Are non-economic caps constitutional?

• Author: Bryan, J. Chase

As part of broader tort reform efforts, states have enacted non-economic damage cap statutes over the past few decades. States often cite creating a positive business climate and concerns over the availability of insurance coverage as bases for damage caps. Balancing these concerns with society's interests in fairly compensating tort victims has proven difficult.

Almost all damage cap statutes have been challenged on constitutional grounds at some point since their enactment. Supreme courts in Alabama, Georgia, Illinois, New Hampshire, Oregon, Texas, and Washington have declared their respective state non-economic damage cap statutes unconstitutional either altogether or in certain circumstances. Other states, like Mississippi, await decisions from appellate courts regarding the constitutionality of the state's damage caps.

The most common argument against the constitutionality of cap statutes is that they violate the plaintiff's right to a jury trial. This argument appears in almost every constitutional challenge to a cap statute, although it has successfully convinced a court to strike down a cap statute as unconstitutional in only a handful of state cases. Advocates of caps consistently rely on the "legitimate state interest" argument--a very difficult argument to overcome and an attractive argument for a court to rely upon in upholding a cap statute. This article presents summaries of the various arguments and provides an overview of the status and constitutionality of non-economic damages caps in each State.

1. Arguments Against Constitutionality

   1. Violate the Right to Jury Trial

      As described above, the most commonly-used argument against statutory caps on non-economic damages are that such statutory caps violate a citizen's right to a jury trial. For example, in Caner v. Interstate Really Mgmt. Co., (1) the trial court held that upholding that cap statute strips jury of its power to decide facts and determine damages thereby denying plaintiff right to jury trial. (2) However, to support this argument, this reasoning must distinguished statutory caps from the accepted practice of judicial remittitur, in which the appellate court remits a judgment to the trial court for reconsideration in light of excessive awards of non-economic damages. (3)

   2. Other Constitutional Arguments

      In addition to putatively violating plaintiffs' right to a jury trial, courts have proposed a myriad of other constitutional arguments against statutory caps. In Carter, the court also suggested that passage of statutory caps allowed the legislature to amend the constitution (by abrogating the constitutional right to a jury trial) extra-constitutionally. (4) This argument will prevail only in those jurisdictions which constitutionally mandate trial by jury and have no constitutional caps on non-economic damages. The court in Carter also argued that statutory caps provide an unconstitutional violation of those powers reserved to the judiciary. (5)

      Other courts have addressed arguments that statutory caps result in a non-uniform operation of laws, (6) constitute impermissible special legislation, (7) and constitute, in effect, a new form of legislative remittitur. (8) In jurisdictions that recognize the doctrine, statutory caps may similarly violate the open courts doctrine. (9) Perhaps most surprisingly, courts have even accepted claims that statutory caps violate state constitutional equal protection and due process rights. (10)

2. Arguments For Constitutionality

   A majority of jurisdictions have found caps of non-economic damages to be constitutional. These jurisdictions have accepted variations of the following arguments.

   1. No Violation of Right to Jury Trial

      In contrast with those states that have overturned statutes as a violation of the right to jury trial, many states have dismissed such challenges and upheld statutory caps. In these states, courts have considered that the right to jury trial may be satisfied in any situation in which law is applied to facts. In the case of statutory caps, the mere fact that judges apply the cap statute to facts determined and damages assessed by a jury does not render the statute unconstitutional. In Evans v. State, for example, the Alaska Supreme Court made such a determination, holding "[t]he decision to place a cap on damages awarded is a policy choice and not a re-examination of the factual question of damages determined by the jury." (11)

      In states where the right to jury trials is not "inviolate", arguments in support of jury trials also hold less sway. (12) Similarly, courts which have found other bases on which to hold statutory caps constitutional have also evaluated and rejected due process, (13) equal protection, (14) and open courts doctrine challenges. (15) These statutes also did not violate separation of powers because the statute provides a law to be applied and usurps no prerogatives of the jury or the judge. (16)

   2. Rational Relation

      Most broadly, many courts have recognized that statutory caps are rationally related to the legitimate state interests of ensuring greater access to and affordability of liability insurance for public and private sector businesses, and accordingly should be presumed constitutional. In Fein v. Permanente Medical Group, the Supreme Court of California cited the rising cost of insurance as a basis for upholding a cap on non-economic damages. (17) This line of argument also extends to related "legitimate state interests" like providing citizens with access to quality health care.

3. The Current Statutory Landscape

   Currently, twenty-nine states have adopted some form of statutory caps on non-economic damages in tort actions, medical malpractice actions, or both. Fourteen (14) states have no such statutory caps. Of the twenty-nine states that have adopted non-economic damage caps, the constitutionality of those caps has been challenged and upheld in seventeen (17) states and not challenged in twelve (12) states. Constitutional challenges to non-economic damage caps have been successful in eight (8) states. We believe that lawyers who practice in multiple jurisdictions, clients who are exposed to personal injury lawsuits in multiple jurisdictions, or even corporate lawyers who are making choice of law selections in contracts, will find helpful the following survey of non-economic damages. The following state-by-state survey describes the current statutory caps on non-economic damages in effect, whether those caps have been challenged in court, and the result of those challenges.

   Alabama: Section 6-5-544 provides a $400,000 cap on non-economic damages in medical malpractice actions. This statute was held UNCONSTITUTIONAL as a violation of the right to jury trial and equal protection clause. Moore v. Mobile Infirmary Ass'n, 592 So. 2d 156 (Ala. 1991).

   Alaska: AS [section] 09.17.010 provides a cap on non-economic damages in all tort actions of $400,000 (or life expectancy x $8,000); and for severe permanent injury or disfigurement of $1,000,000 (or life expectancy x $25,000)). This statute was found CONSTITUTIONAL on the basis of the State's legitimate interest in capping non-economic damages. The statute also does not violate the right to jury trial, substantive due process, the separation of powers, or the bar against "special legislation." Evans v. State, 56 P.3d 1046...