Michigan, Missouri High Courts to Examine Caps on Noneconomic Damages

Is it constitutional to place a cap on noneconomic damages in a medical malpractice case? If not, how should that cap be calculated when one of multiple defendants settles prior to the trial?

These are questions soon to be decided by the Supreme Courts in Michigan and Missouri.

In the Missouri case of Sanders v. Ahmed, the plaintiff contends that the state’s noneconomic damages cap, which lowered a jury award of $9.2 million to $1.2 million, is in violation of the state’s constitution. The plaintiff’s attorney claims that the cap denies a plaintiff’s right to receive the “full and intended” effect of a jury’s determination of damages. However, counsel for the defendant argues that the constitutional right to a trial by jury does not translate into a right to a jury award, but a right to have a jury determine the case’s facts and make a judgment.

In Velez v. Tuma, the cap itself is not being challenged, but the method of calculating damages when a plaintiff receives a jury award as well as a pretrial settlement from a joint tortfeasor. In Velez, the jury awarded the plaintiff $1.4 million in noneconomic damages, which was reduced by the judge to $394,200 in compliance with the state’s cap. The defendant physician argues that the award should also have been offset by the $195,000 settlement that the plaintiff received from two other hospital defendants prior to trial. The physician’s position is supported by the American Medical Association, which is filing an amicus curiae brief.

The issue of caps on noneconomic damages has already been litigated in Illinois, where the state’s Supreme Court found a cap to violate the separation of powers between the judicial and legislative branches by limiting the ability of a judge to award damages. The court stated, “It is the province of the court system to determine damages and not the prerogative of the legislature to require judges to reduce damages to a predetermined level.”

Agreeing with the court’s rationale, the President of the American Bar Association, Carolyn B. Lamm stated that research showed that it is inappropriate to adopt statutory limits in medical malpractice compensation because “courts have inherent power to increase or reduce verdicts if they are…excessive or…inadequate.” However, one justice dissented, contending that the judiciary’s function is not to make law, but to utilize it to achieve justice and that the legislature’s function is to formulate “statutory solutions to social problems.”

Many believe that reining in jury awards in medical malpractice cases will lower medical malpractice insurance premiums, which had become so high in Illinois that physicians were allegedly leaving the state to practice. According to the American Medical Association, after the cap was passed in Illinois, liability costs stabilized, insurance competition increased, and more specialists were attracted to shortage areas. Only time will tell whether this progress will become undone as a result of the Lebron decision.

Do you believe that legislative caps on noneconomic damages are necessary for tort reform? Do they violate the concept of separation of powers?

Sanders v. Ahmed, Mo. Cir. Ct., Case No. 0516-CV12867, September 28, 2010.

Velez v. Tuma, Mich. Ct. App., Doc. No. 281136, April 16, 2009.