Roa v. Lodi Medical Group, Inc.

695 P.2d 77, 37 Cal. 3d 920, 211 Cal. Rptr. 164, 1985 Cal. LEXIS 243

• Court: California Supreme Court
• Decided: February 7, 1985
• Docket: S.F. 24435
• Status: Published

Opinions

Opinion

KAUS, J.

This is the third in a series of cases involving the constitutionality of various provisions of the Medical Injury Compensation Reform Act of 1975 (MICRA). In American Bank & Trust Co. v. Community Hospital (1984) 36 Cal.3d 359 [204 Cal.Rptr. 671, 683 P.2d 670], we upheld a provision of the act which authorizes the periodic payment of damages in medical malpractice actions. (Code Civ. Proc., § 667.7.) In Barme v. Wood (1984) 37 Cal.3d 174 [207 Cal.Rptr. 816, 689 P.2d 446], we concluded that a provision of the act barring a “collateral source” from obtaining reimbursement from a medical malpractice defendant was also constitutional. (Civ. Code, § 3333.1, subd. (b).) In this case we address a challenge to Business and Professions Code section 6146, which places limits on the amount of fees an attorney may obtain in a medical malpractice action when he represents a party on a contingency fee basis.¹ As in American Bank and Barme, while we express no view as to the wisdom of the measure, we conclude that the legislation is constitutional.

I

This action was brought by Frank Roa, Jr., individually, and by Yvonne Jean Roa, individually and as guardian ad litem for their minor son, Frank Joseph Roa, for injuries allegedly suffered as a result of negligent treatment and care during the child’s birth. The complaint named the Lodi Medical Group, Inc., Dr. Gordon B. Roget, the Lodi Community Hospital and numerous Does as defendants.

After some discovery, plaintiffs negotiated a settlement with two of the defendants, the Lodi Medical Group, Inc., and Dr. Roget. The agreement provided for payment of $495,000 to the minor and $5,000 to the parents. Pursuant to Probate Code section 3500,² plaintiffs sought court approval of the settlement, advising the court that the $500,000 represented the total policy limits of these two defendants’ insurance coverage. The court found the settlement reasonable and approved it.

At the same time, pursuant to Probate Code section 3601,³ plaintiffs requested that the court approve the payment of fees to their attorneys from the net proceeds of the settlement. Plaintiffs informed the court that they were aware that the maximum fee that could be awarded under the schedule of contingency fees set forth in section 6146 would amount to about $90,800. They explained, however, that they believed that under their contingency fee arrangement, the attorneys were entitled to 25 percent of the minor’s net recovery—about $122,800—and asked the court to award their counsel this greater amount. Accompanying this request, plaintiffs’ attorneys filed points and authorities asserting that section 6146 was unconstitutional on due process, equal protection and separation of powers grounds.

The trial court found (1) that plaintiffs and their attorneys had entered into an understanding that the attorney fee would be 25 percent of the net recovery and (2) that the $122,800 fee which that percentage would yield “is á fair and reasonable amount for attorneys’ fees in this case and is in no way disproportionate to the quality or quantity of the legal services provided to the plaintiffs in this case.” The court also noted that “were it not for the existence of Business and Professions Code [section] 6146, the amount of attorneys’ fees requested” by plaintiffs would be awarded. The court, however, rejected the constitutional challenge to section 6146 and concluded that it was compelled to award fees in accordance with the statutory limitations. Accordingly, it approved a fee of $90,800.

Plaintiffs appeal from the attorney fee order, reasserting their constitutional objections to section 6146.⁴

II

Plaintiffs, and amici on their behalf, contend that section 6146 is unconstitutional as (1) a denial of due process, (2) a violation of equal protection, and (3) a violation of the separation of powers doctrine. We address each of the contentions in turn.

A

Plaintiffs’ due process argument rests on the claim that the statute impermissibly infringes on the right of medical malpractice victims to retain counsel in malpractice actions. Although the right to be represented by retained counsel in civil actions is not expressly enumerated in the federal or state Constitution, our cases have long recognized that the constitutional due process guarantee does embrace such a right. (See, e.g., Powell v. Alabama (1932) 287 U.S. 45, 68-69 [77 L.Ed. 158, 170-171, 53 S.Ct. 55, 84 A.L.R. 527]; Mendoza v. Small Claims Court (1958) 49 Cal.2d 668, 673 [321 P.2d 9].) Section 6146, however, does not in any way abrogate the right to retain counsel, but simply limits the compensation that an attorney may obtain when he represents an injured party under a contingency fee arrangement.

Statutory limits on attorney fees are not at all uncommon, either in California or throughout the country generally. In this state, attorney fees have long been legislatively regulated both in workers’ compensation proceedings (Lab. Code, § 4906) and in probate matters. (Prob. Code, §§ 910, 901.) Some states have adopted maximum fee schedules which apply to all personal-injury contingency fee arrangements (see, e.g., American Trial Lawyers v. New Jersey Supreme Ct. (1974) 66 N.J. 258 [330 A.2d 350]; Gair v. Peck (1959) 6 N.Y.2d 97 [188 N.Y.S.2d 491, 160 N.E.2d 43, 77 A.L.R.2d 390], app. dismissed (1960) 361 U.S. 374 [4 L.Ed.2d 380, 80 S.Ct. 401]); others have enacted limits which, like section 6146, apply only in a specific area, such as medical malpractice. (See, e.g., Johnson v. St. Vincent Hospital, Inc. (1980) 273 Ind. 374 [404 N.E.2d 585, 602-603]; Prendergast v. Nelson (1977) 199 Neb. 97 [256 N.W.2d 657, 669-670]; DiFilippo v. Beck (D.Del. 1981) 520 F.Supp. 1009, 1016.) Congress has passed numerous statutes limiting the fees that an attorney may obtain in representing claimants in a variety of settings. (See, e.g., 28 U.S.C. § 2678 [limit on attorney fee in actions under the Federal Tort Claims Act]; 42 U.S.C. § 406(b)(1) [limit on attorney fee in actions under the Social Security Act]; 38 U.S.C. § 3404 [limit on fee for claims under the Veterans Benefit Act].)

The validity of such legislative regulation of attorney fees is well established. Over 60 years ago, in Calhoun v. Massie (1920) 253 U.S. 170 [64 L.Ed. 843, 40 S.Ct. 474], an attorney who had represented successful claimants in an action against the United States raised a similar due process challenge to a provision of federal law which limited contingent fee recoveries to 20 percent of the amount recovered. In rejecting the challenge, Justice Brandéis explained: “For nearly three-quarters of a century Congress has undertaken to control in some measure the conditions under which claims against the Government may be prosecuted. Its purpose has been in part to protect just claimants from extortion or improvident bargains and in part to protect the Treasury from frauds and imposition. [Citation.] While recognizing the common need for the service of agents and attorneys in the presentation of such claims and that parties would often be denied the opportunity of securing such services if contingent fees were prohibited [citation], Congress has manifested its belief that the causes which gave rise to laws against champerty and maintenance are persistent. By the enactment, from time to time, of laws prohibiting the assignment of claims and placing limitations upon the fees properly chargeable for services, Congress has sought both to prevent the stirring up of unjust claims against the Government and to reduce the temptation to adopt improper methods of prosecution which contracts for large fees contingent upon success have sometimes been supposed to encourage. The constitutionality of such legislation . . . resembling in its nature the exercise of the police power, has long been settled. [Citations.]” (Italics added, fn. omitted.) (253 U.S. at pp. 173-174 [64 L.Ed. at pp. 845-846]; see, e.g., Frisbie v. United States (1895) 157 U.S. 160, 165-166 [39 L.Ed. 657, 658-659, 15 S.Ct. 586]; Yeiser v. Dysart (1925) 267 U.S. 540, 541 [69 L.Ed. 775, 779, 45 S.Ct. 399]; Margolin v. United States (1925) 269 U.S. 93, 102 [70 L.Ed. 176, 180, 46 S.Ct. 64]; Estate of Goodrich (1907) 6 Cal.App. 730, 732 [93 P. 121].) These decisions establish that—contrary to amici’s contentions—legislative ceilings on attorney fees are in no respect “constitutionally suspect” or subject to “strict” judicial scrutiny.⁵

Plaintiffs contend, however, that even if statutory limitations on attorney fees are generally permissible, the limits established by section 6146 are invalid because the authorized fees are so low that in practice the statute will make it impossible for injured persons to retain an attorney to represent them. The adequacy of the fees permitted by the statute is in large measure an empirical matter, and plaintiffs have made no showing to support their factual claim. Furthermore, a comparison of the fees permitted by section 6146 with the fees authorized under the numerous statutory schemes noted above suggests that section 6146’s limits are not unusually low.⁶ Under the circumstances, we certainly cannot hold that the amount of the fees permitted renders the statute unconstitutional on its face.

Plaintiffs alternatively challenge the “sliding scale” nature of the fee schedule, asserting that the decreasing percentage permitted for larger recoveries creates a conflict of interest between attorney and client, reducing the attorney’s incentive to pursue a higher award. As a number of commentators have explained, however, potential conflicts of interest are inherent in all contingent fee arrangements. (See generally MacKinnon, Contingent Fees for Legal Services (1964) pp. 196-200; Schwartz & Mitchell, An Economic Analysis of the Contingent Fee in Personal-Injury Litigation (1970) 22 Stan.L.Rev. 1125, 1136-1139.) On the one hand, whenever a contingency fee agreement provides for either a flat percentage rate regardless of the amount of recovery or a declining percentage with an increase in recovery, “it may be to the lawyer’s advantage to settle [the case] quickly, spending as little time as possible on the small claim where the increment in value through rigorous bargaining or trial, while significant to the client, is not significant or perhaps compensatory to the lawyer. ...” (MacKinnon, supra, at p. 198.) On the other hand, “[w]here the rate is graduated according to the stage of litigation at which recovery is attained ... the increase in the rate of fee may lead the lawyer to bring suit or start trial, for example, solely to increase his rate from 25% to 33 Vá %, without actually doing that much additional work and without the likelihood of a comparable increment to the client.” {Ibid.) Furthermore, no matter how the particular percentage fee is calculated, “[t]he difference in the financial position of the lawyer and client may make for a complete disparity in their willingness to take a risk on a large recovery as against no recovery at all. In the same way the use of delay to increase the eventual recovery on a claim may have an entirely different impact on the injured and uncompensated claimant than it does on the lawyer, who is busy with other claims and regards this as one of a series which are ripening on the vine. ...” {Id. at p. 199.) Thus, though the sliding scale arrangement embodied in section 6146 may affect the settings in which the attorney’s and client’s interests diverge, it does not create the basic conflict of interest problem.

Indeed, section 6146’s decreasing sliding-scale approach has been recommended as the preferable form of regulation by a number of studies that have examined the question. As a report of an American Bar Association commission explained: “[I]n order to relate the attorney’s fee more to the amount of legal work and expense involved in handling a case and less to the fortuity of the plaintiff’s economic status and degree of injury, a decreasing maximum schedule of attorney’s fees, reasonably generous in the lower recovery ranges and thus unlikely to deny potential plaintiffs access to legal representation, should be set on a state-by-state basis.” (Rep. of Com. on Medical Professional Liability (1977) 102 ABA Annual Rep. 786, 851. See also Dept, of HEW, Rep. of Sect’s. Com. on Medical Malpractice (1973) pp. 34-35; Kohlman, An Equitable Contingency Fee Contract (1975) 50 State Bar J. 268, 295-298 & fn. 42.) For just these reasons, the Legislature could rationally have determined that this aspect of the statutory scheme would promote the fairness of attorney fees. The sliding scale schedule certainly does not unconstitutionally impinge on a malpractice victim’s right to counsel.

Finally, plaintiffs suggest that because the fee limits of section 6146 apply only to medical malpractice actions, the statute will operate to drive the most competent attorneys out of medical malpractice litigation into other areas of personal injury practice; they argue that this amounts to an unconstitutional infringement of a malpractice victim’s right to counsel. Once again, plaintiffs have failed to make any showing to support the factual premise of their contention. In addition, a similar claim could, of course, be raised with respect to every statutory provision which creates legislative limits on attorney fees in a particular field. As we have seen, such statutes are commonplace. Suffice it to say that we know of no authority which suggests that due process requires a single, uniform attorney fee schedule for all areas of practice.

B

We turn to the equal protection claim. Here plaintiffs’ principal contention—somewhat related to their final due process argument—rests on the assertion that the Legislature acted arbitrarily in selectively imposing section 6146’s attorney fee limits only in medical malpractice actions.

In American Bank and Barme we explained the background against which MICRA was adopted and there is no need to repeat that discussion here. In brief, the Legislature found that the high cost of medical malpractice insurance premiums was (1) threatening to curtail the availability of medical care in the state and (2) creating a situation in which patients, injured by medical malpractice, might well find that there was no liability insurance to cover the damages they had sustained. To meet those problems, the Legislature enacted a series of measures aimed at reducing medical malpractice insurance costs. In American Bank and Barme we found that it was entirely rational for the Legislature to limit the application of the enacted measures to the medical malpractice field, since it was the “crisis” in that particular area which the Legislature hoped to alleviate.

Plaintiffs contend that this reasoning does not apply to section 6146. They maintain that while the statutory measures at issue in American Bank and Barme were directly related to reducing the costs borne by medical malpractice defendants and their insurers, section 6146 has no such effect, for it simply limits the percentage of a malpractice plaintiff’s judgment that may be paid to the plaintiff’s attorney. Plaintiffs insist that since a contingency fee is by definition paid from the plaintiff’s recovery, and since a jury may not properly consider such fees in assessing damages (see Krouse v. Graham (1977) 19 Cal.3d 59, 79-82 [137 Cal.Rptr. 863, 562 P.2d 1022]), the statutory limitations on such fees will not rechice defense costs at all. They suggest that if the Legislature wanted to reduce such costs, it should have limited the fees malpractice defense attorneys may charge, rather than the contingency fees obtained by attorneys for malpractice plaintiffs.⁷

We cannot agree that the limits on contingency fees embodied in section 6146 bear no rational relationship to the objectives of MICRA. In the first place, it is unrealistic to suggest that such limits will not reduce the costs to malpractice defendants and their insurers in the large number of malpractice cases that are resolved through settlement. A plaintiff is quite naturally concerned with what a proposed settlement will yield to him personally, and because section 6146 permits an attorney to take only a smaller bite of a settlement, a plaintiff will be more likely to agree to a lower settlement since he will obtain the same net recovery from the lower settlement. Accordingly, the Legislature could reasonably have determined that the provision would serve to reduce malpractice insurance costs.⁸

Second, the Legislature may also have imposed limits on contingency fees in this area as a means of deterring attorneys from either instituting frivolous suits or encouraging their clients to hold out for unrealistically high settlements. Although plaintiffs contend that there is no evidence to suggest that unregulated contingency fee agreements pose special problems in the medical malpractice field, plaintiffs themselves stress—in another context— that an unusually high percentage of medical malpractice cases that go to trial result in defense verdicts. While there may be many explanations for this phenomenon, the Legislature could rationally have believed that unregulated contingency fee contracts—calling for potentially huge attorney fee awards if cases are won—play at least some part in leading so many plaintiffs to pursue malpractice claims that ultimately prove unsuccessful. (See, e.g., DiFilippo v. Beck, supra, 520 F.Supp. 1009, 1016.) Of course, even when defendants ultimately win such lawsuits, they and their insurers incur considerable expense in defending the action. Thus, by reducing plaintiffs’ attorneys’ incentive to encourage their clients to pursue marginal claims, section 6146 again bears a rational relation to the legislative objective of reducing insurance costs.

Finally, section 6146’s limits are rationally related to the MICRA scheme in yet another respect. In order to reduce malpractice insurance costs, MICRA incorporated a number of provisions that place special limits on, or that at least may tend to reduce, a malpractice plaintiff’s recovery, provisions that are not applicable to other personal injury plaintiffs. (See, e.g., Civ. Code, §§ 3333.2, subd. (b) [limiting recovery for noneconomic losses to $250,000]; 3333.1, subd. (a) [authorizing admission of evidence of “collateral source benefits”].) The Legislature may reasonably have concluded that a limitation on contingency fees in this field was an “appropriate means of protecting the already diminished compensation” of such plaintiffs from further reduction by high contingency fees. (See Johnson v. St. Vincent Hospital, Inc., supra, 404 N.E.2d 585, 602-603.) Accordingly, there is no merit to plaintiffs’ initial equal protection claim.⁹

Plaintiffs alternatively contend that the statute violates equal protection because it places limits on the fees that plaintiffs ’ attorneys may charge but imposes no limits on defense counsel’s fees. As we have already seen, there are a host of statutes—both in California and in other jurisdictions—that place similar limits on contingency fees without limiting attorney fees that are earned on some other basis. Here, as in those instances, the Legislature could have determined that there was a special need (1) to protect plaintiffs from having their recoveries diminished by high contingency fees, and (2) “to reduce the temptation to adopt improper methods of prosecution which contracts for large fees contingent upon success have sometimes been supposed to encourage.” (Calhoun v. Massie, supra, 253 U.S. at p. 174 [64 L.Ed. at p. 846],)¹⁰

Finally, plaintiffs argue that the decreasing-sliding-scale component of section 6146 unconstitutionally discriminates against more seriously injured malpractice victims. They suggest that in light of the lower percentage fee which the statute authorizes for higher recoveries, the provision makes it more difficult to obtain an attorney who will be willing to undertake the additional effort required to obtain such awards. As we have already noted, however, the Legislature could reasonably have concluded that the sliding-scale approach in fact produces more equitable fees than the traditional flat contingency fee, helping to ensure that an attorney does not obtain a “windfall” simply because his client is very seriously injured and guaranteeing that the most seriously injured plaintiffs will retain the lion’s share of any recovery secured on their behalf.¹¹

C

Plaintiffs’ final claim is that section 6146 violates the separation of powers doctrine. They argue that in light of this court’s inherent power to review attorney fee contracts and to prevent overreaching and unfairness (see, e.g., Bushman v. State Bar (1974) 11 Cal.3d 558, 563-564 [113 Cal.Rptr. 904, 522 P.2d 312]), the question of the appropriateness of attorney fees is a matter committed solely to the judicial branch. But, as we have seen, legislative bodies have imposed limits on attorney fees in a variety of fields throughout our history. Applicable California authority expressly refutes the claim that the Legislature has no power to act in this setting. (See Estate of Goodrich, supra, 6 Cal.App. 730, 732. See generally Brydonjack v. State Bar (1929) 208 Cal. 439, 443 [281 P. 1018, 66 A.L.R. 1507].)¹²

Accordingly, we conclude that plaintiffs’ constitutional challenge to section 6146 is unfounded. The order appealed from is affirmed.

Broussard, J., Grodin, J., and Lucas, J., concurred.

1 Section 6146 provides in relevant part: “(a) An attorney shall not contract for or collect a contingency fee for representing any person seeking damages in connection with an action for injury or damage against a health care provider based upon such person’s alleged professional negligence in excess of the following limits: [1] (1) Forty percent of the first fifty thousand dollars ($50,000) recovered, [f] (2) Thirty-three and one-third percent of the next fifty thousand dollars ($50,000) recovered, [fl (3) Twenty-five percent of the next one hundred thousand dollars ($100,000) recovered. (4) Ten percent of any amount on which the recovery exceeds two hundred thousand dollars ($200,000). [([] The limitations shall apply regardless of whether the recovery is by settlement, arbitration, or judgment, or whether the person for whom the recovery is made is a responsible adult, an infant, or a person of unsound mind, [f] . . . [H] (c) For purposes of this section: [f] (1) ‘Recovered’ means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim. Costs of medical care incurred by the plaintiff and the attorney’s office-overhead costs or charges are not deductible disbursements or costs for such purpose. ...”

Unless otherwise stated, all section references are to the Business and Professions Code.

2 Section 3500 provides in relevant part: “(a) When a minor has a disputed claim for damages . . . and does not have a guardian of the estate, the following persons have the right to compromise ... the claim . . .: [t] (1) Either parent if the parents of the minor are not living separate and apart. . . . [t] (b) The compromise or covenant is valid only after it has been approved, upon the filing of a petition, by the superior court. . . .”

3 Section 3601 provides in relevant part: “(a) The court making the order or giving the judgment [approving the compromise of a minor’s disputed claim], as a part thereof, shall make a further order authorizing and directing that such reasonable expenses . . . costs, and attorney’s fees, as the court shall approve and allow therein, shall be paid from the money or other property to be paid or delivered for the benefit of the minor or incompetent person. ”

4 One amicus questions whether plaintiffs may properly maintain this appeal. Because the trial court order has the effect of preserving more of the settlement for the minor’s own use than the fee requested by plaintiffs, amicus suggests that plaintiffs are not “aggrieved” by the trial court order and may not prosecute this appeal on their own behalf. (See Code Civ. Proc., § 902.) Amicus asserts that if plaintiffs’ attorneys were dissatisfied, they should have challenged the order themselves.

Although the attorneys may well have had standing to appeal from the order in question (cf., e.g., Estate of Merrill (1946) 29 Cal.2d 520, 523 [175 P.2d 819]), it does not necessarily follow that plaintiffs are not themselves entitled to prosecute this appeal. (See Estate of Lagersen (1962) 210 Cal.App.2d 788, 791-792 [26 Cal.Rptr. 783].) While many in plaintiffs’ position might not consider themselves aggrieved by the trial court ruling, one of plaintiffs’ contentions on appeal is that the fee limitations of section 6146 are invalid because they impinge on the right of malpractice plaintiffs to retain competent counsel. Plaintiffs argue that if the statutory limits remain in place, their attorneys will have less of an incentive to pursue additional recovery against the remaining defendants who are not covered by the settlement. We conclude that plaintiffs should not be deprived of the opportunity to pursue this substantive argument on appeal by a threshold determination that they are not “aggrieved” as a matter of law.

We have no occasion to decide at this juncture whether, as a matter of professional ethics, the potential conflict of interest between plaintiffs and their attorneys on the attorney fee issue called for separate representation of their interests. We hold only that the appeal may properly be maintained by plaintiffs. We note that numerous amicus briefs have been filed on both sides of the constitutional issue, assuring that the competing viewpoints are adequately represented.

5 One amicus—in an argument embraced by the dissent—attempts to invoke “strict judicial scrutiny” on a different tack. Noting that the right to maintain a lawsuit has been viewed as one aspect of the First Amendment right to petition the government for redress of grievances (see, e.g., Mine Workers v. Illinois Bar Assn. (1967) 389 U.S. 217, 222-223 [19 L.Ed.2d 426, 430-431, 88 S.Ct. 353]), and that in Buckley v. Valeo (1976) 424 U.S. 1, 51-54 [46 L.Ed.2d 659, 706-707, 96 S.Ct. 612], the Supreme Court, inter alia, invalidated, on First Amendment grounds, statutory limits on the amount of his own funds a candidate could spend in seeking public office, amicus argues that “the decision of how much should be spent, and is necessary to spend, [on attorney fees] is one which [plaintiffs] desiring to exercise their First Amendment rights of petition and speech are constitutionally entitled to make for themselves.” Although the argument is creative, its logic clearly proves too much, for it would preclude a state from imposing any limitation on attorney fees, no matter how unconscionably high such fees might be, a position even amicus does not embrace.

The use of contingency fees in connection with the pursuit of First Amendment activities has historically been the subject of governmental regulation and restriction. Indeed, California—like a great number of states—has long completely prohibited lobbyists, including attorney-lobbyists, from using contingency fee agreements in connection with the most “hardcore” of First Amendment activities. (See Gov. Code, § 86205, subd. (f) [“No lobbyist shall ...(f) Accept or agree to accept any payment in any way contingent on the defeat, enactment or outcome of any proposed legislative or administrative action.”]. See generally Maggio, Lobbying—Multistate Statutory Survey (1962) 38 Notre Dame Law. 79, 85-86.) We are unaware of any decision which questions the validity of such legislation.

Of course, unlike the lobbyist provision, section 6146 does not prohibit the use of contingency fees in medical malpractice actions, but simply places limits on the percentage of a plaintiff’s recovery that an attorney may retain when he represents the plaintiff on a contingency basis. To the extent that amicus’—and the dissent’s—First Amendment contention rests on the proposition that the particular fees allowed by section 6146 are too low to permit the effective exercise of the right to bring a lawsuit, the argument parallels plaintiff’s claim-discussed below—that the statute denies his due process right to counsel by making it difficult or impossible to secure an attorney. As we explain, the record provides no factual basis to support such a claim.

Furthermore, for the same reason there is no merit to the claim that the statute on its face unconstitutionally discriminates against poor plaintiffs. Although it may be that the continued availability of contingency fee contracts is more important to poor than to rich litigants, without a factual showing that the fee limits at issue here are so low as to impinge on a plaintiff’s ability to obtain a lawyer, there is no basis for finding that the statute works an invidious discrimination against the poor. It can as logically be argued that the statute—by limiting the fees an attorney can charge when he represents a client on a contingency basis— operates to the benefit of poor plaintiffs.

6 As noted, section 6146 authorizes a contingency fee of up to (1) 40 percent of the first $50,000 recovered, (2) 3314 percent of the next $50,000, (3) 25 percent of the next $100,000, and (4) 10 percent of any amount exceeding $200,000.

Under the New Jersey schedule upheld in American Trial Lawyers v. New Jersey Supreme Ct., supra, 330 A.2d 350, which provided something of a model for section 6146, the maximum permissible fees were: (1) 50 percent of the first $1,000, (2) 40 percent of the next $2,000, (3) 3314 percent of the next $47,000, (4) 20 percent of the next $50,000, and (5) 10 percent of any amount over $100,000. (See 330 A.2d at p. 351, fn. 3.) The New Jersey rule also permitted an attorney to request additional fees in exceptional situations. Under that schedule, the fee for the settlement in this case would have been limited to approximately $66,400, rather than the $90,800 permitted by section 6146. Although the New Jersey schedule, as modified in 1984 (see N. J. Rule 1:21-7 (as amended Jan. 1984)), does authorize somewhat greater fees than section 6146 in a variety of instances, the disparity does not in itself demonstrate that section 6146’s fee limits deny access to an attorney.

The federal statutes generally designate a single, maximum percentage fee, applicable without regard to the amount of the recovery. The Federal Tort Claims Act limits fees to 25 percent of a judgment or settlement obtained after a court action has been filed, and 20 percent of any recovery obtained prior to such filing. (28 U.S.C. § 2678.) The Social Security Act authorizes reasonable fees not in excess of 25 percent of the claimant’s recovery. (42 U.S.C. § 406(b)(1).) The Veterans Benefit Act contains perhaps the most restrictive provision, limiting the fee that may be obtained by anyone assisting a claimant to a mere $10. (38 U.S.C. § 3404.) Although this provision has been upheld against constitutional challenge in numerous decisions (e.g., Frisbie v. United States (1895) 157 U.S. 160, 165-166 [39 L.Ed. 657, 658-659, 15 S.Ct. 586]), one federal district court recently enjoined its application, concluding that the practical effect of this low limit raised substantial doubts as to the statute’s continuing constitutional viability. (National Assn. of Radiation Survivors v. Walters (N.D.Cal. 1984) 589 F.Supp. 1302.) The United States Supreme Court has noted probable jurisdiction in the Walters case (Walters v. National Assoc. of Rad. Survivors (1984) — U.S. — [83 L.Ed.2d 698, 105 S.Ct. 588]) and has stayed the district court’s injunction pending review of the decision. (— U.S. — [82 L.Ed.2d 908, 105 S.Ct. 11] [stay granted by Rehnquist, J.]; — U.S. — [83 L.Ed.2d 178, 105 S.Ct. 238] [request to vacate stay denied by court].)

7 In enacting MICRA, the Legislature did adopt a provision directing the Board of Governors of the State Bar to “report and make recommendations to the Legislature by July 1, 1976, on an equitable method for regulating compensation of defense counsel consistent with the policies embodied in this article regarding regulation of plaintiff’s attorney fees.” (Former § 6146, subd. (c), enacted Stats. 1975, Second Ex. Sess., ch. 1, § 24.2, p. 3967.) After appointing a committee to study the problem, the State Bar recommended that the Legislature take no action with respect to defense fees, and the Legislature repealed former subdivision (c) in 1981. (Stats. 1981, ch. 714, § 23, p. 2580.)

8 Plaintiffs cannot legitimately claim that the Legislature should have restricted the limits on contingency fees only to cases of settlement, for the Legislature could reasonably have feared that any such restriction would strongly discourage plaintiffs’ attorneys from promoting settlements.

9 As already noted, a number of the medical malpractice reform statutes enacted in the mid-1970s imposed limits on attorney fees which apply only to medical malpractice litigation. Most courts that have addressed equal protection challenges to such provisions have rejected the challenges. (See, e.g., Johnson v. St. Vincent Hospital, Inc., supra, 404 N.E.2d 585, 602; DiFilippo v. Beck, supra, 520 F.Supp. 1009, 1016.) To our knowledge, only one case has sustained such an attack (Carson v. Maurer (1980) 120 N.H. 925 [424 A.2d 825, 838-839, 12 A.L.R.4th 1]), and in Carson the court applied an “intermediate scrutiny” equal protection standard that is inconsistent with the standard applied by this court in American Bank and Barme. Indeed, in American Bank we noted that of the twenty-six state courts that had passed on equal protection challenges to recent medical malpractice legislation, Carson was one of only three that had sustained the challenge. (See 36 Cal.3d at p. 370, fn. 10.)

10 The dissent’s suggestion that a statute which draws a distinction between plaintiffs’ and defendants’ attorney fees violates the First Amendment’s ban on “content discrimination” (post, pp. 939-941), not only is unsupported by any authority, but is also quite shortsighted. Numerous statutes contain provisions authorizing successful plaintiffs to recover attorney fees under circumstances in which successful defendants may not so recover. (See, e.g., Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412, 417-422 [54 L.Ed.2d 648, 653-657, 98 S.Ct. 694] [federal civil rights action]; Code Civ. Proc., § 1021.5 [private attorney general action].) Surely, the dissent does not intend to suggest that all such statutes are unconstitutional.

11 The case of Echlin v. Superior Court (1939) 13 Cal.2d 368 [90 P.2d 63, 124 A.L.R. 719], provides no support for plaintiffs’ equal protection contention. In Echlin, we addressed a provision which purported to give attorneys retained on a contingency basis greater rights vis-á-vis their clients than other attorneys, requiring a client who employed a lawyer under a contingency fee contract to pay the lawyer a sum fixed by the court before the client could dismiss the lawyer and replace him with another. The Echlin court invalidated the provision, finding that it was arbitrary to provide this special advantage to attorneys employed on contingency fees. That holding obviously does not suggest that a statute which limits the fees an attorney may charge when he represents a client on a contingency basis is constitutionally suspect or subject to any special, “rigorous” scrutiny.

12 In Heller v. Frankston (1983) 76 Pa.Commw. 294 [464 A.2d 581, 584-587], an intermediate appellate court in Pennsylvania invalidated a statutory limitation on attorney fees contained in Pennsylvania’s medical malpractice legislation as a violation of the separation of powers doctrine. In so holding, however, the court took no note of the numerous federal and state decisions upholding statutory limits on contingency fees in a variety of settings. The Pennsylvania Supreme Court took over the Heller case and ultimately affirmed the judgment on other grounds, without reaching the separation of powers issue. (Heller v. Frankston (Pa. 1984) 475 A.2d 1291.)

Civil Code section 3333.2 imposes a $250,000 ceiling on noneconomic damages.

Thus, the injured plaintiff in a case with $1 million in damages who settles before trial may receive $97,400 less under section 6146 than he or she would have before MICRA. Plaintiff’s attorney’s fee may be reduced by over $300,000, to less than 25 percent of the former available fee. It is little wonder attorneys may be unwilling to pursue such claims at all.

The injured plaintiff in a case with a small recovery ($50,000) may receive $5,625 less under section 6146 than prior to MICRA. The plaintiff’s attorney in the small recovery may receive a greater percentage of the recovery after MICRA, because of the “floor” effect of section 6146. (See Ethics and Economics, supra, 16 Akron L.Rev. at p. 755.)