Appellate court upholds California medical liability cap

California's $250,000 noneconomic damages cap in medical liability lawsuits is intact after withstanding its first constitutional challenge at the appellate court level in more than two decades.

The Court of Appeal of the State of California, 5th Appellate District ruled that the dollar limit set under the state's 1975 Medical Injury Compensation Reform Act, or MICRA, is constitutional and doesn't infringe on a jury's power. The three-judge panel also rejected an argument that the cap violates a plaintiff's rights because the maximum $250,000 allowed under the law doesn't give plaintiffs the same buying power today as it did in 1975.

The decision in Van Buren v. Evans reaffirmed state Supreme Court rulings from the 1980s that said the Legislature had the right to limit damages as a way to curb doctors' insurance costs so they could stay in business and treat patients.

Lawmakers passed MICRA at the height of a state medical liability crisis. Physicians nationwide view California reforms as the gold standard in tort reform.

The ruling, issued in late May, is a win for California doctors who credit MICRA with keeping their medical liability insurance premiums affordable, especially during times when doctors in states without tort reform saw premiums soar to unaffordable levels.

"This decision is a great confirmation of MICRA. ... It is a critical component of the California health system infrastructure," said Alicia From, legal counsel for the California Medical Assn., which filed a friend-of the-court brief with the California Hospital Assn. and California Dental Assn.

MICRA's constitutionality was challenged after it was passed. In the 20-plus years since the landmark California Supreme Court rulings upholding MICRA's constitutionality, physicians have been fighting cases challenging how MICRA was enacted instead of whether it was constitutional, said Curtis A. Cole, a Pasadena, Calif.-based lawyer for the doctor and surgical associates group at the center of the latest lawsuit.

This most recent case is a new effort to challenge MICRA's constitutionality, he said, but "there is a modern trend among appellate courts [around the nation] to enforce tort reform efforts."

Challenge to noneconomic damages cap

In the case, patient James Van Buren challenged the noneconomic damages cap after a California trial court reduced the $2.5 million in noneconomic damages that the jury awarded him to the $250,000 allowed under law. He sued a physician and the surgical group, alleging that the physician had breached her duty to meet the standard of care in treating his perianal cyst. He said she severed muscle, resulting in permanent incontinence.

Van Buren asked California's 5th Appellate District court to rehear the case, but the court denied the request June 18. He is asking the California Supreme Court to review the lower court ruling, said Van Buren's attorney, David M. Jamieson, based in Modesto, Calif.

"It is an important issue in California, because plaintiffs are limited to $250,000 regardless of the extent of their injury and the time they have to live with their injury," Jamieson said. "The jury's verdict, which is reached fairly, is then second-guessed by the Legislature. It's a one-size-fits-all determination."

He said the law treats medical liability plaintiffs differently from other plaintiffs. "There is no damage limitation for people who sustain injuries through other means."

And since MICRA was enacted, Jamieson said, there has been no increase in damages.

"What a plaintiff would have received in the mid-'70s is drastically diminished," he said. "$250,000 then only buys you $65,000 today."

The appellate court disagreed with those arguments.

Citing a 1985 California Supreme Court decision, the 5th Appellate District judges said that "the Legislature retains broad control over the measure, as well as the timing, of damages that a defendant is obligated to pay and a plaintiff is entitled to receive, and that the Legislature may expand or limit recoverable damages so long as its action is rationally related to a legitimate state interest."

MICRA is intended to keep doctors in the state so that patients have access to care and to make sure physicians have insurance so that injured patients can collect judgments, the 1985 Supreme Court said and the current appellate court reaffirmed.

The court also noted that the Legislature didn't place limits on a plaintiff's right to recover all of the economic damages, such as medical expenses or lost earnings.

The opinion is an unpublished one. That means it is binding for the plaintiff and defendants in this case, but it cannot be cited as case law in future cases. At the time of this article's deadline, the court was considering requests to publish the opinion, so future cases could cite the findings.