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Florida Overturns Arbitrary, Unconstitutional Damage Caps

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Scales of Justice

 

In a victory for justice and the 7th Amendment right to jury trial, the Florida Supreme Court became the latest to strike down unconstitutional medical malpractice damage caps that do nothing but protect negligent doctors and hospitals at the expense of innocent victims.

In reading through the opinion, the Florida Supreme Court articulated a number of powerful arguments against the arbitrary, unconstitutional damage cap.

Arbitrary Distinctions

The Court identified how such caps serve to discriminate against those with the most grievous injuries while benefiting the negligent actor and insurance company:

In the first example . . . three plaintiffs are injured as a result of the same tortfeasor’s negligence. Plaintiff A is injured moderately, and suffers pain, disability and disfigurement for a month. Plaintiff B is severely injured and suffers one year of pain and disability.  Plaintiff C is drastically injured, and suffers permanent pain and disability. . . . [I]t is further assumed that a jury awards plaintiffs A and B $100,000 in compensatory damages for noneconomic injuries.  Plaintiff C receives $1 million for his permanent, lifelong pain and
disability.

. . .  With respect to plaintiff C, [the challenged legislation] arbitrarily and automatically reduces the jury’s award for a lifetime of pain and disability, without regard to whether or not the verdict, before reduction, was reasonable and fair.

The tortfeasors in this example are also treated differently, without any justification. The tortfeasor who injures plaintiffs A and B is liable for the full amount of fairly assessed compensatory damages. In contrast, [the challenged legislation] confers a benefit on the similarly situated tortfeasor who injures plaintiff C.  This tortfeasor pays only a portion of fairly assessed compensatory damages because of the limitation [on noneconomic damges].

Therefore, the statue discriminates between slightly and severely injured plaintiffs, and also between tortfeasors who cause severe and moderate or minor injuries.

Thus, the Court concluded it was “simply unfair and unreasonable to impose the burden of supporting the medical care industry solely upon those persons who are most severely injured and therefore most in need of compensation.”  To reduce damages in that way, the Court said, “is not only arbitrary, but irrational, and we conclude that it ‘offends the fundamental notion of equal justice under the law.'”

No Medical Malpractice Crisis

The Florida Supreme Court also concluded there neither was nor is a medical malpractice crisis.

In passing the unconstitutional caps, the Florida legislature recited the tired mantra that litigation costs and increased medical liability insurance premiums, which resulted in doctors retiring early, quitting high-risk practices, or fleeing Florida for states in which they could commit malpractice at will without fear of uncapped liability.

The Court noted that it was required to give the legislature’s findings of “fact” deference, but only if the findings were actually fact.

As politely as possible, the Florida Supreme Court suggested the legislature was full of it, saying “the conclusions reached by the Florida Legislature as to the existence of a medical malpractice crisis are not fully supported by available data.  Instead, the alleged interest of health care being unavailable is completely undermined by authoritative government reports.”  The reasons for the unconstitutional caps provided by the legislature, the Court found, was “most questionable.”

Actual facts included:

  • Florida’s doctor supply per 100,000 people increased from 214 to 237 (10.7% increase) in metro areas and from 98 to 117 (19% increase) in rural areas from 1991 to 2001.
  • In cases that resulted in payments of $1 million or more, only 7.5% involved a jury trial verdict
  • 10.1% of settlements of $1 million or more were resolved without a lawsuit ever being filed.

During the so-called “crisis”, the per capita number of doctors increased substantially.  Jury trials and verdicts represented only a very small fraction of medical malpractice payments.

Unconstitutional Caps Do Not Lower Malpractice Premiums

The Florida Supreme Court also found that unconstitutional damage caps do not lower malpractice premiums for doctors, finding that “available evidence fails to establish a rational relationship between a cap on noneconomic damages and alleviation of the purported crisis.”

Reports have failed to establish a direct correlation between damages caps and reduced malpractice premiums. Weiss Ratings, which evaluates the performance of the malpractice insurance industry, has detailed two particularly salient findings. First, based upon data acquired from 1991 until 2002, the median medical malpractice premiums paid by physicians in three high-risk specialties—internal medicine, general surgery, and obstetrics/gynecology—rose by 48.2 percent in states that have damages caps, but in states without caps, the median annual premium increased at a slower rate—by 35.9 percent.  Second, the study noted that among states with caps on damages, only 10.5 percent (two of nineteen states with caps) experienced static or declining medical malpractice premium rates following the imposition of caps. In contrast, among states without damages caps, 18.7 percent (six of thirty-two states without caps) experienced static or declining medical malpractice premiums.

The Court also found that nothing in the cap required the insurance companies to pass their savings on to doctors in the form of premium reductions.

One insurance company president said, “No responsible insurer can cut its rates after a bill [that caps noneconomic damages at $250,000] passes.”  Even if they could, the company president indicated that it would yield only a 16% premium reduction.  Said one legislator during floor debate, “At the end of the day, actually, [the insurance companies] don’t have to pay anything back to the doctors.  It’s just a windfall, and there’s no provision in the bill that says otherwise.”

That’s precisely what happened in Oklahoma.  As the Oklahoma Supreme Court said:

[An] unanticipated result of statutes similar to Oklahoma’s scheme has been the creation of a windfall for insurance companies… which are not required to implement post-tort reform rates decreasing the cost of medical malpractice insurance to physicians.  These companies happily pay less out in tort-reform states while continuing to collect higher premiums from doctors.

Texas rejected a similar claim, saying, “[i]n the context of persons catastrophically injured by medical negligence, we believe it is unreasonable and arbitrary to limit their recovery in a speculative experiment to determine whether liability insurance rates will decrease.”

What It All Means

States continue to strike down unconstitutional damage caps and other tort reforms that infringe on the fundamental right to trial by jury.  Tort “reforms” are nothing more than a government bailout of negligent corporations and insurance companies funded by the public and, ironically, by those injured by the very negligent actors who are receiving this unnecessary “protection”.  We must preserve and protect each fundamental right if we are to protect any of them. Constitutional rights should not be attacked, demeaned, or trivialized for the political gain of an isolated lobbying group.

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© Copyright 2014 Brett A. Emison

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2 Comments

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  1. Robert says:
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    What you fail to mention is that it was a plurality decision and the thundering language you quote was accepted by only toe Justices. There is much uncertainty as to what this actually means and the Legislature is in session.

    • Brett Emison says:
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      Robert,

      Thanks for your comment. It is true that two justices signed the primary opinion, but your observation is only half correct. The three justices signing the plurality opinion agreeing that the Florida damage caps are unconstitutional did not disagree with the findings of the primary opinion – only whether such findings should be considered in the analysis.

      What the concurring opinion said was, “I emphasize that I have no reason to question the plurality’s excellent scholarship regarding the flaws in the Legislature’s conclusions as to the existence of a medical malpractice crisis.” Yet the plurality opinion also found the damage cap to be unconstitutional without considering the plurality opinion’s “excellent scholarship” and analysis.