Senate Democrats moved in lockstep today to pass a bill that critics say will make it easier for trial lawyers to sue homebuilders, driving up the price of housing. Republicans fought unsuccessfully to amend the measure to limit the expected flood of frivolous claims.

“There are only two things that bill will do,” said Sen. Josh Penry, R-Fruita. “It will push the cost of buying a house even higher, and it will make a couple of trial lawyers very rich.”

After getting a late start, House Bill 1338 has been slowly moving through the legislature, on mostly party-line votes. The bill prohibits builders from offering contracts to buyers that include liability waivers for a variety of complaints, including noise complaints in mixed-use and transit-oriented developments. 

Critics of the bill argue that it will drive up the cost of new homes.

“This bill is ruinous to the building industry, it is very healthy for the suing industry,” said Sen. Shawn Mitchell, R-Broomfield.

Mitchell also argued that increasing the cost of housing makes it harder for low-income families to become homeowners.

“Homeownership is the single most important step for moving from the working-class to the middle-class,” said Mitchell in comments after the debate. “Why would we make that harder for people?”

Last month, testimony before the committee pitted prominent Denver-area trial lawyers Scott Sullan and Cass McKenzie against engineers and business owners and even the members of an Aurora homeowners association who complained about the lawyers – rather than the builders – in a lawsuit over construction defects.

Sullan and McKenzie, whose firms represent construction-defects plaintiffs nationwide, pumped hundreds of thousands of dollars into a failed, 2004 statewide ballot issue to remove limits on lawsuits against homebuilders. Sullan’s role in Amendment 34 earned him the moniker “one-man suing machine” from Evan Dreyer, who at the time ran the campaign against that proposal and now serves as spokesman for Gov. Bill Ritter.

Penry led an attempt on the Senate floor to amend the bill, so that mixed-use developments would be exempted from the bill.

“We debate affordable housing a lot in this body, and how we can make sure there are sufficient housing options out there so that the good folks of Colorado, especially on the lower end of the wage scale, can live their American dream,” said Penry. “This amendment would take that particular class (of housing) out of the bill.”

Lawsuits in mixed-use developments frequently are based on noise complaints from commercial enterprises in the building or nearby public transit, which critics point out were openly obvious to tenants before moving in to the development.

Sen. Chris Romer, D-Denver, agreed with Penry’s concern. “I had some real concerns, particularly concerning the transit-oriented development,” he said.

“I also took the time to call the two major litigants in the area, and both of them gave me their word,” he continued. “The proponents of this bill have assured me that this will not affect transit-oriented development.”

“I’m glad that The Suing Machine gave you his word,” Penry responded. “I’m not sure whether that would be a reliable predictor of whether or not it will happen.”