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Landmark medical liability cap survives court challenge

California and Mississippi doctors win liability reform court victories, while Oklahoma physicians see their provisions defeated.

By — Posted July 22, 2013

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Physicians cheered a California appeals court ruling that upholds the constitutionality of the state’s Medical Injury Compensation Reform Act, reaffirming what physicians nationwide consider the gold standard among tort reforms.

In a July 9 opinion, the Court of Appeal of the State of California, 1st Appellate District, said lawmakers have the authority to regulate recovery of noneconomic damages in tort cases, and that MICRA does not violate plaintiffs’ trial rights. MICRA includes a noneconomic damages cap of $250,000 in medical liability cases.

The decision is a victory for doctors, patients and the health care industry, said Alicia Wagnon, legal counsel for the California Medical Assn. The CMA wrote a friend-of-the-court brief in support of the cap, joined by the Litigation Center of the American Medical Association and the State Medical Societies.

The decision “is another affirmation of the fact that MICRA is constitutional and that it is rationally related to [the] purposes as declared by the Legislature and continues to be supported throughout the state,” she said. “We are facing huge changes in health care, and there are a lot more stresses on our system. Without MICRA and its protections, we [would have] significantly less access to health care, and we cannot afford that right now.”

Daniel U. Smith, an attorney for the plaintiff in the case, expressed frustration at the ruling. The court declined to consider that the 1975 crisis in health care — triggered by skyrocketing medical liability insurance rates — is over, he stated in an email.

“When a court does accept that undisputed fact, the $250,000 cap on noneconomic damages will be held unconstitutional as discriminating against severely injured medical malpractice victims, as denying their right to a jury trial, and as denying malpractice victims who only have noneconomic injuries their due process right of access to the courts,” he wrote.

How the latest challenge unfolded

The case involved a lawsuit filed by the family of Gary Gavello, who died in 2008 after undergoing cosmetic surgery. His family claimed medications administered in connection with the surgery caused Gavello to experience respiratory arrest, leading to his death. The plaintiffs in 2009 sued San Francisco plastic surgeon Donald Brown, MD, anesthesiologist Bernard Millman, MD, and a nurse who had treated Gavello. The claims against Dr. Brown and the nurse were resolved in arbitration, according to court documents.

Dr. Millman argued at trial that he did not breach the standard of care. But a jury found him negligent and awarded the plaintiffs $2.9 million in economic damages and $1 million in noneconomic damages. The court reduced the noneconomic damages to $250,000 in accordance with the state’s damages cap, and the plaintiffs appealed. They called on the appeals court to overturn MICRA, arguing the statute violated plaintiff’s equal protection and jury trial rights.

In their opinion, judges said legislators had a rational basis for enacting MICRA.

“First, the distinction between malpractice plaintiffs and other tort victims is rationally related to the legislative purpose of responding to an insurance crisis in that particular area,” the court said. “Second, the differential impact of the $250,000 cap among subclasses of malpractice plaintiffs is also rationally related to the objective of reducing the costs of malpractice defendants and their insurers. … The Legislature clearly had a reasonable basis for drawing a distinction between economic and noneconomic damages, providing that the desired cost savings should be obtained only by limiting the recovery of noneconomic damages.”

Two Oklahoma setbacks

The California ruling follows other 2013 liability reform wins for doctors. In June, a federal judge upheld Mississippi’s $500,000 noneconomic damages cap in medical liability cases. The ruling affirmed the reduction of a $5.5 million court award against a medical center in a wrongful death case.

In Indiana, the state Supreme Court on Jan. 15 left intact a $1.25 million damages cap, the limit for total awards in medical liability cases. The state high court in that case ruled that the plaintiff waited too long to raise his legal challenge to the state’s damages cap.

Oklahoma physicians, however, recently experienced two court defeats related to the state’s tort reform measures. The Oklahoma Supreme Court ruled in June that the Comprehensive Lawsuit Reform Act of 2009 was unconstitutional. Justices said the act violated the single-subject rule of the state constitution by compiling several subjects into one. Also in June, the same court struck down the state’s certificate-of-merit statute, deciding the rule unfairly applies only to some plaintiffs and creates “an undue financial barrier on access to the courts.”

In a statement, the Oklahoma State Medical Assn. said it is working with legislators and evaluating its next steps after the ruling.

“It is truly unfortunate to see this fate befall a law for which we had worked so hard and which was paying dividends for so many Oklahoma physicians and their patients,” the statement said.

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External links

Kristina Gavello et al. v. Bernard Millman, MD, Court of Appeal of the State of California, 2nd Appellate District, July 9 (link)

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