The Doctor’s Advocate | Third Quarter 2014
Latest News on Challenges to Caps on Noneconomic Damages
The November ballot measure attacking California’s Medical Injury Compensation Reform Act (MICRA) will pit the state’s plaintiff attorneys against a broad and growing coalition of physicians, hospitals, dentists, clinics, organized labor, civil rights groups, teachers, and school districts.
The ballot measure, now identified as Proposition 46, is the latest in a decades-long series of attempts by plaintiff attorneys to raise or repeal the MICRA cap on noneconomic damages. The legislature has rejected a number of bills, including proposals introduced by the Speaker of the Assembly and the President pro Tempore of the Senate. The state’s appellate and supreme courts have rejected multiple constitutional challenges, including claims that MICRA violates the guarantees of equal protection and the right to a jury trial.
The Doctors Company has given significant financial support to the campaign against the ballot measure. We play a leading role in both Californians Allied for Patient Protection—the coalition to preserve MICRA—and the campaign committee fighting the proposition. In the coming months, we will be engaging our California members directly to join the effort to defeat the ballot measure. In addition to reaching out to our members, the campaign against the ballot measure is beginning targeted social media advertising now and will begin broadcasting and mailing campaign ads in September 2014. The campaign against the ballot measure is called Patients, Providers and Healthcare Insurers to Protect Access and Contain Health Costs. Visit www.NoOn46.com for the latest campaign news and materials and to see a comprehensive list of the organizations opposing the ballot measure.
In 2012, the Supreme Court of Missouri struck down the state’s cap on noneconomic damages in medical liability actions. The Missouri court held that the cap:
…is unconstitutional to the extent that it infringes on the jury’s constitutionally protected purpose of determining the amount of damages sustained by an injured party. Such a limitation was not permitted at common law when Missouri’s constitution first was adopted in 1820 and, therefore, violates the right to trial by jury guaranteed by article I, section 22(a) of the Missouri Constitution. (Watts ex rel. Watts v. Lester E. Cox Med. Ctrs., 376 S.W.3d 633, 636, Mo. 2012.)
The court left the cap in place for actions alleging wrongful death, because that cause of action is a product of legislation rather than the common law. This reasoning is very similar to the 1999 decision invalidating the cap in Oregon except in actions for wrongful death (Lakin v. Senco Prods., Inc., 329 Ore. 62).
The effort to reinstate a noneconomic damage cap in Missouri took two forms in the 2014 legislative session. The first, as embodied in Senate Bill 589 (Brown-R) and House Bill 1173 (Burlison-R), was an attempt to abolish the common law claim for medical liability and to create a new statutory cause of action, with a limit on noneconomic damages.
The second approach was an effort to pass Senate Joint Resolution 25 (Lager-R) to put a question on the ballot for the voters, asking for a change to the Missouri constitution to authorize a cap.
Although the abolish-and-create approach is thought by many in the Missouri capitol to have greater support, neither strategy was successful this session. Opposition in the senate, led by the trial lawyers, resulted in a late-session attempt to establish a drastically increased cap in excess of $750,000—which the physician community defeated. The issue will continue to be contentious next session. The Doctors Company remains at the center of efforts to reinstate a cap at a sensible level.
In 2014, the Kansas legislature passed and the governor signed into law Senate Bill 311, which will raise the noneconomic damage cap in increments from its previous level of $250,000 per incident to $350,000 by July 1, 2022. The bill also included a section adopting the federal standard for expert testimony, often called the Daubert standard after Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), one of the cases articulating the rules for admissibility of expert testimony.
The bill was initiated by the Kansas Senate Judiciary Committee at the request of the Kansas State Medical Society (KMS) in response to the Kansas Supreme Court’s decision in Miller v. Johnson, 295 Kan. 636 (2012). While the Miller decision upheld the constitutionality of the Kansas cap on noneconomic damages, questions raised in the dissent to the opinion suggested that if the noneconomic damage cap were not raised in some amount, it would eventually be found to be unconstitutional. KMS believed that it would be better to seek a modest cap increase and, with scheduled increases, buy eight years of peace for the cap, than to risk either an adverse decision from a future court or a larger increase from a less tort-reform–friendly legislature.
The bill was supported by both the KMS and Kansas Medical Mutual Insurance Company, the state’s largest provider of physician liability insurance, and opposed by the Kansas state trial lawyers’ association. The trial bar wanted the cap to be declared unconstitutional and indicated that it could not agree to a cap increase without conceding the question of constitutionality.
In 2003, the Arkansas State Legislature passed comprehensive tort reforms, including a cap on noneconomic damages, limits on admissible evidence of medical costs, and requirements for expert witnesses in medical malpractice cases. In 2009, the state supreme court struck down the provisions relating to evidence of medical costs. Subsequent rulings in 2010 and 2012 struck down the cap on noneconomic damages and the legislation regarding expert witness testimony.
The legislature responded by introducing legislation intended to designate itself as the sole determiner of the legitimacy of damages in civil actions, removing the state supreme court from the discussion. There were serious questions about the legality of the legislation, and it ultimately failed.
With this history as a backdrop, there is now an effort under way to have a constitutional amendment placed on the ballot in 2016 that would either designate the legislature as the sole determiner of the legitimacy of damages in civil actions or specifically set a damage amount limit. The movement is in the early stages and is currently being led by Arkansas Mutual, a medical malpractice insurer. The proponents are attempting to build a coalition of medical malpractice insurers, medical professional groups, and small business interests, but they are doing so without the participation of the state medical society. The groups targeted for membership in the coalition include hospitals, nursing homes, and other advocates of tort reform.