Oregon appeals court strikes down state liability limits

Doctors fear that the ruling will result in more lawsuits and discourage them from providing care at public institutions.

By Amy Lynn Sorrel — Posted Oct. 9, 2006

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Oregon physicians are concerned that a recent appeals court decision striking down part of a statute that limits the liability of state agencies could mean more lawsuits against individual doctors who work for public health institutions.

In Clarke v. Oregon Health & Science University, the Court of Appeals of Oregon upheld the $200,000 overall damage cap that applies to government entities. But judges ruled that plaintiffs could pursue separate claims for unlimited damages against the individual doctors the public medical institution employs.

Before the ruling, the Oregon Tort Claims Act let the state entity substitute itself as a defendant for its employees. Plaintiffs could recover damages of $100,000 per individual found to be negligent, up to $500,000.

But the appeals court ruled in July that this part of the statute was unconstitutional because it deprived plaintiffs of the right to a jury trial and appropriate compensation for injuries from the individual defendants responsible for the alleged negligence.

Doctors say they are not panicking yet because under the law, government entities are responsible for covering any awards against their contracted employees, said Oregon Medical Assn. Chief Operating Officer James Kronenberg.

But the OMA is concerned that in less-populated areas, public agencies might not have the resources to defend medical liability claims, leaving physician employees responsible.

Volunteer doctors, or private physicians who contract their services to a government agency but are not protected from liability in their contract, also could be vulnerable, he said.

"That's where ultimately this could set a dangerous precedent" and could discourage doctors from working with public entities to provide care, Kronenberg said.

The OMA has joined in OHSU's appeal that asks the state Supreme Court to overturn the lower court decision. It is up to the high court whether to accept the case. The state also has joined in the appeal, said Attorney General Hardy Myers.

Attorney William A. Gaylord, who represents plaintiff Jordaan M. Clarke and his guardian, Sari Clarke, in the case, said the ruling should stand, because it is unfair to expect a $200,000 award limit to be a "fair trade" for the patients' losses that result from negligent medical care.

Clarke was born at OHSU in 1998 with a congenital heart defect. After a successful surgery, the Clarkes allege that the boy had brain damage because OHSU doctors deprived him of sufficient oxygen during recovery.

The Clarkes sued OHSU and the doctors. OHSU asked to substitute itself for the individual doctors who treated Clarke. The hospital admitted to the negligence and agreed to pay the $200,000 damage award.

The trial court found that the Oregon Tort Claims Act limited OHSU's liability, and dismissed the Clarkes' additional claims against the doctors, who were not party to the lawsuit when OHSU admitted negligence.

The Clarkes appealed the ruling, however, arguing that it violated their constitutional rights to a jury trial.

The appeals court denied the Clarkes' claims against OHSU, however, and allowed them to pursue their case against the individual doctors involved, ruling that they are subject to unlimited damages. The physicians have not admitted negligence and deny any wrongdoing.

The Clarkes are seeking to recover nearly $12 million for Jordaan's care, Gaylord said.

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Case at a glance

Clarke v. Oregon Health & Science University

Venue: Court of Appeals of Oregon
At issue: Whether medical liability plaintiffs can file claims against individual physicians at public medical institutions for damages beyond the $200,000 overall damage cap that applies to government entities. The court said yes.
Potential impact: Doctors fear it could mean an increased number of lawsuits for those employed at public institutions. Plaintiffs attorneys say the ruling allows injured parties to be compensated fairly.

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