‘Deep-Pockets’ Limits Do Not Apply to Prior Cases, State Appeals Court Rules

With millions of dollars in damages at stake, a state appeals court ruled Friday that the limits on damages in Proposition 51, the “deep-pockets” initiative, do not apply to cases pending when the measure was passed in June.

The unanimous ruling by a three-judge panel of the 1st District Court of Appeal is the first published appellate decision on the issue and can be cited by judges in other cases.

However, a lawyer for asbestos and insurance companies on the losing side of the decision said an appeal to the state Supreme Court is likely. The court is already considering an appeal from a contrary decision by a Superior Court judge in Los Angeles, and has the power to set a uniform statewide standard.

Proposition 51 limits each defendant’s share of non-economic damages, such as pain and suffering, to the percentage of its share of fault. Under the so-called deep-pockets rule, established by court decisions and still applicable to economic losses, each defendant is potentially responsible for all of the damages and might have to pay the entire amount if other defendants have no money.

The initiative contained no language on whether it would apply to suits that involved injuries suffered before June and were still pending when the measure passed.

Those suits include massive litigation for thousands of asbestos victims whose claims against multiple employers and insurers date back several decades. If Proposition 51 applied to those cases, it could limit the damages substantially.

The appeals court, reversing a decision by a Superior Court in Alameda County, said new laws are normally applied only to future cases unless a different intent is expressed clearly. The court said that nothing in the language or purposes of Proposition 51 expressed a retroactive intent.