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Florida to lawyers: What medical malpractice insurance crisis?

Throughout the late 1990s and early 2000s, in an effort to cure what was perceived at the time as a “medical malpractice insurance crisis,” many states promulgated a wide range of tort-reform laws that acted to limit noneconomic damage awards, such as recoveries for pain and suffering. (Laws that limit noneconomic damage awards are widely referred to as damage “caps.”)

In 2003, the Florida legislature enacted a noneconomic damages cap specifically applicable to medical malpractice actions. The cap remained valid and unchallenged until recently, when an injured patient successfully overturned it, a decision with ramifications likely to reverberate far outside of Florida.

The facts

In 2007, Susan Kalitan underwent routine carpal tunnel surgery in North Broward Hospital in Florida. During the procedure, while being intubated, her esophagus was perforated. Upon awakening after surgery, Kalitan complained to her physicians of chest and back pain but she was nevertheless discharged from the hospital without a clear determination as to the cause of her complaints. The next day, Kalitan’s neighbor found her unresponsive and she was rushed back the hospital for emergency life-saving surgery.

Due to various complications, Kalitan was kept in a drug-induced coma for several weeks, and she had a subsequent difficult recovery, including several additional difficult surgeries. She ultimately sued, alleging medical malpractice, and a jury awarded her $4.7 million, $4 million of which was four noneconomic damages. Not surprisingly, the trial court reduced Kalitan’s verdict to comport with the Florida’s damages cap.

The holding

On appeal, the Florida Supreme Court, in North Broward Hosp. v. Kalitan, held last June that Florida’s cap on noneconomic damages in medical malpractice negligence actions violates the Equal Protection Clause of the Florida Constitution.

The Florida Supreme Court reasoned the statute’s only effect was to “unreasonably and arbitrarily limit recovery of those most grievously injured by medical negligence,” as opposed to the noneconomic damages recoveries permitted to others who are harmed in other ways. The court further stated due to the “lack of evidence demonstrating how the statutory cap alleviated (a medical malpractice insurance) crisis,” this unequal treatment could not be supported on a rational basis.

The court went on to explain the objective of reducing medical liability insurance rates was nothing more than a “speculative experiment,” and further it was not even clearly evident there ever was a medical malpractice crisis in Florida.

Several dissenting justices stated, however, they thought the court was effectively “legislating from the bench,” and it is for the legislature – not the judiciary – to determine whether a medical malpractice crisis exists in Florida and what actions should be taken to address it.

Sky’s the limit?

In the past, at least in Florida, health-care practitioners and hospitals accused of malpractice could go to trial having foreknowledge of the worst possible outcomes. That is, they knew what the maximum possible noneconomic damages award against them might be and could negotiate accordingly. Now, however, Florida medical providers will face much greater uncertainty, and Florida malpractice insurers will face much greater liability.

It seems clear that this decision is a win for medical malpractice claimants in Florida, but how will this decision affect medical malpractice claims in other states? It seems probable that injured parties in other states might also raise similar constitutional challenges to their own state’s damages caps. Will this decision have an effect on states such as Maryland, where there are different noneconomic damages caps for different types of injured parties? Time will tell. 

Barry F. Rosen is the chairman and CEO of Gordon Feinblatt LLC, heads the firm’s Health Care Practice Group, and can be reached at 410-576-4224 or [email protected]. Justin P. Katz is a member of the firm’s Personal Injury Practice Group and can be reached at 410-576-4102 or [email protected]