In trucking and transportation matters involving catastrophic personal injuries, a plaintiff’s lost earnings or future earning capacity can be a major component of plaintiff’s damages. The parties’ expert consultants may use financial data in the form of decades old race and gender-based tables to complete complex calculations in order to determine the value of a plaintiff’s past lost earnings or future loss of earning capacity.
Senate Bill (S.B.) 41, which was signed into law by Gov. Gavin Newsom in September 2019 and took effect on January 1, 2020, was created to prohibit the estimation, measure, or calculation of past, present, or future damages for lost earnings or impaired earning capacity resulting from personal injury or wrongful death from being reduced based on race, ethnicity, or gender.
Through the passage of S.B. 41, California’s legislature has spoken, declaring that using race and gender-based tables can, by some estimates, under-value women and minorities by hundreds of thousands of dollars, including children who have not yet had the opportunity to work or identify career options. Specifically, these practices greatly disadvantage children of color, who are more likely to be impacted by environmental hazards created by the industrial facilities and factories located in low-income communities.
Section 3361 has been added to the Civil Code, to read:
“ 3361.
Estimations, measures, or calculations of past, present, or future damages for lost earnings or impaired earning capacity resulting from personal injury or wrongful death shall not be reduced based on race, ethnicity, or gender.”
While it remains too early to determine whether S.B. 41 has had any effect upon recoverable damages and jury verdict values, knowing the developments in the law related to such damages calculations is crucial to accurately assessing overall client exposure and successfully resolving cases involving catastrophic injuries.