## Facts

- Aidan Ming‑Ho Leung was born at Verdugo Hills Hospital with signs of neonatal jaundice and later developed kernicterus, causing severe permanent brain injury and lifelong medical needs.
- Through a guardian ad litem, Leung sued (1) his pediatrician, Dr. Steven Wayne Nishibayashi, for negligent diagnosis and treatment of jaundice, and (2) the Hospital for negligence, including inadequate parental education and inadequate policies to reduce kernicterus risk.
- Before trial, Leung settled with the pediatrician for $1 million (the policy limit) and executed a release; the settlement contemplated that the pediatrician would remain on the verdict form for allocation of fault.
- The trial court declined to find the settlement in good faith under Cal. Civ. Proc. Code §§ 877 and 877.6, concluding it was grossly disproportionate to the pediatrician’s likely share of liability and expected total recovery.
- A jury found the pediatrician and the Hospital negligent and awarded substantial damages, including large future medical-care and future-earnings components.
- The jury allocated fault as follows: pediatrician 55%, Hospital 40%, and the parents 5% total.

## Issues

1. Whether California should continue to apply the common-law rule that a release of one joint tortfeasor automatically releases other joint tortfeasors liable for the same injury.
2. Whether the plaintiff’s settlement and release of the pediatrician barred recovery of economic damages from the nonsettling Hospital under California’s comparative-fault and joint-and-several-liability scheme.
3. What effect, if any, the absence of a statutory “good faith” settlement determination has on the nonsettling defendant’s liability.

## Decision

- The California Supreme Court reversed the Court of Appeal.
- The court abrogated the common-law release rule in California.
- The Hospital was not discharged from liability for economic damages merely because the plaintiff released the pediatrician.
- The Hospital remained jointly and severally liable for economic damages, subject to a setoff credit for the $1 million settlement payment.

## Legal Principles

- A plaintiff’s release of one joint tortfeasor does not automatically release nonsettling tortfeasors from liability for the same indivisible injury.
- California’s comparative-fault system and policies favoring partial settlements are inconsistent with an automatic discharge rule that gives nonsettling defendants a windfall.
- Cal. Civ. Proc. Code §§ 877 and 877.6 govern the consequences of good-faith settlements (including setoff and contribution protections), but the absence of a good-faith determination does not justify extinguishing a nonsettling tortfeasor’s liability.
- In multi-tortfeasor cases, settlement payments reduce the plaintiff’s recoverable damages through setoff; they do not eliminate remaining defendants’ liability otherwise imposed by joint-and-several liability for economic damages and several liability for noneconomic damages.

## Conclusion

California no longer follows the common-law rule that releasing one joint tortfeasor releases all others; instead, nonsettling defendants remain liable under comparative fault and joint-and-several principles, with the plaintiff’s recovery reduced by setoff for settlement amounts paid.


Leung v. Verdugo Hills Hosp., 55 Cal. 4th 291 (Cal. 2012)