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California Punitive Damages Budget Proposal is Flawed for the Injured

Punitive Damages Are Meant to Deter Fraud

SACRAMENTO, CA -- July 23, 2004 -- In a state budget package, California governor Arnold Schwarzenegger has proposed that 75% of punitive damages awarded against corporations go to the state rather than to the people who were injured. The proposal also requires that punitive damages regarding a defective product be imposed only once, even if other lawsuits are filed by different injured parties.

Punitive damages are used to deter malicious and fraudulent behavior. They often involve severe injuries from dangerous products. Various consumer groups say that a small portion of punitive damages should go to the state, but that a 75% allocation is too high. Instead, they suggest eliminating corporate loopholes that allow a company to write off the cost of punitive damages, while requiring those who are seriously injured to pay taxes on their awards. They also point out that having a company pay punitive damages only in the first product liability case provides a windfall for the company and does little to discourage future wrongful behavior. For further details about the problems with the governor's proposal, see a letter to Sen. Martha Escutia (D-Norwalk) from the president of Consumer Attorneys of California.

At Brayton Purcell, we are concerned about preserving the legal rights of our clients, and work to get them fairly compensated to the fullest extent of the law. We have been successful advocates for over 25 years.

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