February 18, 2010

Assemblyman Introduces Bill to Cap Punitive Damages in California

Assemblyman Roger Niello (R-Fair Oaks) has introduced a bill to cap punitive damages in California. Assembly Bill X8 40 would limit punitive damages to three times the amount of compensatory damages. It would also preclude punitive damages in product defect cases if the product complied with applicable regulatory standards, and it would limit non-economic damages to $250,000 in all negligence cases.

Many other states have adopted similar restrictions on punitive damages, but the idea hasn't caught on in California. A similar bill was introduced in the California Senate two years ago and never got past the Senate Judiciary Committee. This proposal is not likely to fare any better. The Civil Justice Association of California (CJAC), which sponsored this bill, is probably using it more as an opportunity to spread its message about the problem of excessive punitive damages in California.

The proposed $250,000 cap on non-economic damages will draw heavy criticism from the Consumer Attorneys of California, who have been mounting an attack on the existing $250,000 cap on non-economic damages in medical negligence cases, a cap that was adopted as part of the Medical Injury compensation Reform Act of 1975 (MICRA). The MICRA cap has already withstood several legal challenges.

Hat tip: CJAC