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Part IX: The Past, Present and Future

Changes to the Law

The law is an ever-evolving thing, and is constantly being updated and reinterpreted. Since the first edition of our book, there have been some changes to California’s laws that pertain to personal injury. Other rulings have changed how the courts view certain kinds of damages.

These are just a few examples of how the law has changed in the short time since our First Edition.

Leung v. Verdugo Hills Hospital

This was an interesting case that has changed the way shared or joint-liability is handled.

In 2012, the California Supreme court reversed a lower court’s decision, thus undoing a 200 year old concept regarding co-defendants and something called “good faith” settlements. With this decision, your lawyer has to change how they handle a case with more than one at-fault party. The change, however, benefits the victims in a major way.

Aidan Ming-Ho Leung was six days old when he suffered irreversible brain damage due to a mistake by his pediatrician. The case was complicated when it was revealed that the hospital was also at fault for not catching the preventable mistake, thus making the damage worse. Leung’s parents sued both the pediatrician and the hospital, seeking to hold both parties responsible.

The pediatrician agreed to a settlement with the Leung family of $1 million, the limit of the malpractice insurance policy. The hospital, on the other hand, did not settle and took the case to trial.

A jury found the pediatrician 55% at fault and the hospital 40% at fault, placing 5% of the fault on the Leung family. Before damages were awarded, the hospital appealed the ruling on the grounds of a common law “release rule.” This release rule stated that once a plaintiff settles with one co-defendant, the other defendant is off-the-hook, and cannot be held liable. The hospital used this rule to claim they could not be held liable for Aidan’s brain damage, since the family had accepted a settlement with the pediatrician.

The California Supreme Court decided that the family in fact did have the right to seek compensation from the hospital, despite having already settled with the pediatrician. This created what is now called the “setoff-with-contribution approach.”

After the Leung decision, if more than one party is responsible for your injuries, they both have to either answer to a jury or settle. If Party A decides to settle, Party B doesn’t get to just walk away scot-free. This eliminates the “waiting game” some co-defendants can use: waiting to see if the other co-defendant settles before making their next move.

Sherman v. Hennessy Industries, Inc.

In 2015, the California Supreme Court declined to review this case, thus upholding a lower court’s decision. What it did was protect workers from defective products they’re forced to use.

Michael Sherman was a mechanic for Hennessy Industries, building drum brake pads. One of the machines employed in the manufacturing process was ejecting asbestos dust while in operation. Sherman was bringing the dust home on his clothes, which eventually caused his wife to develop mesothelioma, a disease she later died from.

Sherman sued his employer, arguing they failed to properly notify him of the machine’s dangers and did not protect him fully. The employer argued they could not be held liable for a product they did not design or manufacture.

A jury initially ruled in favor of Sherman, and Hennessy quickly appealed. Hennessy argued again that they could not be held liable since they did not design the product, citing an earlier judgement. The courts found this to be an exception to the rule, since Hennessy knew the brake pads contained asbestos, that asbestos was harmful for you, and that the machine exposed workers to it.

Since the California Supreme Court would not review the case, this means that if you are exposed to a hazardous or faulty product, the party who placed you in that position can be held liable.

This has far reaching implications, since it removes protections from a number of situations. Imagine if a shopping mall uses an escalator they know is defective. Or if a car rental company rents you a vehicle previously shown to be faulty.

The “we didn’t design it” defense no longer keeps you from recovering damages from someone who exposed you to danger.

Howell vs. Hamilton Meats Inc.

Many people don’t realize that their medical care is often billed to their insurance provider at a substantial discount. You might rack up a medical bill of $70,000, but the hospital bills your insurance company at a discounted rate of $40,000 or so.

For a long time in California, this discount was ignored and a plaintiff would be awarded “fair market value” for the medical services rendered. While the hospital only billed for $40,000, you’d be awarded the full $70,000 in bills.

In 2011, the California Supreme Court made a landmark decision that changed all of this, in turn changing the entire face of Personal Injury law.

A woman named Rebecca Howell was injured in an accident caused by a truck owned and operated by Hamilton Meats Inc. When her case had gone to trial, she had received just short of $190,000 worth of billable medical care.

Howell’s insurance company however, received a discount from the hospital, and only paid $60,000.

With the law the way it was then, when Howell won the case, the meat company had to pay the full $190,000 of medical costs. After the judgement, they appealed the decision and said they should only have to pay the $60,000 the insurance company was billed, since that’s the actual amount that was paid.

After a long legal battle, the case ended up in front of the California Supreme Court, who sided with the meat company. They were only liable for the $60,000 the insurance company was billed.

This has effectively punished you for having insurance. You pay for your insurance to cover the costs of an injury, yet you are completely unaware that the hospitals are giving insurance companies such a discount. Nobody tells you this until it becomes vital information.

Howell vs. Hamilton Meats delivered a massive blow to the rights of accident victims. The California Supreme Court effectively endorsed the questionable practice of providing massive discounts to insurance companies as a way to cover themselves.

The Howell decision is basically insurance for the insurance companies.

Troy and Alana Pack Patient Safety Act of 2014 (Prop 46)

In the 1970s, the state of California placed a cap on the amount of money a plaintiff could be awarded in a medical malpractice suit. This meant that if someone was injured because of a doctor’s mistake, they could only recoup $250,000 in damages.

Even in the 1970s, people had a misconception that plaintiffs in personal injury cases were looking for a payday. This, of course, is not true. The political climate didn’t see it that way, however.

Fast forward to 2014, and the caps had not moved. While $250,000 may have been a substantial amount in the 1970s, it was nowhere near ample in the 2010s. The cost of living, inflation, changing medical climate, and other factors made that cap an absurdly inadequate amount. The cost of recovering from a major malpractice incident was several times that. But the cap remained.

Prop 46 aimed to raise this cap, to give victims and their family a much more realistic settlement. While a system with no cap would make much more sense, the proposition was just a start. The cap was to be raised to $1 million, giving juries freedom to award appropriate amounts.

The proposition was defeated based on two things. First, the opposition argued that the bill wouldn’t have been about protecting patients, but benefiting trial lawyers. The second issue hinged on pieces that were tacked onto the law regarding drug and alcohol testing for doctors and other such measures. Doctors were furious about this, as they felt it was an overreach by the government.

As the debate raged, the opposition kept repeating the idea that the law would only benefit “the greedy trial lawyers.” Proponents of the bill insisted this was about getting victims awards that made sense.

Proposition 46 would have made sure you were compensated for all expenses and damages you incurred from a malpractice injury. It also would have held doctors who committed malpractice accountable for their negligence. Doctors would no longer be able to hide behind the caps and their malpractice insurance, but would be held financially accountable.

Yet over and over, it kept coming back to this idea of “greedy trial lawyers”—an idea firmly rooted in the stigma left over from the Liebeck case. People still, for some reason, felt like there was a wave of cash-grabbing lawsuits out there—an idea that is entirely fictional.

Because of the drug testing clause and the public’s misconception of what these caps meant, Prop 46 is merely a memory.

This brings a chilling problem for the future. Malpractice cases aren’t going to be worth fighting anymore.

With the damages capped at the 1970s level they are now, merely mounting and fighting the case costs more than you could ever be awarded. Too many lawyers will end up passing on these cases, since they’d end up being a Pyrrhic victory at best.

With Prop 46 defeated, will victims of malpractice ever get the justice they deserve? It’s hard to say.