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Drug Tests and Damages

By Kari Santos | Oct. 2, 2014

Law Office Management

Oct. 2, 2014

Drug Tests and Damages

Proposition 46, which would raise a four-decade-old cap on noneconomic medical malpractice damages, followed a rocky path to the ballot.

A 39-year-old limit on medical malpractice damages doesn't translate easily to a 30-second campaign spot. But a confluence of frustration, tragedy, and political bargaining has California consumer attorneys hopeful that Proposition 46 on November's ballot is their best attempt yet to lift a cap on noneconomic damages that they say unfairly stymies victims.

The measure - which spawned one of the nation's priciest electoral contests this year, with more than $67.5 million donated in support and opposition by September - is a mishmash. It would quadruple the damages cap to $1.1 million and add an inflation adjuster; it would require doctors to check patients' narcotics prescription histories; and it would mandate drug testing of doctors. Advocates say the three prongs are equally important, but some have acknowledged they hope the last element would finally turn a long-running battle over damages in their favor.

The fight began in 1975, when Gov. Jerry Brown signed the Medical Injury Compensation Reform Act, or MICRA, capping noneconomic malpractice damages at $250,000 after a spike in insurance rates led some doctors to suspend services to all but emergency patients. (See Cal. Civ. Code § 3333.2(b).) Providers blamed plaintiffs lawyers for the rate increases. Tort lawyers blamed the hikes on insurers' efforts to recoup unrelated investment losses. They challenged MICRA from the start as unconstitutional, lobbied legislators, and supported reform-minded candidates.

Similar arguments from both sides show up in this year's campaign literature. But University of Pennsylvania law professor Tom Baker says neither explanation is right: The spike was a market correction after insurers competed too vigorously and found themselves short on cash to pay claims.

October 2003 was a turning point for lawyers fighting the cap. Just as they were closing in on success in the Legislature, they lost a key ally when Gov. Gray Davis was recalled. But they gained important champions after two young children were killed in Danville by a driver high on prescription drugs. When the grieving parents, Bob and Carmen Pack, consulted lawyers about suing Kaiser Permanente for negligence, the first nine refused their case, citing the cap on noneconomic damages. In addition, economic damages for victims with low incomes - or none, like children - may be reduced to zero. "Damages caps are a blunt instrument," says Stanford University law professor Nora Engstrom. "They're bad at what they purport to do, and they have terrible side effects."

Bob Pack became a prominent spokesman for raising the cap. The former America Online executive, who co-founded Internet provider NetZero, also created the online version of a database where California doctors can check patients' prescription records. And he got the Consumer Attorneys of California and the nonpartisan Consumer Watchdog to back requiring clinicians to use it.

The drug testing prong of Prop. 46 was added in part because it played well with likely voters and in part because supporters realized it could be awkward for the medical industry to oppose. "Most people don't know that doctors aren't drug tested and are appalled," says Jamie Court, Consumer Watchdog's president. Still, providers argued that raising the cap would be too costly.

And opponents of the measure, who have raised more than seven times as much money as supporters, are running ads that lean heavily on antipathy toward lawyers. They were particularly angry about the summary that Attorney General Kamala Harris's office wrote for signature-gathering petitions because it gave top billing to the measure's drug testing provision. "Harris intentionally deceived ballot signers by highlighting one of the fig leaves that trial lawyers attached to the measure to hide their real intent," a San Diego newspaper editorial declaimed. A Field Poll in early September found the tide turning against the measure, with just 34 percent of likely voters in favor.


Kari Santos

Daily Journal Staff Writer

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