Are limits on medical malpractice awards unconstitutional?

Medical Malpractice Caps

Tam v. Eighth Jud. Dist. Ct. (Nev. Supreme Ct. – Oct. 1, 2015)

NRS 41A.035 (2004) limits the recovery of a plaintiff’s noneconomic damages in a health-care provider’s professional negligence action to $350,000. The issues are whether the statute violates a plaintiff’s right to trial by jury, whether the cap applies separately to each cause of action, and whether the statute applies to medical malpractice actions.

After the death of Charles Thomas Cornell, Jr, Sherry Cornell, individually and as administrator of Charles’s estate, filed a complaint alleging, among other causes of actions, professional negligence and medical malpractice. The complaint named numerous defendants, including Stephen Tam, M.D.

Charles had several chronic medical conditions. However, Cornell alleged that Charles died after receiving care from the defendants, who discharged him without medications or prescriptions for essential medications, including insulin, to treat his diabetes. Consequently, the complaint alleged that Charles died because he did not have access to insulin.

The district court dismissed several of the defendants and numerous claims from the action, and the remaining claims for trial fell within the definition of medical malpractice as set forth in NRS 41A.009. Relevant to this matter is that Dr Tam filed an omnibus motion in limine requesting in part that the plaintiffs’ noneconomic damages be limited to $350,000 as a whole pursuant to NRS 41A.035 (2004).

The district court denied this motion finding that NRS 41A.035 was unconstitutional, as it violated a plaintiff’s constitutional right to trial by jury. The district court also found that the cap in NRS 41A.035 did not apply to the case as a whole but that a separate cap applied to each plaintiff for each of the defendants. In addition, the district court found that the cap in NRS 41A.035 did not apply to medical malpractice claims. Dr. Tam petitioned the Supreme Court of Nevada for a writ of mandamus compelling the district court to vacate its order denying his motion in limine.

The Supreme Court of Nevada noted that although an appeal from a final judgment appeared to be an adequate and speedy remedy for the individual parties, resolving this writ petition could affect the course of the litigation and thus promote sound judicial economy and administration. Moreover, this petition raised an important legal issue in need of clarification involving public policy, which could resolve or mitigate related or future litigation. Accordingly, the Court exercised its discretion to entertain Dr. Tam’s petition for writ of mandamus.

Did the the district court err in finding NRS 41A.035 unconstitutional because it violates the right of trial by jury?

NRS 41A.035 provides that in an action for injury or death against a provider of health care based upon professional negligence, the injured plaintiff may recover noneconomic damages, but the amount of noneconomic damages awarded in such an action must not exceed $350,000. The district court concluded that the statute violated the right of trial by jury because it takes a question of fact—the determination of damages—away from the jury.

Pursuant to Article 1, Section 3 of the Nevada Constitution, the right of trial by jury shall be secured to all and remain inviolate forever. This provision guarantees the right to have factual issues determined by a jury. The Court explained that in order for a statute to violate the right to trial by jury, a statute must make the right practically unavailable.

The Court noted that while jurisdictions disagree on whether caps on statutory damages violate the right to trial by jury, it has previously held that a statutory limit on damages does not infringe upon a plaintiff’s constitutional right.

In Arnesano v. State, Dep’t of Transp., 113 Nev. 815, 942 P.2d 139 (1997), plaintiffs contended that a $50,000 cap on damages under NRS 41.035 (limiting damages in a tort action against the government) violated their right to a jury trial. After explaining that it is the jury’s role to determine the extent of a plaintiff’s injury, the Arnesano court concluded that it is not the role of the jury to determine the legal consequences of its factual findings. That is a matter for the Legislature.

In Yates v. Pollock, 239 Cal. Rptr. 383 (Ct. App. 1987), California also addressed this exact issue in upholding the constitutionality of its statutory cap on noneconomic damages in an action involving a health-care provider’s professional negligence. The Yates court reasoned that while the statute could possibly result in a lower judgment than the jury’s award, the Legislature retains broad control over the measure of damages that a defendant is obligated to pay and a plaintiff is entitled to receive, and it may expand or limit recoverable damages so long as its action is rationally related to a legitimate state interest.

Consistent with its prior holding in Arensano and persuasive caselaw from California, the Court concluded that NRS 41A.035’s cap did not interfere with the jury’s factual findings because it takes effect only after the jury has made its assessment of damages, and thus, it did not implicate a plaintiffs right to a jury trial.

Does NRS 41A.035 violate equal protection rights?

Cornell also argued that the district court correctly found the statute unconstitutional but for the wrong reasons. Cornell argued that NRS 41A.035 violated the Equal Protection Clause and claimed there was no rational basis for the statute.

The Court noted that the argument presented to voters in support of passing NRS 41A.035 was to “stabilize Nevada’s health care crisis and provide protection for both doctors and patients.” The Court explained that based on this express goal, NRS 41A.035’s aggregate cap on noneconomic damages was rationally related to the legitimate governmental interest of ensuring that adequate and affordable health care is available to Nevada’s citizens. The Court believed that by providing a hard cap limiting potential noneconomic damages arising from an incident of malpractice, the statute would seem to provide greater predictability and reduce costs for health-care insurers and, consequently, providers and patients.

Thus, the Court concluded that NRS 41A.035 did not violate equal protection because the imposition of an aggregate cap on noneconomic damages in medical malpractice actions is rationally related to the legitimate governmental interests of ensuring that adequate and affordable health care is available to Nevada’s citizens.

Did the district court err when it found the cap in NRS 41A.035 applied per plaintiff, per defendant?

Cornell argued that the district court properly found that the plain language and legislative history of NRS 41A.035 supported the argument that its cap applied separately to each plaintiff for each defendant, as each plaintiff had an independent action. Cornell compared this statute with the wrongful death statute where heirs’ actions may be joined, and each action is separate and distinct.

NRS 41A.035 provides that in an action for injury or death against a provider of health care based upon professional negligence, the injured plaintiff may recover noneconomic damages, but the amount of noneconomic damages awarded in such an action must not exceed $350,000. Cornell argued that the term “action” referred to each separate claim and applied separately to each defendant. Conversely, Dr. Tam argued that the plain meaning of “action” referred to the case as a whole. The Court noted that because both interpretations were reasonable, the statute was ambiguous and looked to the legislative history to aid in interpreting the statute.

In repealing NRS 41A.031(3)(a), which limited the noneconomic damages awarded to each plaintiff from each defendant, the 2004 amendments to NRS Chapter 41A adopted instead NRS 41A.035, which limits the amount of noneconomic damages awarded in such an action. The Court believed that such an alteration suggested that noneconomic damages are restricted to a per-incident basis.

The Court concluded that the noneconomic damages cap in NRS 41A.035 applies per incident, regardless of how many plaintiffs, defendants, or claims are involved. Thus, the district court erred in denying the portion of Dr. Tam’s motion in limine requesting that the plaintiffs’ noneconomic damages be limited to $350,000 as a whole pursuant to NRS 41A.035.

Did the district court err when it found NRS 41A.035 applies to claims of professional negligence an not to medical malpractice?

The district court found that NRS 41A.035 only applied to professional negligence claims and not to medical malpractice claims. Citing the Supreme Court of Nevada’s opinion in Egan v. Chambers, 129 Nev., Adv. Op. 25, 299 P.3d 364 (2013), the district court explained that the terms were essentially mutually exclusive. Dr. Tam argued that professional negligence was broader and included medical malpractice. Dr. Tam additionally argued that NRS 41A.035 applied because under the statutory definitions, he is a physician, and physicians are covered under professional negligence. Cornell argued that her claims are based on medical malpractice, which is distinct from professional negligence, and following Egan’s logic, the statute did not apply.

The Court noted that what is unclear from its reading of the statutes is the relationship between professional negligence and medical malpractice.  NRS 41A.009 (1989) defined medical malpractice as the failure of a physician, hospital or employee of a hospital, in rendering services, to use the reasonable care, skill or knowledge ordinarily used under similar circumstances. Although not identical, the definitions for both professional negligence and medical malpractice are similar and ultimately include negligence by a physician. Moreover, the Court believed that while the definition of medical malpractice is narrower in scope, the definition of professional negligence encompasses almost all of the medical malpractice definition.

The Court explained that this ambiguity was expounded when taking into account the legislative history of these statutes. The initiative was explained to the voters using professional negligence and medical malpractice interchangeably. Similarly, the legislative history prior to the voter initiative indicated that the statute would apply to medical malpractice actions, and the discussion surrounding the proposed legislation further conflated the terms.

Here, the district court relied on Egan for the proposition that medical malpractice and professional negligence are essentially mutually exclusive. The Egan court held that NRS 41A.071, which required an affidavit of merit in medical malpractice claims, applied only to medical malpractice actions, thus partly overruling a previous decision that applied the statute to professional negligence actions as well. NRS 41A.071 did not mention professional negligence, only medical malpractice and dental malpractice, so the Egan court turned to the statutory definitions of medical malpractice. Because medical malpractice only encompasses claims against physicians licensed pursuant to NRS Chapters 630 and 633, and podiatrists were licensed under NRS Chapter 635, the Egan court determined that a negligence action against a podiatrist, while professional negligence, was outside the purview of medical malpractice.

The Court explained that to the contrary, NRS 41A.035 applied to professional negligence claims, which by definition of NRS 41A.015 applied to a provider of health care, and included physicians licensed pursuant to NRS Chapters 630 and 633. Thus, construing the statutes in harmony and consistent with what reason and public policy suggest the Legislature intended, the Court concluded that medical malpractice is incorporated into professional negligence, making NRS 41A.035 applicable to medical malpractice actions. Accordingly, the Court further concluded that the district court erred when it found that NRS 41A.035 only applied to professional negligence claims and not to medical malpractice claims.

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