Who Goes on the Verdict Form: Proposition 51 and Apportionment of Fault in California

December 2016Article

California courts allow any entity at fault to go on the verdict form. Settled parties, bankrupt companies, entities that are immune from suit, employers, and even general categories like “insulation companies”  go on the verdict form in asbestos cases. Although California ranks high on the list of judicial hellholes, the legislature has ensured a more even handed apportionment of fault in California than almost any other state.

In 1986, California voters approved Proposition 51, also known as the Fair Responsibilities Act of 1986. Proposition 51 effectively modified California’s joint and several liability principles, with the People of the State of California declaring:

The legal doctrine of joint and several liability, also known as “the deep pocket rule”, has resulted in a system of inequity and injustice that has threatened financial bankruptcy of local governments, other public agencies, private individuals and businesses and has resulted in higher prices for goods and services to the public and in higher taxes to the taxpayers. (Civ. Code § 1431.1.)

Proposition 51 was considered “necessary and proper to avoid catastrophic economic consequences for state and local governmental bodies as well as private individuals and businesses.” (Id.) Otherwise, under the traditional joint and several liability doctrine, plaintiffs focused litigation on a target defendant thought to have the “deepest pockets” regardless of that defendant’s actual degree of fault. (DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593, 597.) As codified by Civil Code section 1431.2, Proposition 51 mandates that in personal injury, wrongful death, or property damage actions, “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.” (Civ. Code § 1431.2(a).) Fault is then distributed more evenly, as Proposition 51 requires the jury to “consider all others whose conduct contributed to the plaintiff’s injury, whether or not they are named as defendants and regardless of their economic circumstances.” (Collins v. Plant Insulation Co. (2010) 185 Cal.App.4th 260, 267.)

In practice, Proposition 51 has sparked much debate over the individuals and entities that can be named on the verdict form and to whom fault can be apportioned. While it is essentially undisputed that all companies against whom the plaintiff can assert claims belong on the verdict form—regardless of whether they have settled with the plaintiff prior to trial or received a claim submitted by the plaintiff to a bankruptcy trust—the plaintiffs’ bar has fought to keep other non-party entities off the verdict form. (See Vollaro v. Lipsi (2014) 224 Cal.App.4th 93, 100 n. 5.)

Plaintiffs commonly seek to exclude from the verdict form those entities that are shielded by legal immunity. However, California law is clear that although an entity may be immune from a lawsuit, it can still be included on the verdict form provided that the entity has engaged in wrongdoing that contributed to the plaintiff’s harm. (Collins, supra, 185 Cal.App.4th at 268.) Our courts have held that, “under Proposition 51, fault will be allocated to an entity that is immune from paying for its tortious acts, but will not be allocated to an entity that is not a tortfeasor, that is, one whose actions have been declared not to be tortious.” (Taylor v. John Crane Inc. (2003) 113 Cal.App.4th 1063, 1071.) The question is one of fault rather than liability.

Plaintiffs often attempt to exclude the Navy and other employers from the verdict form under the principles of sovereign immunity and the workers’ compensation bar, respectively. Nevertheless, it is common practice for the Navy to be included on the verdict form because sovereign immunity is “grounded not on the notion the government is infallible and can do no wrong....” (Collins, supra, 185 Cal.App.4th at 273, 276 n. 7.) It follows then that “fault may be apportioned to the Navy under Proposition 51 because, although the Navy is immune from suit, no authority suggests it owes no duty of care to its service personnel and civilian employees. Indeed, all authority is to the contrary.” (Id. at 275.) Likewise, the plaintiff cannot seek to exclude his or her employer from the verdict form simply on account of the workers’ compensation bar to litigation by an employee injured on the job. Rather, “an employer’s immunity from suit does not mean it owes no duty of care to its employees and cannot be characterized as being at ‘fault’ for injuries suffered in the workplace for purposes of Proposition 51.” (Id. at 267.) Accordingly, the immunity that prevents an entity from being sued as a defendant in an asbestos action does not foreclose apportionment of fault under Proposition 51.

Where there is evidence of fault associated with products not identified by name, some trial courts have allowed apportionment to categories of products. Although no appellate court has addressed the issue, trial courts have included on the verdict form unspecified manufacturers of products and categories like “insulation manufacturers” and “other.” If an asbestos exposure can be described, it will likely be eligible for apportionment.

Finally, California law also recognizes that plaintiffs may bear responsibility themselves. As such, the California Supreme Court stated, “we do not permit plaintiff’s own conduct relative to the product to escape unexamined, and as to that share of plaintiff’s damages which flows from his own fault we discern no reason of policy why it should . . . be borne by others.” (Id. at 737.)

Defense counsel should be prepared to characterize every potential asbestos exposure to apportion fault to employers, bankrupt companies, entities immune from suit and other potential entity at issue.