Data Refutes Claim of ‘Deep Pocket’ Victimization, Prop. 51 Foes Assert

Opponents of Proposition 51 charged Wednesday that the municipal insurance crisis is being used as a “front” by the insurance industry to win passage of the “deep pockets” initiative so toxic polluters and manufacturers of dangerous products can avoid paying their full share of damages in personal injury suits.

The opponents of the June 3 ballot measure released figures that they said prove that local government entities have not been seriously victimized by the “deep pockets” rule, known formally as the doctrine of joint and several liability.

The figures, gleaned from Jury Verdicts Weekly, showed that since 1976 California juries had invoked the deep pockets doctrine in assessing damages against public agencies only 52 times in 879 verdicts.

Information on Cases

The Santa Rosa-based publication gathers information from court clerks and attorneys on cases throughout California for distribution to insurance companies and attorneys, a spokesman said.

The figures were immediately challenged as misleading by initiative backers because they failed to include the estimated 95% of civil lawsuits that local governments settle without trial. The figures also do not include the amount of money that public entities paid out in defense costs, proponents said.

The League of California Cities last week released data that it said supported contentions that the deep pockets rule had cost municipalities more than $75 million over the last three years. The league’s conclusions were challenged as exaggerations by initiative opponents.

The deep pockets doctrine makes a co-defendant found even slightly to blame for causing a personal injury responsible for paying up to 100% of the damages if other defendants are unable to pay.

Degree of Responsibility

Under Proposition 51, a defendant’s liability for paying non-economic damages, such as pain and suffering, could not exceed that defendant’s degree of responsibility for causing the accident--even if other defendants are unable to pay. Initiative backers say the current law unfairly punishes rich or heavily insured defendants--those with deep pockets of wealth--in cases where co-defendants more to blame are without assets.

In releasing the figures, Joan Claybrook, president of Public Citizen, the consumer organization founded by Ralph Nader, said, “Californians should not trade the protection of the laws for promises Proposition 51 won’t keep.”

Attorney Jim Wheaton, chairman of the opposition campaign, said: “Insurance companies have tried to portray Proposition 51 as an issue of too many lawsuits against municipalities. The municipal insurance issue is being used as a front by the insurance companies to hide the real effect of Proposition 51 upon taxpayers, consumers and victims of irresponsible actions by polluters and others.”

But Victoria Clark of the League of California Cities said the figures, even if accurate, substantiate the belief by California government entities that the measure’s passage is needed.

“If what they’re trying to do is to illustrate that the judgments represent a small portion of the pay-outs, we would agree with that,” Clark said. “In fact what they’re doing is helping us make one of our prime arguments, and that’s that there is a tremendous amount of pressure on cities to settle in these cases regardless of the merits.”