Proposed Initiative to Increase Damages Under MICRA Recently Amended

California Government Update

On September 26, 2019, a proposed ballot measure titled the Fairness for Injured Patients Act was filed in California. The measure would significantly increase California’s nearly 45-year-old Medical Injury Compensation Reform Act (MICRA) cap of $250,000 on pain and suffering-type damages in medical negligence lawsuits by taking into account inflation as measured by the Consumer Price Index, and provide for annual adjustments thereafter. The initiative would also allow judgments in excess of the cap for “catastrophic injuries”—defined as “death, permanent physical impairment, permanent disfigurement, permanent disability, or permanent loss of consortium.”

On November 4, 2019, the proponents of the measure submitted amended text of the initiative to the Office of the Attorney General. Among other things, the amended text provides that effective January 1, 2021, available damages in covered suits “shall be adjusted to reflect any increase in inflation since [the damages] thresholds were adjusted in 1987 as measured by the Consumer Price Index published by the United States Bureau of Labor Statistics[, and shall be adjusted annually thereafter] … to reflect any increase in inflation as measured by the Consumer Price Index.” This change would increase the MICRA cap to $1 million or more for noneconomic damages effective January 1, 2021, and provide for further increases annually based on inflation.

Proponents of the initiative must collect signatures from nearly 625,000 registered voters to qualify the measure for the ballot. This is not expected to be a problem given the issue and that two high-profile proponents are expected to help with signature gathering—Consumer Watchdog and the Consumer Attorneys of California. Both groups have decades of experience working for and against initiatives in California, and each group has demonstrated its ability to carry out successful signature-gathering efforts in the past.

The ultimate questions for the opponents of the proposed initiative, including the powerful California Medical Association and a coalition of hospitals, health providers, organized labor and malpractice insurers known as Californians Allied for Patient Protection, are whether they can come up with a winning message and whether they will be able to finance an effective opposition campaign in a year when many other high-stakes issues will be on the ballot.

Opponents have reason to be optimistic. In November 2014, Proposition 46 would have raised the MICRA cap to over $1 million and required doctors to undergo drug and alcohol testing and to utilize the state’s prescription drug database. The measure failed passage with 66.8% of voters opposing it. Opposing organizations spent nearly $58 million to defeat the measure. On the other hand, the 2014 gubernatorial election featured an all-time record low turnout of registered voters, with only 42% of voters casting a ballot, skewed heavily to an older and more conservative electorate. Next November’s high-stakes presidential election is expected to draw a much higher turnout, attracting a much higher percentage of young and first-time voters to the polls.

One thing is certain: Another round of MICRA reform promises a MACRO fight in 2020.