care law can remain in place even though the individual insurance mandate can be struck down.

Judge George Vinson went further in his ruling. He ruled that Congress does not have the power to force people to buy something that they don’t want, and therefore the entire law must be declared void.

I understand that many people object to the regulation because of the individual mandate. However, there are additional reasons to oppose this law in Missouri. With or without the individual mandate, the PPACA will raise the cost of health care in Missouri by increasing mandates to cover specific conditions and expanding the eligibility requirements for Medicaid. This component of policy will burden state budgets and threaten state sovereignty. In order to come up with the cash, Missouri will have to raise taxes, cut services, or both.

Koster’s decision to file an amicus brief may be partly due to the Show-Me Intitute’s prodding. Encouraging him to join the lawsuit is a topic that we’ve tracked closely. Show-Me Institute staff have released an open letter, an editorial, an “urgent call for action” via email, and several blog posts on the subject.

Kansas City’s Pitch has a detailed account of a legislative town hall forum in northern Missouri regarding the issue of corporate hog farms. Sen. Brad Lager has introduced a bill limiting the liability of these types of large-scale hog farms, one of which is planned for his district. Many of his constituents near the proposed hog farm (aka, confined animal feeding operation, or CAFO) are opposed both to the legislation and to the hog farm itself. Right off the bat, I am going to admit that I don’t really know where I stand on this particular issue.

We have debated the important issues of corporate farms, local land-use controls, and tort reform here at Show-Me Daily before. My own views favor general tort reform (as passed in Missouri in 2005), and the power of local communities to pass zoning regulations (although I would be perfectly happy to live somewhere without zoning), but generally oppose special laws. In this case, those special laws could be seen as either tort limitations or land-use contraints involving only large-scale animal farming operations.

The theoretical free-market solution here does not involve either zoning  restictions or tort limitations. On the other hand, the practical solution probably does not involve them, either. If an area does not have zoning, or is zoned for industrial uses, a CAFO should be able to open. If that CAFO then harms its neighbors, its owners should be held responsible under the same civil litigation rules that all businesses face. Regular readers know that I generally favor practical solutions over theoretical ones, but it’s nice when they fit together.

It may seem that I have arrived at a conclusion despite my initial statement that I don’t know where I stand. Not really, though — this is a very tricky issue, and I’d love to read comments from people with firsthand knowledge of these cases. I don’t want to see businesses driven from Missouri by nuisance lawsuits, but, from what I have read, I don’t see these lawsuits as petty or improper. I think this was one of the best points in the article:

A grad student pointed out — correctly — that the innovations in odor-reducing technology are the direct result of litigation. Companies like Smithfield didn’t start spending money to reduce the stench of tens of thousands of hogs and their waste until the threat of legal action provided incentive to do so [...].

If the company in question is improving its production process, it won’t be nearly as affected by the lawsuits in the future. That is something we can all root for.

Because most of the nation is focused on recent union issues in the Badger State, many people might overlook the fact that the Gopher State is also engaged in a healthy debate. State lawmakers in Minnesota are discussing a proposal to prevent people from suing food companies — including fast-food chains — for making them fat. According to an Associated Press article:

The bill would prevent consumers from suing the food industry for weight gain, obesity and health problems caused by long-term consumption of fattening foods and non-alcoholic drinks such as soda.

In general, I believe that the less government does, the better. However, encouraging tort reform is not inconsistent with a free-market philosophy (we discuss the issue often on Show-Me Daily), and interpreting this policy as simply another government restriction is an oversimplification. Reducing frivolous lawsuits will have positive consequences for companies and their consumers.

One possible benefit of this policy is that it will encourage people to take ownership over their own health, encouraging personal responsibility and limiting government dependence — things that Free Marketeers like me support (e.g., health savings accounts, limiting the welfare state, etc). Americans tend to blame their weight problems on everyone except themselves, but this policy would limit their ability to blame food companies. As I always say, personal responsibility is the best medicine. As one state legislator puts it:

“Let’s say I choose to eat 100 bananas and my stomach ruptures,” said Rep. Glenn Gruenhagen, a Glencoe Republican. “That’s not the banana growers’ fault.”

It’s also possible that more businesses will locate to the state because they will no longer fear a barrage of frivolous lawsuits. Frivolous lawsuits increase the cost of doing business in the state, which discourages companies from locating there.

Additionally, perhaps this policy would result in lower food costs, much like medical malpractice reform leads to lower health costs. In the health care industry, medical providers practice defensive medicine; I wonder if an equivalent practice exists in the fast food industry?

Lawmakers in Missouri would be wise to watch how Minnesota fares under this policy, if and when it is enacted. As long as the measure doesn’t restrict consumers from suing food companies when they incur actual harm (e.g., health code violations), it will likely benefit the state.

On Wednesday, lawyers from the Institute for Justice will argue before the 8th U.S. Circuit Court of Appeals in Saint Louis on behalf of Jim Roos, whose anti–eminent domain mural has become familiar to most of us in the Saint Louis metro area.

Roos painted the mural to protest the city’s decision to use eminent domain to seize numerous properties from his low-income housing nonprofit organization, Sanctuary in the Ordinary. After Roos completed the mural in 2007, the city cited him for violating its sign code and ordered Roos to remove the mural. Roos refused, and fought the case in federal court on First Amendment grounds. Last March, a U.S. District Court ruled against Roos, remarkably claiming that the mural would be legal if it were devoid of political content, like a fleur-de-lis or a Cardinals logo. This turns the First Amendment on its head, because it was explicitly added to the Constitution with the intent of protecting political speech.

The case also illustrates the unity of property rights and civil rights. If the government can legally regulate away Roos’ most effective platform, it will have the same chilling effect on free speech as direct censorship. Similarly, freedom of religion is useless if zoning laws prevent groups from building places of worship; freedom from search and seizure only applies if your home is your castle; and freedom of the press will not get you very far if the government can block access to all the presses. Many people think of property rights and civil rights as fundamentally different things, but if the government places enough restrictions on how you can use your property, it must necessarily interfere with our fundamental political rights. Let us hope that the appeals court will understand this connection and allow Roos to speak his mind.

Headline allusion here.

The judge in the multstate lawsuit struck down the individual mandate component of the federal health care regulation.

Twenty-six states were party to the lawsuit, but Missouri was not among them. Even though Missourians signaled their overwhelming opposition to the health care regulation by passing Proposition C, Missouri’s attorney general, Chris Koster, didn’t jump on board.

This ruling is good news for Missourians. If the Supreme Court upholds this ruling, Congress will not be able to force people to buy something that they don’t want.

Hopefully, this foreshadows success for Missouri Lt. Gov. Peter Kinder’s own lawsuit challenging the health care reform law. So far, two federal judges have upheld the law, but two have ruled that it is unconstitutional (a lawsuit in Virginia, and now this multistate lawsuit in Florida).

We have followed the Florida lawsuit very closely at the Show-Me Institute, and we will continue to track it as it progresses through the courts.

The full text of the Florida ruling is available online.

Missouri Attorney General Chris Koster has not yet signed onto the multistate lawsuit challenging the federal health care law. At least he is beginning to talk about the issue, however. From an article by Brian Hook at the Missouri Watchdog:

Acknowledging the will of the state legislature, a vote by the people, and his fiduciary duty, Missouri Attorney General Chris Koster inched closer to challenging the constitutionality of the federal health care law.

“We haven’t finally formulated what the plans are,” said Koster, following a question by Missouri Watchdog about his plans regarding the health care law during a press conference Tuesday in St. Louis.

Twenty-six states have already joined. Why hasn’t Missouri yet? What’s the delay?

Not only have a majority of Missouri voters signaled that they’re against the health care law, lawmakers in Jeff City have, too. The Missouri Senate recently filed a resolution, SR 27, encouraging Attorney General Chris Koster to join the multistate lawsuit in Florida that challenges the federal health care regulation. This resolution is similar to the one passed recently by the Missouri House, HR 39. Practically the only person who hasn’t demonstrated interest in joining the lawsuit is Koster.

This is an issue that we have been tracking very closely at the Show-Me Institute.

Critics argue that joining the lawsuit will be a waste of time and money for Missouri. This argument is not factually true; Missouri will incur few costs by joining. If Koster decided to join the lawsuit, the only cost for the taxpayers of Missouri would be the time it takes for somebody in the attorney general’s office to write the letter, along with the price of a postage stamp — if that.

Although states are free to help offset the costs of the lawsuit, it is completely voluntary. Furthermore, the maximum amount that they may contribute is $5,000. According to the 2010 U.S. Census, there are 5,988,927 individuals living in Missouri. If they were to split this sum equally, each person would pay less than nine hundredths of one cent to fund Missouri’s contribution to the lawsuit. That’s 9 cents for every 100 residents. Decrying the cost of the lawsuit is a smokescreen argument.

Koster would be wise to free-ride on the Florida lawsuit. Missourians have nothing to lose by joining the lawsuit, but they have much to gain, such as freedom in their health care decisions.

Yesterday, with a vote of 115-46, the Missouri House passed a resolution encouraging Missouri to join the multistate lawsuit in Frorida. This lawsuit challenges the federal health care law and encourages Congress to repeal it.

Encouraging Attorney General Chris Koster to join the lawsuit is a topic that we’ve been tracking closely at the Show-Me Institute. Executive Director Brenda Talent released an open letter to the attorney general on Thursday. I discussed the topic in an editorial that published in the Springfield News-Leader, on the Mike Ferguson show on the Eagle 93.9 FM in Columbia, and in some posts on the blog. The Show-Me Institute also released an “urgent call for action” via email last week.

With the passage of Proposition C, Missouri voters were the first to oppose this attempt by the federal government to take control over health care, and they deserve to have an attorney general that listens to them. The precedent that Missourians set by approving Proposition C could be continued if Koster joins the lawsuit. The fact that the Missouri House has passed a resolution is another signal that Missourians oppose the health care law.

Other states have recently jumped on board, including Wisconsin, Ohio, Wyoming, and Kansas. There’s no compelling reason why Missouri should not be on the list.

I thought that the Missouri Department of Economic Development (DED) could sink no further. After all, the agency recently awarded tax credits to a man who pleaded guilty to passing bad checks, and has been scolded by the State Auditor’s Office for (perhaps accidentally) pulling numbers out of thin air that happen to overstate the economic benefits of a particular tax credit project.

But the DED has outdone even itself. This week, the St. Louis Post-Dispatch reported that the agency had awarded $8 million to a redevelopment project that a court judge has ruled no longer exists.

NorthSide Regeneration LLC, the company behind an enormous and ambitious project slated to occur in north Saint Louis, received the $8 million. However, the tax credits that the DED awarded must be tied, according to state statute, to a “redevelopment agreement.”

State statute specifies that such a redevelopment agreement exists only when a city has selected a developer (in this case, NorthSide), by passing an ordinance to award additional local tax incentives to the company. Unfortunately for the NorthSide company, although city alderman passed such an agreement, it was thrown out by a judge in July — so, according to the statute, NorthSide simply isn’t entitled to the money. The judge, in his ruling, stated:

FURTHER ORDERED, ADJUDGED AND DECREED that defendants [including NorthSide and the city of Saint Louis], their officers, agents, employees, and all persons acting in concert with them with notice of this Order and Judgment be and they are hereby permanently restrained and enjoined from implementing Ordinances 68484 and 68485 [the city ordinances that authorized the redevelopment agreement] of the City of St. Louis, including but not limited to implementing any special allocation fund pursuant to said ordinances, transferring revenues to or from any fund pursuant to said ordinances, or otherwise taking action under said ordinances.

I find these lines from the Post-Dispatch to be sadly amusing:

The credits, which come on top of $20 million the developer received in 2009, were authorized under the Distressed Areas Land Assemblage program. Economic development officials said that after McKee met all the law’s requirements, they had no choice but to issue the credits.

“We have to abide by the statute as it stands and as it stands, there are no safeguards for taxpayers,” said agency spokesman John Fougere. “We thought it was very important to demand the protections we secured in this agreement.”

Of course, what Fougere fails to mention is that one easy way of safeguarding Missouri taxpayers is not to award $8 million to a redevelopment agreement that has been thrown out by the court. Instead, the department awarded the tax credits, but with a specification that if a court were to throw out the redevelopment agreement again, the company has to give back the money.

In essence, the DED has awarded NorthSide an interest-free loan, just in case the company manages to prevail in court at some point in the future. I admit that I am flabbergasted as to why the DED would do this. Surely, DED employees wouldn’t ignore their statutory obligations?

A possible reason is that because NorthSide is in the process of appealing this ruling, the DED viewed the judge’s ruling as not final — it could be overturned. However, it is strange that the DED, especially in light of recent public scrutiny, would not take the more prudent course of awaiting the result of the appeal before awarding tax credits.

Not only does Missouri desperately need a thorough, critical review of tax credit programs in general, it is clear that the workings of the DED need to be examined. This agency awards hundreds of millions of dollars each year, and is neglecting its duty to safeguard taxpayer money.

When they passed Proposition C last August, Missourians demonstrated their overwhelming opposition to the federal health care reform law. They voted for freedom and against federal takeover of their health care. Although Prop C may prove to be more ceremonial than legally effective, it established the state of Missouri as a bellwether for health care reform. Just last month, a federal judge in Virginia struck down the individual mandate component. Because the health care package that President Barack Obama signed into law last year hasn’t yet been overturned, it’s important that Missourians continue fighting to restore freedom in health care.

Currently, a bipartisan group of more than 20 state attorneys general and elected officials are asking a judge in Florida to invalidate the federal health care reform law. Missourians should encourage their attorney general, Chris Koster, to join this multistate lawsuit, which resumes on Jan. 10. In my view, the precedent that Missourians set by approving Proposition C could be continued if Attorney General Chris Koster joined the lawsuit.

The following are some facts related to the lawsuit:

• Twenty attorneys general are challenging the Affordable Care Act (ACA), the health care reform law that Congress passed earlier this year, in a courtroom in Pensacola, Fla. They are arguing that the law is unconstitutional and would set a dangerous precedent.
• The case involves two arguments. The first is that the requirement for all Americans to purchase insurance is unconstitutional. The second is that expanding the eligibility requirements for Medicaid, the joint federal-state health insurance program for the poor, threatens state sovereignty and will burden state budgets.
• The states party to the suit are Florida, South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington, Idaho, South Dakota, Indiana, North Dakota, Mississippi, Arizona, Nevada, Georgia, and Alaska. Additional states, such as Wisconsin, are considering joining.
• Americans are divided in their support for the health care legislation. Only 42 percent of Americans say they have a generally favorable view of the law, while 41 percent say the opposite, according to a poll by the Kaiser Family Foundation in December 2010.

Missouri voters were the first to oppose this attempt by the federal government to take control over health care. As Missourians, we live in a democracy. We should have a government that represents the demonstrated wishes of Missourians in this matter, thereby advancing liberty with responsibility by promoting market solutions for health care policy.

I will discuss the effort to encourage Attorney General Koster to join the Florida lawsuit on the Mike Ferguson show on the Eagle 93.9 FM tomorrow, Jan. 6 at 5:00 p.m in Columbia. I encourage our readers to tune in or listen online.