Autonomous vehicles, ballot tricks, and the end of contingency law

Coverage of the Uber-funded initiative, which is on track for the November 2026 ballot, provides a welcome discussion on this potentially devastating attempt to strip the rights of consumers injured in automobile crashes. ("Trial lawyers rally against Uber-backed fee cap initiative," Daily Journal, Feb. 25, 2026.) The article drew comparisons between the 1975 MICRA legislation and Uber's deceptive initiative but misstated the origins of the MICRA legislation.  

The 1975 MICRA legislation was not crafted on a napkin in a Chinese restaurant--apparently in reference to the "Napkin Deal" hammered out in 1987 at Frank Fat's in Sacramento to avert a larger fight over efforts that would have stripped away consumer rights. Trial lawyers never negotiated what became the 1975 MICRA legislation.

The 1975 legislation was instigated by two medical malpractice insurance carriers, Travelers and Argonaut, who sent notices to doctors announcing premium increases of 435%. This panicked a first-term, 36-year-old Gov. Jerry Brown to call a special session of the legislature to enact emergency legislation, which the trial lawyers vigorously opposed, and which Brown signed. The legislation remained on the books even after the father of insurance bad faith law, William Shernoff, successfully represented a large physician's group in a case against Travelers resulting in a $50 million refund of premiums in 1981 because there was no actuarial justification for the premium increases due to any increase in malpractice claims or payouts. Although Brown later admitted MICRA was a mistake, during his next two terms as governor he did nothing to undo or improve it.

As bad as that legislation was, which had the effect of denying access to justice for innumerable malpractice victims, the deceptive Uber initiative will inflict greater harm on people involved in serious automobile crashes, including crashes caused by autonomous vehicles going haywire, defective, exploding gas tanks, and drunk and reckless drivers. Even under MICRA, lawyers willing to help malpractice victims know they will receive all of the litigation costs they have to advance for litigation expenses and expert witnesses, which the client does not have the money to pay, plus a statutorily mandated cap on fees--currently 33% on a litigated case. The Uber initiative makes it a criminal misdemeanor for an attorney in a motor vehicle case to charge a fee that results in the plaintiff retaining less than 75% of the total recovery. Because medical liens are paid from the recovery, attorneys effectively cannot charge a fee when liens equal or exceed 25% and may charge only the difference when liens are less (e.g., a 15% lien caps the fee at 10%). Moreover, whether any fee may be charged cannot be determined until the medical liens are known, which typically occurs well into the litigation. 

Uber, as well as Tesla and the other auto manufacturers, all of whom have no limits on what they can pay defense lawyers and experts to fight lawsuits, know that lawyers cannot handle cases on contingency when it is so uncertain whether costs advanced and fees can be recovered, and will therefore decline to take the risks of representing these victims. Clearly, the goal is to eliminate the risks of any lawsuits just as Uber is planning to roll out its driverless vehicles with Nuro technology--which the Department of Motor Vehicles (DMV) has concluded cannot go 700 miles without requiring human intervention--as compared to Zoox autonomous vehicles, which can go over 60,000 miles without incident.

Elon Musk and Tesla continue to claim they are about to introduce autonomous robotaxis in our state despite California DMV's position that the Tesla "autonomous" driving vehicles have not established safety without human supervision and the fact that Tesla has not yet applied for a permit from the DMV to begin testing their vehicles in California.

Ballot initiatives are a messy way to enact laws with profound consequences, but at least two measures on the ballot aim to hold companies like Uber accountable and protect the public.