One faction scores win in Capitol’s perpetual ‘tort wars’ while another battleground looms

One of the state Capitol’s perpetual conflicts, dubbed “tort wars,” pits personal injury attorneys and their allies, such as labor unions, against business groups and their insurers over laws governing which activities can be subjected to damage-seeking lawsuits.

Over the years, as one side seeks to expand the universe of civil wrongs (torts) that can be brought to court and the other seeks to freeze or even shrink such opportunities, titanic political clashes have erupted either in the Capitol or the ballot arena.

One highlight — or lowlight — of the never-ending duel occurred in 1987 when private negotiations over a tort war truce moved from the Capitol to Frank Fat’s restaurant, a Sacramento political hangout. Then-state Assembly Speaker Willie Brown hopped from table to table. The result was the infamous “napkin deal” that gave something to each faction and suspended hostilities for a few years.

Overall, tort wars have been something of a standoff as each side claimed occasional victories and suffered occasional losses. But they continue because the potential stakes are many billions of dollars. Well-heeled participants will spend millions on lobbying fees, campaign contributions to legislators and ballot measure battles to prevail.

Three years ago, the warring factions were headed for a very expensive showdown with dueling ballot measures. The pro-litigation side had qualified a measure for the 2022 ballot that would, if passed, have virtually repealed a 1975 law limiting pain and suffering damages in medical malpractice suits to $250,000.

In response, the Civil Justice Association of California, an umbrella organization of business and insurance interests, proposed a countermeasure that would have limited lawyers’ shares of personal injury damages to 20%.

The standoff resulted in a quickly enacted compromise that preserved the cap on malpractice damages but gradually raises it. The two ballot measures were shelved.

Legislative sessions usually see at least one effort by one or both of the factions to change tort law. This year’s example is Senate Bill 799, carried by Sen. Ben Allen, an El Segundo Democrat, and backed by trial lawyers, labor unions, local governments and Attorney General Rob Bonta. SB 799 would extend California’s False Claims Act to high-dollar tax disputes, thus allowing lawyers to go after taxpayers deemed to be scofflaws and collect fees if they win.

Its introduction sparked an intense effort by business and insurance groups, via the Civil Justice Association of California and the California Taxpayers Association, to strangle the measure.

The bill easily cleared the Senate Judiciary Committee but opponents prevailed in a showdown hearing in the Senate Revenue and Taxation Committee last week, with just two of the committee’s five members (both Democrats) voting for it. Two other Democrats refused to vote, which had the same practical effect as voting “no.”

Read More: Power is never having to say ‘no.’ How California Democrats kill bills without voting against them

The civil justice and taxpayers groups hailed their win, declaring, “SB 799 would have unleashed shakedown lawsuits against business owners and outsourced the state’s responsibility for tax enforcement to the plaintiffs’ bar.”

There was an ironic coincidence on the issue. As SB 799 was being rejected, Los Angeles Mayor Karen Bass was visiting Sacramento to plead for state help in dealing with her city’s huge budget deficit, citing a huge increase in payouts from liability lawsuits as a major factor.

“Liability settlements have tripled from backed up lawsuits during the pandemic in uncapped damages,” Bass said.

City Attorney Hydee Feldstein Soto accompanied Bass to seek a limit on damages from suits against cities. “We’re trying to bring California more into the mainstream and make sure that we don’t pay taxpayer dollars out unnecessarily or in disproportionate amounts,” Feldstein Soto said.

Their position is a little odd, given that the League of California Cities had supported SB 799.