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Oral Argument: Florida’s Medical Malpractice Damage Caps

On Thursday, February 9, 2012, Florida’s Supreme Court heard oral argument in McCall v. United States of America. I have written about this matter several times in these blog pages. The case was a wrongful death action arising from the medical malpractice death of a 20 year old woman who had just given birth to her first child. It occurred at a military hospital and was brought in Federal Court under the Federal Tort Claims Act.

A federal judge awarded Ms. McCall’s husband and child damages, finding that her death was the result of medical malpractice. But because the Florida legislature passed a law in 2003 capping damages in medical malpractice cases, the federal judge who heard all the evidence in the case was forced to reduce the damage award to the family by one million dollars. Not because she wanted to, not because the evidence warranted it, and not because she decided it was fair. She was required to reduce the award because the Florida legislature in 2003 decided to enact a cap as part of a “tort reform” agenda.

Ms. McCall’s Estate courageously fought the damage reduction, arguing that the Florida legislature defied the Florida constitution when it capped non-economic damages in medical malpractice cases. The case made its way through the federal system and the 11th Circuit Court of Appeals sent the constitutional questions to the Florida Supreme Court for answers.

To watch a web cast of the oral argument click here.

A few observations after watching the argument:

1) The Court, Justice Pariente in particular, seemed concerned about whether a wrongful death case under the Federal Tort Claims Act could be the right vehicle to challenge the constitutionality of the law because (a) wrongful death cases are creatures of statute so the legislature has greater latitude in what it does with regard to the limits or expansiveness of the wrongful death remedy and (b) a right to jury trial constitutional challenge seems non sequitur when applied to the requisite bench trial of the FTCA.

2) Justice Pariente’s concern with regard to wrongful death cases contradicts Supreme Court precedent. She should not be concerned. The Florida Supreme Court specifically applied Florida’s Equal Protection clause to broaden the scope of a previous medical malpractice wrongful death damage cap in St. Mary’s Hospital, Inc. v. Phillipe, 769 So.2d 961 (Fla. 2000). See paragraph 4, below.

3) The Court did not seem to grasp the Equal Protection Argument, concerned that the Federal Court already ruled on the issue. But the Federal Court (11th Circuit) specifically wanted the Florida Supreme Court to address the Equal Protection issue as it certified the question to the Florida Supreme Court.

4) Equal Protection is a compelling argument here for a lot of reasons:

a. The cap is an aggregate cap and must be shared by all survivors. A one survivor case (a husband without children for example) would result in a greater recovery to that sole survivor than a circumstance where the decedent left a husband and a child, or multiple children, who have to share the aggregate cap. This irrationally discriminates against family members of large families. In fact, the Florida Supreme Court has already found this precise type of aggregate cap statute to be unconstitutional in St. Mary’s Hospital, Inc. v. Phillipe, 769 So.2d at 972. In Phillipe, addressing the very same Equal Protection challenge to an aggregate cap (a different statute relating to pre-suit arbitration caps, Florida Statutes section 766.207(7)(b) (1997)) in a wrongful death medical malpractice case, the Court stated the point: “We fail to see how this classification bears any rational relationship to the Legislature’s stated goal of alleviating the financial crisis in the medical liability industry. Such a categorization offends the fundamental notion of equal justice under the law and can only be described as purely arbitrary and unrelated to any state interest.” Id. In Phillipe, the Florida Supreme Court determined that an aggregate cap would be an Equal Protection violation. Id. For the reasons sated here, the Court held that the Equal Protection clause required the cap to apply equally per claimant, and not in the aggregate;

b. The cap also irrationally and unfairly segregates wrongful death survivors from less catastrophically harmed victims of medical malpractice, meaning that the smaller, less serious injuries get full compensation, while those who have lost a mother or spouse or child are likely to receive less than full recovery. The legislature unfairly discriminated against the most seriously injured victims, such as those who are killed by medical malpractice as compared to those who suffer minor injuries; the former get their recoveries reduced while the latter get full justice; and

c. The cap irrationally and unfairly treats medical malpractice death victims differently from all other wrongful death victims; thus a mother who dies in a car accident gets better protection under the law than one who dies due to medical neglect.

5) On the Access to Courts argument, no one made the realistic point: limiting non-economic damages in catastrophic cases limits the amount of potential recovery for a medical malpractice victim. Therefore, it limits the amount of money available to pay a contingency fee lawyer, who is the only type of lawyer most medical malpractice plaintiffs can afford. Also, the economic damages are the monies needed to pay for medical expenses, lost earnings, and out of pocket expenses. These are hard costs. Limiting non-economic damages puts the plaintiff and her lawyer at odds with one another, reduces the money available to pay the lawyer, reduces the recovery, and usually forces the plaintiff to sacrifice hard costs for things like essential medical care to afford a lawyer. In the end, most medical malpractice cases, incredibly expensive and risky to begin with, become less and less appealing to most lawyers. This is the cynical, insidious, and well thought out plan of the tort reformers: limit damages to limit or eliminate cases by limiting or eliminating the incentive plaintiff’s lawyers have for taking them. If this is not an Access to Courts problem, I don’t know what is. It is not simply that the plaintiff “gets less money than she wanted.” The practical effect is that damage caps reduce recovery, reduce fees, reduce incentives, and thereby reduce access to courts. No lawyer, no representation, no access.

6) The Court stated its concern about the applicability of the plaintiff’s arguments to a wrongful death case in an FTCA context. But what about the applicability of the government’s arguments? What does the alleged “compelling state interest” in providing affordable medical malpractice insurance to physicians have to do with doctors working for the United States military on an Air Force Base? These are government employees who have no private insurance. Their lives, practices, and indemnity have nothing to do with the Florida insurance market. The alleged reasons for capping damages advocated by the insurance industry and the FMA in 2003 are irrelevant to the defendant in this case. Why should the cap apply at all to a military hospital? Mr. Peck did a nice job on rebuttal explaining the fallacious nature of the “compelling state interest” that allegedly supports damages caps (fake “doctor exodus,” mythological insurance crisis, no truth to the runaway jury verdict and claims payouts, etc.), but I challenge anyone to find a shred of legislative evidence for a malpractice insurance crisis related to the United States military hospital at Eglin Air Force Base!

7) The arbitrary and political nature of the damage cap is evident in the size of the cap itself. Justice Pariente noted that the requested cap was $250,000 and shouldn’t the plaintiff be happy the cap is higher than that. But if the legislature was acting with precision to address a crisis, what basis was there for the cap it enacted? Was it adhering to the evidence presented? Was it crafting a remedy based on the testimony it received? Or did it, instead, follow a policy of political expediency, fulfilling a tort reform agenda aimed at hindering trial lawyers and limiting recovery and access for the most injured and most in need? What evidence was there that a $1 million cap would have any effect on the so-called crisis?

8) Damage caps are not a solution for frivolous lawsuits. They claim to be but they are not. Frivolous cases are not worth anything, they usually go nowhere, and they are a waste of time. Catastrophic cases, on the other hand, are the target of damage caps. They are the ones where people are really hurt and where they have serious gripes. They are the few cases our system was designed to address on a case-by-case basis. The cynicism runs deep. We were sold a bag of goods: in the name of curbing frivolity, we have declared war on meritorious claims brought by serious people.

9) The legislature had no right to decide, in 2003, what Ms. McCall’s death is worth many years before it even happened. I believe a federal court judge, listening to evidence, is eminently more qualified to assess the value of the loss. So is a jury of six Floridians, who harbor no bias and who do their civic duty by making a sacrifice to listen to evidence and to do justice. Our constitution should protect the judicial system from the overbearing, politically charged legislature. This is a Separation of Powers issue, not only a Right to Trial By Jury issue. Our constitutional democracy, with three separate, co-equal branches of government is the worldwide benchmark for balanced, democratic government. It deserves our respect. Leave it to juries and judges to decide damages, and, if necessary, remit or add to the damages on appeal. The legislature should stay out of it.

Damage caps are not the reason for stability in the medical malpractice premium markets. Over the years, rates stabilize when financial markets stabilize. Insurance companies use the market cycles as opportunities to propagate the myths of runaway juries, frivolous lawsuits, and greedy trial lawyers as the causes of rate increases. Then, they benefit from legislation that does nothing but enhance insurance profits. When will we learn?