Product liability defendants in New York were glad to hear earlier this week that Governor Hochul had finally vetoed the Grieving Families Act (GFA) which, if signed, would have greatly increased allowable damages in wrongful death cases and the class of persons who could recover for them.

The good feeling may not last long, however.  In her pre-veto message published in one of New York City’s tabloids, the governor hinted at her general acceptance of the “reforms” embodied in the GFA, but expressed concern about the proposed law’s impact on business costs and insurance premiums. She invited the state legislature to revise the GFA and resubmit it for consideration later this year. Expect that to happen during the upcoming legislative year.

By amending New York’s Estates, Power & Trusts Law, the GFA would have greatly expanded the class of plaintiffs entitled to recover for wrongful death, including (but not limited to) anyone deemed by the fact-finder to have a “close” relationship with the decedent regardless if the person was an actual distributee of the decedent’s estate. This expansion would have included non-traditional family members such as same-sex partners, step-parents and others besides close blood relatives. In addition, the GFA would have allowed claimants to recover not just for economic damages (per current law) but also for non-pecuniary damages such as grief, sympathy and loss of consortium. Finally, the GFA, as drafted and sent to the governor, would have applied retroactively to all pending wrongful death lawsuits in the state.

The GFA passed both chambers of New York’s legislature by wide margins and was sent to the governor for consideration in late December, thereby starting the clock on her decision as to whether to sign it or veto it. Proponents argued that the GFA was a much-needed reform to New York’s existing and archaic wrongful death statute that was passed in the mid-1800s and would simply recognize a right of recovery to grandparents, domestic partners, same-sex partners and others who did not rely on the decedent for economic support, but were nonetheless directly impacted by the loss of their loved one’s emotional support, love, advice and guidance. Part of the GFA’s “justification” language, in fact, noted that 41 other states compensate family members for emotional loss, but without the reform, New York would continue to merely “measure(s) the worth of loved family members solely by their value as wage earners” – in so doing, unfairly treating children, seniors, women and people of color.

Opponents of the GFA, led by the Defense Association of New York and medical industry representatives such as the New York Hospital Association, cited the legislation’s potential impact on insurance premiums, including a likely 40 percent rate increase paid by hospitals, physicians and other health care providers. They also estimated an increase of $6 billion in loss reserve set-asides by insurers and self-insured groups in order to pay for the newly recoverable emotional damages.

In the end, Governor Hochul appears to have been swayed by their arguments. In her statement preceding the veto, she expressed her general acceptance of the concept of expanding wrongful death damages; however, she expressed reservations as to the GFA’s impact on “already-high insurance premiums, adding significant costs for many sectors of our economy, particularly hospitals.…” Also citing the legislation’s potential impact on small businesses, she urged the legislature to amend the GFA, citing an exemption for medical malpractice claims as one way of making it more palatable. 

We predict that the legislative sponsors of the GFA will take up the governor’s invitation and resubmit the GFA in a different form later this year, but with modifications that assuage the governor’s stated concerns. For example, the exemption for medical malpractice claims – or some other way of protecting the state’s hospitals and health care providers – is likely to be inserted in any revised legislation. Also, the GFA’s retroactive application might be deleted and the reformulated legislation might contain a narrower definition of what constitutes a “close” relative.

Those revisions might be helpful for the state’s large health care industry, but they are little solace for future products liability defendants. In this case, “half a loaf” may be as bad as the full thing.

We’ will continue to watch developments in this area and report to our clients about the prospects for this important legislative change.