Supreme Court Overturns Medical Malpractice Caps on Noneconomic Damage Awards
The Wisconsin Supreme Court on Thursday, July 14, held (4-3) that the statutory limitation for an award of noneconomic damages in malpractice cases is unconstitutional, violating the equal protection clause of the Wisconsin Constitution. The Majority reiterates the theory of “judicial deference to the legislature and the presumption of constitutionality of statutes,” but states that a statute will be held unconstitutional if the statute is shown to be “patently arbitrary” with “no rational relationship to a legitimate government interest.”
“Noneconomic damages” include pain and suffering, mental distress and loss of enjoyment of normal activity. The caps in question apply only to these damages and no limit is placed on “compensatory damages” such as medical and other care-related expenses and lost wages.
The Majority relies upon the rational basis “with teeth” test to arrive at its conclusion that the cap on noneconomic damages is arbitrary; creates an undue hardship on a small unfortunate group of plaintiffs; and, is not rationally related to the legislative objectives of lowering medical malpractice premiums and controlling health care costs. On the last point, the Court cites certain portions of various studies (some state, some national, some old, some new) to support its conclusion that there was no rational basis (“with teeth”) to support the adoption of statutory caps.
The Majority does point out that statutory limitations are not per se unconstitutional and noted that the Court recently (July 2004) upheld the cap on noneconomic damages for wrongful death medical malpractice actions. In his concurring opinion, Justice Crooks “emphasizes” that statutory caps in medical malpractice cases can be constitutional.
The Majority also does not address other constitutional issues raised by the petitioner since it reached its decision on equal protection grounds. Justice Crooks, however, joined by Justice Butler, states rather clearly that an unreasonably low cap (presumably including one at $350,000) can also violate the constitutional right to a trial by jury and legal remedies for wrongs inflicted.
Justice Prosser (joined by Justices Wilcox and Roggensack) and Justice Roggensack (joined by Justices Wilcox and Prosser) wrote strong dissents challenging the Majority’s conclusion that the legislatively adopted cap is not rationally related to the Legislature’s objective.
Both Justices challenge the selective use of studies, many outside of Wisconsin, and selected portions of those studies and the conduct of a “mini trial” to justify its conclusions under the rational basis theory.
Justice Prosser also states that “This court is not meant to function as a ‘super legislature,’ constantly second-guessing the policy choices made by the legislature and governor.” Prosser points out the deliberative nature of the legislative process; the input that may be provided from parties on both or all sides of an issue; and, the voters remedy to retire those who supported laws that the voters disfavor.
Speaker John Gard and Democrat Representative (and physician) Sheldon Wasserman both issued press releases [Gard] [Wasserman] calling for legislative action to respond to the Court’s decision.
Not surprisingly the plaintiff’s bar, the Wisconsin Academy of Trial Lawyers, praised the Court’s ruling while the Medical Society and the Hospital Association expressed serious concerns about the adverse impacts expected from the Court’s ruling.
Other reactions:
Wisconsin Manufacturers and Commerce
National Federation of Independent Business - Wisconsin
Compelling Testimony of Medical Witnesses
In another decision involving medical malpractice, the Court in Amanda Carney-Hayes v. Northwest Wisconsin Home Care, Inc. clarifies the duties and privileges of medical witnesses, reaffirming the Alt/Glenn holdings, regarding witnesses’ refusal to answer certain questions posed at deposition by asserting privilege.
Collateral Source Payments Allowable Under Section 893
In Lagerstrom v. Myrtle Werth Hospital-Mayor Health System, another medical malpractice case, the Court concluded that evidence of collateral payments to an injured person should be allowed under Wisconsin statute section 893.55(7), but the jury must be instructed not to reduce the value of reasonable medical services based on the collateral source payments.
According to the Court, “The legislature did not mandate that a fact-finder offset collateral source payments in determining the reasonable value of medical services to protect subrogation.”
Justice Roggensack dissented from the majority conclusion that evidence admitted pursuant to s. 893.55(7) could not be used by a fact-finder to abrogate Wisconsin's collateral source rule in this case.
Justice Wilcox wrote separately to "indicate that the majority opinion represents yet another instance of this court undermining the intent of the legislature by rendering void a properly enacted statute through creative judicial interpretation."
Supreme Court Decision in Lead Paint Case
In a review of a decision by the District I Court of Appeals, the Wisconsin Supreme Court held that Article I, Section 9 of the Wisconsin Constitution does not insulate wrongdoers from liability simply because recovery has been obtained from an altogether different wrongdoer for an altogether different wrong. The Court further concluded that the lead paint claims at issue warrant extension of the risk contribution theory.
Justice Butler wrote, "…we again conclude 'that as between the plaintiff, who probably is not at fault, and the defendants, who may have provided the product which caused the injury, the interest of justice and fundamental fairness demand that the latter should bear the cost of injury.'"
The manufacturers are in a better position to absorb the cost of the injury, said Butler. “They can insure themselves against liability, absorb the damage award, or pass the cost along to the consuming public as a cost of doing business.” The Court concluded that it is better to have the manufacturers or consumer share in the cost of the injury rather than place the burden on the innocent plaintiff.
In his dissent, Justice Wilcox said the end result of the majority decision was "manufacturers can be held liable for a product they may or may not have produced, which may or may not have caused the plaintiff's injuries, based on conduct that may have occurred over 100 years ago when some of the defendants were not even part of the relevant market." He added, "Simply put, the majority opinion amounts to little more than this court dictating social policy to achieve a desired result."
Justice Prosser warned of the potential consequences of the decision. “Wisconsin will be the mecca for lead paint suits. There is no statute of repose on products liability here, and this court has now created a remedy for lead paint poisoning so sweeping and draconian that it will be nearly impossible for paint companies to defend themselves or, frankly, for plaintiffs to lose."
Supreme Court Reviews Economic Loss Doctrine Cases
Three cases involving the economic loss doctrine were reviewed by the Supreme Court and the opinions were released on July 8.
James B. Linden v. Cascade Stone Company, Inc. involved a claim for faulty workmanship against a subcontractor; In Gerald Grams v. Milk Products, Incorporated, the suit claimed damages that were the result of disappointed expectations of a bargained-for product's performance; Kaloti Enterprises, Inc. v. Kellogg Sales Company and Geraci & Associates, Inc. addressed the issue of whether an intentional misrepresentation claim is barred by the doctrine.
For further reading, go to the CTCW Journal article, “The Economic Loss Doctrine – A Coverage Defense?” written by Monte Weiss.
Zoning Appeals Board Must Provide Reasons for Rulings
Members of a board of zoning appeals must explain their reasons for decisions involving variances the Supreme Court ruled in Lamar Central Outdoor, Inc. v. Board of Zoning Appeals of the City of Milwaukee. Said the Court, "The Board may not rest on a declaration that an application does not meet certain ordinance criteria; the Board must explain why the application does not meet the criteria."
Supreme Court: Chapter 133 May Apply to Interstate Commerce
In Gene L. Olstad v. Microsoft Corporation, the Supreme Court held that Chapter 133, which prohibits monopolistic practices, may reach interstate commerce under some circumstances. The court then established the circumstances under which it could reach that level, by noting the allegations required for a civil plaintiff filing such an action. The case involves a class action anti-trust lawsuit filed against Microsoft under state law.
For more information on legislation of interest to CTCW members, go to the CTCW Tracking Report. |
