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The Importance of the Napkin Deal


One of the most important laws that govern personal injury practice was written on a napkin at Frank Fat’s in 1987. This significant historical event related to plaintiff’s personal injury law occurred on the evening of September 10, 1987. Present that night were lobbyists for the tobacco industry, doctors, manufacturers, insurance industry representatives and plaintiff lawyers. Negotiations were led by elected legislatures, Willie L. Brown, Jr and Bill Lockyer. The goal of the dinner was to create tort reform that would accommodate the interests of everyone and negotiate a truce in the ongoing tort reform war that was raging at the time.

This deal was written on the back of a napkin thus becoming known as the “Napkin Deal.” It changed existing laws related to product liability, medical malpractice and punitive damages in California. The agreement became Senate Bill No. 241, which was quickly passed into law that same year in 1987. This “Napkin Deal” amended Business and Professions Code § 6146 which limits the amount of contingency attorney fees a plaintiff attorney may charge to prosecute a medical malpractice case.  

Any lawyer new to personal injury law must understand the laws that were impacted by the Napkin Deal.  For example does your state have attorney fee caps on medical malpractice cases? What is the standard of proof in your state to prevail on a punitive damages claim?  Finally, are the products in your state that have immunity from legal liability? To be a competent personal injury lawyer, you need to know the answers to these questions.

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You can read the Legislative Counsel discussion of the “Napkin Deal” here. The agreement gave the cigarette companies immunity in California starting in 1987, but that immunity came to an end ten years later on September 29, 1997. Here is the California Civil Code 1714.15 in its current state.


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