Schwarzenegger Sees Money for State in Punitive Damages

[CShine]

Gov. Arnold Schwarzenegger's new budget aims to raise almost half a billion dollars by taking 75 percent of the punitive damages that juries in California award to plaintiffs. In the process, he proposes to limit the fees lawyers can charge their clients and to protect defendants from multiple punitive awards for similar conduct.

Critics say the proposal is a Trojan horse. Though the governor presented it as a budget measure meant to raise revenue, it is, they say, a comprehensive revision of the rules governing punitive awards in injury cases - not a tax but tort reform in disguise. At hearings in Sacramento this week, lawmakers are to hear from scholars, consumer advocates and business groups, many of whom say they find aspects of the proposal dangerously flawed.

Unlike compensatory damages, which are meant to pay plaintiffs for their losses or injuries, punitive damages are intended to punish and deter defendants who engage in egregious wrongdoing. They are thus similar in purpose to criminal fines. They can also be a windfall to plaintiffs and their lawyers.

http://www.nytimes.com/2004/05/30/national/30california.html
"The problem with punitive damages," said Cass Sunstein, a law professor at the University of Chicago and a co-author of a book on the subject, "is that they have a lotterylike feature. If there are going to be windfall gains, they shouldn't go to one person but to the public as a whole."

[w4rma]

1. …

[Massacure]

2. Where does the money go to currently?

[KittyWampus]

3. The Injured Party & Their Lawyer

without these damages... I wonder if lawyers will be as likely to represent injured or aggrieved clients. It can take an awful long time before settlements happen. And when they do, sometimes the compensatory amounts are whittled down.

[AP]

7. They'll only represent rich people with high potential econmic...

...losses.

Poor people wouldn't even bother suing because most of their award (if any) would have to go to their lawyer.

Why put yourself to all the trouble of pursuing a case just to make your lawyer rich?

And why would a lawyer waste their time representing a poor person when they could represent rich people and make more money?

[Massacure]

10. CShine said that

punitive damages were being taxed. Not compensatory.

Whats the difference between them, and where the money goes?

[AP]

11. Damages you can get when you sue for a civil wrong

- you can sue fo economic loss to compensate you for your actual, financial damages.

- you can sue for pain and suffering

- you can sue for punitive damages.

In some situations, statutes limit the damages you can get. For example, in the UK, race discrimination claimants can't sue for punitive damages (which is lame as hell, since a lot of race discrimination is extremely egregious and is against people who are very poor).

Taxing punitive damages at 70% is basically saying don't bother claiming them, because your lawyer is going to get most of it.

[Trillo]

4. Just one more aspect of State Ownership of the aggrieved. n/t

[AP]

5. This will stop poor people from suing.

When you sue you can get your economic losses and punitive damages. Poor people never get large economic damages, because they tend not to have have a lot to lose. Corporations would injure poor people left and right if all they had to do was pay you for your lost wages.

Republicans NEVER talk about limiting economic losses, because if I guy who makes 500K a year gets injured by a negligent doctor, he wants to get his full economic damages from the doctor, which could be millions.

Republicans always talk about limiting punitive damages because, say, you're unemployed, your potential award could be so little it wouldn't be worth bringing a suit.

That's why Arnold wants the tax to be as high at it is -- 70%. That means, if your poor, and the only damages you could really get were punitiive, your entire award would be eaten up by your 30% lawyer fee. Why bring the suit?

Another thing that's crazy about this, as another DU'er pointed out recently, is that if punitive awards should be windfalls for a plaintiff, they DEFINITELY shouldn't be winfalls for the state (and isn't it a little crazy that a state would have an economic incentive in, say, not regulating corporate activities because they were turning private lawyers into windlfall collection agencies for themselves?).

[mulethree]

12. what if -

you made attorney's fees and court costs part of the economic damages? Then the court/jury could determine what attorney fees are reasonable. Base reasonable in part on the defendant's attorney fees?

[AP]

13. In the US you can't sue for attorney's fees unless...

...there's a statute that says you can, or you make a very compelling argument that you're entitled to them.

In the US, each party pays his or her own legal fees.

But if this law actually passed, I would hope that something lke that would happen. But it just seems so much smarter to just not do this. It's so obvious that it's basically a license for big businesses to hurt poor people, and the best example of how this would happen is that big businesses would build poluting factories near poor neighborhoods.

[lanparty]

6. 75% taxation rate ...

You would expect that from a "tax and spend" liberal ... right?????

This is a great plan. Tax the small percentage of disfigured and wounded people who actually WON their cases againt corporate America. Great fucking strategy.

I strongly believe in laws meant to punish lawyers who bring amazingly frivolous lawsuits into the justice system. But this is ridiculous. Without trials lawyers, we would have ZERO consumer protection. Thats just the way the system works.

[Deja Q]

8. Great. Add that to tort "reform" and the people hurt by corporate america

get zilch.

Arnold can fsck himself with a blunt instrument.

As for Uncle Cass: "The problem with punitive damages," said Cass Sunstein, a law professor at the University of Chicago and a co-author of a book on the subject, "is that they have a lotterylike feature. If there are going to be windfall gains, they shouldn't go to one person but to the public as a whole."

Wow. A lawyer for conditional socialism. :eyes: Make the whole society socialism and I might seriously listen...

[AP]

9. By the way, if you're ever the victim of negligence, prey that you're...

...employed when you get hurt or prey that you suffer a great deal of pain.

it could be the difference in 100s of thousands of dollars.

If your not employed, you may be only limited to recovering punitive damages and pain and suffering.