Business and community leaders gathered Tuesday morning to celebrate the opening of a new Phoenix office for Holtzman Vogel, one of the nation’s most prominent law firms specializing in government, regulatory matters and litigation. The firm’s regional office is located at The Esplanade.

Founded over two decades ago and based in Washington, D.C., Holtzman Vogel has expanded quickly in recent years. In addition to Phoenix and the nation’s capital, the firm also has regional offices in Virginia and Florida.

Managing Partner Jill Holtzman Vogel said the Arizona marketplace is a perfect fit.

“We could have chosen anywhere to expand our reach, but Arizona and the Phoenix metro area is dynamic and fast-growing – just like our team,” she said. “This is absolutely the right place for Holtzman Vogel to put down roots, and we are thrilled to open the doors and get started.”

In addition to leading the law firm, Ms. Holtzman Vogel is a Republican member of the Virginia General Assembly, where she has served since being elected in 2007. Ms. Holtzman Vogel’s extensive experience includes stints as chief counsel of the RNC and deputy general counsel of the Department of Energy during the George W. Bush administration. Following the 2000 general election, she represented the Bush-Cheney campaign in West Palm Beach and Osceola County during the Florida Presidential Recount.

Holtzman Vogel lawyers have decades of combined experience working at the highest levels of government, law and public policy – including in the White House, Cabinet, federal agencies, Department of Justice, Federal Election Commission, Congress, state governments, and at every level of national party committees.

Attorneys in the firm have done work in Arizona for years, but Ms. Holtzman Vogel said the brick-and-mortar location provides a physical platform for further growth and demonstrates the firm’s commitment to the Phoenix market. The new office will be led by resident Partner Christine Fort and Dallin B. Holt, Of Counsel.

“After over 20 years representing high-profile clients in all aspects of political and regulatory law,” Holtzman Vogel said, “we are grateful to now open our fourth office to help support our growing roster of clients in the West.”

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A recent Applied Analysis study finds that Cox Communications has a $5.5 billion economic impact on Arizona each year.  

Cox, the largest family-owned telecommunications provider in the nation, contributes more than $84 million in state and local taxes and franchise fees each year. Additionally, the company and its employees give over $33 million annually  to nonprofits and community programs. 

The company has more than 3,100 employees in Arizona and supports over 11,000 jobs across the state. 

“Upholding the commitment to the communities where we work and live that was made by our founder, Governor James Cox, Cox is proud to have a history of contributing billions of dollars to the Arizona economy through investment and employment,” said Cox Southwest Vice President and Region Manager, Percy Kirk. “We are committed to providing great service and the fastest internet speeds in the state.” 

Pandemic assistance

Last year, Cox launched ConnectAssist, a program for lower-income families to receive discounted modem rental and internet packages, as part of its efforts to create digital equity and ensure all Arizonans are connected to high-speed, reliable internet. 

The Covid-19 pandemic has shown how important connectivity is, as many schools and workplaces moved online. During the pandemic, Cox pledged $60 million to help close the “digital divide”, in addition to offering free and heavily discounted subscriptions for families in need. 

The company operates 43 computer labs across Arizona, as part of a partnership with various nonprofits throughout the state. 

In total, more than 69,000 families with children received assistance from Cox throughout the pandemic.

Rural broadband

The company is also integral to Arizona’s push to fully connect rural and tribal Arizonans with high-speed internet. Over the past couple of years, the state has average of households connected to broadband internet connections, but rural areas continue to lag. 

Gov. Doug Ducey in February announced a $68.1 million investment to expand broadband connectivity along Interstate 40 West from Flagstaff to the California border. 

In March, as part of a $2.7 billion nationwide investment, Cox is bringing high-speed internet and communications infrastructure to the southern Arizona community of Huachuca City and to parts of Sierra Vista.  

Since 2010, Cox has invested $2.7 billion in Arizona’s communications infrastructure and now operates more than 30,000 miles of fiber optic and coaxial infrastructure across the state.

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Sky-high inflation was the topic of ASU Professor Jonathan Barth’s recent talk at the Political History and Leadership program’s Engaging Citizenship Luncheon.

Barth’s presentation addressed the dramatic year-over-year Consumer Price Index increase of 6.8% and explored the differences between the Federal Reserve’s response to the 2008 recession and the central bank’s response to the COVID-19 pandemic. 

While many blame supply-chain shortcomings and pent up demand from the pandemic as causes of inflation in the U.S, Barth is more concerned with what he believes is the Federal Reserve’s extreme monetary response to the pandemic. 

Barth is particularly focused on “”, or QE, a kind of monetary policy where a nation’s central bank purchases long dated government bonds from the nation’s largest banks to increase the liquidity in its financial system. 

When the central bank pursues this kind of monetary policy, which is not uncommon, new money is added to the market, interest rates are lowered, and the central bank’s balance sheet is expanded. 

Barth says that Federal Reserve Chairman Jerome Powell has embraced quantitative easing. 

From 2020 to 2022, Powell has overseen the central bank’s increase in the nation’s money supply (M2) by 42%. Federal Reserve assets are up $4.7 trillion and excess reserves of depository institutions are up $2.2 trillion. From March of 2020 to December of 2021, the Fed’s balance sheet increased from $4.2 trillion to $8.6 trillion. 

“The latest quantitative easing has led to a jump in the supply of money,” Barth said. “Banks did increase reserves, but the money supply in the U.S. economy has increased by 42% in the past two years.”

All this means that the Federal Reserve has purchased trillions in assets to add new money to the economy. But Barth says Powell has done so with newly printed money dollars “created out of thin air.”  

Barth posed this question to his audience: “Why didn’t we see this kind of inflation when quantitative easing was used during 2008-2014 when the U.S. experienced the housing crisis?” 

The 2008 housing crisis began with the collapse of subprime mortgages, which essentially burst what was known as the housing market bubble. Imprudent lending led to a significant number of loans in default. The confluence of these factors led many financial institutions to require a government bailout. Homebuilders, the stock market, as well as the U.S. and world economies experienced the greatest recession of the 21st century. 

From 2008 to 2014, Federal Reserve Chairman Ben Bernanke saw a 37% increase in money supply (M2), a $3.2 trillion increase in Federal Reserve assets, and an increase of $2.5 trillion in the Fed’s excess reserves of depository institutions. 

Barth noted that over these six years, the Fed’s balance sheet increased from $900 billion to $4.1 trillion.

The two periods of QE were different, according to Barth.

“Powell’s Federal Reserve has managed a 37% increase in money supply in roughly one-third the time that it took Bernanke’s Fed to experience a 42% growth in money supply,” Barth said. 

But Barth says that Bernanke never saw the kind of significant inflation that Powell is seeing today. 

provided by the Board of Governors of the Federal Reserve System, shows the difference in uptrend during the two time periods. 

Money Supply (2002-2021)

Besides the difference in duration for the two periods, the QE in 2008-2014 served a different function. 

While most of Powell’s QE has entered the market and has been multiplied by our credit system, the 2008 crisis saw banks and financial institutions hold onto money to shore up their own balance sheets. 

“Unlike the QE under Bernanke, a significant amount of Powell’s quantitative easing has entered the real economy,” Barth said. “Reserve balances are up since the beginning of the pandemic, but only by $2.5 trillion. The Fed’s balance sheet, meanwhile, grew by more than $4.5 trillion.” 

What can the Fed do?

Barth referenced Larry Summers, an American economist who served as treasury secretary, who said, “There have been few if any instances in which a market can fix inflation without a recession.”

The U.S. economy, according to Barth, is a resilient one, however.

“The U.S. is responsible for 25% of the world’s GDP. China is a distant second and we have a very strong economy,” he said.

It is not yet apparent how hard of a landing the U.S. will experience from quantitative tightening, a monetary policy that involves balance sheet normalization and a reduction by central banks in the reinvestment of proceeds from maturning government bonds. 

Barth recommends a financial strategy that “would involve the selling of treasury bonds that have not matured yet, the treasury yield would go up and the U.S. government would have a harder time spending money.”

Barth is skeptical whether the administration will pursue such a policy. 

“The U.S. can right the ship, unfortunately it doesn’t seem like many people are interested in doing it.”

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The Arizona Chamber of Commerce & Industry is applauding Gov. Doug Ducey for dramatically improving Arizona’s tax code by signing into law HB 2822, a bill passed with bipartisan support that simplifies the state’s business personal property tax law. 

The legislation was a top tax policy priority for the Chamber in 2022. 

“Compliance with business personal property tax is notoriously cumbersome, especially for the state’s small businesses who don’t have an army of accountants behind them to navigate the Arizona Department of Revenue’s 76-page manual of instructions that explains how to value everything from farm equipment to laptops.”  

The bill, sponsored by Rep. Jeff Weninger, R-Chandler, sets the valuation factor at 2.5% for business personal property acquired in tax year 2022 and beyond in taxation classes 1, 2, and 6. These classes include commercial & industrial uses, agriculture, and non-profits. 

“Business personal property tax is a form of double taxation,” Seiden said. “Businesses pay sales tax at the time of purchase but remain on the hook to the taxman throughout the life of the equipment. We thank Rep. Weninger for his leadership in introducing legislation that improves the tax climate for businesses of all sizes and for encouraging greater capital investment. On behalf of Arizona job creators, the Chamber extends its appreciation to members of both parties who came together to adopt this wise policy.” 

The Arizona Chamber is the state’s most consistent advocate for pro-economic-growth tax policy, having successfully led efforts to improve the state and federal individual and corporate income tax codes, and the corporate property tax assessment ratio.  

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The state Legislature on Tuesday passed a personal property tax reform with bipartisan support that supporters say will dramatically simplify a complicated section of Arizona tax law. 

H.B. 2822, sponsored by Rep. Jeff Weninger, R-Chandler, sets the valuation factor at 2.5% for business personal property acquired after tax year 2022 in taxation classes 1, 2, and 6. These classes include commercial & industrial uses, agriculture, and non-profits.

Compliance with business personal property tax is notoriously cumbersome. The Arizona Department of Revenue’s Business Personal Property Tax manual includes 76 pages of instructions and 49 pages of tables that explain how to value equipment ranging from cranes to TVs and chairs. 

Chad Heinrich, the Arizona state director of the National Federation of Independent Business, said in a state Senate Commerce Committee hearing earlier this month that it’s an issue of major importance for small businesses. 

“Our members rank it second only to federal income taxes, when they look at tax issues that are important to them,” he said. 

The personal property tax requires businesses to pay taxes on assets like machinery and equipment of all types, ranging from something as large as a farmer’s tractor all the way down to a simple laptop. The personal property tax is on top of the sales tax the buyer pays at the time of purchase. 

The Tax Foundation, a Washington, D.C.-based tax research association, says that unlike real property like a building or land that cannot be easily moved to a jurisdiction with more favorable tax policy, the mobility of personal property makes it more sensitive to taxation. The foundation argues that “personal property taxes distort investment decisions, complicate business tax compliance, and reduce economic growth.” 

Tim Lawless, president and CEO of CREED, a commercial property owner advocacy group, said passage of the bill into law will help make Arizona’s tax code more competitive when it comes to landing investment over other states in the region. 

State Sen. J.D. Mesnard, chairman of the Commerce Committee and a longtime advocate for business property tax reform, supported the bill. 

“Business personal property tax is double taxation. You pay the sales tax when you buy the thing, and then you pay it for holding it,” he said. “So, if you want folks to invest in new capital and all the jobs that creates, you want businesses to locate or expand here, this is not what you want to have.” 

State Rep. Morgan Abraham, D-Tucson, said the state’s personal property tax law is overly complex, especially for small businesses. 

“I own many businesses that involve personal property and the depreciation associated with personal property is terrible – the state laws that we have,” he said in a party caucus meeting where the bill was discussed. “And it’s very confusing and very hard for small business owners to adequately account for the depreciation of personal property.” 

Abraham was one of five House Democrats who supported the bill. 

Bill sponsor Weninger said the legislation would improve the state’s overall business environment.

“It brings new jobs here, which brings new income tax, which brings new people going out and shopping and getting more sales tax,” he said during debate on the bill in the House in response to criticism from state Rep. Mitzi Epstein, D-Tempe, an opponent of tax cuts. “I think this will be a magnet and attract more large businesses, but, also, in the possibility that some businesses replace older assets sooner, as was contemplated, guess what – we get sales tax on a new item. And guess where that sales tax goes. It goes to pay for police officers, firefighters, it goes to pay for teachers, and all those kinds of things. So, to me, that’s a good thing.”

The Arizona Chamber of Commerce & Industry, which made passage of the bill one of its top priorities for the legislative session, hailed Tuesday’s vote.

“We are grateful for thoughtful leaders of both parties coming together to enact a simple and fair policy solution that allows small businesses to spend more time on their operations and creating jobs, and less time with their accountants trying to cut through government red tape,” Chamber Vice President of Government Affairs Courtney Coolidge said. 

Also supporting the bill was a large cross section of the business community, including the Arizona Tax Research Association, the Arizona Chamber of Commerce & Industry, and the Arizona Farm and Ranch Group. 

The bill now heads to Gov. Doug Ducey for his signature.

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Against the backdrop of an anticipated increase in cyberattacks from Russia, the Arizona Junior Fellows hosted an expert panel at Arizona State University on Monday on the future of cybersecurity, as part of their Future of Arizona Democracy series. 

The panel was moderated by President-Emerita of the Arizona Board of Regents and former Arizona Treasurer Eileen Klein. The panel consisted of Arizona Department of Homeland Security Director Tim Roemer; Klon Kitchen, senior fellow at the American Enterprise Institute; Brian Elisco, CEO of Abrazo Health and Gregg Davis, president of Global Market Innovators. 

Russia’s invasion of Ukraine and the retaliatory sanctions and American and western support for Ukraine has American government and private sector leaders on high alert for attacks originating from Russia or from non-state actors sympathetic to the regime of Vladimir Putin. 

On Monday, the White House urged businesses to implement to improve their cybersecurity.

While the federal government can urge the private sector to improve overall cybersecurity, the government’s ability to help is often limited. Intelligence on cyber threats often cannot be shared with those who do not have a security clearance. Additionally, the government generally is not as familiar with companies’ technology and vulnerabilities as in-house cybersecurity teams.

“The federal government is increasingly a stakeholder in cybersecurity and not the stakeholder in it.” Kitchen said. “For example, Google has done the same if not more than the government for preventing cyber-attacks in Ukraine.”

Kitchen explained that even as cybersecurity becomes more important, it is important that the government does not overreach its authority. 

“We don’t want to just be secure. We want to be secured and free,” he said. “We want to make sure that we maintain the things we’re trying to keep secure and not give them away in the name or security.”

Arizona is one of two states with a Department of Homeland Security. Part of AZDHS’s responsibilities are to ensure the state government remains protected from cyberattacks and helps private sector businesses improve their resilience. 

“There’s not one specific piece of government that can handle this on their own,” Roemer said. “The best way to combat this is through partnerships between the public and private sector.”

Elisco praised Arizona’s approach to cybersecurity. 

“What surprised me the most coming into the state of Arizona was how accessible our government officials really are and how open they are to collaboration,” he said.

However, Elisco added that cyberattacks are not always complicated attacks. 

“Some of the largest cyberattacks in healthcare are some of the simplest emails that look like they were sent internally,” he said.

The panel concluded by discussing various cybersecurity measures that the public can implement: enable two-factor authentication, change passwords, think twice about clicking on links in emails, and adopt an attitude of “see something, say something.”

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“The state of manufacturing in America is resilient,” National Association of Manufacturers President and CEO Jay Timmons said last Thursday at his annual State of Manufacturing address, which he delivered at the Chandler-Gilbert Community College Williams Campus in Mesa.

Timmons’ speech touched on several key issues concerning the manufacturing industry, including the need to inspire the workforce of today and tomorrow as well as enacting sound public policy.

Each of the past nine months manufacturers across the country have had more than 800,000 open jobs, and manufacturers’ need to fill critical positions has only grown more acute according to Timmons. But, he said, manufacturers are not just looking for new employees.

“Manufacturers are saying more than ‘Help Wanted,’” he said. “We’re saying, ‘Creators Wanted.’”

In this search for creators, the National Association of Manufacturers has begun an ambitious mission to tackle the current workforce crisis through its Creators Wanted campaign. 

In the next few years, the campaign aims to reduce the skills gap by 600,000, increase the number of students enrolling in technical and vocational schools or reskilling programs by 25% and increase the positive perception of the industry among parents to 50% from 27%.

How do you protect and strengthen the workforce of a $2.6 trillion dollar industry? Timmons stressed the importance of enacting smart policy in areas like energy and taxation.

Timmons cited last year’s passage of the bipartisan infrastructure bill, which he called “the biggest deal for tour infrastructure since the Eisenhower presidency.” 

Timmons also spoke about the importance of passing immigration reforms that allow the U.S. to continue to bring in talent to meet the country’s economic needs and avoid losing talent to other countries.

With more than 11,000 job openings in Arizona’s manufacturing industry in the first 45 days of 2022, workforce development will be a major factor driving the state’s manufacturing growth. 

Manufacturing has reached record levels of growth as new companies relocate to Arizona, while existing companies expand and hire additional workers. Between 2016 and 2020, Arizona ranked No. 2 in the nation for the rate of manufacturing job growth (EMSI). 

Timmons also cited the importance of pro-growth tax policy to manufacturers.

“Pivot Manufacturing in Phoenix is a great example. CEO Steve Macias says that the business was stagnating in 2017, but after tax reform, everything changed,” Timmons said. “The company was able to invest in advanced manufacturing equipment, which meant they could recruit a math- and tech-focused workforce, establish a new apprenticeship and mentorship model and set themselves on a strong growth trajectory.”

Timmons also discussed the importance of the American system of government and the country’s values that allow manufacturing to thrive. 

“Manufacturers believe in—and the NAM works to advance—four core values that have made America exceptional and that keep our industry strong: Free enterprise, competitiveness, individual liberty and equal opportunity,” he said. “Underpinning those values, the foundation of it all, is our constitutional republic, our democratic system.”

NAM leadership, members and prominent guests are meeting this week in Scottsdale for the organization’s spring board meeting.

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With four electric vehicles registered in the state for every 1,000 Arizona residents, Arizona ranks nationally for having the most registered electric vehicles.

The state is also becoming an EV sales and manufacturing hub. Lucid, Polestar, Rivian, Tesla, and Atlis Motor Vehicles have all set up operations in the state.

On September 28, 2021, Lucid motors rolled out an , all-electric vehicle. The Lucid Air Dream Edition has about 1,111 horsepower and has a performance model offering about 470 miles in range.

Atlis Motor Vehicles

Atlis Motor Vehicles, a startup based in Mesa, is producing electric work trucks. These trucks are expected to sell for about $45,000 with a range of about 300 miles with the capability to tow up to 35,000 pounds. Atlis is also preparing to have additional enhancements that could sell for up to $75,000.

Atlis Motor Vehicles recently launched a crowdfunding campaign to raise capital and expand their operations. 

“2021 was an incredible year for us and I truly believe we’ve just embarked on an even more exciting one,” Atlis Motors CEO Mark Hantchett wrote in a . 

“We have made leaps and bounds in the energy technology space with so little compared to larger companies around us. We have secured $300+ million in future revenue from battery technology alone and over 24,000 contractual orders for trucks around the world. Now, 2022 is all about growth. This year we become a revenue-generating company — an unheard of scenario for a startup in our position.”

This is not the first time Atlis has crowdfunded to raise capital. Previously they raised about $22 million from . As of February 17, 2022, the company has a little more than $2.8 million from 1,855 investors. Atlis opened its capital-raising effort to the public. Investors must purchase at least 16 shares at $15.88 for a minimum investment of $254.08.
Atlis plans to use the capital to help further to create a new truck called the XT that targets customers in the agriculture, construction, and utility industries. They plan to hire more engineers, buy more battery testing equipment, expand sales programs and finalize the production-level design for the XT.

Statewide benefits 

The Southwest Energy Efficiency Project (SWEEP) conducted to illustrate the air quality and economic benefits of electric vehicles in Arizona. They found that EVs provide air quality and economic benefits to Maricopa County and the state, concluding that the state should consider policies that promote the manufacture and sale of more electric vehicles.

“We get clear skies. No oil changes, no muffler work, no transmission, faster acceleration. No smog or smog tests,” Jim Stack, president of the Phoenix Electric Auto Association “It’s priceless.”

If more Arizonans make the choice to transition over to electric vehicles there could also  be a large . Depending on the rate and price of gasoline, SWEEP found in its study the total economic benefit to Arizona in reduced fuel costs could be between $75 million and $489 million per year by 2030. 

Arizona laws and incentives

Arizona offers to electric vehicle buyers. These laws and incentives are for specific alternative fuel vehicles (AFV). A vehicle qualifies as AFV if it uses propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas.

Another for electric vehicle owners is the High Occupancy Vehicle (HOV) Lane Exemption. The Arizona Department of Transportation (ADOT) allows individuals who have an AFV with an AFV license plate to use HOV lanes, regardless of the number of occupants. Individuals may also park without penalty in parking areas that are designated for carpool operators.

APS offers vehicle supply equipment, installation, maintenance, and educational service. They do this through its workplace, fleet, and multi-unit dwelling customers through the Take Charge AZ pilot program. 

SRP offers residential customers who purchased or leased a plug-in electric vehicle a $1,000 rebate.

Arizona, Wyoming, Utah, Nevada, New Mexico, Colorado, and Idaho signed the (REV) West Plan. By signing this plan Arizona committed to the following:

• educating consumers and fleet owners to raise EV awareness
• reduce range anxiety
• increase EV adoption
• coordinate on EV charging station locations to achieve a consistent user experience, use and promote the REV
• Identify and develop opportunities to incorporate EV charging stations into planning and development processes such as building codes, metering policies, and renewable energy generation projects
• Encourage EV manufacturers to stock and market a wide variety of EVs
• Identify, respond to, and collaborate on funding opportunities to support the development of the plan
• support the build-out of direct current (DC) fast-charging stations along EV corridors through investments, partnerships, and other mechanisms.

More about Arizona’s EV laws and incentives can be found

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It’s not business as usual at the Arizona state Capitol.  

Several bills have been introduced this session that fit a common theme: more government intrusion into private employers’ workplaces; new regulations undermining the ability of job creators to set their own policies; and the threat of costly litigation, stiff financial penalties or even criminal charges against employers just operating in the best interest of their employees and their businesses.  

Put more directly: these measures seek to punish employers who require COVID-19 vaccinations as a condition of employment.  

I appreciate that policymakers can have good-faith differences of opinion about vaccine mandates.  following a move by the Biden administration to implement a “vaccine-or-test” mandate without consulting with the nation’s business community or governors. Job creators should have the authority to set their own workplace policies. Allowing these federal mandates to stand would have set troubling precedent for future and more cumbersome government overreach on private businesses.  

The Chamber applauded the U.S. Supreme Court’s decision last month to block the administration’s rule, and free enterprise advocates in Arizona and across the country collectively agreed: this ruling was a win for private employers and their authority to run a business without the heavy hand of government getting in the way.  

Now, many of the same lawmakers who claim that government has no business dictating the workplace policies of private employers are leading efforts at the state Legislature that would do exactly that.  

Many of these measures are being pushed through the Legislature under the guise of religious liberty, medical freedom and personal choice. , Arizona businesses would be on the hook for $500,000 in damages – at a minimum – if they refuse a religious exemption from an employee who later experiences “significant injury” as a result of the vaccine (never mind that the bill never defines “significant injury”). 

I want to be clear: if businesses are violating religious freedoms, they are already breaking existing law, and they should be held accountable. If employees are injured as a result of a workplace policy, they should seek recourse and be appropriately compensated.  

We already have longstanding federal and state laws in place to address religious discrimination and workers’ compensation. We should not be creating new avenues to sue employers.  

Meanwhile,  stipulates any business that terminates an employee for not receiving a vaccine as a condition of employment would either have to pay that individual an annual salary’s worth of severance, or rehire the employee at the same or similar position.  

Not only does the language in this bill apply broadly to any separation from employment – not just wrongful termination – it also doesn’t account for the fact that some industries remain subject to federal vaccination requirements. Under this legislation, these businesses would be forced to choose between complying with federal law or state statute – an impossible “sued-if-you-do, sued-if-you-don’t” scenario. 

Just last year, the Legislature enacted commonsense liability protections for employers, protecting Arizona businesses from meritless litigation and rightfully recognizing the appropriate avenue for addressing employee claims was through Arizona’s workers’ compensation system. The Chamber and the broader business community strongly supported that bill. 

Ironically, some of the same lawmakers who helped lead those efforts are championing legislation that encourages more lawsuits and more government intrusion. In some cases, one might think these bills were drafted by labor unions or trial lawyers, not legislators who purport to be champions of employer freedom.  

Whether it’s the federal government telling businesses they must require vaccines or the state Legislature telling businesses they can’t, a mandate is a mandate. And we will continue to communicate to lawmakers of both parties that private sector job creators will resist government overreach – regardless of whether it’s coming from Washington, D.C. or the state Capitol. 

Danny Seiden is president and CEO of the Arizona Chamber of Commerce & Industry.

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The state Senate on Wednesday passed two bills to rein in frivolous lawsuits, with bipartisan support for both.

SB 1157, sponsored by Sen. Vince Leach, R-SaddleBrooke, would curb a trial lawyer strategy of suing several parties in personal injury lawsuits related to asbestos exposure, even if those potential defendants’ connection to an injury was negligible. 

“This is a commonsense bill,” Leach said when the bill was heard in the Senate Judiciary Committee. “We have a problem in this particular area where over-naming in a lawsuit creates more liability.” 

Mark Behrens, who testified in the committee on behalf of the United States Chamber of Commerce, said asbestos litigation over the last several decades has devolved into an endless search for a solvent bystander. 

Behrens said the bill “simply requires the plaintiff to disclose upfront, the who, what, why, and where of their injury.” 

The legislation would accelerate the disclosure of information and make sure that innocent companies are not named erroneously or frivolously, which currently leads to a dismissal rate of more than 90% during the discovery period of the lawsuit. Of the companies dismissed from the suits, nearly all of them were not found to have any connection to the damages or injuries claimed by the plaintiff. 

The erroneously identified companies, however, must cover without reimbursement the cost of defense counsel during the early stages of litigation before they are dismissed. 

In one example cited by Behrens, Marine One, a steel company named in more than 182,000 different personal injury asbestos suits, was sued in cases they never should have been named in. While their product was never found to have harmed people, they were forced to file for bankruptcy due to the cost of defense attorneys. 

The bill passed the Senate 18-12.

The Senate on Wednesday also passed SB 1092, another bill by Leach, that places limits on product liability lawsuits brought against product sellers who find themselves the target of product liability lawsuits despite not having made any alterations to a product or doing anything else that could have caused an injury to the plaintiff.

“SB 1092 would protect retailers and other businesses from unfair product liability lawsuits while maintaining the right of the consumer to sue other parties in a product’s chain of distribution,” said Chad Heinrich, Arizona state director for the National Federation of Independent Business, one of the bill’s supporters. “The current law in Arizona places the burden of product liability at the doorstep of the retail business owner. This is unfair since most issues with products should be addressed through the manufacturer of the product, not the store owner who sold the product. SB 1092 would protect sellers of a product from the unfair financial burden of expensive attorney’s fees and the time required for litigation—simply to prove their lack of liability.”

The bill passed the Senate 17-12.

Leach said the state’s legal environment is important to its overall economic development prospects.

“I am proud to sponsor these two bills to promote a better legal environment in Arizona, which will only help our state attract jobs,” Leach said. “When trial lawyers bring bogus lawsuits, it’s job creators who pay the price by spending more time and money on defending themselves than on running their business.”

The Arizona Chamber of Commerce & Industry, the state’s leading advocate for reforms to the civil justice system, applauded Leach and the Senate votes.

“Sen. Leach and the senators from both parties who supported these bills have our sincere thanks,” Chamber spokesperson Annie Vogt said. “Unfortunately, we’ve seen several bills introduced this session that encourage litigation against employers, which the plaintiffs’ bar would be happy to see become law. Thankfully, Sen. Leach continues to stand up for job creators.”

Both bills now head to the House of Representatives.

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