My last blog post examined the new laws and how they affect case selection in the setting of an “emergency medical condition.” This post discusses the draconian (and unconstitutional in my opinion) cap on non-economic damages in medical malpractice cases.
B. Economic v. Non-Economic Damages
Perhaps the biggest impact of the new laws is the $500,000 cap on noneconomic damages, except under very limited and hard to prove circumstances. The statute reads as follows:
SECTION 7. Article 1B of Chapter 90 of the General Statutes is amended by adding the following new section to read:
Ҥ 90-21.19. Liability limit for noneconomic damages.
(a) Except as otherwise provided in subsection (b) of this section, in any medical malpractice action in which the plaintiff is entitled to an award of noneconomic damages, the total amount of noneconomic damages for which judgment is entered against all defendants shall not exceed five hundred thousand dollars ($500,000). Judgment shall not be entered against any defendant for noneconomic damages in excess of five hundred thousand dollars ($500,000) for all claims brought by all parties arising out of the same professional services. On January 1 of every third year, beginning with January 1, 2014, the Administrative Office of the Courts shall reset the limitation on damages for noneconomic loss set forth in this subsection to be equal to five hundred thousand dollars ($500,000) times the ratio of the Consumer Price Index for November of the prior year to the Consumer Price Index for November 2011. The Administrative Office of the Courts shall inform the Revisor of Statutes of the reset limitation. The Revisor of Statutes shall publish this reset limitation as an editor’s note to this section. In the event that any verdict or award of noneconomic damages stated pursuant to G.S. 90-21.19B exceeds these limits, the court shall modify the judgment as necessary to conform to the requirements of this subsection.
(b) Notwithstanding subsection (a) of this section, there shall be no limit on the amount of noneconomic damages for which judgment may be entered against a defendant if the trier of fact finds both of the following:
(1) The plaintiff suffered disfigurement, loss of use of part of the body, permanent injury or death.
(2) The defendant’s acts or failures, which are the proximate cause of the plaintiff’s injuries, were committed in reckless disregard of the rights of others, grossly negligent, fraudulent, intentional or with malice.
(c) The following definitions apply in this section:
(1) Consumer Price Index. – The Consumer Price Index – All Urban Consumers, for the South urban area, as published by the Bureau of Labor Statistics of the United States Department of Labor.
(2) Noneconomic damages. – Damages to compensate for pain, suffering, emotional distress, loss of consortium, inconvenience, and any other nonpecuniary compensatory damage. “Noneconomic damages” does not include punitive damages as defined in G.S. 1D-5.
(3) Same professional services. – The transactions, occurrences, or series of transactions or occurrences alleged to have caused injury to the health care provider’s patient.
S.L. 2011-400 (2011). Under the new statute, cases involving significant economic (income) loss and/or medical bills will continue to make it through the case selection process, assuming your experts are solid on liability. However, cases involving the elderly, children, and non-working spouses, particularly wrongful death cases with relatively low medical expenses, should receive greater scrutiny. Regardless, it will be doubly important to ensure we maximize all aspects of available damages going forward.
N.C.G.S. § 28A-18-2 sets forth the damages recoverable in a wrongful death case. These include:
1. Expenses for care, treatment and hospitalization incident to the injury resulting in death;
2. Compensation for pain and suffering of the decedent;
3. The reasonable funeral expenses of the decedent;
4. The present monetary value of the decedent to the persons entitled to receive the damages recovered, including but not limited to, compensation for the loss of the reasonably expected:
a. Net income of the decedent;
b. Services, protection, care and assistant of the decedent, whether voluntary or obligatory, to the persons entitled to the damages recovered;
c. Society, companionship, comfort, guidance, kindly offices and advice of the decedent to the persons entitled to the damages recovered;
5. Such punitive damages as the decedent could have recovered pursuant to Chapter 1D of the General Statutes had he survived, and punitive damages for wrongfully causing the death of the decedent through malice or willful or wanton conduct, as defined in G.S. 1D-5;
6. Nominal damages when the jury so finds.
N.C. Gen. Stat. § 28A-18-2 (2006).
1. Loss of Services, Protection, Care and Assistance
During the legislative battle over SB 33, there was much debate about how the new law would impact certain vulnerable classes of people, particularly where wrongful death is the result. One of those classes consists of non-working spouses (housewives and househusbands). The fear was that, because non-working spouses did not derive an income, that these cases would essentially be capped by the $500,000 limit plus medical expenses. However, the loss of services, protection, care and assistance are properly categorized as economic losses. Thus, the husband and 2 young children that lose their 32 year old stay-at-home mom who did all the cooking, cleaning, etc., will have suffered significant economic loss. The cost to replace all the services provided by that mother can be worth tens of thousands of dollars per year. Thus, it will be crucial to flesh out all the services performed by the decedent in these types of cases, and to get a good economist to project the present value of the cost of replacement services.
2. Loss of Society, Companionship, Comfort, Guidance, Kindly Offices And Advice
There has been some discussion as to whether the new noneconomic damages cap really applies to loss of society, companionship, comfort, guidance, kindly offices and advice. The new statute explicitly sets forth types of damages that are considered noneconomic: “Damages to compensate for pain, suffering, emotional distress, loss of consortium, inconvenience, and any other nonpecuniary compensatory damage.” The first argument against application of the cap is that loss of society, companionship, etc., are not specifically mentioned in the definition of noneconomic damages. Second, the wrongful death statute entitles the estate to “[t]he present monetary value of . . . [s]ociety, companionship . . . .” Arguably, this implies that society, companionship, etc., are pecuniary in nature, thus exempting them from the statute. Thus, this would mean that “[c]ompensation for pain and suffering” would be the only element of the wrongful death statute subject to the cap.
C. Case Selection Going Forward
Because of the new statute, as well as the increased medical malpractice caseload experienced by many firms, trial lawyers will have to be more judicious in the case selection process. In many cases we have taken over the years, the “soft damages” consisting of pain and suffering, as well as loss of society, companionship, etc., were by far the biggest (and perhaps only) real damages. Many of these very same cases now have to be declined in today’s climate. Before incurring the time and expense of gathering records and finding experts for review, spend more time up front fleshing out the damages.
We have always looked to see at the start whether there is loss of income or high medical expenses. However, we now need to consider other things. Does this case involve an “emergency medical condition” that may make the case harder to prove? What is the value of the medical care that will be required in the future? What are all the services that have been lost by dependents? Get a better handle on the answers to these questions early on. Otherwise, you may end up at mediation with an offer of $200,000 because the insurance company knows your client is capped at $500,000 and there is little incentive to settle the case, while the risk of trial for you and your client is substantial.
Only time will tell how the courts interpret what falls under the umbrella of noneconomic damages. It is my hope that the caps on noneconomic damages will be declared unconstitutional. However, it will be a few more years before the issue is decided by the appellate courts. The notion that a jury of 12 people can not be expected to arrive at a fair assessment of the damages after listening to all the evidence is inexplicable. A “one size fits all” approach is unjust and contrary to the notion of the American civil jury system. My next post will address the new law governing bifurcation of liability and damages in ALL civil cases where the amount requested exceeds $150,000.
