THIRD QUARTER 1998
A publication of the Civil Justice Association of California -- dedicated to restoring fairness and balance to the civil justice system
A publication of the Civil Justice Association of California -- dedicated to restoring fairness and balance to the civil justice system
HEADLINERS
The California Supreme Court has said "no" to attempts to create a novel tort that would circumvent medical malpractice reforms and drastically raise document and property retention costs for all businesses. The case (Cedars-Sinai v. Superior Court) involved the loss or "spoliation" of evidence.
Following arguments in Civil Justice Association of California's amicus brief, the court in a 6-1 decision authored by Justice Joyce Kennard said that evidence spoliation is not a tort in California. Kennard wrote that "existing and effective nontort remedies" can be used to address evidence loss and destruction and that "a tort remedy would impose a number of undesirable social costs."
The decision ended trial lawyers' hope of firmly establishing a new basis for suing that would let them drive up settlements by attaching new lawsuits to existing cases in all areas of liability law. Fred Hiestand, Civil Justice Association of California general counsel and author of Civil Justice Association of California's brief, said the decision is important not only for future litigation but for evidence retention and routine file destruction situations. The threat of a "spoliation" tort would have meant millions of dollars in increased record-keeping and storage costs for business and government.
Lawyers and judicial candidates themselves contribute three-quarters of the campaign funds in Superior Court elections, an Civil Justice Association of California study has revealed. Approximately two-thirds of the attorney contributions come from plaintiff trial lawyers. The study covered 16 contested Superior Court elections in 1994 and 1996 in Los Angeles, San Diego, and San Francisco counties. Ten of the races were in Los Angeles County.
"While California's process for selecting and electing judges receives high marks in comparison with other states, the public should be aware of campaign contributions to judges," commented Civil Justice Association of California president John H. Sullivan.
"While our judges are generally able to do their jobs without undue political pressure, our study turns on some caution lights," Sullivan said. "When judicial candidates solicit or accept contributions from lawyers who may appear face-to-face before them, it can create an appearance of impropriety regardless of how well a judge adheres to the Canons of Judicial Ethics. As campaigns in metropolitan areas become more expensive and the need for campaign funds increase, matters get worse."
The Civil Justice Association of California study found that contributions per contested superior court election averaged $162,626. Broken down by source, average contributions per race were: candidates themselves- $84,127; plaintiff's attorneys-$19,196; all other attorneys-$10,672; non-attorneys-$31,615; unidentified contributors (contributions under $100)-$17,015. The study and a news release summary are available at www.cjac.org.
Proposition 224, a public employee union initiative that twisted tort and bidding law, was defeated by an overwhelming margin of 62% to 38% on the statewide ballot June 2. Designed to prevent cost-effective contracting of state and local government design and engineering work to private firms, the measure included a requirement that a firm under contract indemnify the government entities against any lawsuits associated with privately-engineered projects-regardless of where fault lies.
Civil Justice Association of California Board members Paul Meyer (Executive Director of the Consulting Engineers and Land Surveyors of California) and Allan Zaremberg (President of the California Chamber of Commerce) played key roles in Proposition 224's defeat.
AROUND THE NATION
While Civil Justice Association of California-sponsored legislation (AB 1710-Firestone and Cunneen) designed to head off predatory lawsuits over computer problems resulting from the calendar date change from 1999 to 2000 was held in committee, the effort to enact legislation in this area is far from over. Assembly Speaker Antonio Villaraigosa has assigned Assembly member Mike Honda to investigate ways the Legislature can help businesses cope with the Year 2000 computer software problem.
Many states, as well as Congress, have begun researching and formulating Year 2000 legislation and some have used AB 1710 as a model. Additionally, the Civil Justice Reform Group (CJRG) and the American Legislative Exchange Counsel (ALEC) have formed Year 2000 working groups, with Civil Justice Association of California president John Sullivan being named chair to the CJRG legislative committee on the issue.
Federal legislation (S. 1260) to set up uniform standards for securities litigation has received Senate approval, and a House version (H.R. 1689) began moving through hearings in June. The bills would require most securities fraud cases to be heard in federal courts and end plaintiff lawyers' ploy of filing in both federal and state courts to avoid the requirements of the 1995 securities litigation reform bill.
A Stanford Law School study released in July said the number of securities class action suits has grown rapidly from a year ago, with an increase in allegations focusing on a company's accounting practices.
The Fairness in Punitive Damages Act (S. 1554) was set to be heard June 29 in the Senate Judiciary Committee as the Balance went to press. Strongly supported by Civil Justice Association of California, the bill would make punitive damages in financial loss cases proportionate to the degree of responsibility for causing the loss.
Heavy White House drafting involvement in product liability legislation resulted in a bill that Civil Justice Association of California warned could "increase the amount and cost of litigation" for California manufacturers and retailers. The bill included language that could pre-empt state laws designed to prohibit lawsuits over old equipment and limit punitive damages. On July 9 the bill died in the Senate, nine votes short of the 60 needed to end filibuster.
America may be on the verge of a "pet law" litigation explosion, according to a Tufts University veterinary professor and animal law expert who has been surveying legal trends around the country. Lawyers have begun to succeed in convincing courts and juries to value an animal higher than its market value, laying the basis for attractive money damages. The Wall Street Journal reports an Animal Legal Defense Fund lawyer stating that veterinarian malpractice cases that used to have a "nuisance settlement" value of $250 now have a value between $2,000 and $4,000, making them attractive to lawyers.
A Kentucky lawyer has won $15,000 for "loss of companionship" in a malpractice suit involving a German Shepard. In California a security company had to pay damages of $30,000 for shooting a dog. Local governments are being sued over their attempts to control dangerous dogs.
Richard L. Cupp Jr., a Pepperdine University law professor and critic of this trend, says the ultimate losers will be animals because the lawsuits will drive up veterinarian insurance costs, forcing fee increases that will mean fewer people will be able to pay for treatment their pets need.
The General Aviation Manufacturers Association reports continued success from the 1994 legislation to reverse the job-killing effect of litigation in the general aviation industry. Since passage of the General Aviation Revitalization Act(GARA), total general aviation production has increased 69% and production of single-engine piston-power aircraft has increased 103%. The GARA reforms stopped lawsuits against manufacturers over aircraft which had been in use many years.
AROUND THE STATE
"Lawyerland," the California Lawyer monthly magazine called California, noting that with more than 1,500 would-be lawyers passing the latest State Bar exam, the state's lawyer population is close to 130,000. Statistics show an increase from 53,003 in 1977 to 93,877 in 1987 and on to 128,436 in 1998. From 1977 to 1998 the residents-per-attorney ratio has dropped from 421 to 1 to 259 to 1.
IN SACRAMENTO
Personal injury lawyers continue to try to take advantage of the current debate over managed health care.
"It's a two step process," summarized Civil Justice Association of California president John H. Sullivan. "First they want to define every decision in health care management as the 'practice of medicine' and make it a target of medical malpractice suits. Then they want to deny those decisions the protection of California's medical liability reform act. If they succeed, they get a new array of deep pockets for personal injury suits, and they move toward their goal of eliminating MICRA."
In the Legislature, a bill (AB 2436-Figueroa) to provide virtually unlimited medical injury liability for health plans was resurrected on the Assembly floor and sent to the Senate one day after falling seven votes short of passage. The bill, strongly opposed by Civil Justice Association of California, is modeled after 1997 Texas legislation making plans liable for the negligence of their agents and "ostensible agents."
"The Assembly passed this bill only after several ambitious promises by the author that the problems stopping it on the first vote would be worked out in the Senate," said Civil Justice Association of California vice president and legislative advocate Mark Krausse. "We believe the concurrence vote in the Assembly will be the best opportunity to stop the bill, but we're certainly applying pressure throughout the Senate."
The bill was expected to be heard in the Senate Judiciary Committee in early August when the Legislature returns from its summer recess.
In another MICRA-related area, Civil Justice Association of California is working to make sure that patient confidentiality legislation (AB 1644-Figueroa) does not become a stealth vehicle for weakening non-economic damage limits and other medical malpractice reform provisions.
A dangerous bill to strip a judge's power to determine whether statistical evidence is legitimate enough to be allowed into court is being held in the Assembly Judiciary Committee for lack of the 41 floor votes needed to send it to the Governor. Although aimed at tobacco, SB 1917 (Sher) would set a harmful precedent for practically all products and services, according to Civil Justice Association of California's analysis.
The bill would allow a plaintiff's attorney to bypass a judge and expert witness qualification and directly introduce health studies and other statistical evidence as proof of both causation and damages. This ability to admit unchecked evidence is granted only to plaintiffs-the court's "gate keeper" role would continue to apply to evidence proposed by defendants.
"If the one-sided concept of bypassing the judge and allowing any statistical evidence to prove causation and damages takes hold, there is no basis for preventing its expansion to virtually every food, fuel, medicine or any other chemical produced by or within the custody of any potential defendant," said Civil Justice Association of California legislative advocate Barbara Wheeler.
California trial lawyers are aggressively supporting the bill.
A month after Legal Secretary Dan Kolkey announced Governor Wilson's State Bar reorganization and dues proposal, Assemblyman Bob Hertzberg, the author of AB 1669-the current Bar-sponsored dues bill-introduced an alternative bill (AB 1374- Hertzberg) to simply fund the Bar's disciplinary functions for 1998. The move signaled that Bar leadership was not ready to work on Wilson's proposal to completely revamp the Bar's governing structure and cut member dues to $295 a year. The delay meant a June 26 layoff of 500 of the Bar's 700 employees.
Wilson proposes a 19-member Bar board of governors (17 selected by the Governor with Senate confirmation and two named by the Legislature) modeled on the state Medical Board. The current Bar board consists of 23 members (16 lawyers elected by Bar membership, one elected by the California Young Lawyers Association and five public members, three appointed by the Governor and two by the Legislature).
The Governor's plan also reinforces Civil Justice Association of California's proposal for strictly limiting the Bar's political lobbying.
Bar President Mark Adelman asked the state Supreme Court to set attorney licensing fees to keep the Bar's discipline system running. The request was denied, but Chief Justice Ron George offered to mediate the dispute. Talks in Section 17200 Reform
Work to stop abuse of the state Unfair Competition Act (Business and Professions Code Section 17200) has moved to negotiations sponsored by the Assembly Judiciary Committee. An Civil Justice Association of California-sponsored bill (AB 2511-Morrow) to stop repetitive suing was considered but not approved by the committee in May. The bill would provide finality in UCA judgments so that defendants could not be sued more than once for the same conduct. It deals with only one of several ways the law is being misused to increase settlement leverage in suits against a wide range of defendants.
While it is unlikely any legislation will be enacted this year, runaway misuse of the UCA be will a high priority target of Civil Justice Association of California's legislative and appellate programs in 1999.
A public survey shows that four out of five potential voters support the proportionate liability concept embodied in a bill (SB 1536-Brulte) that moved from the Senate to the Assembly in June. The measure would ensure that in financial loss cases with multiple defendants, no single defendant will pay a share of damages greater than its share of fault.
The proposal is a logical successor to Proposition 51 of 1986, which voters approved to establish proportionate liability in personal injury cases. A broad-based coalition, Californians for Fair Liability Laws, is developing support for the measure.
The Legislature in August is expected to send the Governor a bill (SB 1661-Haynes) to continue a long-running early settlement pilot project in Riverside and San Bernardino counties. Under the project, a party who rejects an early settlement offer and later receives a less favorable outcome may be ordered to pay the other party's attorney fees after the date of the offer. Trial lawyer opposition has prevented the pilot law from ever applying to personal injury and wrongful death suits or to class actions, and evidently its use has been so limited that results still cannot be fairly studied. Construction Litigation Package
A 10-year construction warranty and efficient arbitration provisions are being considered as part of an overall legislative package to stop the plague of construction defect litigation that is making it harder for builders to meet the state's housing needs.
The Coalition for Quality, Affordable Housing (CQAH) is coordinating the plan's development as well as educating opinion leaders on the problem. As a coalition member, Civil Justice Association of California is providing appellate support on construction-related cases and helping develop the legislative proposal's arbitration component. The litigation problem has especially inhibited the building of new affordable attached housing in the Silicon Valley and other burgeoning communities. Arbitration Update
The trial lawyer-orchestrated attack on arbitration is expected to pick up pace during the final weeks of the legislative session when a conference committee is set to begin addressing the leading proposal (SB 19-Lockyer) to make it easy to take an arbitration decision to court. Civil Justice Association of California has consistently opposed the bill because giving binding arbitration decisions the same review as civil court verdicts will destroy the speed, finality, and cost savings that make arbitration an attractive dispute resolution alternative.
An Civil Justice Association of California-sponsored arbitration proposal (AB 2086-Keeley) died in committee. It would have let arbitrators correct any factual or legal errors in a decision prior to its court confirmation. Management by Judge and Jury
One of three bills making it much easer to win age discrimination lawsuits reached the Governor's desk in early July. Each of the measures would spawn age discrimination claims without a showing of actual discrimination.
"Under these bills the law will consider it age discrimination to lay off-or fail to hire or promote-someone over the age of 40 on the basis that their salary requirements are too much for your budget," said Civil Justice Association of California's Mark Krausse. Senate Bill 1098 (Kopp) cleared the Legislature despite strong employer opposition. In its letter to Governor Pete Wilson urging a veto, Civil Justice Association of California noted that the bill would "paralyze employers from making basic business decisions" and would go well beyond layoff situations by permitting age discrimination suits over a "hostile work environment."
The other age discrimination bills AB 1643 (Escutia) and SB 2192 (Vasconcellos) were awaiting floor votes.
Civil Justice Association of California-led opposition stopped a proposal (SB 1556-Kopp) to allow evidence of a defendant's financial condition to be presented to a jury before any verdict on liability is reached. The existing "bifurcated trial" rule is an important mid-1980s punitive damage reform later adopted by a number of other states. Opposition on the Senate floor in May convinced the author to remove the harmful language from his bill.
A bill (AB 2134-Escutia) to establish yet another basis for "private enforcement lawsuits" (this time dealing with unwanted phone solicitations) had its language removed after Assemblywoman Helen Thomson joined with Civil Justice Association of California in voicing her concerns over the creation of another basis for private lawsuits.
And a bill (SB 1926-Mountjoy) was defeated that included a provision making a manufacturer liable for damages caused by leaking fuel additives even though the manufacturer was not in any way responsible for the leak
IN THE COURTS
A year ago high school seniors at a Concord water park tried to set a school record for "clogging" a water slide by going down it in a huge group. The slide collapsed, with one death and numerous injuries resulting. As the one-year statute of limitations arrived, lawyers for 18 students and the parents of the dead student have filed suits blaming the private park, the city, and the school -despite numerous studies finding the slide structurally safe and the staff well-trained.
Two lawyers for a 20-year Hughes Aircraft employee sued 55 companies manufacturing a combined total of 222 chemicals for causing their client to develop cancer. The trial court dismissed the case twice because the plaintiff couldn't identify which chemicals caused the cancer or even which he had been exposed to. Upholding the dismissals, the appellate court recalled a "black letter statement" from California law: "It is axiomatic that a defendant cannot be held liable in tort for an injury he or she did not cause." The decision listed 23 law firms and 44 lawyers representing the firms blamed.
In Nebraska, parents of a 16-year-old girl are reported to be suing her boyfriend's mother for not preventing her son from making their daughter pregnant . . ..
California appeals judges upheld a lower court's throwing out a lawsuit blaming a Las Virgenes school district for a knee injury suffered by a cheerleader practicing a routine.
VERBATIM
"It allows plaintiffs' lawyers the ability to create laws undreamed of by the Legislature, and gives courts the power to boldly go where no Legislature has gone before."- San Francisco attorney William L. Stern, writing about California's Unfair Competition Act (Business and Professions Code Section 17200) in the Daily Journal newspaper.
"Making wireless phone companies uniquely vulnerable to lawsuits, as the trial lawyers selfishly demand, would only derail progress toward safer streets." Sacramento Bee editorial, July 2, 1998.
"'I was in such a shock that I didn't really know what was going on,' recalled the victim, who asked not to have her name used so that she won't be solicited by personal injury lawyers." -woman injured by dog attack, interviewed by Sacramento Bee reporter Ted Bell.
Despite the recognition that lawsuit abuse in other areas is undermining our economy and the respect we as a society should have for our legal system, there are still warring factions-between the reasonable approach and what I would call the self-interest approach . . . There are continuing efforts in the Legislature to undercut California MICRA."-Attorney General Dan Lungren in May 18, 1998, speech to the California Association of Health Facilities.
"One of the principal culprits in the drought of affordable-priced housing-particularly condominiums and town homes-is a litigation system which discourages multifamily production, pushes the cost of insurance sky high, and robs homeowners of equity." -Paul Tryon, executive vice president of the San Diego Building Industry Association, writing in the San Diego Business Journal.
"Law schools should give as much time to the study of cases in which disputes have been resolved without litigation as they give to the study of litigated cases."-Harrison Sheppard and Robert A. Edwards, writing in California Lawyer magazine.
" A few weeks ago in this column I gave 'my simple safety rules for traveling in 1998 Baja' . . . It has subsequently occurred to me that in light of today's litigious society, I was incredibly stupid to stick my neck out by giving any safety advice at all, and I hereby formally retract the advice in its entirety." - Baja fishing writer Fred Hoctor in Western Outdoor News.
TRIAL LAWYER WATCH
Trial lawyers did not fare well in their attempt to use their new "Republican Trial Lawyers Caucus" to get sympathetic candidates elected in high Republican registration districts in the June 2 primary election.
The biggest battle was in Assembly District 73, where the trial lawyers invested $90,000 to promote Jim Lacy. Nearly two of every three dollars he raised came from trial lawyers. But candidate Pat Bates won with 44% of the votes. Civil Justice Association of California's PAC, Californians for Civil Justice Reform, weighed in with a campaign mailing exposing the trial lawyer money and carrying a Bates support message from Assemblyman Bill Morrow, who is departing AD 73 to move into the Senate.
In Northern California, Dick Dickerson beat trial lawyer-supported candidate Art Brandwood by a 56%-44% margin in Assembly District 2, while in Assembly District 3 the trial lawyers' candidate David Reade was defeated by Sam Aanestad by the same margin. In these races, Civil Justice Association of California's PAC also played an important role in getting the voters information on the candidates' positions on legal reform.
Civil Justice Association of California's president compared the trial lawyers' new political strategy to "the early days of the space program when all those test rockets were blowing up right after launch."
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