Proposal would limit damage awards in California

Chris Rizo Feb. 17, 2010, 8:17pm

Roger Niello (R)

John Sullivan

SACRAMENTO, Calif. (Legal Newsline)-California courts awarding plaintiffs exorbitant damage awards will come to an end if one Republican state lawmaker has his way.

State Assemblyman Roger Niello introduced legislation Wednesday that would set limits on punitive damages and protect businesses from punitive judgments over products approved by regulatory agencies.

The Sacramento-area Republican's proposal -- outlined in Assembly Bill 8X 40 -- would limit punitive damages to three times the amount of compensatory damages awarded in a case, while awards for noneconomic damages would be capped at $250,000.

"Neither justice nor economic vitality is served through excessive punitive legal extractions," said Niello, who owns retail automobile dealerships with his family partners.

His legislation would also protect manufacturers from punitive damage judgments when their product has been approved by a regulatory agency, unless the company had supplied misinformation or withheld information about the allegedly defective product.

Niello's proposal to cap noneconomic damage awards at $250,000 in all civil cases is similar to California's landmark Medical Injury Compensation Reform Act, the 34-year-old law that limits noneconomic damages in medical malpractice cases at $250,000.

The bill is backed by the Civil Justice Association of California, the state's tort reform lobby. The group's president, John Sullivan, told Legal Newsline that the bill will help the Golden State's beleaguered economy recover.

"This would have a positive effect on keeping jobs in this state and maybe even create them," Sullivan said. "One of the things that makes it's very difficult to operate a business (in California) is the uncertainty that's caused by the legal system."

He conceded that the bill could face a tough go of it in the Democrat-controlled state Legislature.

"It's going to be tough," Sullivan said. "Traditionally, plaintiffs' lawyers contribute heavily to candidates ... they have people on (legislative) committees who do their bidding."

But given California's fiscal woes, Sullivan said efforts ought to be made to jumpstart the state's economy.

"These are times when some trade-offs have to be made, and they are going to have to give some," Sullivan said of trial lawyers.

From Legal Newsline: Reach staff reporter Chris Rizo at

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