Michael Smith, the state director for Colorado and Wyoming for the National Federation of Independent Business (NFIB), expressed concerns about the impact of expanding civil liability on small employers. He urged lawmakers to consider balanced reforms to address these issues.
“When lawmakers make it easier and more lucrative to sue, small business owners and their employees pay the price,” said Smith. “Lawsuit abuse doesn’t just stifle our state’s economy but results in nearly 100,000 jobs lost in the state per year. Our Main Street businesses want to create good-paying jobs and meet their customers’ needs, but every dollar spent fighting a frivolous lawsuit is one less dollar going toward operating their business and investing in their community. It’s time for lawmakers to stand up for small businesses and the hardworking Coloradans they employ and promote a more balanced civil justice system here in our state.”
In its 2025 Legislative HeatCheck, the American Tort Reform Association (ATRA) labeled Colorado a “Lawsuit Inferno.” This designation was based on a surge in measures that expand liability, add private rights of action, and increase available damages. According to ATRA, these policy shifts could lead to increased litigation exposure for both employers and consumers, potentially suppressing investment and job growth across the state.
ATRA estimates that Colorado residents now face an annual “tort tax” of approximately $1,982 per person—amounting to nearly $8,000 for a family of four—due to excessive litigation costs. The group attributes nearly 100,000 lost jobs each year in the state to these costs, citing both direct legal expenses and indirect effects on hiring, prices, and competitiveness. These figures highlight the economic challenges faced by Main Street firms dealing with higher risk and compliance burdens.
An analysis conducted by The Perryman Group for the Colorado Chamber modeled the potential impact of eliminating caps on noneconomic damages. The baseline scenario projects an annual loss of roughly $2.1 billion in gross state product, about $1.1 billion in personal income, and approximately 15,500 jobs when multiplier effects are considered. The study also estimates per-person output losses of $357 and $921 per household due to excess civil justice costs.
Smith was appointed as NFIB’s state director for Colorado and Wyoming in December 2024 after more than 14 years in state government relations. He represents over 5,700 NFIB small-business members in Colorado and 1,800 in Wyoming, advocating on issues related to tax, regulatory matters, labor laws, and legal climate that affect entrepreneurs and their employees across both states.
