Sewing Up Deep Pockets

When the California Legislature returns to work next week, the Assembly Judiciary Committee will take up an important measure that has been passed by the Senate for the last few years but always gets stalled in the Assembly. The bill (SB 75) would amend the “joint-and-several-liability” rule under which all co-defendants in a liability suit are responsible for paying the full amount of damages even if they were only minimally responsible for the accident.

This state of affairs has led to a proliferation of “deep-pockets” lawsuits in which lawyers for injured persons include in their suits city and county governments, corporations, hospitals, doctors and anyone else they think will have enough money to pay a sizable judgment even if the people who were primarily responsible for the accident turn out to have no assets or insurance. As a result of this seemingly unlimited liability of deep-pockets defendants, their insurance rates are skyrocketing--if they can get insurance at all. The taxpayers are winding up footing the bill for this quirk in the liability law.

Here are some recent examples of the effect of the joint-and-several-liability rule:

--A driver lost control of his car and rolled down a hill in Los Angeles County, severely injuring a passenger. The jury found the driver 70% responsible and the county 30% responsible, but the county paid 99% of the $1.77 million awarded to the injured passenger.

--A drunk driver going 70 m.p.h. on a winding road in San Diego wandered across the center line and struck an oncoming car, killing two college students and paralyzing a third. The posted speed limit was 45 m.p.h., and there was a 35-m.p.h. sign on the curve, but the City of San Diego settled for $1.6 million rather than risk an even-larger judgment in court.

--A man stopped his car in a freeway’s right lane, which he thought was the shoulder, and was hit by a another vehicle going 60 m.p.h. He won $8.2 million from the state of California.

--A woman in Redondo Beach was injured when she pulled out of her driveway and was struck by a car. The court ruled that the city should have ordered a neighbor to remove a row of shrubs that blocked her vision, and awarded her $3.6 million.

--A boy in Daly City ran into the street from behind a bus and was hit by a car. Daly City settled for $750,000.

To be sure, the victims of accidents deserve to be compensated for their injuries. But the public cannot be expected to pay the cost of all judgments, which is increasingly becoming the case.

Under the bill now before the Legislature that was sponsored by Sen. John F. Foran (D-San Francisco), all co-defendants would continue to be jointly and severally liable for an accident’s direct costs, such as medical bills and lost income. This would protect accident victims from receiving no money if the people primarily responsible had no assets. But when it comes to the non-economic part of a judgment--the “pain and suffering” part--the bill would limit each co-defendant’s liability to the percentage that the defendant had contributed to the accident. So if the City of Los Angeles, for example, was found to have contributed 1% to an accident, the city’s exposure to paying the judgment would be greatly reduced.

In the interest of fairness and economic sanity, the Assembly should pass this bill.