April 8, 2010

Proposal to Cap Punitive Damages in California is Still Alive

A few weeks ago we reported that a proposed bill to cap punitive damages in California (AB X8 40) was dead. As it turns out, the reports of that proposal's death were greatly exaggerated.

That particular bill is indeed dead, but the substance of it has been added to another pending bill (AB 2740) through a gut-and-amend procedure, by which the contents of one bill are stripped out and replaced with something new. The original version of AB 2740 dealt with benefits for National Guard veterans, but now it contains three entirely different proposals: (1) cap punitive damages to three times compensatory damages, (2) prohibit punitive damages against product manufacturers who comply with federal or state regulations, and (3) limit non-economic damages in negligence cases to $250,000. We will continue to follow the status of this bill as it moves through the legislative process.