Under the Dome

"Ag-gag" bill still being tweaked; would outlaw lawsuit loan industry

Senators are still tinkering with a bill that would make undercover investigations of companies illegal in North Carolina.

The Senate Rules Committee on Tuesday took a look at the latest version of the bill, SB648, but members had concerns, which will be addressed in another revision. Not all of the concerns had to do with the undercover investigations provision. The bill includes several unrelated provisions, including a new section outlawing the lawsuit loan industry.

Tuesday’s version of the bill clarifies that making false representations on a job application for the purpose of conducting an undercover investigation at a business would be a criminal offense. So would failing to turn over to law enforcement within 48 hours any recordings or records obtained in such a probe.

Both offenses would be misdemeanors and carry a hefty minimum fine of $10,000. Subsequent convictions would bring fines of $25,000.

The bill also now specifies that state employees would still be protected under the whistleblower law in reporting improper government activity. The bill’s sponsor, Sen. Brent Jackson, a Republican from Autryville, said it would also protect the news media from prosecution for materials given to it by undercover investigators, but the legislation doesn’t specifically say that.

Although it would apply to any business or industry, the legislation has its roots in “ag-gag” bills seen in other states states aimed at preventing animal-welfare groups and journalists from exposing cruelty in livestock operations. Ashley Perkinson, representing the ASPCA and the Human Society of the United States, told the committee the organizations still oppose the bill.

“It would extinguish undercover investigations at a time when transparency and food safety are key,” she said.

Some Republican senators were prepared to approve the bill, but committee chairman Sen. Tom Apodaca, a Republican from Hendersonville, said a new version addressing some of the senators’ concerns would be prepared.

The new section of the bill outlawing “lawsuit loans” drew opposition from an industry representative. These companies loan money to people who have sued someone to pay their legal expenses. In exchange, the companies collect a portion of whatever money they receive from the lawsuit.

Eric Schuller, representing Oasis Legal Finance, based in Illinois, said the industry doesn’t currently operate in North Carolina because of the state Supreme Court’s broad definition of a loan. The industry would like to be regulated here, Schuller said.

He said the industry isn’t outright prohibited in any state. A typical fee, he said, would be $700 on a $1,000 loan; but that money isn’t collected unless the plaintiff successfully sues.

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