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Chevron Corp. and its tort-reformer allies on Wednesday withdrew a proposed California ballot initiative that would have blocked plaintiffs from collecting punitive damages in some product liability cases. John Sullivan, co-sponsor of the Civil Justice Association of California, said he agreed not to submit thousands of signatures collected to qualify the initiative after legislative leaders promised to address lawsuits targeting oil companies like Chevron for polluting groundwater with methyl tert-butyl ether, the fuel additive better known as MTBE. It’s unclear what solution the Legislature might offer, but “I’m confident that the leadership is interested in solving this problem,” Sullivan said. The initiative’s demise marks the third time in little more than a year that California trial lawyers have survived corporate-sponsored ballot-box threats. In early 2005, the pharmaceutical lobby withdrew a contingency-fee cap initiative after the Consumer Attorneys of California agreed to stay out of an ultimately unsuccessful campaign to cut prescription costs. And in February, a coalition of homebuilders and restaurant owners dropped its own lawsuit-limiting initiative after the Consumer Attorneys proposed, and later withdrew, three retaliatory construction-defect measures. Consumer Attorneys President Frank Pitre praised lawmakers “for their help in discouraging a destructive initiative war and for their encouragement to discuss issues within the legislative arena.” The Chevron initiative would have barred consumers from collecting punitive damages against a manufacturer whose product complied with applicable state and federal rules. If approved, the measure may have aided Chevron and other MTBE producers now facing hundreds of contamination lawsuits. Chevron, which did not return messages left at its San Ramon, Calif., headquarters Wednesday, bankrolled signature-gathering for the punitive-damages initiative with $1.9 million in contributions between March 3 and May 4. But beyond $29,500 in donations from small business groups, the initiative never attracted support from other oil giants or corporations traditionally interested in curbing punitive damages. Two sources familiar with the initiative said sympathetic companies were reluctant to pony up money for a pricey campaign after voters resoundingly defeated eight ballot measures last November. What’s more, oil companies, enjoying record profits while gas prices reach record highs, are gearing up to defeat a well-financed initiative to tax oil pumped from California wells. They’re also likely to contribute significantly to four public-works bonds on the November ballot, one source said. State Sen. Joe Dunn, D-Santa Ana, a consumer attorney who helped broker the deal withdrawing the punitives initiative, said he is sincere in his desire to resolve the MTBE lawsuit debate. “This is not just a diversionary tactic,” he said. “My hope is that if all the players come to this with an open mind there may be some long-term solution.”

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