Vote Heavily Favors Limit on Liability

By a wide margin, California voters Tuesday approved Proposition 51, the “deep pockets” initiative that backers claimed would help local governments find insurance and that opponents charged would harm injury victims and consumers.

Incomplete statewide returns showed that the “Yes” vote on the controversial liability measure, the subject of a massive media campaign on both sides, was well ahead in 56 of 58 counties reporting. Proposition 51 aimed to change state law to limit the amount of damages co-defendants must pay in personal injury lawsuits.

With 53% of precincts reporting, the vote on Proposition 51:

Results Vote % Yes 1,441,907 61 No 921,290 39

Proponents hoped voters would agree it was “fair” to limit what has been dubbed the “deep pockets” doctrine to payment of non-economic damages in lawsuits so long as the plaintiff could collect such things as lost wages or medical expenses.

At the San Francisco Airport Marriott Hotel, the measure’s backers awaited returns with cautious optimism that they had withstood a statewide media blitz in which opponents had spent nearly $900,000 on TV spots in the final week.

“People felt it was an unfair law and it needed to be changed,” said Richard Woodward, campaign manager for the Yes on Proposition 51 campaign.

Kirk West, president of the California Chamber of Commerce, meanwhile, predicted that Proposition 51 would pass and lead to more liability reforms such as reduction of the fees that plaintiffs lawyers receive if they win jury verdicts.

Opponents, meanwhile, gathered at the Biltmore Hotel in Downtown Los Angeles and hoped their 11th-hour media blitz had worked.

“The real story tonight is that an unprecedented coalition of organizations around the state joined together to fight the special interests who are for Proposition 51,” said No on 51 campaign coordinator Harvey Rosenfield. “Win or lose, Proposition 51 is just the opening round in a campaign that will ultimately result in an upsurge of citizens support for regulation of the insurance companies in California.”

Roger Beck, a spokesman for the California Trial Lawyers Assn. responded to the early results with a statement reflecting the bitterness of the five-month campaign.

“The insurance industry has brought a lot of attention to itself,” Beck said. “(Regardless of the results) the insurance industry is guilty of the greatest consumer rip-off in modern times. If the vote on this is “yes,” the public will have been hoodwinked once again by the big interests.”

In other ballot propositions, a state measure to place future limits on pension benefits of retired officeholders was leading; so was another to prohibit political endorsements in nonpartisan races. A Los Angeles County measure to make the office of county assessor appointive rather than elective was defeated.

Opposing Factions

In the $10-million-plus fight over Proposition 51, insurance companies pulling for passage were allied with cities, counties, medical professionals and business groups. Consumers, victim groups and environmentalists united with the lawyers against the measure.

The central campaign question was whether the measure’s passage would alleviate a crisis that has seen hundreds of California local government agencies scrambling to find affordable--or even available--liability insurance. Backers said that Proposition 51, by sewing up the “deep pockets” of municipalities, would improve the prospects of finding insurance. But insurance companies, as opponents were quick to point out, were making no such promises.

Opponents argued that the insurance industry “manufactured” the crisis to force statutory limits on damage awards and thus reduce amounts payable to injured parties.

Among other state ballot measures, voters were approving four bond proposals: an $850-million program for the Cal-Vet home loan program; a $100-million plan for parks and recreation, a $150-million program for water conservation, and a $495-million proposal to build or remodel local jails.

Prop. 13 Spinoffs

Two ballot measures were aimed at establishing two more exceptions to Proposition 13, the landmark property tax limitation approved by Californians in 1978. Since then, voters have approved only three of eight legislative attempts to alter Proposition 13. On Tuesday, the latest of these measures, Propositions 46 and 50 were both leading.

Proposition 46 was designed to allow an exception to Proposition 13’s 1% property tax ceiling. Under the ballot measure, local governments would have an alternative to raising cash for land acquisition and construction through the issuance of general obligation bonds. The exception, triggering a tax hike, would require a two-thirds vote by local taxpayers.

Proposition 50 would give property owners a chance to rebuild on a separate parcel of property following a disaster such as an earthquake without facing reassessment by the appraiser, which would likely result in higher taxes.

HOW THE OTHER PROPOSITIONS FARED

STATEWIDE MEASURES

Proposition 42, $850 Million in Veterans Bonds ---- PASSED

Proposition 43, $100 Million in Park Bonds ---- PASSED

Proposition 44, $150 Million in Bonds for Water Project Loans ---- PASSED

Proposition 45, Public Funds in Credit Unions ---- LEADING

Proposition 46, Taxation Exception to Allow Bond Sales ---- LEADING

Proposition 47, Giving Motor Vehicle Taxes to Local Government ---- LEADING

Proposition 48, Limits on Officials’ Future Retirement Benefits ---- LEADING

Proposition 49, Political Endorsements in Nonpartisan Races ---- LEADING

Proposition 50, Taxation Exception for Disaster Victims ---- PASSED

Proposition 52, $495 Million in Local Jail Bonds ---- PASSED

LOS ANGELES COUNTY MEASURES

Charter Amendment A, Merit System for County Managers ---- TRAILING

Charter Amendment B, Appoint Rather Than Elect Assessor ---- FAILED

LOS ANGELES CITY MEASURES

Charter Amendment C, Pay Off Workers’ Comp in Installments ---- PASSED

Charter Amendment D, Proposition E, Extend Cable TV Franchises to 15 Years ----LEADING