Money pouring into California's Prop 46 fight

SACRAMENTO, Calif. (Legal Newsline) – In the months leading up to November, millions of dollars will be spent to persuade voters to do one thing that California courts and legislators have refused to do - inflate the cap on damages in medical malpractice lawsuits.

Adhering to the motto “if at first you don’t succeed,” software designer Bob Pack and state trial lawyers crafted Proposition 46, a ballot measure that would increase the Medical Injury Compensation Reform Act’s current cap of $250,000 on non-economic damages.

Come November, California voters will decide the fate of Prop 46, which in addition to inflating the MICRA cap to $1.1 million, will create a prescription drug database and call for the mandatory drug testing of physicians.

The coming battle to persuade voters will be an expensive one.

The initiative’s author and lead spokesperson, Pack, who lost his two children in 2004 when a woman high on prescription pills ran them over, is primarily supported by two organizations, Consumer Watchdog (in-kind contributions) and Consumer Attorneys of California (financial).

“There’s a good chance we will have around $10 million,” said Pack, who says his allies lack the monetary resources of the California Medical Association – MICRA’s primary defender and builder of an anti-Prop 46 collation incorporating hundreds of medical organizations, unions, business leagues and tort reform groups.

CMA spokesperson Molly Weedn confirmed the “Vote No On 46” campaign has about $34 million in the bank at the moment, a sizable amount donated from a wide range of coalition members committed to defeating the measure.

However, Eric Bailey, communications director for Consumer Attorneys, believes there is only one major group funding the effort to defeat the measure.

“Most of the money our foes have on hand has come not from CMA, but from malpractice insurance firms,” Bailey said.

“They are the true force behind this resistance, and it’s all about money for them. They have for decades secured huge profits or surpluses far beyond the insurance industry standard. Their opposition is about protecting those profits or surpluses. The medical insurance industry has some of the deepest pockets around. Backers of Proposition 46 have always expected to be outspent.”

Bailey says what Prop 46 really “has going for it is a solid base of support,” the “backing of scores of medical malpractice victims and their survivors” and endorsements by two of California’s leading politicians, House Minority Leader Nancy Pelosi and U.S. Sen. Barbara Boxer.

But despite encouragement from liberals Pelosi and Boxer, backers of the measure were dealt a blow over the weekend of July 12-13 when the Executive Board of the California Democratic Party voted to remain neutral on Prop 46, offering trial lawyers no political or financial support in the unfolding battle.

Tom Scott, the executive director of California Citizens Against Lawsuit Abuse, applauded the Democratic Party for taking a neutral stand and offered a theory on why the left and usual left-leaning groups, such as teacher and labor unions, are not supporting the measure: “We are all going to pay because the trial lawyers want more money.”

“It doesn’t matter what your political party is - everyone’s health care is going to go up with this,” Scott said. “The MICRA coalition is one of the most diverse and broad-based I’ve ever seen in politics. There are enough business-friendly Democrats out there that get the MICRA debate.”

Scott says the “multi-million dollar initiative will come down to 30 second spots” and that he ultimately believes voters won’t approve the measure so “trial lawyers can get more money.”

While MICRA may cap non-economic damages such as pain and suffering, plaintiffs can still sue for any tangible damages, like lost wages and medical costs, without restriction, and even seek an award of unlimited punitive damages in cases of malice, oppression or fraud.

Bailey, however, contends raising “California’s medical negligence cap to account for more than 38 years of inflation” will “provide a deterrence effect” and end the valuing of human life at $250,000.

“The MICRA cap artificially limits the value of a human life. In California, it means the life of our most vulnerable citizens – little kids, the elderly, nonworking parents – is worth just $250,000,” Bailey said.

“Should a child be worth just $250,000? Of course not. And in some cases, their lives are worth nothing because of MICRA. Many parents who have lost a child to malpractice can never get to court because of the stalling tactics of defense attorneys for malpractice insurance firms and the sheer costs of bringing these sorts of contingency cases to court – more than $100,000 in many instances. Proposition 46 will help address that sad paradox by raising the cap to account for more than 38 years of inflation.”

According to the Hamm-Frech-Wazzan report, while the MICRA cap has limited non-economic damages awards and discouraged the filing of weak and non-meritorious claims, it has not actually prevented the average payment to medical liability claimants from continuing to rise at a rate exceeding the rate of inflation.

Since 1976, the average size of paid medical liability claims in California has increased at a rate 2.54 times the rate of inflation. As a result, the average payment per claim in 2012 ($191,162) was more than six times what the average would have been if it had merely kept pace with the rate of inflation ($31,404), the report states.

A higher cap could mean higher health care costs, opponents of Prop 46 say.

Included in the official voter’s guide for Prop 46 is an assessment from the California Legislative Analyst Office, which estimates increased government health care from raising the cap of med-mal damages, likely ranging from the tens of millions of dollars to several hundred million dollars annually.

The estimate further shows those costs could potentially be offset from the measure’s new requirement on health care providers, “such as provisions related to prescription drug monitoring and alcohol and drug testing of physicians.”

The voter’s guide also contains a final rebuttal to the measure, prepared in part by Scott, which states: “Prop 46 is before you for one reason – to make it easier for trial lawyers to sue doctors.”

It adds, “46’s sponsors claim this is about drug testing doctors … but the lawyers who wrote and funded this measure have NEVER gone to the state legislature to propose drug testing of doctors.

“They have, however, sponsored three different proposals to get the state legislature to raise the cap on lawsuits … all three times the legislature rejected them. And no less than 10 times, trial lawyers have asked the courts to strike down the cap.”

In 1985, the California Supreme Court ultimately upheld MICRA in the case of American Bank & Trust v. Community Hospital, finding the act’s cap serves the intended purpose of keeping costs contained, court records show.

More recently, on Feb. 21 state Sen. Darrell Steinberg, a Democrat, introduced Senate Bill 1429 – an attempt to bring “interested parties” together “to develop a legislative solution to issues surrounding medical injury compensation.”

With no other option but to put the issue before voters, Bailey believes Californians will see past the “distorted” arguments against the measure and focus on the benefits – patient safety and civil justice for medical negligence victims.

“Proposition 46 makes sense,” Bailey said. “We have faith that California voters will see through the distortions spewed by foes and put California in the vanguard of the patient safety movement by approving Proposition 46.”

Reach David Yates at elections@legalnewsline.com