State Supreme Court Agrees to Rule on ‘Deep-Pockets’ Liability Initiative

With millions of dollars in potential damage awards at stake, the California Supreme Court agreed Thursday to review Proposition 51, the “deep-pockets” initiative and to decide whether it applies to cases that were pending when it was passed in June, 1986.

In an order signed by all seven members of the court, the justices acted to resolve conflicting lower court rulings on the scope of the far-reaching reform measure.

The court will review a ruling last February by the state Court of Appeal in Los Angeles upholding the constitutionality of the initiative and saying that it could be applied to cases that arose before the law became effective.

Last September, another state appellate panel in San Francisco had concluded that the measure did not apply to such pending cases. A few weeks later, the state Supreme Court, under then-Chief Justice Rose Elizabeth Bird, refused to hear a challenge to the ruling, leaving it intact.

Thursday’s action brought the issue back before the justices for a far-ranging review by a new and more conservative court that now is led by Chief Justice Malcolm M. Lucas and that has a majority of appointees of Gov. George Deukmejian in the wake of the defeat of Bird and two other justices in the Nov. 4 election.

The initiative, one of the most ambitious revisions of personal injury law in California history, limits defendants’ liability for non-economic damages--such as pain and suffering--to their proportion of fault.

Under the so-called “deep-pockets” doctrine, a defendant, such as a city or county, could be required to pay all such damages if other defendants could not pay, regardless of its degree of fault. That rule still applies to economic damages, such as current medical expenses.

The court’s agreement to review the issue was hailed by the Los Angeles attorney representing the plaintiff in the case, Gregory Evangelatos, who at age 18 was blinded while mixing chemicals for homemade firecrackers and later brought suit against the chemical maker and others.

The attorney, Daniel C. Cathcart, noted that the justices now have an opportunity to declare the initiative unconstitutional, an action that could discourage an effort now under way to place another initiative limiting liability awards before the voters in the next election. “I hope we can sink this thing right now,” he said.

Cathcart also pointed out that, provided that the law’s validity is upheld, the court’s decision on the question of retroactive application could affect countless personal injury cases that had been pending at the time the initiative was adopted.

“There are tens of millions of dollars riding on this case,” he said.

On the other side, an attorney representing the defendants in the case said the court’s action came as no surprise and expressed the hope that the justices will resolve the issues surrounding the initiative that have divided the lower courts.

“It was expected that the justices would want to take a look at this question, particularly with the change in (the court’s) makeup,” said the lawyer, Dennis Wheeler of Santa Monica. “We welcome the action.”

Rejected Claims

In its ruling in February, the state Court of Appeal had rejected claims that the law violated civil plaintiffs’ constitutional rights to due process and equal protection of the law.

Among other things, Evangelatos’ lawyers had contended that the measure unfairly penalized those who suffer most from non-economic injuries by arbitrarily limiting the awards they can receive for damages.

The appellate court, in a decision written by Justice Lynn D. Compton and joined by Justices Lester W. Roth and Donald N. Gates, said that applying the law only to cases arising after passage of the initiative would frustrate the intent of the voters.

While the law should not apply to cases that had been tried before passage but were still on appeal, the court said, it should be applied to as many other cases “as feasible.”

Attorneys for the City of Los Angeles and 25 other California municipalities filed a brief before the state Supreme Court supporting the ruling by the appellate panel.

See ‘Clear Design’

They contended that the “clear design” of the initiative was to apply its limitations to pending cases in order to avoid the “catastrophic consequences” of high damage awards to state and local governmental entities.

In other actions Thursday, the justices:

- Agreed to decide whether a 1982 law aimed at cracking down on pandering can be used to prosecute producers of pornographic movies who hire actresses to perform sex acts on film.

- Let stand a ruling by a state appellate panel allowing “whistle blowers”--workers who report improper actions by their supervisors to authorities--to sue their employers when they believe that they have been improperly disciplined for doing so.