SB 41: Lost earnings damages can’t be reduced based on race, ethnicity or gender

Senate Bill 41 adds Section 3361 to the Civil Code stating, "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."

SB 41 aims to combat long-standing practices where race, ethnicity and gender are factored into the future lost earnings component of damage awards. As the legislative findings explain, "[n]early one-half of economists surveyed by the National Association of Forensic Economics said they consider race, and 92 percent consider gender, when projecting earning potential for an injured person, including children." The new law recognizes the danger that arises when forensic economist experts estimate potential future earnings based on statistical tables that consider race, ethnicity and gender, including demographic tables from the Bureau of Labor Statistics' Current Population Survey. Such estimations -- particularly when made notwithstanding the individual's achievements or potential -- tend to disfavor plaintiffs who are members of certain protected classes.

Moreover, where certain groups have been historically discriminated against in their earning capacity, the legislature recognized such statistical tables will inherently be tainted by past discrimination, and serve to perpetuate biases in calculating future earnings. As such, it was found that "[u]sing 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."

Criticism against this practice within the legal community has existed for some time, particularly where it has been argued as a violation of the Fifth and Fourteenth Amendments. But SB 41 is the first legislative action of its kind to attempt to tackle this problem, declaring that "[a]ny generalized reduction of civil damages using statistical tables alone, based on a plaintiff's membership in a protected class identified in Section 51 of the Civil Code, is counter to the public policy of the State of California."

The practical impact of Section 3361 is still somewhat speculative, but it should provide a useful tool for plaintiffs' litigators to attack problematic expert testimony through motions in limine, objections at trial, or perhaps even jury instructions. It may also provide support for opposing remittitur in some cases. Some observers also suggest that, on a broader basis, it will increase access to counsel for minorities and women seeking contingency fee engagements.

Los Angeles employment attorney Bryan Lazarski exclusively represents plaintiffs in workplace litigation. He formerly worked at a large international law firm defending corporations before switching sides, and has extensive experience litigating both individual and class actions in federal and state courts.