Utah Supreme Court Upholds Liability Damage Cap

November 29, 2004

A Utah law that caps the noneconomic damages that can be awarded in medical liability lawsuits will remain in place, the Utah Supreme Court ruled in November, according to the American Medical Association.

In the nearly 20 years since the law was passed, this was the first time the Utah Supreme Court had been asked to rule on the cap’s constitutionality. In its 3-2 decision, the court said the Legislature had put a reasonable limit on pain and suffering awards without arbitrarily restricting what plaintiffs can recover.

Physicians and other proponents of such caps said the ruling would help keep insurance rates affordable for doctors and help ensure that they would continue to practice in Utah.

“We wanted to make sure the cap stayed intact,” said Mark Fotheringham, spokesman for the Utah Medical Assn., which filed a friend-of-the court brief in the case. “We believe it has helped keep our medical liability insurance rates low.”

The state has not seen physicians leave, retire early or discontinue high-risk procedures at the high rates that some states have due to rising medical liability insurance rates, Fotheringham said.

“We’ve seen some people move here because the rates are lower than elsewhere,” he said.

AMA President John C. Nelson said he hoped this latest ruling in favor of caps combined with recent passage of several tort reform ballot initiatives sends a signal to lawmakers at the state and federal levels.

“We hope they will pass meaningful reforms, something that will keep access to care for patients,” he said.

In Utah, few jury awards for noneconomic damages have exceeded the $250,000 cap, passed in 1986.

The ceiling was adjusted for inflation and now stands at $400,000. Ralph L. Dewsnup, the attorney who represented the injured patient in the case before the Utah Supreme Court, called the law unfair.

“It’s a concern in my mind when even one person is affected,” said Dewsnup, a member of the Utah Trial Lawyers Assn.’s advisory board. “This was the clearest of all possible situations, and the verdict was taken away because the Legislature decided how much a person received before the event even happened.”

The underlying case, Judd v. Drezga, involved a boy born severely brain damaged in a forceps delivery. A jury found the doctor negligent and awarded the boy’s mother $1,022,735 to pay for expenses necessary for his care. It awarded $1,250,000 in noneconomic damages.

When the judge reduced the noneconomic award to $250,000, the mother appealed, saying the cap violated a number of different areas of the law, including the rights to a jury trial and to due process.

But the majority of the court said that on an issue that is “fairly debatable,” it cannot say the Legislature overstepped its constitutional bounds when it determined that there was a crisis needing a remedy.

“Although it causes great hardship for a small, severely injured group of plaintiffs, we find that the damage cap is reasonable, and it substantially furthers and is reasonably necessary to the legislative goal of decreasing health care costs and ensuring the continued availability of health care.”

The decision is “a significant change in the case law,” said Michael D. Zimmerman, an attorney who represented the physician during the Supreme Court appeal and a former chief justice of the court.

The Utah Supreme Court recently saw a turnover in justices. Indications were that if the makeup of the court had not changed, it likely would have narrowly ruled the cap unconstitutional, legal experts said.

The two justices who dissented in the Judd opinion said the court’s responsibility was to uphold individual rights guaranteed in the Utah Constitution. In that light, they concluded, the cap is not constitutional.

“[It] violates the right to a remedy for personal injury … and the right to a jury trial,” the dissenting judges wrote. “It also violates the fundamental principle of separation of powers by invading the province of the jury in a manner that belongs historically and inherently to the judiciary.”

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