TORT REFORMS

THIS PAGE WILL REPORT TORT REFORMS THAT AFFECT MEDICAL MALPRACTICE LIABILITY AND LITIGATION.

For summary of these reforms, see Ronen Avraham, Database of State Tort Law Reforms (DSTLK 5th) (May, 2014), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=902711.

June11, 2016

Medical Malpractice: The New Wave of Constitutional Attacks on Damage Caps

Dodson v. Ferrara, — S.W.3d — (Mo. 2016) 2016 WL 1620102

About forty-five years ago, tort reforms took off and states have started capping compensation awards for victims of medical malpractice. The plaintiffs bar countered this initiative by raising different constitutional challenges against caps. Those challenges alluded to equal protection, due process, separation of powers, and the general right to a jury trial. Some state courts have rejected those challenges, while other courts have struck the caps down for being unconstitutional. For discussion and the list of representative cases, see Alex Stein, Toward a Theory of Medical Malpractice, 97 Iowa L. Rev. 1201, 1253-54 (2012).

Courts’ decisions in favor and against the caps juxtaposed the victim’s entitlement to remedy against society’s interest in reducing doctors’ compensation burden and cost of liability insurance. Courts that gave precedence to the latter interest did so in the hopes to contain the cost of medical care for patients. The “trickle down” theory underlying these hopes has been questioned on empirical and doctrinal grounds. See Tom Baker, The Medical Malpractice Myth 1-21 (2005) (demonstrating that claims linking the cost of medical care to medical-malpractice liability are empirically unfounded and calling them an “urban legend”) and Stein, id. at 1247-56 (showing that, as a doctrinal matter, doctors can be found responsible for patients’ injuries only in extreme cases and that a rational physician should care more about being identified and reported to the federal databank as a malpractitioner than about how much she will pay if found liable). The Florida Supreme Court has rejected that theory in a recent decision, McCall v. United States, 134 So.3d 894 (Fla. 2014), that relied (inter alia) on Tom Baker’s work. For my discussion of this landmark decision, see here.

For obvious reasons, plaintiffs’ attorneys are loath to depend on such tradeoffs and prefer to base their claims on constitutional rights that are not subject to balancing. Many state constitutions incorporate such entrenched rights, in particular, the right to recover jury-assessed compensation for personal injuries and other tort damages. For example, Article XVI, Section 5 of the Utah Constitution provides that “The right of action to recover damages for injuries resulting in death, shall never be abrogated, and the amount recoverable shall not be subject to any statutory limitation, except in cases where compensation for injuries resulting in death is provided for by law.” Based on this provision, Utah’s Supreme Court has recently struck down the state’s $450,000 cap on noneconomic damages resulting from medical malpractice that kills the patient. The Court ruled that tort victims’ entitlement under Article XVI, Section 5 is not subject to balancing and that the “statutory compensation” exception to this entitlement refers to statutory compensation schemes akin to workers’ compensation, as opposed to tort actions at common law. Smith v. United States, 356 P.3d 1249 (Utah 2015).

A year before that important decision, the Oregon Supreme Court voided the state’s cap on noneconomic tort damages for violating “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) and the constitutional guarantee that “In all civil cases the right of Trial by Jury shall remain inviolate” (Or. Const., Art. I, § 17). The Court reasoned that the cap is unconstitutional because it clashes with a person’s entitlement to recover full jury-assessed compensation for injuries recognized as actionable in 1857 when Oregon adopted its constitution. The legislature, it held, has no power to curtail that constitutional entitlement. Klutschkowski v. Oregon Medical Group, 311 P.3d 461 (Or. 2013) (relying on Smothers v. Gresham Transfer, Inc., 23 P.3d 333 (Or. 2001), and Hughes v. PeaceHealth, 178 P.3d 225 (Or. 2008)). For my discussion of these important decisions, see here and here.

A similar challenge has been adjudicated seven weeks ago by the Supreme Court of Missouri in Dodson v. Ferrara, — S.W.3d —- (Mo. 2016), 2016 WL 1620102. This challenge targeted Missouri’s $350,000 cap on noneconomic damages recoverable by medical-malpractice victims (as of August 28, 2015, Missouri caps noneconomic recoveries for medical malpractice at $450,000, while allowing plaintiffs to recover up to $700,000 in cases involving catastrophic injury or death: V.A.M.S. 538.220(2)). The challengers relied on Article I, section 22(a) of the Missouri Constitution under which “the right of a trial by jury as heretofore enjoyed shall remain inviolate.” The Missouri Supreme Court interpreted this provision to preserve the right to a jury trial, as it existed at common law before the state constitution’s first adoption in 1820, “beyond the reach of hostile legislation.” State ex rel. St. Louis, Keokuk & Nw. Ry. Co. v. Withrow, 36 S.W. 43, 48 (Mo. banc 1896). Correspondingly, in 2012, the same Court ruled that the Missouri legislature has no constitutional power to limit the compensation amount recoverable by medical malpractice victims. Watts v. Lester E. Cox Med. Ctr., 376 S.W.3d 633 (Mo. banc 2012). The Court, however, also decided that the noneconomic-damage cap does not violate the right to trial by jury in wrongful death cases because the state’s common law did not recognize wrongful death as actionable in torts before 1820. Sanders v. Ahmed, 364 S.W.3d 195 (Mo. banc 2012).

The case at bar involved a 34-year old patient who died from an ill-performed heart catheterization. The patient’s husband and three children sued the doctor and his employer for malpractice and obtained (inter alia) a jury award of $9,000,000 in noneconomic damages. Pursuant to the state’s statute, as it was then, the trial court reduced this award to $350,000. The plaintiffs challenged this reduction on constitutional grounds and their appeal reached the Missouri Supreme Court. Based on an historical investigation of past decisions, the Court ruled that, prior to 1820, tort victims could successfully sue defendants for personal injuries, but not for wrongful death. “Wrongful death,” it explained, “is a purely statutory cause of action that did not exist at common law” (2016 WL 1620102, at *4 (citing Sanders v. Ahmed, 364 S.W.3d 195, 203 (Mo. banc 2012)). This cause of action also belongs to the victim’s survivors and not to the victim herself (see, e.g., O’Grady, v. Brown, 654 S.W.2d 904, 907 (Mo. banc 1983); American Family Mutual Ins. Co. v. Ward, 774 S.W.2d 135, 136-37 (Mo. banc 1989)).

For these reasons, the Court decided that, although the legislature has no power to cap compensation recoverable at common law for personal injury, it does have the constitutional authority to limit the compensation amounts for statute-based wrongful-death actions.

This ruling partially reinstated the ancient legal regime under which “it was cheaper for the defendant to kill the plaintiff than to injure him, and . . . . the most grievous of all injuries left the bereaved family of the victim, who frequently were destitute, without a remedy.” W. Page Keeton, Prosser & Keeton on Torts § 127 at 945 (5th ed. 1984). Cognizant of this intolerable consequence, the Court ended its decision with the following statement:

“This Court recognizes the inadequacy of $350,000 to compensate the Dodson family for the tragic death of their loved one, particularly in light of the amount awarded by the jury. It is not for this Court to question the policy determinations of the General Assembly, however, and the Court is bound to apply the law as written by the legislative branch.”

As I mentioned above, Missouri’s General Assembly upped the cap to $700,000 but I doubt that this statutory change – effective as of August 28, 2015 – benefited the Dodson family.

The Court’s decision was opposed by two dissenters: Judge Draper and Judge Teitelman. Judge Draper rejected the basic legislative premise underlying the cap. Based on scholarly literature, he properly observed that “A clear, cogent argument exists that [the] medical malpractice “crisis” was manufactured and continues to be exacerbated today by a special interest group that persistently labels, for shock value, and characterizes some jurisdictions as “judicial hellholes.” These characterizations and the underlying “support” for these characterizations have been criticized roundly.” More contentiously, Judge Teitelman wrote that the modem statutory wrongful-death action need not be mirrored in the common law in order to qualify as available prior to 1820. According to him, this action has an old common law analog: a parent’s right to recover compensation for the loss of services that could have been provided to him or her by a son negligently killed by the defendant (citing James v. Christy, 18 Mo. 162 (1853)).

This case illustrates the centrality of historical analysis of tort victims’ rights. I address this issue in a new article on medical malpractice that will soon be available on my website and SSRN.

October 30, 2015

Nevada’s $350,000 Cap on Noneconomic Damages Held Constitutional and Applicable Per Incident

Tam v. Eighth Jud. Dist. Ct., — P.3d — , 2015 WL 5771245 (Nev. 2015)

Bad news for Nevada’s victims of medical malpractice. This state’s Supreme Court upheld the constitutionality of the $350,000 cap on noneconomic damages as limiting recovery for all kinds of victims and injuries. Moreover, the Court held that the cap applies per incident, which encompasses all mistakes that the doctor may have made in delivering a single treatment to a patient and all the victims of those mistakes (such as twins born with birth defects as a result of negligent prenatal care or delivery). For my discussion of the “per incident” and alternative approaches to caps, see here.

The Court’s rejection of the constitutional challenge to the cap is particularly noteworthy. The challengers argued, quite sensibly, that the cap was unconstitutional because it violated victims’ right to a trial by jury. According to the Court, “the cap does not interfere with the jury’s factual findings because it takes effect only after the jury has made its assessment of damages, and thus, it does not implicate a plaintiffs right to a jury trial.” That is, when a Nevada jury assesses the victim’s noneconomic damage at, say, $1,000,000, reducing this amount to $350,000 would not violate the victim’s right to a jury trial because the court here nullifies the jurors’ verdict ex post without telling them how to decide the case.

I don’t think much commentary is needed here. The Court’s interpretation of the right to a jury trial is analogous to a decision that interprets the Takings Clause as allowing the government to seize private property upon paying the owner “just compensation” reduced by a special 65% tax.

The Court also dismissed the plaintiffs’ equal protection challenge by categorizing medical malpractice victims’ entitlement to recover damages as “[not] a fundamental constitutional right.” This debatable categorization enabled the Court to upheld the cap’s constitutionality by applying the famous mechanism of “minimal scrutiny in theory and virtually none in fact” (Gerald Gunther, Foreword: In Search of Evolving Doctrine On A Changing Court: A Model for a Newer Equal Protection, 86 Harv. L. Rev. 1, 8 (1972)).

Nevada’s Supreme Court drew its inspiration from the California Supreme Court decisions, as it does in many cases. Perhaps on this occasion, it could have done better if it considered an excellent constitutional analysis carried out by the Florida Supreme Court in McCall v. United States, 134 So.3d 894 (Fla. 2014). For my discussion of this medical-malpractice decision of the year for 2014, see here.

August 31, 2015

Utah’s Cap on Medical Malpractice Damages Held Unconstitutional in Suits for Wrongful Death

Smith v. U.S., — P.3d — (Utah 2015), 2015 WL 4742499

As I previously wrote here and here, some state constitutions protect plaintiffs’ right to file a tort action at common law against legislative curtailment.

Article XVI, section 5 of the Utah Constitution gives plaintiffs a similar, albeit more narrow, protection:

“The right of action to recover damages for injuries resulting in death, shall never be abrogated, and the amount recoverable shall not be subject to any statutory limitation, except in cases where compensation for injuries resulting in death is provided for by law.”

Based on that provision, the Utah Supreme Court voided the state’s $450,000 damage cap on noneconomic damages recoverable by victims of medical malpractice, is Utah Code Ann. § 78B–3–410. The cap’s defenders tried to convince the Court, unsuccessfully, that it falls into the exceptional category of “compensation for injuries resulting in death is provided for by law.” The Court decided that “compensation” mentioned in Art. XVI, s. 5 proviso does not include “damages for injuries.” The Court explained that “The word damage defines the constitutional protection; the word compensation defines the scope of the exception. Accordingly, the two terms must mean something different otherwise the exception would swallow the rule. We gain insight into the meaning of the compensation exception by its context. The compensation exception was not part of the original constitution, but was added through an amendment made in 1921. The exception remedied the inconsistency between the unamended constitutional provision and the Workmen’s Compensation Act of 1917. Thus, as we have previously held, the term compensation, as used in amended section 5, carries the same meaning that it had in the Workmen’s Compensation Act, namely “any payment required by the act to be made to a workman or to his dependents, or for their benefit, or into the state treasury for the special purposes of the compensation act.” (citations omitted)

January 22, 2015

Caps, Settlements, and Chutzpah under California’s Medical Malpractice Law

Rashidi v. Moser, — P.3d — (Cal. 2014)

This important decision of the California Supreme Court dealt with a very serious incident of medical malpractice.

A patient underwent surgery to stop severe nosebleed. His doctor ran a catheter through an artery in his leg up into his nose. Tiny particles were injected through the catheter to irreversibly block certain blood vessels. The particles, however, traveled to places other than the intended sites. As a result, when the patient awoke after the surgery he was permanently blind in one eye. He sued the doctor and the hospital for medical malpractice and the particles’ manufacturer for products liability.

Subsequently, the patient settled with the particles’ manufacturer for $2,000,000 and with the hospital for another $350,000. The case went to trial against the doctor alone. The jury found that the doctor was negligent and that his malpractice was responsible for the patient’s incapacitation. Based on that finding, it awarded the patient $125,000 for future medical care, $331,250 for past noneconomic damages, and $993,750 for future noneconomic damages. The trial court reduced the noneconomic damages to $250,000, pursuant to the cap set by the Medical Injury Compensation Reform Act of 1975 (MICRA, Civil Code § 3333.2: “In no action [for injury against a health care provider based on professional negligence], shall the amount of damages for noneconomic losses exceed two hundred fifty thousand dollars ($250,000).”).

The defendant doctor did not benefit from the cap alone. He also took full advantage of California’s Civil Code § 877 that allows a nonsettling tortfeasor to set off the amount of a jointly liable tortfeasor’s settlement against damages awarded at trial. This offset was only available with respect to the patient’s economic damages, for which tortfeasors are liable jointly and severally. Under California’s Civil Code § 1431.2, tortfeasors assume strictly several liability for noneconomic damages and pay in proportion to their share of fault. Because the patient’s settlements with the hospital and the manufacturer did not differentiate between economic and noneconomic damages, the doctor obtained a post-verdict allocation pursuant to the rule devised in Espinoza v. Machonga, 11 Cal.Rptr.2d 498 (Cal.App. 1992). Under that rule, the percentage of the jury’s award attributable to economic damages is calculated and applied to the settlement, yielding the amount that the nonsettling tortfeasor is entitled to offset. The patient’s award attributable to economic damages was 8.62% ($125,000 in economic damages divided by the total award of $1,450,000). Applying that percentage to the $2,000,000 settlement with the manufacturer yielded $172,400 in economic damages, which allowed the doctor to offset the jury’s $125,000 economic-damages award.

For the settlement between the patient and the hospital, the requisite calculation was different. Because the hospital (unlike the manufacturer) was entitled to cap the patient’s noneconomic damages at $250,000 pursuant to MICRA, the jury’s award of noneconomic damages was reduced to $250,000 and then juxtaposed against the economic award of $125,000. This juxtaposition yielded a different percentage: $125,000/$375,000=33.33%. Applying that percentage to the $350,000 settlement between the patient and the hospital yielded another $116,655 in economic damages—an allocation that the doctor no longer needed because the patient’s economic settlement with the manufacturer – $172,400 – already compensated him for his entire economic loss of $125,000.

After eradicating the patient’s economic award, the doctor also tried to offset his noneconomic liability – $1,325,000, capped at $250,000 pursuant to MICRA – by the patient’s settlement recoveries for noneconomic damages ($233,345 from the hospital and $1,827,600 from the manufacturer). The doctor argued that he is entitled to this setoff as well.

Happily, the California Supreme Court rejected this audacious argument.

The Court properly distinguished between apportionment and setoff. Apportionment of noneconomic damages under Civil Code § 1431.2, it explained, “is a form of equitable indemnity in which a defendant may reduce his or her damages by establishing others are also at fault for the plaintiff’s injuries.” The doctor failed to establish the hospital’s and the manufacturer’s faults, and for that reason he was not entitled to apportion his liability for the patient’s noneconomic damages. Hence, the doctor should be obligated to pay the patient the capped compensation in the amount of the $250,000 unless he can establish that MICRA caps settlement recoveries as well.

The Court then went on to explain that MICRA’s cap provision only applies to judgments awarding noneconomic damages and does not extend to settlement recoveries. In the Court’s words,

“Neither the parties nor amici curiae direct us to anything in the legislative history [of MICRA] that indicates an intent to include settlement recoveries in the cap on noneconomic damages. To the contrary, we have noted that the Legislature had jury awards in mind when it enacted the cap, and that only a collateral impact on settlements was contemplated. In Fein v. Permanente Medical Group, 695 P.2d 665 (Cal. 1985), where the constitutionality of the cap was upheld, this court observed that one problem identified in the legislative hearings was the unpredictable size of large noneconomic damage awards, resulting from the inherent difficulties in valuing such damages and the great disparity in the price tag which different juries placed on such losses. The Legislature could reasonably have determined that an across-the-board limit would provide a more stable base on which to calculate insurance rates.

Furthermore, as one amicus suggests, the Legislature may have felt that the fixed $250,000 limit would promote settlements by eliminating ‘the unknown possibility of phenomenal awards for pain and suffering that can make litigation worth the gamble.’ Thus, the Legislature was primarily concerned with capricious jury awards when it established the MICRA cap. However, excluding settlement dollars from the cap does not leave settlements unaffected. The prospect of a fixed award of noneconomic damages not only increases plaintiffs’ motive to settle, as noted in Fein, but also restrains the size of settlements. Settlement negotiations are based on liability estimates that are necessarily affected by the cap. By placing an upper limit on the recovery of noneconomic damages at trial, the Legislature indirectly but effectively influenced the parties’ settlement calculations.”

The Court also observed in this connection that “If nonsettling defendants were assured of an offset against noneconomic damages regardless of their degree of fault, an agreement with one defendant would diminish the incentive for others to settle. Conversely, if all defendants are responsible for their proportionate share of noneconomic damages, settlements are encouraged. Nonsettling defendants must weigh not only their exposure to liability for noneconomic damages within the limits imposed by section 3333.2, but also the prospect of having to prove the comparative fault of settling defendants in order to obtain a reduction under section 1431.2.”

March 14, 2014

Medical Malpractice Decision of the Year:
Florida Supreme Court voids the $1M cap on noneconomic damages for a patient’s wrongful death.

McCall v. United States, So.3d , 2014 WL 959180 (Fla. 2014)

We are just in mid-March, but yesterday’s decision of the Florida Supreme Court, McCall v. United States, — So.3d —, 2014 WL 959180 (Fla. 2014), is – and will likely remain – the most important medical malpractice decision of 2014.

The case at bar presented a particularly egregious example of medical malpractice: a young woman died after delivering a healthy baby as a result of preventable loss of blood. This tragic event took place at an air-force base hospital. The victim’s survivors therefore filed their medical malpractice suit with a federal court pursuant to the Federal Tort Claims Act (FTCA). Under FTCA, the suit was governed by Florida law. Following bench trial, the United States District Court found the United States liable, but applied Florida’s $1,000,000 cap on wrongful-death noneconomic damages recoverable for medical malpractice. On appeal, the victim’s survivors challenged the cap’s constitutionality. The Eleventh Circuit affirmed the District Court’s decision, but certified questions of Florida constitutional law with regard to the cap.

The Florida Supreme Court rephrased the certified questions as follows:

Does the statutory cap on wrongful death noneconomic damages, Fla. Stat. § 766.118, violate the right to equal protection under Article I, Section 2 of the Florida Constitution?

Florida’s Equal Protection Clause mandates that “All natural persons, female and male alike, are equal before the law.” Hence, “everyone is entitled to stand before the law on equal terms with, to enjoy the same rights as belong to, and to bear the same burden as are imposed upon others in a like situation.” Caldwell v. Mann, 26 So.2d 788, 790 (Fla. 1946).

The challenged statute, Fla. Stat. § 766.118, provided that “The total noneconomic damages recoverable by all claimants from all practitioner defendants [in the event of wrongful death] shall not exceed $1 million in the aggregate.” The capped damages included pain, suffering, lost consortium, emotional distress and other noneconomic losses.

Based on its previous precedent, St. Mary’s Hospital, Inc. v. Phillipe, 769 So.2d 961 (Fla. 2000), the Court ruled that the cap violates the Equal Protection Clause “because it imposes unfair and illogical burdens on injured parties when an act of medical negligence gives rise to multiple claimants.” The Court explained that, under this cap, medical malpractice claimants “will not receive the same rights to full compensation because of arbitrarily diminished compensation for legally cognizable claims.” For example, in the case at bar, the noneconomic damages suffered by the victim’s parents were assessed at $1,500,000 and her surviving son’s noneconomic damage was determined to be $500,000. The cap reduced those damages by 50% for each claimant (from $2M to $1M in the aggregate). If the cap were to apply, each of the victim’s parents would have recovered $375,000 and her son would have received $250,000. Contrast this case with an identical scenario featuring a victim with no parents: under that scenario, the victim’s child would recover $500,000 rather than $250,000.

After finding this inequality, the Court went on to determine whether it can be justified by a compelling state interest. In that most important part of its decision, the Court has found no rational relationship between the cap and its stated purpose: “the alleged medical malpractice insurance crisis in Florida.” The Court ruled in that connection that the Task Force responsible for the cap’s enactment based its recommendations to the Legislature on fact-free speculations about “medical malpractice crisis” and the cap’s ability to resolve it. Based on amici briefs and important studies by Tom Baker, Neil Vidmar and other leading scholars, the Court determined that there is no medical malpractice insurance crisis in Florida. Moreover, the Court used empirical data to project that, had there been such a crisis, it could not be alleviated by caps on noneconomic damages (for my argument that excessive medical liability should be fixed by narrowing the applicable liability rules rather than by capping damages, see here, at pp. 1253-57).

I predict that this important decision will soon be used to challenge similar caps that exist in other states. Whether those challenges will succeed is hard to tell at this point.

October 27, 2013

Georgia’s Medical-Malpractice Reform Bill

Georgia’s Senate is considering a far-reaching medical malpractice reform: see here. If implemented, this reform would substitute the conventional malpractice regime by a no-fault compensation scheme for patients sustaining medical injuries. This scheme will be modeled on the extant workers’ compensation regime. An injured patient will submit her claim to a special administrative tribunal—the Patient Compensation Board—that will determine her eligibility for compensation promptly and expediently.

Will this reform succeed?

This question is very hard to answer. There is no doubt that the reform will be challenged on constitutional grounds. Georgia’s Constitution protects a person’s right to sue her doctor for malpractice and have the suit adjudicated by a jury of her peers: see Oculoplastic Surgery, P.C. v. Nestlehutt, 691 S.E.2d 218 (Ga. 2010). On the other hand, the proposed reform would create a new compensation entitlement that a patient can realize even when her doctor commits no malpractice. Arguably, this unconditional entitlement adequately compensates patients for the lost malpractice action that does not guarantee redress. This “quid pro quo” may allow the reform to pass constitutional muster. For this to happen, however, Georgia’s Supreme Court would have to soften its categorical formulation of the right to a jury trial in Nestlehutt. This formulation extends an “inviolate right” to a jury trial “with respect to cases as to which there existed a right to jury trial at common law or by statute at the time of the adoption of the Georgia Constitution in 1798.” As the Court properly noted, these cases unquestionably included suits for medical malpractice. For my analysis of a similar formulation by the Oregon Supreme Court, see here.

To secure the reform’s constitutionality, its proponents therefore will do well to make it voluntary rather than mandatory. Specifically, the reformers should allow patients to opt out from the new scheme while retaining their right to sue doctors for malpractice and have those suits adjudicated by a jury. Patients who select to opt out would then have to pay more for their treatments (which would require them to purchase more expensive medical insurance). For a proposal to reconfigure private health plans along those lines, see here.

In all likelihood, if this reform initiative goes through, the scheme will be compensating patients only for their economic damages that include lost earnings and medical expenses. The reformers plan to obtain coverage for those damages by charging care providers remarkably modest annual rates: $500-$600 for physicians; $100-$250 for physician assistants and nurses; and $100-$200 per bed for hospitals.

Whether this money will buy enough coverage critically depends on the chosen compensation rules, which are presently unclear. The key question here is how to deal with the causation problem, given the presence of preexisting conditions in most patients. Under the extant fault-based system of medical liability, courts have devised workable solutions to that problem. These solutions relax the causation requirements for wronged patients by allowing them to establish causation and get compensated upon proof of “reasonable medical possibility,” “differential etiology,” or “lost chances to recover”: see here, at 1216-26, and here. These plaintiff-friendly rules are counterweighted by the narrowly defined scope of “medical malpractice” that shields doctors against liability: see here, at 1208-16.

Under Georgia’s proposed scheme, however, a patient need not to be wronged by her doctor in order to recover compensation for injuries. If so, what would Georgia’s fault-free causation rules look like?

As I indicated at the outset, Georgia’s scheme draws on the workers compensation regime, but there is a big difference between workplace and medical injuries. With the exception to some asbestos cases, workplace injuries pose no serious causation problems. When a worker gets injured in a work-related accident, the accident and the worker’s injury are observable ex ante (before trial) and verifiable ex post (in court). Medical injuries are different because most patients have preexisting conditions. Those conditions are often causally responsible for the patient’s injury, but this scenario is virtually always uncertain. As a result, a patient’s unreserved entitlement to recover compensation for medical injuries enables her to file a viable suit whenever she is not cured by her doctor. Realization of this overclaiming opportunity might unravel the scheme.

This is what happened with a similar compensation scheme in New Zealand prior to its fix in early 90s that backpedaled to the fault system by requiring claimants to prove that their injuries resulted from a medical “error or mishap.” Presently, New Zealand uses an intermediate—and rather vague—“treatment injury” standard for compensable damages. This standard brought the false claim problem back.

To tackle this problem, Georgia’s scheme would have to use strict causation rules that will deny compensation to patients with serious preexisting conditions. This policy will bring about a disturbingly regressive consequence: it will deny recovery to the most disadvantaged subclass of patients whose preexisting conditions are most acute. Those patients would then be able to mount a successful constitutional challenge to the scheme, as they will receive no benefits in exchange for the abolition of their preexisting right to sue doctors for malpractice.

The scheme’s advocates claim that Georgia’s medical malpractice law forces doctors into defensive medicine, but this claim is uncertain at best. Georgia’s “same specialty” requirement for experts who come to court to identify medical malpractice makes it difficult for patients and their families to win suits against doctors. Georgia’s Supreme Court has been very strict about this requirement: see Hankla v. Postell, — S.E.2d —, 2013 WL 5508611 (Ga. 2013), and here. This requirement fortifies the legal safe harbor for Georgia doctors who follow their specialty’s internal rules and protocols. Hence, apart from being costly and constitutionally questionable, the proposed scheme may not be necessary after all.

 October 4, 2013

Oregon’s Unfulfilled Tort Reform

Klutschkowski v. Oregon Medical Group, P.3d, 2013 WL 5377913 (Or. 2013)

Oregon has a statute capping noneconomic damages recoverable in medical malpractice suits at $500,000.

The Oregon Supreme Court decided that this cap is unconstitutional insofar as it clashes with a person’s right to recover full jury-assessed compensation for injuries recognized as actionable in 1857 when Oregon adopted its constitution. Specifically, it ruled that Article I, sections 10 and 17, of the Oregon Constitution entrench this right and deny the legislature the power to curtail it: see Smothers v. Gresham Transfer, Inc., 23 P.3d 333 (Or. 2001), and Hughes v. PeaceHealth, 178 P.3d 225 (Or. 2008). This ruling separated the constitutionally protected pre-1857 causes of action, which the statutory cap cannot curtail, from the constitutionally unprotected causes of action that came into existence after 1857 and that can consequently be capped.

Consequently, in order to reduce a jury’s award of noneconomic damages to $500,000, the defendant must show that the plaintiff’s complaint was not actionable before 1857. To adjudicate such claims, courts must carry out an historical investigation into Oregon’s medical malpractice law.

The Court’s most recent decision on that issue, Klutschkowski v. Oregon Medical Group, — P.3d —, 2013 WL 5377913 (Or. 2013), made this task easy to perform. This decision reviewed a jury verdict obligating an obstetrician, who delivered the plaintiffs’ baby, to pay the plaintiffs (inter alia) $1,375,000 in noneconomic damages. The jury based this verdict on the following facts: the baby was too big to be delivered vaginally; the obstetrician therefore ought to have delivered the baby by a C-section; the vaginal delivery and the McRoberts maneuver carried out by the obstetrician caused the baby brachial plexus injury that impaired his use of one of the arms.

The obstetrician asked the trial court to cap the plaintiffs’ noneconomic award at $500,000. He claimed that the error the jurors found him responsible for was not actionable before 1857 and that babies born at that time also could not sue doctors responsible for their delivery. The Oregon Supreme Court disagreed: it held that it was enough for the plaintiffs to show that medical malpractice was recognized as a cause of action in the pre-constitution period. Because medical malpractice was generally actionable at that time, capping the jury’s $1,375,000 award at $500,000 would have been unconstitutional.

This decision makes Oregon’s cap ineffectual in the vast majority of medical malpractice cases. The cap provision will only apply in a small category of cases that involve violations of the patient’s right to give her informed consent to a noninvasive procedure or treatment. In the pre-constitution era, the right to informed consent did not extend to noninvasive treatments and procedures. Importantly, damages for informed-consent violations recoverable in cases in which the underlying procedure or treatment was invasive will not be capped. In those cases, an aggrieved patient can sue the doctor for assault, which she could also do before 1857. Assault has been actionable in torts since very early days.

August 31, 2013

Bypassing Damage Caps

Damage caps are widespread. A typical cap provision precludes medical malpractice victims from recovering more than a specified sum for pain, suffering and other noneconomic harms. These caps vary between $250,000 (as in California that might soon increase its cap by a referendum) and a $1,500,000-$500,000 scale (as in Florida). Some state supreme courts (e.g., Georgia, Illinois, and Wisconsin) voided the caps as unconstitutional, but many others (e.g., Alaska, California, Louisiana, Mississippi, Nebraska, Ohio and West Virginia) have upheld their constitutionality. In a few states (e.g., Florida and Texas), statutory caps had to be corrected to secure their alignment with state constitutions.

Damage caps are controversial. Some people believe that they help contain the costs and secure the affordability of medical care. Others believe that caps shortchange malpractice victims and weaken the deterrence of malpractitioners. People falling into the first group generally support tort reforms. People falling into the second group ardently oppose those reforms. For my middle-way position—that supports procedural tort reforms that block away unsubstantiated malpractice suits, while opposing damage caps and other substantive tort reformssee here.

The plaintiffs bar expectedly tries to bypass the caps: see Catherine Sharkey’s important article that identifies the “crossover” dynamic: Facing caps on their clients’ noneconomic recovery, patients’ attorneys boost and vigorously pursue their clients’ claims for economic damages with the jurors’ blessing and approval.

Another, relatively recent, way of bypassing the cap is splitting the “occurrence” or “event” of medical malpractice into several events or occurrences. When successful, this strategy doubles, or more than doubles, the recoverable compensation amount.

For example, the plaintiff’s attorneys in a Missouri case, Scott v. SSM Healthcare, St. Louis, 70 S.W.3d 560 (2002), have persuaded the court that “occurrence” refers to a single act, or instance, of medical malpractice. As a result, two separate acts of malpractice, committed by two different doctors at the same hospital, have doubled the plaintiff’s compensation amount for his noneconomic harm: the plaintiff was awarded $1,056,000 instead of a single statutory amount of $528,000. The court rejected the defendant’s interpretation of “occurrence” as referring to the plaintiff’s total damage.

A few weeks ago, the “occurrence” issue was decided by the Supreme Court of Pennsylvania: Kinney–Lindstrom v. Medical Care Availability and Reduction of Error Fund, — A.3d —, 2013 WL 4410996 (Pa. 2013). Pennsylvania’s Medical Care Availability and Reduction of Error Act of 2002 limits an aggrieved patient’s recovery to $1,000,000 per “occurrence” of medical malpractice. This limit was set for payments coming from the government’s fund that supplements the primary insurance coverage of participating healthcare providers.

The plaintiff was a mother of twins who suffered serious injuries as a result of a doctor’s prenatal neglect: failure to diagnose and treat the plaintiff’s infection while she was pregnant with the twins. The fund conceded that the doctor was negligent, but argued that this negligence amounted to a single occurrence, which should cap the plaintiff’s compensation at $1,000,000. The plaintiff, for her part, argued that she and her twins had suffered from two occurrences of medical malpractice; and so she should recover $2,000,000 (following the jurors’ assessment of the twins’ injuries at $13,150,000).

The Court rejected the plaintiff’s effect-based interpretation of “occurrence” (favored by the defendant in the abovementioned Missouri case). The Court also rejected the argument that “occurrence” should be construed broadly in order to expand an aggrieved patient’s entitlement to compensation. Based on the legislative language and history, the Court adopted the cause-based interpretation under which a single act of malpractice constitutes one “occurrence” even when it injures multiple victims.

In the case at bar, the plaintiff argued that she and her twins are entitled to a $2,000,000 compensation even under the “cause” approach. Specifically, she claimed that her evidence demonstrated that the “twins were subjected to different infectious organisms at different times, which the doctor discretely failed to diagnose and treat.” According to the plaintiff, there were two separate occurrences of medical malpractice that caused distinct injuries to each twin.

The Court remanded the case with instructions to adjudicate the plaintiff’s claim under the “cause” approach.

Remarkably, Florida statute, West’s F.S.A. § 766.118, settles the “occurrence” issue by capping “the total noneconomic damages recoverable from all [defendants] regardless of the number of claimants.” In my opinion, this provision can still be challenged on constitutional grounds.

From a deterrence perspective, the Missouri-Pennsylvania approach seems preferable. As far as compensation is concerned, because cap amounts generally undercompensate victims, courts will do well to interpret “occurrence” in a way that increases the deserving victim’s compensation.

June 18, 2013

Mississippi’s $500,000 cap: arbitrary, but still constitutional

Clemons v. United States, (S.D. Miss. 2013)

“All grief is not equal. All pain cannot be reduced to a one-size-fits-all sum. One cannot imagine what it is like to know that the doctor right in front of you, the one who is refusing to insert a chest tube into your body even as nurses beg her to provide that treatment, is causing you to die and killing your unborn baby as you are helpless to stop her. In Mississippi, though, one’s suffering at the hands of a health care provider is worth no more than half a million dollars, no matter how egregious, and no matter if your suffering leads to your death, your unborn child’s death, and leaves your children orphans. This is offensive.”

Judge Carlton W. Reeves wrote this paragraph in a very recent decision that applied Mississippi medical malpractice law in a suit adjudicated under the Federal Tort Claims Act.

The judge upheld the constitutionality of Mississippi’s $500,000 cap on noneconomic damages recoverable for medical malpractice, which he properly criticized as arbitrary. This cap applies indiscriminately to all cases: there is no statutory adjustment for egregious malpractice that kills or severely injures the victim. Astonishingly, Mississippi caps noneconomic damages recoverable for torts other than medical malpractice at $1,000,000. The $500,000 cap was legislated exclusively for medical malpractice cases. Because this cap protects the entire medical industry rather than an individual entity or person, Judge Reeves decided that it does not violate Mississippi’s constitutional prohibition of special laws. The judge also Erie-guessed that the Supreme Court of Mississippi would find in that cap no violation of due process or equal protection.

June 7, 2013

Oklahoma Supreme Court voids the affidavit-of-merit requirement for suits alleging professional negligence, holding that this requirement violates the constitutional prohibition of special laws and creates an unconstitutional burden on access to cour.

May 9, 2013

An update on the California initiative to up the $250,000 cap on noneconomic recoveries: influential consumer groups move this initiative forward for the November 2014 ballot.

May 3, 2013

CALIFORNIA: New initiative is mounted to repeal next year the $250,000 cap on noneconomic recoveries for medical malpractice. To hear the report, click here (courtesy of the California Report: see here).

That would be a very good development, as the $250,000 cap is unreasonably low.

May 3, 2013

UPDATE: Florida’s legislation setting up the “same specialty” requirement for malpractice experts went through, subject to Governor’s approval. See here.

For discussion of this requirement and updates from other states, click here, here, here, and here.

May 1, 2013

Arkansas Supreme Court voids the “same specialty” requirement for malpractice experts for violating separation of powers Broussard v. St. Edward Mercy Health System, 386 S.W.3d 385 (2012)

According to the Arkansas Supreme Court, any expert with requisite knowledge is eligible to testify in medical malpractice and other cases.

This important decision flew under my radar. Recently, Arizona’s Supreme Court upheld the constitutionality of a similar statute. See here.

I am not going to argue with Arkansas’s Chief Justice about the meaning of “separation of powers” under Arkansas’s Constitution, but his decision that “Procedural matters lie solely within the province of this court” and that “the General Assembly lacks authority to create procedural rules” (at p. 389) strikes me as too sweeping. Under medical malpractice law, procedural and substantive rules operate in tandem to promote the chosen state policy: for full explanation, see my article Toward a Theory of Medical Malpractice, 97 Iowa Law Review 1201 (2012). If so, the General Assembly should be able to adjust evidentiary and procedural rules towards accomplishing its substantive policy with respect to medical liability.

Importantly, expert witness requirements for medical malpractice cases are generally considered “substantive” rather than “procedural”: see, e.g., Creekmore v. Maryview Hosp., 662 F.3d 686, 690 (4th Cir. 2011); Legg v. Chopra, 286 F.3d 286, 291 (6th Cir. 2002). Arkansas’ Supreme Court departed from that traditional view.

May 1, 2013

Missouri’s bill capping noneconomic damages of medical malpractice victims at $350K stalled.

The bill’s stalling may be undemocratic.

But justifying the bill by saying that “Doctors had been hoping the legislature would pass a new law this year saying they could not be hit with punitive damages greater than $350,000″ is hilarious.

Courts virtually never obligate doctors to pay punitive damages for medical negligence.

April 26, 2013

West Virginia court bypasses a $500,000 cap on noneconomic recovery:
Nursing home’s outrageous treatment of a resident triggers a $91.5M award after being categorized by the court as a general tort, rather than “medical malpractice”

West Virginia court held that a nursing home must pay $11.5M in compensatory damages and $80M in punitive damages for its outrageous neglect of an 87-year old woman. Reportedly, the woman died of dehydration after staying just 19 days in the nursing home. She had suffered head trauma from numerous falls and developed sores in her mouth that had to be scraped away with a scalpel. The court categorized the nursing home’s outrageous misconduct as a general tort, rather than medical malpractice, which made West Virginia’s $500,000 cap on noneconomic damages inapplicable.

The court’s categorization of the nursing home’s misconduct runs contrary to the approach taken by other states: see, e.g., Husby v. S. Ala. Nursing Home, Inc., 712 So. 2d 750, 751–54 (Ala. 1998) (applying medical malpractice rules to a suit involving a nursing home resident who fell out of bed, fractured her femur and died shortly after femoral surgery). See also this discussion. The nursing home will likely appeal this decision: it will try to convince the West Virginia Supreme Court to categorize its misconduct as “medical malpractice” and limit the plaintiff’s noneconomic recovery to $500,000.

April 20, 2013

Oregon has just passed a Medical Malpractice Mediation Bill that facilitates confidential negotiations.

Reportedly, the Bill aims to reduce the volume of medical malpractice litigation, and its supporters believe that it will also reduce frivolous suits.

I question this belief. The promise of informal negotiations and settlement can only embolden opportunistic plaintiffs. To protect doctors against frivolous suits, the law should expand their opportunity to file motions to dismiss. Mediation should come after the judge decided to keep the suit and not throw it away.