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

By Alex Stein

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.

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About Alex Stein

Alex Stein is a Professor of Law at Brooklyn Law School. Before joining Brooklyn, Alex was a Professor of Law at Cardozo Law School (2004-2016) and served for more than a decade at the Hebrew University of Jerusalem Faculty of Law (1991-2004). He also held visiting professorial appointments at Alabama, Columbia, Miami, and Yale Law Schools. In Fall 2016, he visited Harvard Law School, where he taught Torts and a seminar on Medical Malpractice. Alex's specialty areas include Torts, Medical Malpractice, Evidence, as well as general legal theory and economic analysis of law. He authors three books, An Analytical Approach to Evidence (with Ronald J. Allen et al.) (6th ed. 2016); Foundations of Evidence Law (2005) and Tort Liability under Uncertainty (2001, with Ariel Porat), and over sixty articles of which many have appeared in leading journals. Alex was one of the founding editors of Theoretical Inquiries in Law and is on the editorial board of the International Journal of Evidence & Proof. In 2013, he launched an e-journal STEIN on Medical Malpractice, http://www.steinmedicalmalpractice.com, that covers all significant developments in medical malpractice laws across the United States. He graduated from the Hebrew University of Jerusalem and earned a Ph.D. from the University of London.