The Constitutionality of Damage Caps in Pennsylvania

Zauflik v. Pennsbury School Dist., — A.3d — (Pa. 2014)

In this important case, the Supreme Court of Pennsylvania upheld the constitutionality of the statutory $500,000 cap on tort compensation payable by the local government. This decision was delivered in a case involving a student who lost her leg in an accident in which a school bus accelerated out of control onto a sidewalk and struck her (along with other nineteen students). The jury awarded the student $14,036,263.39 ($338,580 for past medical expenses, $2,597,682 for future medical expenses, and $11.1 million for past and future pain and suffering), but the court reduced the award to $500,000.

In affirming that decision, the Pennsylvania Supreme Court rejected a number of constitutional challenges against the statutory cap. These challenges alluded to equal protection, open courts, the right to a jury trial, separation of powers, and, most promisingly, to the guarantee against liability limitations set forth in Article III, Section 18 of the Pennsylvania Constitution. The Court rejected the Article III, Section 18 challenge by separating private actors from public agencies funded by the taxpayers’ money. Specifically, it held that Article III, Section 18 prohibits limitations on the liability of private, as opposed to governmental, actors and then justified the cap as a government immunity.

This decision has two significant implications for medical malpractice law:

First, there is no constitutional way at this point to cap medical-malpractice damages payable by private doctors, hospitals, and other healthcare providers in Pennsylvania.

Second, malpractice damages payable by municipal and state providers of medical care can be statutorily reduced to a level that would allow these governmental actors to self-insure or buy inexpensive liability insurance.