The Infamous Napkin Deal

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evening, filling the large booth along with several tables and bar stools. Present were Browne Greene, president of the California Trial Lawyers Association (now the Consumer Attorneys of California), and CTLA lobbyists Don Green and Kathleen Snodgrass, who was formerly chief counsel to Speaker Brown.
    Representing doctors’ interests was Jay Michael, formerly the California Medical Association’s chief  lobbyist, and for the insurers, Clay Jackson, lobbyist for the Association of California Insurance Companies (which no longer exists). Jackson, who smoked four to five cigars a day, was an enormous man, well over 6 feet, 6 inches tall and weighing probably 300 pounds. His nickname was the “41st Senator,” and he was known to be a formidable lobbyist.
    Representing business and manufacturing interests were Kirk West, president of the California Chamber of Commerce, and Bob Naylor and Steve Merksamer, partners in the law firm Nielsen, Merksamer, Parrinello, Mueller & Naylor. Merksamer was the former chief of staff for Gov. George Deukmejian, and Naylor was a former Assembly Republican leader. Finally, there was Gene Livingston, president of the Association for California Tort Reform, a front organization for the state Chamber of Commerce, doctors and insurers.
    Negotiations and the smoke from Jackson’s cigars swirled around the one remaining unresolved issue, that of an increase in attorneys’ contingency fees on medical malpractice in exchange for a five-year moratorium on any attack on California’s landmark Medical Insurance Compensation Reform Act (MICRA).
    Speaker Brown didn’t arrive until around 9 p.m. His role was that of a closer, shuttling among the parties and “really putting on the pressure” to make the deal, says Naylor. He recalls CMA’s Michael went “three shades of pale.”
    “It was so close to an all-out initiative war,” says Michael, “it could have gone either way that night.”

Who Got Screwed?
Finally, after equal amounts of persuasion and threats, cajoling and bullying, doctors and trial attorneys reached agreement, and Lockyer marched everyone to the upstairs banquet room to memorialize the provisions of the deal. In a move calculated for drama, he laid out one of the restaurant’s white linen napkins, pulled out a black Sharpie and wrote “DMZ,” for demilitarized zone, in large letters across the top left side and proceeded to list details: no regulation of professional fees or insurance or business rates, a definition of the word “malice,” no insurance or MICRA reform for five years, among others. Also included was a stipulation of mutual consent on the agreement — no one present that evening would initiate or support any breach of it.
    It was a long-sought and hard-fought deal, but no one that night celebrated, recalls Michael. “The trial lawyers just sat around wondering how badly they’d been screwed, and we sat around and wondered the same.”
Continued...

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