SACRAMENTO — The trial lawyers say it is a horrible idea, but Gov. Arnold Schwarzenegger wants taxpayers to stake a claim to some of the whopping awards juries slap against negligent carmakers, deceptive cigarette companies and fast-food restaurants that serve coffee too hot.
In a proposal that took the Capitol by surprise, Schwarzenegger is suggesting the state collect 75% of the punitive damages awarded in civil lawsuits filed in California. After all, the governor says in the revised budget plan he released Thursday, plaintiffs in civil lawsuits already get a separate award to compensate them for their injury or loss.
"Punitive damages were never meant to be windfalls" for those who file lawsuits, said Richard Costigan, the governor's legislative affairs secretary. "They are meant to punish the defendants. Society as a whole is impacted by those actions .... How does it benefit everybody when one plaintiff gets $100 million?"
Costigan says the money should go to the public good -- like closing California's multibillion-dollar budget gap. The administration suggests that the state could rake in $450 million through this maneuver, although legal scholars who have done the math say that may be wishful thinking.
Trial lawyers say the whole idea is a mistake.
"The reason the award goes to the plaintiff is to incentivize the bringing of the lawsuit," said Jim Sturdevant, president of the Consumer Attorneys of California. "The plaintiff is the person who takes the risk involved."
What the administration is particularly eager to get in on is the money generated by headline-grabbing verdicts, like the one in New Mexico in which a 79-year-old woman was awarded $2.7 million -- though it was reduced on appeal -- when she scalded herself with coffee from McDonald's. Or the ones involving smokers who are winning billions of dollars in verdicts against tobacco companies. Or the verdicts delivered to families of people who were killed or maimed as a result of car accidents involving defects that had been well known to automakers.
Eight other states are already trying it -- with mixed results -- and some California Democrats are intrigued by the idea.
"I find it interesting," said Assembly Budget Committee Chairman Darrell Steinberg (D-Sacramento). "I think it is something we should be open to."
He and others in his party are, however, suspicious of the fine print.
