Dan Walters: California Supreme Court plays role in tort war

dwalters@sacbee.comAugust 15, 2011 

One of California's longest-running political battles pits personal injury lawyers against insurance companies and their business clients over rules governing who can sue and collect for what kind of injurious act.

The rivals have spent countless hundreds of millions of dollars on campaign contributions, lobbying fees, public relations operatives and other political weaponry, but that's chicken feed compared to the multibillion-dollar stakes.

Milestones in what insiders call "tort war" include then-Gov. Jerry Brown's signature on a 1975 law that limits pain and suffering damages in medical malpractice cases; a five-year truce known as the "napkin deal" in 1997; a huge ballot war over auto insurance in 1988; a successful insurer-backed referendum to repeal a lawyer-sponsored "bad faith" law in 2000; and still another ballot battle in 2004 that curbed unfair business practice suits against small business.

Insurers and their allies win some of the clashes in the political arenas and lawyers win some, but the war is also fought in the courts because judges can be just as powerful as legislators, governors and voters in setting tort parameters.

That brings us to Howell v. Hamilton Meats & Provisions, a case now awaiting a state Supreme Court decree that could have multibillion-dollar results.

The courtroom was packed when the precedent-setting case was argued in May. Ever since, legal analysts have been speculating – based on the comments of the justices hearing the case – about which way it would go.

The issue is whether someone who suffers injuries in an auto collision or other incident is entitled to collect the full amount of the medical bills issued by doctors, hospitals and other care providers, or is limited to the amount actually paid by insurers for that treatment – often a fraction of the supposed bill.

The case stems from a 2005 San Diego County collision in which a Hamilton Meat truck seriously injured Rebecca Howell.

Howell's medical bills approached $200,000 but medical insurance settled with the care providers for $60,000 and the trial judge reduced the medical part of her judgment to that amount.

The full amount was restored by an appellate court, and whatever happens in Howell's case will also settle several other cases hinging on the same issue.

Ironically, Chief Justice Tani Cantil-Sakauye authored one of those other cases as an appellate court justice, siding with the plaintiff.

How big is Howell? The insurance industry has declared that requiring compensation for full medical bills, rather than negotiated payoffs, could cost them a whopping $3 billion a year and generally, plaintiffs' lawyers would receive a third of that amount.

Those are big bucks, and any skirmish of the tort war inside the Capitol this year pales in significance by comparison.

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