The Doctor’s Advocate | Fourth Quarter 2019
Government Relations Report

2019 Judicial Challenges to Damage Caps

Elizabeth Y. Healy, Assistant Vice President, Government and Community Relations, and Dennis Chiu, Government Relations Specialist

State laws limiting damages face near-constant court challenges. This summary discusses three cases decided in 2019 and several more that are undecided.

North Dakota

In Condon v. St. Alexius Medical Center, the North Dakota Supreme Court upheld the state’s cap on noneconomic damages. This was a medical malpractice claim arising from surgical complications that may have led to a stroke. The jury awarded the plaintiff $2 million for economic damages and $1.5 million for noneconomic damages. The trial court denied the defendant’s post-trial motion to reduce the noneconomic damages to $500,000, the limit allowed by state law, ruling that the cap violated the guarantee of equal protection in the state constitution.

Court review of an equal protection challenge to a statute usually begins with a discussion of the standard of review. The court looks at the classifications created by the legislature. At one end of the scale is a classification that cuts into a fundamental interest or is inherently suspect. These kinds of classifications get strict scrutiny. At the other end is a classification that does not intrude on a fundamental interest or an important substantive right. These are subject to a “rational basis” test, and the statutes are often upheld unless they are found to be completely arbitrary and unrelated to legitimate government interests. In this example, the legislature is classifying persons entitled to noneconomic damages in medical negligence cases differently than plaintiffs in other kinds of injury lawsuits.

In Condon, the North Dakota Supreme Court found that the statute limiting noneconomic damages was somewhere in the middle. The court cited precedent establishing that the right to recover damages for personal injuries is an important substantive right. Review of a statute that intrudes on an important but not fundamental right requires intermediate scrutiny. The test is whether there is close correlation between the statutory classification and the goals of the legislature in enacting it.

The court examined the cap’s legislative history and economic effect and noted that the current cap “[did] not prevent seriously injured individuals from being fully compensated for any amount of medical care or lost wages.” The court concluded that the statute did not violate the state constitution’s equal protection guarantee. (Decided April 22, 2019.)

Kansas

The Kansas case discussed here and the Oklahoma case that follows do not deal with healthcare defendants, but these two states do not have separate limits for medical liability claims. The decisions in these cases may affect noneconomic damages in all injury cases.

In Hilburn v. Enerpipe Ltd., the plaintiff was rear-ended by a truck owned by the defendant. Enerpipe admitted liability, the jury awarded $301,509 in noneconomic damages, and the trial court reduced it to $250,000, which is the limit under the state statute.

On appeal, the Kansas Supreme Court struck down the state’s cap on noneconomic damages in personal injury cases on the grounds that the statute violated the state’s constitutionally guaranteed right to a jury trial. The decision in Hilburn overturned the 2012 decision in Miller v. Johnson, which upheld the cap in a 2012 medical malpractice case.

In Miller, the court held that the cap on damages encroached on the right to a jury trial by interfering with the jury’s determination of noneconomic damages. However, the court found that the limitation was in the public interest. Further, the court found that there was an adequate substitute remedy available for plaintiffs in the form of mandatory insurance coverage for healthcare providers.

In Hilburn, the court rejected the adequate remedy analysis of Miller and prior cases, and it ruled that the right to a jury trial—including the right to determination of damages by a jury—is a fundamental interest requiring the strictest scrutiny. The court held that this right is inviolate under the Kansas Constitution regardless of whether an adequate remedy exists.

A concurring justice took special note of the provision in the damage cap statute that prohibits disclosure of the cap to the jury, taking this provision as evidence that the legislature had sought to substitute its judgment for that of the jury. It is worth pointing out that all but three states that limit damages also prohibit disclosure of those limits to juries. (Decided June 14, 2019.)

Oklahoma

In Beason v. I.E. Miller Services, the Oklahoma Supreme Court considered a challenge to the state’s $350,000 per person cap on noneconomic damages. The plaintiff was hit by a boom that fell off a crane operated by an employee of the defendant. The plaintiff underwent two amputations on parts of his arm. The jury awarded the plaintiff and his wife a total of $15 million, with $6 million of that amount as noneconomic damages. The trial court reduced the jury’s noneconomic damage award to $700,000, or $350,000 each.

The court held that the state’s cap was an unconstitutional “special law.” Oklahoma’s constitution deals with equal protection by prohibiting special laws. A special law is a statute that subjects part but not all of a class of similarly situated persons to different treatment. In this case, the court held that the cap on noneconomic damages is an impermissible special law because it does not apply in cases resulting in the death of the plaintiff. In fact, the state constitution explicitly prohibits limiting damages in wrongful death cases. (Okla. Const. art. 23, § 7.) The court wrote: “By forbidding limits on recovery for injuries resulting in death, the people have left it to juries to determine the amount of compensation for pain and suffering in such cases, and no good reason exists for the Legislature to provide a different rule for the same detriment simply because the victim survives the harm-causing event....” (Decided April 23, 2019.)

Pending Cases in Oregon, New Mexico, and Tennessee

In Busch v. McInnis Waste Systems, Inc., the Oregon Supreme Court will decide the constitutionality of the state’s noneconomic damages cap. Oregon limits noneconomic damages to $500,000. Oral arguments for the case are set for January 14, 2020, with a decision expected in 2020.

In Siebert v. Okun, the New Mexico Supreme Court will decide the constitutionality of the state’s damages cap in medical malpractice cases. The state cap allows plaintiffs to recover all medical expenses and $600,000 in additional damages. A decision is likely in 2020.

In McClay v. Airport Management Services, LLC, the U.S. District Court for the Middle District of Tennessee certified to the Tennessee Supreme Court the question of whether the state’s cap on noneconomic damages is valid under the state’s constitution. Tennessee’s cap on noneconomic damages is $750,000 in most cases and $1 million for wrongful death, severe burns, amputation, and paralysis due to spinal cord injury. The court heard oral arguments on September 3, 2019. There is a chance of a fast decision in 2019 or early 2020.

The U.S. Supreme Court is being asked to review the 6th Circuit U.S. Court of Appeals’ decision invalidating Tennessee’s cap on punitive damages under the state constitution’s right to a jury trial. The U.S. Supreme Court may make a decision on whether to take the case in late 2019 or early 2020, with no decision expected until 2020 or later.

We will report on decisions in these pending cases in future issues of The Doctor’s Advocate.

See more issues