Michigan and Missouri high courts to hear challenges to noneconomic damages caps

In Michigan, a physician is asking to reduce what he must pay. Missouri's two cases will determine the constitutionality of the state's cap.

By Tanya Albert Henry — Posted Dec. 2, 2011

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The Michigan Supreme Court is set to hear arguments Dec. 6 in a case that questions how caps on noneconomic damages should be calculated when one of the defendants settles before trial.

The query before the high court: Should a defendant who goes to trial be responsible for the full dollar amount allowed under the state's noneconomic damages cap? Or should the court subtract the money another defendant paid when settling the case before trial?

In Velez v. Tuma, a doctor is arguing that the $394,200 a lower court ordered him to pay in noneconomic damages should be reduced by the $195,000 that two hospitals paid to the plaintiff before the trial. In an amicus brief, the Michigan State Medical Society and the Litigation Center for the American Medical Association and the State Medical Societies urge a reversal of the lower court decision.

"The noneconomic damages cap determines the compensation to which [the] plaintiff is entitled," the brief states. "The lower court's disregard of this mandate allows [the] plaintiff to recover more than the law allows."

The brief also says if the lower court ruling stands, it would "defeat the legislative purpose in enacting the cap."

Dan Schulte, legal counsel to the MSMS, said the plaintiff received the full amount of the cap from the defendant physician and got to keep the $195,000 from the settling defendants. "It's an end run around the cap," he said. The plaintiff could not recover economic damages in this case because a "collateral source" had paid or would be paying the economic damages.

Constitutional challenge in Missouri

Meanwhile, Missouri's Supreme Court on Nov. 2 heard oral arguments in a case that challenges the state's noneconomic damages cap.

In Sanders v. Ahmed, a patient's family argues that the cap used to reduce noneconomic damages from $9.2 million to about $1.2 million violates Missouri's constitution. Specifically, the family told the court that the cap interferes with the right to have a jury determine damages and deprives it of receiving the "full and intended" effect of the jury's verdict. The physician told justices the cap does not violate the right to a jury trial and is constitutional.

The doctor also is asking the court to reduce the verdict, which included more than $920,000 in economic damages. He told the court the damages should be reduced by the amount the family received from other defendants who settled before the case went to trial. The family told justices that their award should not be reduced.

Another case, though not as far along, is scheduled to go before the Supreme Court of Missouri. Watts v. Cox Medical Center questions the constitutionality of the state's noneconomic damages cap. At this article's deadline, the Missouri State Medical Assn. expected to file an amicus brief supporting the cap's constitutionality. The AMA Litigation Center planned to join the brief.

The plaintiff in Watts argues that the cap violates a right to trial by jury, the due process clause, the equal protection clause and other constitutional provisions. The plaintiff's attorney appealed directly to the high court after a trial judge reduced a jury's $1.4 million noneconomic damages award to $350,000.

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