House Economic Matters Chair Del. C.T. Wilson (D-Charles) said he was willing to consider ways to limit the state’s liability for payments to settle sex abuse allegations, after lawmakers were warned this week about an “enormous” potential liability from thousands of claims. (Photo by Bryan P. Sears/Maryland Matters)
The lead sponsor of a 2023 law that vastly expanded the ability of child sex abuse victims to sue their abusers and the institutions that protected them said Tuesday he is open to finding ways of limiting the financial jeopardy faced by state government.
Negotiations to settle allegations against the state by 3,500 people could add additional strain on a budget that already required $3 billion in proposed cuts and tax changes to balance. Del. C.T. Wilson (D-Charles) said Tuesday that he has concerns about the looming potential costs — ranging from hundreds of millions to possibly billions — facing the state.
“The goal was never to bankrupt the state, obviously,” Wilson said of the 2023 law he sponsored. “I made it clear every time I testified, it wasn’t about money. There’s no amount of money that’s going to undo the pain that these individuals have gone through.”
Wilson, who is also the chair of the House Economic Matters Committee, said he was recently contacted by Gov. Wes Moore’s (D) office about the issue. A spokesperson for the governor could not immediately comment and noted the matter was the subject of ongoing negotiations.
Legislative budget analysts Monday warned members of the House Appropriations and Senate Budget and Taxation committees about potential costs to the state of settlement negotiations with lawyers representing the 3,500 people.
“This is potentially an enormous liability to the state,” David Romans, a budget analyst, told the committees.
Senate President Bill Ferguson (D-Baltimore City) said Tuesday the initial tranche of cases are just the first ones to be vetted. He called the allegations of abuse of children in state facilities a “horrific reality.”
“We spent many years warehousing children in facilities in which, now, today, the chickens have come home to roost,” Ferguson said. “These are very real costs associated with very real, horrific scenarios of what’s happened to young people who have been violated when in the state’s custody. And so, we have to figure out a way to make it right.
“We have to do it, obviously, in a way that’s sustainable and is practical and thoughtful. And we’re working closely with the attorney general’s office to understand how we can do this in the midst of settlement negotiations,” he said.
But Ferguson called it a “delicate balance” between victims that deserve compensation and the state’s fiscal realities.
“I think the victims in these cases have borne this cost for years and decades, and so we have to find some way to compensate for those pains and do it in a way that is practical for the state that is real, and it’s going to cost money,” he said.
Senate Minority Leader Justin Ready (R-Frederick and Carroll) voted against the bill in 2023 after raising a number of legal concerns.
“I opposed the bill for two reasons. I believe it is unconstitutional to go back in time and remove statute of limitations retroactively for cases from decades ago,” Ready said. “I believe the court will find that to be the case but unfortunately the bill as passed also obligated the state and potentially county and municipal governments to pay out massive sums of taxpayer money for these lawsuits. Even if the court struck down the private sector part of the legislation, the state would still be on the hook.”
Ready’s amendments to address some of his concerns were all rejected. He was one of four votes — all Republicans – against the bill in the Senate.
Romans did not offer specifics on the potential financial hit facing the state, but noted that there is currently “nothing in the budget to make any sort of settlement payments.”
“It’s very possible that there will be a settlement reached before the end of session, and you all may be asked to find the money to make the first settlement payment, which could very easily be in the hundreds of millions of dollars,” he said.
The total cost could be higher.
The 2023 law lifted limitations on filing lawsuits against institutions involved in hiding sexual abuse allegations and protecting abusers. At the time, much of the focus was on the Roman Catholic Church, but Wilson’s law also lifted the limitations on filing lawsuits against state and local governments.
The law capped liability for public entities at $890,000 per occurrence, and raised the liability limit on claims against private institutions for noneconomic damages, such as pain and suffering, to $1.5 million. It also eliminated caps for economic damages for costs of services such as therapy or medical treatment.
There are open questions in the law — primarily how an “occurrence” will be defined. The definition could have a huge impact on the potential payout from the state.
Even if each of the 3,500 cases was counted as only one occurrence, the state could face more than $3.1 billion in liabilities.
Those 3,500 cases are not believed to be the total number of cases that could be filed against the state. A settlement could potentially set a precedent for lawsuits that come after.
“I am not opposed to putting a cap on or some guardrails around how much money can be collected, because at the end of the day, as I’ve said, I did not put this in for money,” Wilson said. “I did not put this in for individuals to recover any kind of windfall. I put it in so individuals have an opportunity to face their abuser and bring their abuser to court and close this chapter in their lives.”
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One possibility could be to set up a fund to pay claims against the state, Wilson said, calling for “a finite amount of money … I just don’t see some unlimited well that gets to be dug into.”
Wilson called the lawyers involved in the cases “predators” and questioned whether all the claims were even covered by the law.
“All these cases — the institution, had to know something,” Wilson said. “It can’t just be merely a teacher does something to a student in the school. That’s a horrible thing, no question. But you go after the teacher until you find out the school has been hiding, protecting or moving that teacher.
“So, I really do question these claims on that level alone, not that they didn’t happen, but they (the institutions) knew they happened, and they did nothing about it,” he said. “That’s what’s so frustrating about these predatory lawyers. I don’t believe they have the good faith of these people in mind.”
Wilson, who himself was a victim of sex abuse as a child, long fought for the legislation initially known as “The Hidden Predators Act.”
Wilson said he thinks the attorneys involved are more focused on “let’s put a big number up. If you give us half, we’ll go away. I’m not questioning that things didn’t happen to people, because why would I? But they have a burden of proof.”
“I do believe it’s being bastardized quite a bit into being something else, into being this huge catch all,” he said.
Ready said he was very concerned at the time about the huge fees — he estimated 40% — that would go to lawyers because of the law.
“Primarily it’s out of state firms that are advertising and representing these claimants so — for a $3 billion settlement, $1.2 billion of taxpayer money will be going to attorneys in other states, not to education, health care, public safety or roads in Maryland,” Ready said.
“That’s why I also warned about this and offered a floor amendment to at least cap attorneys’ fees but that amendment was also rejected.”