Dan Walters

Opinion: Decades-old mistake is at the root of California’s Prop. 46

Proponents and opponents of Proposition 46 are bombarding California voters with tens of millions of dollars in television spots and other propaganda – probably because of a tactical political mistake 39 years ago.

The measure, if enacted, would do several things, but its major effect would be to more than quadruple the $250,000 cap on noneconomic damages in medical malpractice cases, often dubbed “pain and suffering,” and increase it for inflation in the future.

Doctors, hospitals and other elements of the medical industry have committed more than $50 million to defeating the measure, while advocates, led by personal injury lawyers, are spending perhaps a fifth as much to pass it.

The increase from $250,000 to $1.1 million reflects inflation since 1975, when the Medical Injury Compensation Reform Act (MICRA) was enacted by the Legislature and Gov. Jerry Brown, during his first year as governor. It responded to what doctors and hospitals said was a ruinous escalation of malpractice insurance premiums.

Doctors’ wives camped out in Brown’s foyer to dramatize the issue. And the lawyer lobby, then known as the California Trial Lawyers Association, apparently made a big tactical error.

Barry Keene, the legislator who carried MICRA, said last year that he wanted an inflation escalator in the $250,000 cap, but trial lawyers opposed it, believing that a more restrictive bill would be easier to defeat in the Legislature or in the courts.

But the Legislature passed it and the state Supreme Court upheld it. “It may have been a good bet at the time, but it lost,” said Keene.

Had the inflation escalator been adopted in 1975, the cap would be $1.1 million today and 39 years of political war probably would have been averted.

The lawyer lobby, later renamed Consumer Attorneys of California, has repeatedly tried to persuade the Legislature to repeal or modify the cap, but it achieved just one change in 1987 as part of the infamous “napkin deal” that lobbyists worked out in Frank Fat’s restaurant.

The deal, mediated by Willie Brown, then the speaker of the Assembly, modified several personal injury laws. One provision loosened MICRA’s tight limit on lawyers’ contingency fees.

But the tradeoff was making punitive damages more difficult to assess in all personal injury lawsuits, including malpractice cases.

The napkin deal also included a five-year truce in the MICRA war, and after it expired in the 1992, the lawyers resumed perennial efforts to change the cap. But they never could get traction, thanks to adroit lobbying by medical interests.

With a MICRA initiative looming for the 2014 ballot, former Senate President Pro Tem Darrell Steinberg worked on a deal to raise the cap to $500,000 but was unable to pull it off.

And that’s why voters will now settle the conflict, at least temporarily.

Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.