Tort reform: Damage cap struck down in Georgia, upheld in Missouri

Physicians won one battle but lost another in their crusade to protect damage caps in medical liability cases from legal attacks.

The Georgia Supreme Court felled the state's $350,000 noneconomic damage cap, a move physicians said also will topple access-to-care gains in the state. Doctors in Missouri, meanwhile, praised a high court ruling there that, while narrowing the scope of the state's cap, largely kept it intact.

The cases are among others around the country in which courts have rejected or upheld caps on various constitutional grounds.

Siding with plaintiff lawyers, Georgia's high court on March 22 unanimously declared the state's award limit unconstitutional, saying it encroached on patients' rights to have a jury decide damages.

"The very existence of the caps, in any amount, is violative of the right to trial by jury," Chief Justice Carol W. Hunstein wrote in Atlanta Oculoplastic Surgery v. Nestlehutt. The court also said the ruling applied retroactively to medical liability cases pending in the courts since the law passed in 2005.

But justices declined to address other arguments by plaintiffs that the cap infringed on the separation of powers between the Legislature and the judiciary -- a key contention in such cap debates and one that led the Illinois Supreme Court in February to strike down the state's $500,000 cap for doctors.

"At the end of the day, this [Georgia] decision is disastrous for patients and physicians," said Donald J. Palmisano Jr., general counsel and director of government relations for the Medical Assn. of Georgia. The society, with the Litigation Center of the American Medical Association and State Medical Societies, filed a friend-of-the-court brief supporting the cap.

Since the law passed, doctors' liability premiums have decreased 18%, and claims filings have dropped 30%, MAG said. That's compared with annual increases in the state ranging from 10% to 27% between 2001 and 2004, said AMA President J. James Rohack, MD, who called the ruling "a step backward" for access to care.

Palmisano said the decision could reverse improvements in the liability climate that helped attract some 1,000 new doctors to the state since 2005, many to underserved areas. The law balanced patients' legal rights and did nothing to limit their recovery for economic damages, such as lost wages and medical costs, he added.

MAG is evaluating legislative and other options to address the court ruling, including other tort reform proposals. A constitutional amendment is one possibility, Palmisano said.

Adam Malone, an attorney for the plaintiffs in the case, said the cap did not eliminate medical errors or frivolous lawsuits. Instead, it unfairly penalized injured patients "since, by definition, the jury would not be awarding money to anyone without a legitimate claim in the first place."

But Georgia doctors successfully fended off a constitutional attack on a separate measure that requires a higher burden of proof of liability in cases involving emergency care. On March 15, the high court rejected plaintiff lawyers' contentions that the 2005 statute carved out a special exception for emergency cases.

Instead, justices agreed with physicians that the law furthered a legitimate state interest in promoting health care availability at a time when increased liability risk and costs were harming access. "Furthermore, it is entirely logical to assume that emergency medical care ... is different from medical care provided in other settings," the opinion in Gliemmo v. Cousineau states.

Meanwhile, Missouri's $350,000 noneconomic damage cap in liability cases remains alive, though state trial lawyers hinted at future threats.

Although the state Supreme Court on March 23 concluded that the cap could not be applied retroactively to injuries that occurred before the 2005 law, justices found no other constitutional defects with the statute. The plaintiffs also alleged that the cap violated their equal protection and jury trial rights, but the court skirted the issues. It's unclear how many cases could be affected by the decision.

Nevertheless, the ruling "ensures Missouri will be a state where physicians want to practice," said Missouri State Medical Assn. President Thomas Sparkman, MD, adding that state doctors' premiums were 17% below those in states without caps. The MSMA and the AMA Litigation Center filed a brief in the case, Klotz v. St. Anthony's Medical Center.

The Missouri Assn. of Trial Attorneys, which was not involved in the case, said the ruling was a victory for patients injured before the cap took effect. But "we still believe there are serious constitutional problems with the caps on noneconomic damages, and we hope to see this issue examined by the courts," said MATA President Alan Mandel.