Liability cap shot down by Illinois high court

The ruling marks the third time caps on damages have failed to pass constitutional muster. The decision also invalidated other reforms in the state law.

By — Posted Feb. 15, 2010

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The Illinois Supreme Court declared unconstitutional the state's noneconomic damage cap in a decision the medical community called a major setback for the state's health care system.

Justices in a Feb. 4 ruling said the 2005 law limiting damages to $500,000 for physicians and $1 million for hospitals violated the separation of powers between the Legislature and the judiciary -- suggesting it was the purview of the courts, not lawmakers, to decide awards.

The 4-2 decision also felled other reforms included in the statute because they were inseparable from the cap. Among them were provisions that:

  • Increased affidavit-of-merit requirements for validating a lawsuit's merit.
  • Raised standards for medical expert witnesses.
  • Excluded doctors' apology statements from being used against them in court.
  • Required more reporting by and oversight of medical liability insurers.

The decision marks the third time in roughly 30 years that Illinois justices have thrown out damage caps in medical liability and other personal injury cases based on similar constitutional defects. Such challenges to caps are not new; various courts nationwide have upheld and rejected the constitutionality of caps.

Physicians and hospitals decried the Illinois ruling as an affront to patient care, particularly as states look for ways to control health care costs and expand access to care, said Illinois State Medical Society President James L. Milam, MD.

Medical liability reform has helped control costs and expand care access in Illinois, he said, suggesting that the court may have overstepped the Legislature's authority. "This was a narrowly focused law designed to respond to a lack of access, and in its wisdom, the Legislature said these are things that are important. ... Other states have figured out how to do it, but the [Illinois] Supreme Court has overruled the will of the citizens."

After passage of the 2005 law, physicians saw their liability costs stabilize and even drop, which attracted specialists to shortage areas and encouraged new competition among insurers, Dr. Milam said.

But the court's decision threatens to undo that progress, warned American Medical Association President J. James Rohack, MD. The Litigation Center of the American Medical Association and State Medical Societies and the ISMS jointly filed a friend-of-the-court brief in the case, urging the high court to uphold the cap.

From 1997 -- the last time an Illinois cap was overturned -- to 2005, physicians' premiums jumped an average of 10% to 12% per year, forcing many doctors to flee the state during that period, according to AMA research.

Medical liability reforms at both the state and national levels are critical "so no patient is prevented from getting needed health care because of a broken liability system," Dr. Rohack said in a statement.

The Illinois Hospital Assn. echoed those concerns, saying hospital recruiting efforts are likely to suffer. The organization filed a brief in the case.

Third time no charm

But plaintiff lawyers said the ruling restores injured patients' rights to fair compensation.

"One size does not fit all, and that's the problem," said Peter J. Flowers, president of the Illinois Trial Lawyers Assn., which filed a friend-of-the-court brief supporting the plaintiffs in the case. "Every case contains a different set of facts and evidence, and frankly, it's out of the realm of the Legislature to take away from the jury its ability to decide what is fair and reasonable."

Flowers said the blame for physicians' high liability costs lies with the insurance industry, not the judicial system.

Courts already have the power to reduce jury verdicts if they are deemed excessive, American Bar Assn. President Carolyn B. Lamm said in a statement. The organization filed a brief in the high court case.

In the case, Abigaile Lebron's family argued that compensation for her alleged injuries went beyond the cap, and her rights would be compromised if the law were to stand. The family sued Gottlieb Memorial Hospital after the girl was born with severe brain damage. The hospital did not respond to calls for comment by this article's deadline.

The Supreme Court decision partially affirms a 2007 trial court ruling overturning the cap and returns the case to the lower court for trial.

Flowers said the ruling upheld high court precedents from 1976, when justices struck down a limit on total damages in medical liability cases, and 1997, when the high court threw out a noneconomic damage cap imposed on all personal injury cases.

But Dr. Milam argued the latest legislative measure was carefully crafted to withstand judicial scrutiny. It was narrowly tailored to apply just to pain and suffering damages in medical liability lawsuits, while economic damages for things such as ongoing medical care remained uncapped, he said.

Dissenting justices agreed, calling the 2005 award limit "substantially different" from the earlier broader legislation.

"By contrast, [the 2005 law] represents an attempt by the General Assembly to deal in a focused and particular way with the health care crisis it believed was threatening the health and welfare of our citizens," Justice Lloyd A. Karmeier wrote. "As the legislative branch experiments with workable solutions, the courts must be vigilant about ensuring that the laws ... comport with constitutional requirements. In exercising our authority, however, we must remain mindful that the constitution constrains the courts as well."

Dr. Milam said the majority also ignored the fact that the law was passed as a comprehensive measure designed to address access issues through not just judicial reforms, but also insurance regulation and medical disciplinary reforms.

Although the court invalidated the other provisions, justices emphasized they were not addressing their merits and suggested lawmakers were free to reenact them.

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Caps in the courts

Constitutional challenges to damage caps are pending around the country. Among them:

Klotz v. Shapiro, Missouri Supreme Court
Issue: Whether a $350,000 noneconomic damage cap in medical liability cases violates patients' equal protection and jury trial rights, infringes on the separation of powers and constitutes special legislation. Oral arguments were heard Jan. 14.

Miller v. Johnson, Kansas Supreme Court
Issue: Whether a $250,000 noneconomic damage cap in all personal injury cases, including medical liability actions, violates the constitutional separation of powers between the legislative and judiciary branches and plaintiffs' rights to a jury trial. Oral arguments were heard Oct. 29, 2009.

Atlanta Oculoplastic Surgery v. Nestlehutt, Georgia Supreme Court
Issue: Whether a $350,000 noneconomic damage cap in medical liability cases unconstitutionally infringes on a jury's power and plaintiffs' equal protection rights and is a special law favoring one group. Oral arguments were heard Sept. 15, 2009.

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External links

Abigaile Lebron v. Gottlieb Memorial Hospital, Illinois Supreme Court opinion, Feb. 4 (link)

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