Sharon J. Arkin, President

TO:  Members of the California State Legislature

FR:  Consumer Attorneys of California

DATE: February 8, 2005

RE:  “State Cap on Damages Appeals to President” - Los Angeles Times – February 3, 2005

We wanted to make sure you had an opportunity to read the Michael Hiltzik column from the Los Angeles Times, February 3, 2005.  

Hiltzik illustrates that California’s MICRA should not be used as a model for the nation.  In fact, the MICRA cap should be eliminated, particularly in cases resulting in death or serious injury.  At a minimum, in other cases the cap must be increased to reflect years of inflation which has eroded the value of the cap to $68,225.  To adjust for inflation alone since 1975, the cap should be increased to $916,025. 

“MICRA's effect on malpractice premiums is almost impossible to measure, but the signs aren't encouraging. It has shut the courthouse door to huge numbers of deserving patients and, worse, harmed certain types of victims, including women and the families of dead children, more than others.”

“So let's take a look at MICRA, which a panicky Legislature passed after the state's dominant malpractice insurer had jacked up rates by more than 300% for two straight years, provoking a "crisis." (The insurer later settled a lawsuit alleging rate rigging by agreeing to refund $47 million to overcharged physicians.)”

“[B]ut the cap isn't indexed to inflation; thus, the relative value of the $250,000 ceiling has declined by more than two-thirds since 1975.”

“Moreover, juries normally aren't told in advance that any noneconomic damages they award in excess of $250,000 will be thrown out, so their efforts to strike a fair balance between economic and noneconomic recoveries can be easily tripped up by the law.”

For additional information about eliminating or raising the MICRA cap, feel free to contact the Consumer Attorneys of California office at (916) 442-6902.