(CA) Budget Seeks 75% of Awards for Damages (from civil lawsuits)

[kskiska]

Governor hopes system being tried in eight other states will curb shortfall with money from lawsuits. But experts call proposal too optimistic.

SACRAMENTO — The trial lawyers say it is a horrible idea, but Gov. Arnold Schwarzenegger wants taxpayers to stake a claim to some of the whopping awards juries slap against negligent carmakers, deceptive cigarette companies and fast-food restaurants that serve coffee too hot.

In a proposal that took the Capitol by surprise, Schwarzenegger is suggesting the state collect 75% of the punitive damages awarded in civil lawsuits filed in California. After all, the governor says in the revised budget plan he released Thursday, plaintiffs in civil lawsuits already get a separate award to compensate them for their injury or loss.

"Punitive damages were never meant to be windfalls" for those who file lawsuits, said Richard Costigan, the governor's legislative affairs secretary. "They are meant to punish the defendants. Society as a whole is impacted by those actions …. How does it benefit everybody when one plaintiff gets $100 million?"

Costigan says the money should go to the public good — like closing California's multibillion-dollar budget gap. The administration suggests that the state could rake in $450 million through this maneuver, although legal scholars who have done the math say that may be wishful thinking.

more…
http://www.latimes.com/news/local/la-me-punitive15may15,1,4815291.story?coll=la-home-local

[gratuitous]

1. The State of Oregon claim 60% of any punitive damages

However, punitive damages are also not meant to be a windfall for a state that doesn't lift a finger throughout litigation. In the case our office pursued, we actually had to work against the state's interest in order to secure a $79.5 million punitive damages verdict.

Punitive damages are a very rare award, pleaded, proved and awarded in cases only where the defendant showed a conscious disregard for the safety and well-being of others. Large corporate defendants are usually able to act with impunity against a state's citizens because of the indifference or inaction of the state in defense of its own citizens.

Strange that Gov. Musclehead can only balance the state's budget by plundering the jury awards to grievously afflicted individuals. Why doesn't he just raise taxes on large corporations?

[Trillo]

2. I wonder how many more citizens this will disenfranchise?

How many more lawsuits will go unfiled? How much more will the anger of being wronged boil under the surface of individual citizens who've been wronged?

Why should a government that allowed a civil abuse be allowed to collect the punitive damage when it's proved? It seems to me that this creates an incentive for the government to allow more civil abuses, not less.

[unblock]

3. um, the government already taxes punitive damages, right?

damages that are awarded as compensation for lost wages are also already taxed. only damages awarded to cover direct expenses such as hospital bills are exempt, afaik.

so what's wrong with the government getting 40% or so, between federal, state, and local taxes? isn't that enough?

no, apparently, we need to make sure that people think that suing to stop corporate wrongdoing just isn't worth it.

the party that thinks 33% is too high for filthy rich bastards now thinks that 75% is about right when it's poor people setting things right.

[AP]

9. Nope. Civil damage awards aren't taxed. Most lawyers take a fee that's

smaller than what the plaintiff would have paid in income tax if they received the award as earned income.

So when people complain about lawyers fees, remind them that plaintiffs get more money after lawyers' fees than they would have gotten if the award was earned as income.

[Elidor]

4. When juries award large amounts for punitive damages

Conservative appellate judges (many of whom have worked for the insurance industry at some point in their careers) usually chop the awards way down to size or reverse them altogether. So the math is bogus to begin with.

And doesn't it stink that corporations which may be so fined are allowed to make political contributions to the very lawmakers who can decline such awards? Particularly after the sweetheart deal that Austrian moron gave to Enron after it raped California.

It's not enough for Ahhnuld that Californians have gotten the shaft. He wants to keep giving it to them.

That final point is dead-on, unblock.

[ecoalex]

5. Swartzie will not look where the $$$ could come from.

Swartzie says biz is sacrasanct, and will not tax them, or make them pay their fair share. 60% of the corps do not pay taxes, thanks for screwing us Ahnold. His idea of "creativity" is not mine.He will screw us over and over. He was in on a meeting with Reliant, Enron, Dynergy, Williams et al in April ,during the electricity fraud. He's a dirty bird , Jah, Fer Sure......"I'll Drive " ! No Thanks Pal.

[Straight Shooter]

6. I despise these broadbrush statements in reference to awards

"Punitive damages were never meant to be windfalls" for those who file lawsuits, said Richard Costigan, the governor's legislative affairs secretary. "They are meant to punish the defendants. Society as a whole is impacted by those actions …. How does it benefit everybody when one plaintiff gets $100 million?"

Let's have a list, Mr. Costigan, of all those "one plaintiff $100 million" awards.

[Democat]

7. If Gray Davis did this, the media would call it a "Justice Tax"

When Davis tried to add a fee to car registration, they called it a "tax" - why doesn't the media call this proposal by Arnold a tax?

Because the California media is owned by the right wing.

Here is a line that would be called Communist if it was done by Davis: How does it benefit everybody when one plaintiff gets $100 million?"

The Democrats in California are letting Arnold run wild, just like they did with Bush after 9/11. They don't seem to have any idea how to deal with him, so instead, they just let him get away with murder.

[JDPriestly]

8. What a travesty (sorry this post is so long)

Actually, in California, punitives are available upon a showing of fraud or malice as well as conscious disregard for the rights of others, but only in certain cases. It is not easy to persuade a jury to give punitives. The defendant's conduct has to be pretty disgusting.

Why should the State of California get a share of the damages in a case like the wrongful death suit against OJ? Nicole Simpson was killed outside her house. The police (government) did to nothing to protect her when she was beaten before her murder, nothing to prevent her murder and then botched the murder investigation.

What about police brutality cases? Should the government get a share of the damages? If the State of California did its duty and prosecuted police officers who used excessive force so citizens didn't have to sue, there would be no punitives for police brutality.

How about the cigarette cases? For years, the State of California made it illegal to sue the tobacco companies for damages. Why should the State of California get a share of the punitives now? Think of the lives (and punitive damage payments) that would have been saved had the State of California done more to discourage smoking in the first place.

As for punitives for fraud, the State of California should investigate, enforce and prosecute laws against fraud, not leave that job up to private individuals. The State of California has the right to impose fines and penalties for some of this behavior and should do so.

Unless you have ever brought a civil rights claim or sued someone for fraud or malicious conduct, you cannot imagine how stressful it is to be a plaintiff. Your life is an open book. You have no privacy. With just a little effort, a clever defense attorney can get lots of embarrassing details about your personal business into the public record. At the very least, your name goes into the public record, and future employers, lenders, in-laws, anonymous voyeurs, etc. can read anything in the public record. Remember the film about the man who blew the whistle on the tobacco companies? That's how hard it can be.

In addition, those huge verdicts are not nearly as big as they sound -- after you've paid court costs, experts, research, taxes, etc. And don't forget, a big hunk of the damages goes to the attorneys who, believe me, earn every penny of it. Going to trial is a lot harder than starring in a movie. And you don't get a license to practice law by taking correspondence courses, Meister Schwarzenegger.

The fair thing for Schwarzenegger to do is to raise taxes on all unearned wealth -- dividends and inheritances as well as punitive damages awards. But, of course, Schwarzenegger doesn't want that, because his own taxes would go way, way up.

[AP]

10. Sounds good, but this is meant to discourage poor people from suing corps.

And poor people are the people would incur some of the most obscene damages from corporations (think of the way poor neighborhoods are poluted by chemical companies...).

And you know why it's 75% and not a more reasonable 10%? Because 75% leaves about 25%, which is less than most lawyer fees.

Republicans never want to touch economic damages. They always want to limit punitivie damages. This is because if a rich person is injured by someone's negiligence, they want to get the 100s of millions in lost income they suffer.

If you're poor, your real, economic damages might be as low as 100K no matter how gross the negligence. So, the only incentive for a lawyer to take on a Erin Brocavitch-proportion law suit is for the potential punitive damage award.

But, if you're a poor person and you have a huge class action suit that is going to cost a lawyer a million bucks just to mount a semi-competent action, and the state is going to get 75% of the bulk of the award, and your lawyer can only get 25%, then why bring the case? It's not going to get you anything.

That's why Arnold wants to pass this law.