Tort Reform in Oregon: Constitutional, After All?

Horton v. Oregon Health and Science University, — P.3d — 359 Or. 168 (Or. 2016)

Three years ago, Oregon’s Supreme Court voided the state’s $500,000 cap on noneconomic damages for medical malpractice for violating the constitutional guarantee that “In all civil cases the right of Trial by Jury shall remain inviolate” (Or. Const., Art. I, § 17, as interpreted in Lakin v. Senco Products, Inc., 987 P.2d 463, modified, 987 P.2d 476 (Or. 1999)). Klutschkowski v. Oregon Medical Group, 311 P.3d 461 (Or. 2013). This cap also clashed with “every man’s” right to “remedy by due course of law for injury done him in his person, property, or reputation” (Or. Const., Art. I, § 10, as interpreted in Smothers v. Gresham Transfer, Inc., 23 P.3d 333 (Or. 2001), and in Hughes v. PeaceHealth, 178 P.3d 225 (Or. 2008)). The Court reasoned that a person’s right to recover full jury-assessed compensation for injuries recognized as actionable in 1857, when Oregon adopted its constitution, cannot be abolished or abridged by statute or common law. For my discussion of the Klutschowski decision, see here. For my discussion of a similar entrenchment principle adopted by the Utah Supreme Court in Smith v. United States, 356 P.3d 1249 (Utah 2015), see here.

The Oregon Supreme Court has now changed this course in a long precedential decision, Horton v. Oregon Health and Science University, — P.3d —- 359 Or. 168 (Or. 2016). This decision upheld the constitutionality of Oregon’s Tort Claims Act that caps the total amount of compensation recoverable from the state at $3,000,000. The Court made this decision in connection with medical malpractice committed (inter alia) by a surgeon employed by the state. After trial, the jury found that this malpractice caused the patient economic damages that exceeded $6,000,000 and a roughly the same amount of noneconomic damages ($6,000,000). The trial court denied the surgeon’s request to reduce this award to the total of $3,000,000 after declaring the cap unconstitutional, but the Supreme Court has ruled on direct appeal that the award should be capped.

The Court carried out an extensive historical analysis of the right to a civil jury trial and the remedy clause of the Oregon Constitution. Based on that analysis, it overruled Lakin and Smothers. The Court decided that the constitutional right to a civil jury trial is procedural rather than substantive. Correspondingly, it held that changes in substantive laws that jurors must apply do not clash with this right. The Court then moved on to explain that “Whatever other constitutional issues a damages cap may present, a damages cap does not reflect a legislative attempt to determine a fact in an individual case or to reweigh the jury’s factual findings. Rather, a statutory cap is a legal limit on damages that applies generally in a class of cases.”

With regard to the remedy clause the Court decided that “When the legislature does not limit the duty that a defendant owes a plaintiff but does limit the size or nature of the remedy, the legislative remedy need not restore all the damages that the plaintiff sustained to pass constitutional muster …. but a remedy that is only a paltry fraction of the damages that the plaintiff sustained will unlikely be sufficient.” Based on this criterion, the Court ruled that “the remedy that the legislature has provided for tort suits against the government aligns with the constitution because it “represents a far more substantial remedy than the paltry fraction” and accommodates “the state’s constitutionally recognized interest in sovereign immunity and a plaintiff’s constitutionally protected right to a remedy.”

This decision reopens the constitutionality question with regard to the state’s $500,000 cap on noneconomic damages for medical malpractice. In a non-catastrophic case, an award of $500,000 for pain, suffering and other noneconomic damages will normally satisfy the “substantial remedy” criterion. Cases in which such an award will likely be considered “paltry” and hence unconstitutional are those that involve the patient’s death or catastrophic injury.