Prop. 51 Fight Is Still Being Waged Despite Voter Approval

Proposition 51, the sweeping “deep pockets” liability-reform initiative, was perhaps the hottest issue in the June 4, 1986, election, eventually winning approval by a resounding 62% of the electorate.

But the fight over the measure is far from over. The battle has shifted to the state Supreme Court, which this week will consider whether to apply the initiative to tens of thousands of pending cases with tens of millions of dollars at stake.

The new law, formally known as the Fair Responsibility Act of 1986, restricts defendants’ civil liability for non-economic damages--such as pain and suffering--to their proportion of fault. Economic damages, such as medical costs or lost income, are not affected.

Under the old “deep pockets” formula, manufacturers, municipalities and other wealthier defendants were assessed such damages according to their ability to pay, regardless of their degree of fault.

Major Effect

At issue now is whether the new law’s restrictions on damage awards apply to personal injury, property damage and wrongful death cases that had not gone to trial when Proposition 51 was passed. Some of those cases may not go to trial for as many as five years, and the court’s decision could have a major effect on the amount of damages that plaintiffs ultimately collect.

This hypothetical case shows how the court’s decision could influence the amount of damages:

An injured plaintiff files suit the day before Proposition 51 is enacted, seeking non-economic damages of $1 million from a rich defendant later found 10% at fault and a penniless defendant found 90% at fault. If the initiative is applied to his case, the plaintiff could get only $100,000 in damages from the rich defendant. But if it is not applied, he could get the full $1 million.

What Foes Seek

Opponents of the initiative are asking the state Supreme Court to substantially limit its effect by holding that the restrictions cannot be applied to any case where the allegedly wrongful act took place before Proposition 51’s enactment.

Thus, a victim of an act occurring before the election could still bring suit and go to trial several years later under the old “deep pockets” doctrine.

“It would be very unfair to impose the initiative on the people who were injured and brought suit in reliance on the previous rules,” said Bryce C. Anderson, a Concord attorney representing the California Trial Lawyers Assn.

“Changing the rules on these people just throws everything into chaos.”

But a broad coalition of municipalities, manufacturers and other backers of Proposition 51 is urging the court to widen the initiative’s effect by applying it to any case that had not gone to trial when the measure took effect.

They argue that the initiative was passed overwhelmingly in recognition of a financial crisis afflicting cities and businesses that was brought on by soaring damage awards and prohibitively expensive liability insurance rates.

“It would hardly serve the intention of the voters to apply the initiative prospectively only,” said Los Angeles Assistant City Atty. Richard M. Helgeson, representing that city and 38 other municipalities in the case.

“That would mean they wouldn’t get the benefits of the new law for as many as five years. Many cities are facing staggering judgments right now. It just doesn’t make any sense to delay application,” he said. The case arises as the court itself is undergoing a major transition in the wake of the voter defeat of former Chief Justice Rose Elizabeth Bird and two other court members in the election last fall.

Widened Potential Liability

The old court over the years had steadily widened the potential liability of defendants in civil cases. It ruled, for example, that a state college could be sued by a rape victim for failing to warn students of previous assaults on the campus and for neglecting to trim foliage that gave attackers cover. Backers of Proposition 51 hope that the new and more conservative court, now led by Chief Justice Malcolm M. Lucas, will be more receptive to the liability concerns of defendants in such cases.

“We think the new court is likely to be more realistic in the personal injury liability area,” Helgeson said. “The old court--I have to call it as I see it--just killed us.”

The case will be among 17 heard in oral arguments before the justices this week. A decision is expected by early next year.

The dispute involves a suit brought in Los Angeles in 1981 by Gregory Evangelatos, who the year before, at age 18, was partially blinded while mixing chemicals for homemade firecrackers. The action named as defendants the wholesaler, retailer and four manufacturers of the chemicals he was using to make the fireworks.

The four manufacturers gained dismissals but Evangelatos’ suit against the others was still awaiting trial when the voters adopted Proposition 51.

In subsequent proceedings, Los Angeles Superior Court Judge Bonnie Lee Martin upheld contentions by the two defendants that the newly passed initiative should apply to their case.

Earlier this year, a state Court of Appeal in Los Angeles agreed. The appeal panel said that while the initiative contained no specific language on the issue, it appeared to apply to all cases not yet tried.

To conclude otherwise, the court said in a unanimous opinion by Appellate Justice Lynn D. Compton, would “frustrate the legislative will of the voters by postponing effectuation of their decision by several years, on the average.”

Proportionate Responsibility

In another finding that could reduce the potential liability of defendants, the panel held further that in allocating liability, trial judges could also consider the proportionate responsibility of other parties not named in the suit who contributed to a plaintiff’s injuries.

The panel’s ruling conflicted with an earlier decision reached by another state Court of Appeal in San Francisco that held that the measure could not be applied to cases pending when it was enacted.

The state Supreme Court under Bird declined to review the San Francisco court’s decision--an action that was widely seen at that time as an indication that the justices generally agreed with that ruling.

Backing of Trial Lawyers

But then the new court, in an order signed by all the justices, agreed last April to hear the Evangelatos case and thus to resolve the two conflicting rulings on how the initiative should be applied.

Lawyers for Evangelatos have the backing of the trial lawyers association, which filed a lengthy “friend of the court” brief in their behalf.

The association argues that the “poorly drafted law has raised more questions than it has answered,” but that in the absence of specific language to the contrary it must be interpreted as applying only to cases involving wrongful acts occurring after it took effect June 4, 1986.

The association is urging the court to give the judicial system “breathing room” to decide how to apply the new act. Allowing pending cases to be decided by the old rules would encourage settlements that have been held up awaiting a definitive ruling on the initiative’s applicability, the trial lawyers group says.

The association also is asking the justices to declare Proposition 51 unconstitutional as impermissibly “vague and ambiguous.”

Groups Supporting Defendants

On the other side, governmental, legal and business groups have joined in supporting the defendants in the Evangelatos case.

This list includes Los Angeles and 38 other municipalities; the California Manufacturers Assn.; the Northern California Assn. of Defense Counsel; the Product Liability Advisory Council and the Motor Vehicle Manufacturers Assn., two groups representing major auto makers and other manufacturers; and the Asbestos Claims Facility, a group representing producers and distributors now defending against asbestos-injury claims.

These groups take notice of the severity of liability-related problems that the initiative sought to solve and argue that the voters, in rendering their decisive approval, clearly meant to have it apply to pending cases.

Force Cutbacks

In their brief, Los Angeles and the other cities argue that unless the initiative is applied to pending cases, the increased cost of damage awards and insurance rates will continue to force cutbacks in police, fire and other services.

“Those current pending cases were the reason why voters so overwhelmingly passed the measure,” the brief says. “It could not have been the (intention) of the people that the solution to so imminent a problem should be placed on hold . . . while all pending cases cleared the justice system.”