Justices Deny ‘Deep Pockets’ Retroactivity

SAN FRANCISCO — The state Supreme Court dealt a stunning multimillion-dollar setback to businesses and insurers today, ruling that the 1986 “deep pockets” initiative, which limited damages for pain and suffering, did not apply to cases pending when the measure passed.

The 4-3 ruling was a victory for thousands of injury victims and their lawyers in cases in which the harm had occurred but the lawsuits had not yet been completed by June, 1986, when state voters approved Proposition 51.

The court ruled that the initiative was constitutional, rejecting trial lawyers’ claims that it discriminated unfairly against injury victims. But in the key portion of the ruling, the majority said the measure’s new standards for determining non-economic damages apply only to injuries suffered after the initiative passed.

Justice John A. Arguelles’ opinion cited “the common-sense notion that it may be unfair to change the rules of the game in the middle of the contest.” He also said new laws are generally presumed to apply only to future cases.