‘Job Killer’ Bill Inflating Litigation, Insurance Costs Awaits Assembly Action

​(July 10, 2012) A California Chamber of Commerce-opposed “job killer” bill that once finalized is expected to inflate litigation and insurance costs will be awaiting Assembly action when legislators return from their summer recess.

The Consumer Attorneys of California are sponsoring SB 1528 (Steinberg; D-Sacramento) in an attempt to overturn the recent and well-reasoned California Supreme Court case, Howell v. Hamilton Meats ((2011) 52 Cal.4th 541). That case addressed the question of whether a plaintiff could recover for past medical damages stated in a health care provider’s bill but never actually paid or owed by the plaintiff.

The court stated: “we hold no such recovery is allowed, for the simple reason that the injured plaintiff did not suffer any economic loss in that amount.” Long-standing principles of law, codified in California in 1873, provide the measure of damages to a person is the amount that will compensate for the detriment that was caused. California has more than 100 years in developing an eminently equitable tort system designed to compensate individuals harmed by another’s action.  The point is to make the plaintiff whole of the injuries suffered, not to provide the plaintiff with a windfall.

However, overturning Howell and well-established law will provide a plaintiff with just that:  a windfall.  Such a change in the law will artificially inflate litigation costs, encourage the filing of more lawsuits, and dramatically increase the rates for automobile, workers’ compensation, and general liability insurance to the detriment of individuals and employers alike.

The CalChamber and coalition members oppose the policy of the bill and also the approach being used to make such a dramatic change in the law. Although the sponsor and the author of SB 1528 have directly stated their intent to overturn the Howell decision, the bill has yet to be amended with the final language.  With only a month left in the session once the Legislature returns in August, any final amendments made to the bill will leave little time  for a thorough airing and debate of the proposed policy in committee or floor sessions. The coalition believes that avoiding these processes further undermines public trust in the process.

Key Vote

SB 1528 passed the Assembly Judiciary Committee on July 3, 6-4.

Ayes:  Atkins (D-South Park/Golden Hill), Dickinson (D-Sacramento), Feuer (D-Los Angeles), B. Lowenthal (D-Long Beach), Monning (D-Carmel), Wieckowski (D-Fremont).

Noes: Gorell (R-Camarillo), Huber (D-El Dorado Hills), Jones (R-Santee), Wagner (R-Irvine).