Are Damage Caps Unconstitutional?

The Missouri Supreme Court soon will be hearing a constitutional challenge to the state’s tort laws, specifically its cap on non-economic damages that was enacted in 2005. The case, Klotz v. Shapiro, has not only grabbed the attention of the insurance industry, it has also attracted 11 amicus briefs from such disparate groups as the NAACP, the U.S. Chamber of Commerce, the American Medical Association, and the AFL-CIO.

The court’s decision could impact the lives of Missouri residents with asbestos-related diseases, such as mesothelioma, also called asbestos cancer, who seek damages in court to care for themselves and their families. That’s because the 2005 “tort reform” law contains many provisions that make it difficult for citizens to file lawsuits and recover damages and places a $350,000 cap on awards for non-economic damages.

James Klotz, a retired man living in the greater St. Louis area, was given a new pacemaker in March 2004. However, according to the plaintiff, hospital staff failed to change his IV in a timely manner, resulting in cellulitis and then a staph infection. The infection eventually cost Mr. Klotz part of his right leg, part of his left foot, and one of his kidneys, and also left him with impaired hearing.

Mr. Klotz and his wife, Mary, sued St. Anthony’s Hospital and Dr. Michael Shapiro for malpractice. July 2008 a St. Louis County jury awarded the Klotzes $2.58 million, which included $1 million in noneconomic damages. In a post-trial motion the defendants asked the judge to reduce the noneconomic award to comply with the state’s $350,000 cap from the 2005 law. The judge decided the cap did not apply to the doctor, who had been found 33 percent at fault. But it did apply to the hospital, which was 67 percent at fault. The verdict was reduced by $495,130.

One of the claims in the Klotzes’ appeal of the verdict is that the 2005 law should not have been applied to the case at all, since the underlying injury occurred in 2004. The defendants also have challenged the amount of economic damages awarded by the St. Louis County jury. The jury awarded Mr. Klotz the full billed amount of medical expenses, and the defendants say he should only have been awarded what he actually paid.

But the constitutional challenge of the 2005 tort law is the real meat of the case. A key part of the challengers’ argument is that the Missouri legislature wrote the law as they did because of a faulty assumption — that a “crisis” derived from too many malpractice suits were driving up costs and driving away doctors from the state.

But the fact is that the number of medical malpractice lawsuits in the state long had been in decline when the law was enacted. The sky-high cost of medical liability insurance that so outraged Missouri’s doctors were not caused by over-use of the court system but by bad investment decisions by insurance industry executives.

The amicus brief filed by the AFL-CIO argues that “no logical relationship exists between the cap on non-economic damages” and the objectives of the state legislature. The cap figure is “arbitrary and capricious,” the brief continues, and the tort statute contains provisions that discriminate against the elderly by making them a “suspect class.”

The same argument could be made against the damage caps in most states. If this constitutional challenge is successful, expect similar laws in other states to be hauled into court.

This entry was posted on Friday, January 15th, 2010 at 2:42 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.