The Infamous Napkin Deal

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THE “NAPKIN DEAL,” as it came to be known, enabled arguably the most sweeping tort-reform in decades. In fact, then-state Sen. Bill Lockyer and Assembly Speaker Willie Brown were so proud of the deal and their roles in it that they copied the napkin in a poster, titled it “Tort-Mania 1987” and gave signed copies to participants and friends.
    Hostilities between trial attorneys and doctors, insurers and business and manufacturing interests had been escalating for almost 20 years, with tens of millions of dollars being spent battling one another to a standstill. Medical malpractice insurers were doubling and tripling their rates for fear of going out of business due to escalating liability issues. Emergency room surgeons and anesthesiologists were going on strike and refusing to practice.
    Proposition 51, passed in June 1986, revised the rules of liability in lawsuits, allocating responsibility based on percentage of fault instead of who had the deepest pockets. By 1987 even more initiatives were being threatened by both sides, and the combatants were tired and fearful of what might happen through the ballot process.
    At this point legislative leaders Brown and Lockyer entered the fray, stepping in as mediators in hopes of staving off yet another expensive ballot war on tort
reform. Intensive negotiations went on for months, but the end of the legislative session was only three days away, and hope of reaching a comprehensive agreement was waning. So on the evening of Sept. 10, 1987, Brown put out the word to the representatives of the warring parties: “All report to Frank Fat’s.”

All That Brass
Its pink stucco exterior is unassuming, but Fat’s is a power restaurant just three blocks west of the Capitol, a place where politicians and lobbyists hang out and deals are made. In 1987 it was probably the power restaurant. Beyond the oak entrance door with its brass handle, the room stretches out, long and narrow, with banquette seating and small tables lining the wall to the left and the brass-railed bar with its stools to the right.
    At the front of the bar area is a flight of stairs leading up to the banquet room, where many political fundraisers have been held. At the rear of the bar is a large semi-circular booth, the transition point marking entry to the main dining room and, beyond that, the private booths designed for those who want to dine and deal unobserved.
    It was the back area of the bar where Lockyer and the warring parties’ nine representatives gathered that
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