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PERSONAL INJURY: PROTECTING THE DEEP POCKET- A QUICK OVERVIEW OF PROPOSITION 51 AND ITS EFFECT ON CURRENT LITIGATION

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When state voters approved Proposition 51, otherwise known as Multiple Defendants Tort Damage Liability Act in 1986, this was seen as an important step in tort reform in California. Finally, a mechanism was in place to discourage plaintiffs from suing entities just because they have “deep pockets.”

However, there is an emerging trend by Plaintiffs in trying to get around Proposition 51 by pleading an intentional tort and punitive damages against “deep pocket” defendants in negligence cases.

Proposition 51 is codified in California Code of Civil Procedure section 1431.2, which provides in pertinent part: “In any action for personal injury, property damage, or wrongful death, based upon principles of comparative fault, the liability of each defendant for non-economic damages shall be several only and shall not be joint. Each defendant shall be liable only for the amount of non-economic damages allocated to that defendant in direct proportion to that defendant’s percentage of fault, and a separate judgment shall be rendered against that defendant for that amount.” (Emphasis added.)

There is currently a split among the California appellate courts as to whether section 1431.2 applies to intentional torts such as fraudulent concealment. In 2006, the Fourth Appellate District (which oversees San Diego, Imperial, Orange, San Bernardino, Riverside and Inyo counties) held that section 1431.2 does not apply to an intentional tortfeasor’s liability for noneconomic damages in Thomas v. Duggins (2006) 139 Cal.App.4th 1105. The Court reasoned that at the time Proposition 51 passed, an intentional tortfeasor’s liability was not subject to apportionment where the negligence of one or more third party tortfeasors contributed to a plaintiff’s injuries due in part, to policy considerations of deference and punishment for intentional torts.

However, the Second Appellate District (which oversees Los Angeles, Ventura, Santa Barbara, and San Luis Obispo counties) disagreed. In B.B. v. County of Los Angeles (2018) 25 Cal.App.5th 115 (B.B.), the Court held that section 1431.2 mandates several liability for noneconomic damages in direct proportion to a defendant’s percentage of fault even where the defendant’s misconduct was intentional. The Second Appellate District relied in part on DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593, a California Supreme Court case which held that section 1431.2 applied even in cases when one of the joint tortfeasors is the employer of the injured plaintiff and otherwise immune from liability or have no mutual joint obligation to pay missing shares.

Recently, the First Appellate District (which oversees Alameda, Contra Costa, Fresno, Marin, Monterey, San Benito, San Francisco, San Mateo, Santa Clara, and Santa Cruz counties) weighed in and sided with the Fourth Appellate District in Burch v. CertainTeed Corp. (2019) 34 Cal.App.5th 341 (Burch). The First Appellate District held that Proposition 51 does not eliminate an intentional tortfeasor’s joint and several liability for noneconomic damages.

Given the split in authority at the appellate level, the California Supreme Court has granted review in both B.B. and Burch, with B.B. being designated as the lead case. The sole issue before California’s highest court is whether “a defendant who commits an intentional tort invoke Civil Code section 1431.2, which limits a defendant’s liability for non-economic damages ‘in direct proportion to that defendant's percentage of fault,’ to have his liability for damages reduced based on principles of comparative fault?” The matter has been fully briefed and is awaiting oral arguments to be set.

Until the California Supreme Court resolves this split, the trial courts throughout California may decide which decision they will follow as they are not bound to follow the appellate court within their jurisdiction.

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