| Passed by the Senate March 7, 2006 YEAS 44 ________________________________________ President of the Senate Passed by the House March 3, 2006 YEAS 87 ________________________________________ Speaker of the House of Representatives | I, Thomas Hoemann, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SENATE BILL 6541 as passed by the Senate and the House of Representatives on the dates hereon set forth. ________________________________________ Secretary | |
| Approved ________________________________________ Governor of the State of Washington | Secretary of State State of Washington |
| State of Washington | 59th Legislature | 2006 Regular Session |
Read first time 01/13/2006. Referred to Committee on Ways & Means.
AN ACT Relating to appeal bond requirements involving judgments against signatories of the tobacco master settlement agreement; adding a new section to chapter 43.340 RCW; and creating new sections.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 (1) The legislature finds that:
(a) Over the past five years, Washington has received more than
seven hundred million dollars from the tobacco master settlement
agreement;
(b) While the state has securitized a portion of the moneys it was
promised under the master settlement agreement, the remainder of the
master settlement agreement payments is used to fund important health
programs such as the state's basic health plan, children's health
insurance, childhood vaccines, and public health;
(c) Litigation now pending in the state or filed in the future
could result in damage awards against master settlement agreement
signatories or their successors or affiliates that are so large that
the defendants could obtain a stay of the execution of the judgment
while they appeal only by declaring bankruptcy, rather than posting an
appeal bond under state law;
(d) Should a master settlement agreement signatory declare
bankruptcy, issues might be raised about whether that disrupts or
jeopardizes the payments that fund important state programs;
(e) The legislature has the substantive obligation to raise revenue
and to protect the financial well-being of the state and its citizens.
Pursuant to that obligation, it is the legislature's responsibility to
ensure the continued receipt of master settlement agreement funds to
the maximum extent possible.
(2) Therefore, the legislature intends to place a maximum limit on
the appeal bond a master settlement agreement signatory or a successor
or affiliate of a master settlement agreement signatory can be required
to post in litigation in order to stay execution of the judgment
without being forced into bankruptcy while it exercises its right to
appeal an adverse judgment.
NEW SECTION. Sec. 2 A new section is added to chapter 43.340 RCW
to read as follows:
(1) Except as provided in subsection (2) of this section, in order
to secure and protect the moneys to be received as a result of the
master settlement agreement in civil litigation under any legal theory
involving a signatory, a successor of a signatory, or any affiliate of
a signatory to the master settlement agreement, the supersedeas bond to
be furnished in order to stay the execution of the judgment during the
entire course of appellate review shall be set in accordance with
applicable laws or court rules, except that the total bond that is
required of all appellants collectively shall not exceed one hundred
million dollars, regardless of the value of the judgment.
(2) If an appellee proves by a preponderance of the evidence that
an appellant is dissipating assets outside the ordinary course of
business to avoid the payment of a judgment, a court may require the
appellant to post a bond in an amount up to the amount of the judgment.
NEW SECTION. Sec. 3 This act applies to all actions pending on
or filed on or after the effective date of this section.