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California’s Supreme Court Opens a Path So Plaintiffs Can Recover Greater Nuclear Verdicts Against “Deep Pocket” Defendants

Author: Rob Olson

Guest Editor: April M. Cristal

October 12, 2020 3:11pm

In August 2020, California’s Supreme Court issued a unanimous opinion and created a significant exception to California Proposition 51 (“Prop 51”). The result of this new exception means a single defendant could be responsible for the entire non-economic damages award, even if a jury apportioned more fault to other defendants — and the plaintiff. This opinion will likely create a new strategy for the plaintiffs’ bar. We anticipate plaintiffs will begin pleading more intentional tort causes of actions and actively attempting to prove these claims, especially against “deep pocket” defendants, insured defendants, and particularly in multi-defendant litigation.

What is Prop 51?

In California, defendants are jointly liable for all economic damages and severally liable for non-economic damages. This means if one defendant is judgment proof, then the others must pay its entire share of the economic damages regardless of their respective responsibility in causing the injury. In theory, this ensures the injured party will be able to pay his medical bills. However, Prop 51 states each defendant is only responsible for their share of the non-economic damages based on how the jury apportioned fault. For example, in a lawsuit involving two defendants, a jury finds a judgment-proof defendant 95% responsible and an insured defendant 5% responsible. In that case, the insured defendant is accountable for the entire economic damages award, but only 5% of the non-economic damage award.

The new Supreme Court exception

The Supreme Court created an exception to Prop 51 in B.B. v. County of Los Angeles,10 Cal.5th 1 (2020). In B.B. v. County of Los Angeles, a jury found police officers used excessive force on a man assaulting a woman on the street while in a drug-induced haze. The assault caused the man’s death. The jury awarded $8 million in non-economic damages and apportioned fault as follows:

  • the decedent = 40%
  • several deputies liable negligent = 40% (collectively)
  • Deputy Aviles liable for battery = 20%

The trial court entered a judgment holding Aviles liable for 100% for the $8 million non-economic award. After a series of appeals, the California Supreme Court upheld the trial court’s ruling and explained Prop 51 was not applicable for intentional tortfeasors. Thus, if a defendant is liable for an intentional tort, they are responsible for 100% of the non-economic damages (or emotional distress) — even if the plaintiff was in a drug-induced haze.

What this means going forward and how Defendants should respond

Intentional torts are more than assault and battery claims; they include fraud, trespass, and various catchall claims that plaintiffs use to evoke punitive damages. Typically, plaintiffs tack fraud claims onto negligence or products liability lawsuits (for example, adding a fraud cause of action in strict products liability failure to warn cases). These fraud claims were often ancillary causes of action to get punitive damages before the jury or support efforts for more expansive discovery. However, plaintiffs now have a great incentive (i.e., millions of dollars) for the jury to consider an intentional tort cause of action against a “deep-pocket” defendant.

With non-economic damages for pain, suffering, and loss of consortium, often a multiplier of the economic award, defendants must now aggressively attack the intentional tort cause of action at every stage of the litigation. Defendants can attack them through discovery and in motion practice. Keeping such intentional torts away from the juror’s purview must now become a top priority.

Additional problems will also need to be addressed, such as if intentional torts are added, will these intentional tort claims preclude insurance coverage as a “loss intentionally caused by the insured.” Defendants may also be able to use this new exception as a sword against defendants who committed intentional torts and reduce potential exposure to non-economic damages.

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