‘Deep Pockets’ Initiative Backers Suffer Setback as New Liability Bill Is Dumped

SACRAMENTO —  A coalition of business groups and physicians who sponsored last year’s successful “deep pockets” initiative suffered a major setback Wednesday when an Assembly subcommittee unceremoniously dumped a bill they supported that would have meant an even more radical revision of California’s civil liability laws.

The author of the measure denounced the outcome as “a notorious outrage” and declared that the defeat would pave the way for another initiative in 1988 that would significantly scale back the size of awards in personal injury and product liability suits.

“This has happened to every significant (liability) reform measure presented to the Legislature in the five years of my experience,” said Assemblyman Tom McClintock (D-Thousand Oaks). “That is why measures like Proposition 51 (the deep pockets initiative) are so necessary and why this may have to come to another initiative vote before the people’s will can be exercised.”

Damages Limit

McClintock’s bill, similar to measures rejected year after year by the Judiciary Committee, would limit “non-economic” damages in civil lawsuits to $250,000, cut back on the size of attorney fees and allow large damage awards to be distributed in smaller periodic payments rather than in multimillion-dollar lump sums. The measure, like its predecessors, is bitterly opposed by trial lawyers and consumer groups.

Backers of the McClintock bill say it and similar measures are needed to further limit the size of court judgments and reduce insurance rates.

But in testimony Wednesday, several consumer groups charged that McClintock’s bill and the other proposals are aimed at boosting business profits at the expense of injury victims while building pressure for a new initiative.

“It was a political exercise by special interests to run this up the flagpole and have the Legislature shoot it down,” said Harvey Rosenfield, a prime opponent of last year’s initiative.

Legislative Package

McClintock’s bill, which was rejected on a 3-1 vote of the Assembly judiciary subcommittee, was the centerpiece of a legislative package proposed less than two months ago by the sponsors of last year’s Proposition 51.

That initiative requires that in cases of multiple defendants, each be assessed according to the degree of fault for such non-economic damages as pain and suffering. Previously, defendants who were minimally at fault could be forced to pay a major share of damages if other, more culpable, defendants lacked the means to pay.

McClintock’s bill was modeled after California’s 1975 landmark overhaul of medical malpractice laws, which supporters maintain has led to lower malpractice insurance rates. The Proposition 51 coalition is pushing other reform measures as well, including one that would grant immunity to government agencies for injuries arising from poorly designed public projects.

Rosenfield said the bills would make it more difficult for victims to get legal representation and “alter the balance to encourage more recklessness” on the part of business and government.

‘A Bit Inefficiently’

Harry Snyder, West Coast director of Consumers Union, told the subcommittee that he agrees with supporters of the measures that California’s legal system “is delivering civil justice a bit inefficiently.” But he said the remedy should not be one that “solely cuts back on the rights of plaintiffs to recover damages.”

Snyder also cited a Rand Corp. study that he said shows there has been no explosion of litigation in recent years, as supporters of the bill have maintained. He also noted that insurance rates did not go down significantly after passage of Proposition 51, as some supporters had predicted.

Backers of the McClintock bill and similar measures contend that these efforts always stall in the Assembly because of the influence of the trial lawyers, who oppose any attempt to scale back injury awards.

But Chairman Elihu M. Harris (D-Oakland) of the Assembly Judiciary Committee said measures that set arbitrary limits on court judgments have no place coming before the Legislature. “If people want to do it to themselves, probably the initiative process is the way to go,” Harris said.