Wisconsin Supreme Court to hear tort reform challenge

Organized medicine says the damages cap being tested is vital to the state's stable liability climate.

By Mike Norbut — Posted March 14, 2005

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The Wisconsin Supreme Court, which in the past has ruled in favor of a cap on noneconomic damages in medical liability lawsuits, has agreed to hear another challenge to the law that once again puts the long-time protection for physicians in jeopardy.

The latest challenge to the cap's constitutionality has mobilized organized medicine. Doctors say the cap is a key tort reform factor keeping liability insurance premiums from rising exponentially in Wisconsin the way they have in other states.

"It's hard to speculate on why [the court] chose to hear this case, but our position has always been the state should have a comprehensive system for medical malpractice liability, including a cap and a patients' compensation fund," said Melanie Cohen, an attorney for the Wisconsin Medical Society.

Wisconsin originally established a $1 million cap in 1985, but the law expired in 1991. In 1995, the state enacted a new $350,000 cap that is regularly adjusted for inflation. The cap now stands at $423,000.

The American Medical Association credits the cap for making Wisconsin one of six states with a stable medical liability climate, said Donald J. Palmisano, MD, the AMA's immediate past-president. While the 20 states on the crisis list are seeing physicians retire early, discontinue high-risk procedures or move to a different state, Wisconsin has held steady, he said.

"The AMA strongly urges the court in Wisconsin to uphold its cap," Dr. Palmisano said. "Failure to do so will then place Wisconsin in the position of having the problems that crisis states and states approaching crisis are having."

The WMS and the AMA/State Medical Societies Litigation Center filed a brief in the case before the high court.

But the plaintiffs who filed the lawsuit, Ferdon v. Wisconsin Patients Compensation Fund, disagree that the cap is the best thing for residents.

Dennis and Cynthia Ferdon and their 8-year-old son, who was born with obstetric brachial plexus palsy, say that the state's cap violates the boy's constitutional right to a jury trial and due process. They also claim the cap strips the court of its power to decide whether to uphold awards based on the facts presented at trial.

In addition, the Ferdons are challenging a state law that calls for future medical awards that exceed $100,000 to be placed in a medical expense fund and be paid out over time.

A trial court and the Wisconsin Court of Appeals rejected the Ferdons' challenges, ruling the cap and the medical expense fund constitutional. Now the state's high court will decide.

The Ferdons' challenge stems from a 2002 jury verdict that found a physician was negligent in delivering the couple's baby, causing deformities and some paralysis to the boy's right arm.

The jury awarded the child $403,000 in future medical expenses and $700,000 for past and future noneconomic damages. The noneconomic damages were higher than what the state cap allows -- $410,322 at that time -- so the doctor and other defendants asked the court to reduce them.

The Ferdons' challenged the constitutionality of the laws that allowed the courts to do that. Relying on case law, the lower courts rejected the Ferdons' arguments.

In its decision, the appellate court focused on a 1978 decision on tort law before a cap was enacted, and a 2001 decision that said a cap on noneconomic damages was constitutional.

The AMA and WMS in their brief also point to case law supporting tort reform. Last year in Maurin v. Hall the state Supreme Court found the cap on noneconomic damages awarded in a medical malpractice wrongful death case were constitutional.

But the Ferdons' attorney, Michigan-based Vincent R. Petrucelli, argued in court documents that the couple's case "requires a separate and distinct judicial review" from Maurin because a case involving death differs from a case involving an injury.

Further, he said in papers filed with the court, the "health care provider sector should not be allowed to shift its burden of responsibility and accountability onto the shoulders of the severely injured merely because it claims to be in crisis."

But Steve Means, a Madison-based attorney representing the Wisconsin Patients Compensation Fund, said in a court brief that the cap is "a valid and constitutional response to a situation that threatens the continuing availability of quality, affordable health care for the [state's] citizens."

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Case at a glance

Venue: Wisconsin Supreme Court
At issue: Whether Wisconsin's cap on the noneconomic damages awarded in a medical liability case is constitutional. An appeals court said the cap is legal, but a patient is challenging that ruling.
Potential impact: Organized medicine says the cap must be upheld because it is a vital piece of the medical liability reform system that has helped stabilize the medical liability market in Wisconsin and ensure access to care. Some patients say if the court upholds the cap, they will continue to be denied jury trials and due process when they are injured by physicians.

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