Punitive-sharing: Arnie caves

by Walter Olson on September 10, 2004

California Gov. Arnold Schwarzenegger has signed into law a bill bestowing on the state a 75 percent share of punitive damage awards — but only after the details of the measure had been radically revamped in a manner highly unwelcome to critics of the litigation system. Negotiators agreed to a “lawyers eat first” principle, absent in the original proposal, which would guarantee private counsel a 25 percent share of the state’s take; they also stripped away a provision, much sought by defendants, which would have barred multiple punitive damages over a single course of conduct. Finally, they applied complicated time restrictions to the new law which makes it likely that it will cover relatively few actual cases unless later extended (“Governor Signs Bill Adopting Court Budget Reform, Giving State Share of Punitive Damages”, Metropolitan News-Enterprise, Aug. 18; Dan Walters, “Details torpedo Schwarzenegger’s budget gimmick on civil lawsuits”, Sacramento Bee, Sept. 8). George Wallace at Declarations and Exclusions has more. The state trial lawyers’ association, which styles itself Consumer Attorneys of California, declared itself “gratified” by the governor’s turnaround on the issue. (“Schwarzenegger’s Punitive Award Fund Part of Budget”, Bloomberg, Jul. 29, no longer online). More: Victor Schwartz, Mark Behrens and Cary Silverman have a paper on the subject from Washington Legal Foundation (Sept. 3, PDF). And Southern California Law Blog covered it Sept. 4.