Caps Off to Juries: Noneconomic Damage Caps in Medical Malpractice Cases Ruled Unconstitutional - Jennifer W. Terry

• Publication year: 2011

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Caps Off to Juries: Noneconomic Damage Caps in Medical Malpractice Cases Ruled Unconstitutional

I. Introduction

In 2005 the Georgia General Assembly (General Assembly) passed a controversial tort reform bill in an effort to reduce the cost of medical liability insurance for health care providers.¹ In this bill, the legislature put a cap of $350,000 on noneconomic damages (pain and suffering) for medical malpractice cases.² On March 22, 2010, the Georgia Supreme Court in Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt³ held these caps unconstitutional on grounds that they violate the state constitutional right to jury trial.⁴ By ruling on these grounds, the court was able to avoid weighing in on the competing interests of the medical industry and medical malpractice plaintiffs, which would have required an equal

1. Ga. S. Bill 3, Reg. Sess., 2005 Ga. Laws 1 (codified in scattered sections of titles 9, 24, 33, 43, and 51 of the O.C.G.A.).

2. Id. § 13, 2005 Ga. Laws at 16-17.

3. 286 Ga. 731, 691 S.E.2d 218 (2010).

4. Id. at 731, 691 S.E.2d at 220.

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protection or due process analysis. The court, therefore, circumvented the politics of tort reform by way of a right to jury trial analysis.

II. Factual Background

In 2005 Betty Nestlehutt became a patient of Atlanta Oculoplastic Surgery, P.C. d/b/a Oculus (Oculus) and, in January 2006, underwent a facelift and full face CO₂ laser resurfacing, performed by Dr. Harvey P. Cole III.⁵ The procedure unintentionally cut off blood flow to Mrs. Nestlehutt's face, causing wounds to form from her temple to chin.⁶ As a result of the surgery, Mrs. Nestlehutt became permanently disabled and disfigured. In April 2007, Mrs. Nestlehutt and her husband filed a medical malpractice action in Fulton County State Court against Oculus and Dr. Cole, alleging damages for medical expenses, pain and suffering, and loss of consortium.⁷

After a mistrial, the case was re-tried in 2008, resulting in a jury verdict of $1,265,000, consisting of $115,000 for medical expenses, $250,000 for loss of consortium, and $900,000 in noneconomic damages for pain and suffering.⁸ After the jury returned a verdict, the Nestle-hutts moved the trial court to hold the Georgia statute placing caps on noneconomic damages, section 51-13-1 of the Official Code of Georgia Annotated (O.C.G.A.),⁹ unconstitutional.¹⁰ In February 2009 the trial court granted the motion, finding O.C.G.A. § 51-13-1 violated the right to jury trial, the separation of powers doctrine, and equal protection, and ruled the statute unconstitutional on all three grounds.¹¹ The trial court subsequently entered judgment in the full amount awarded by the

jury: $1,265,000.¹²

5. Complaint for Damages at para. 6, Nestlehutt v. Atlanta Ocoluplastic Surgery, P.C., No. 2007EV002223J (Ga. State Ct. 2007), 2007 WL 5720583.

6. Bill Rankin, Georgia High Court Considers Tort Reform Law, ATLANTA J. CONST., Sept. 15, 2009, www.ajc.com/news/georgia-high-court-considers-139073.html.

7. Complaint for Damages, supra note 5, at paras. 1, 8, 13.

8. Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, 286 Ga. 731, 731, 691 S.E.2d 218, 220 (2010).

9. O.C.G.A. § 51-13-1 (Supp. 2010).

10. Brief in Support of Plaintiff's Motion for Entry of Judgment on the Verdict and for a Declaration of Unconstitutionality for O.C.G.A. § 15-13-1, Nestlehutt v. Atlanta

Oculoplastic Surgery, P.C., No. 2007ev002223j (Ga. State Ct. 2008), 2008 WL 4888267.

11. Order Declaring O.C.G.A. §51-13-1 Unconstitutional, Nestlehutt v. Atlanta

Oculoplastic Surgery, P.C., No. 2007EV002223-J (Ga. State Ct. 2009), 2009 WL 348361.

12. Id.

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In June 2009, after a motion for a new trial was denied, the defendant, Oculus, appealed.¹³ Numerous briefs were filed independently and collaboratively in support of Oculus, including briefs by Emory Healthcare;¹⁴ the Georgia and American Hospital Associations;¹⁵ the Medical Association of Georgia, the American Medical Association, and the American Tort Reform Association;¹⁶ and the Medical Association ofGeorgia Mutual Insurance Company (MAG Mutual) and the Physician Insurers Association of America.¹⁷ Mrs. Nestlehutt responded,¹⁸ and briefs were also filed in her support, including briefs by the AARP¹⁹ and briefs filed on behalf of individuals and former medical malpractice

plaintiffs.²⁰

On March 22, 2010, the Georgia Supreme Court affirmed the trial court's ruling that O.C.G.A. § 51-13-1 was unconstitutional.²¹ The court held that the caps, by limiting awards ofnoneconomic damages in medical malpractice cases, violated the state constitutional right to a jury trial.²² The court also held that the decision would apply retroac-

tively.²³

13. Appellant's Brief at 3, Nestlehutt, 286 Ga. 731, 691 S.E.2d 218 (No. S09A1432), 2009 WL 2954781.

14. Brief of Emory Healthcare, Inc., as Amicus Curiae, Nestlehutt, 286 Ga. 731, 691

S.E.2d 218 (No. S09A1432), 2009 WL 2954780.

15. Amicus Curiae Brief on Behalf of the Georgia Hospital Ass'n and the American Hospital Ass'n, Nestlehutt, 286 Ga. 731, 691 S.E.2d 218 (No. S09A1432), 2009 WL 6690445.

16. Amici Curiae Brief of the Medical Ass'n of Georgia et al., Nestlehutt, 286 Ga. 731,

691 S.E.2d 218 (No. S09A1432), 2009 WL 6690449.

17. Brief on Behalf of Amici Curiae MAG Mutual Insurance Co. and the Physician Insurers Ass'n of America, Nestlehutt, 286 Ga. 731, 691 S.E.2d 218 (No. S09A1432), 2009

WL 6690452.

18. Brief of Appellees, Nestlehutt, 286 Ga. 731, 691 S.E.2d 218 (No. S09A1432), 2009

WL 2954779.

19. Brief Amici Curiae of AARP et al. in Support of Appellees, Nestlehutt, 286 Ga. 731,

691 S.E.2d 218 (No. S09A1432), 2009 WL 6690447.

20. See, e.g., Brief of Amici Curiae Hugh D. Broome, Jr. and Brenda Broome, Nestlehutt, 286 Ga. 731, 691 S.E.2d 218 (No. S09A1432), 2009 WL 6690450; Brief of Amicus Curiae Jesse Outland et al. in Support of Appellees, Nestlehutt, 286 Ga. 731, 691 S.E.2d

218 (No. S09A1432), 2009 WL 6690455; Brief of Appellee Amicus Curiae Robin Frazer Clark, Nestlehutt, 286 Ga. 731, 691 S.E.2d 218 (No. S09A1432), 2009 WL 6690456.

21. Nestlehutt, 286 Ga. at 740, 691 S.E.2d at 226.

22. Id. at 731, 691 S.E.2d at 220.

23. Id. at 740, 691 S.E.2d at 226.

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III. Legal Background

Effective February 16, 2005, the noneconomic damage caps set forth in O.C.G.A. § 51-13-1(b) to (e)²⁴ were the result of a heated legislative debate. Given the legislative history and frequency of constitutional challenges to noneconomic damage caps nationwide, it was not surprising when the caps began to be challenged in Georgia.

A. Legislative History of O.C.G.A. § 51-13-1

The capping of noneconomic damages was a part of a larger tort reform act passed by the General Assembly in 2005 in Senate Bill 3 (SB

3),²⁵ also known as the Georgia Tort Reform Act of 2005.²⁶ The

Georgia Tort Reform Act was purposed on a finding by the legislature that a health care "crisis" exists in Georgia and that medical malpractice actions have caused the crisis by creating increased difficulty and expense for doctors and hospitals in obtaining liability insurance.²⁷ The legislature found the difficulty in obtaining insurance caused a decrease in the availability of health care services in Georgia.²⁸ The

24. O.C.G.A. § 51-13-1(b) to (e) (Supp. 2010). In pertinent part, the statute reads as

follows:

(b) In any verdict returned or judgment entered in a medical malpractice action, including an action for wrongful death, against one or more health care providers, the total amount recoverable by a claimant for noneconomic damages in such action shall be limited to an amount not to exceed $350,000.00, regardless of the number of defendant health care providers against whom the claim is asserted or the number of separate causes of action on which the claim is based.

(c) In any verdict returned or judgment entered in a medical malpractice action, including an action for wrongful death, against a single medical facility, . . . the total amount recoverable by claimant for noneconomic damages in such action shall be limited to an amount not to exceed $350,000.00 . . . .

(d) In any verdict returned or judgment entered in a medical malpractice action, . . . the total amount recoverable by a claimant for noneconomic damages in such action shall be limited to an amount not to exceed $350,000.00 from any single medical facility and $700,000.00 from all medical facilities, regardless of the number of defendant medical facilities against whom the claim is asserted or the number of separate causes of action on which the claim is based.

(e) In applying subsections (b), (c), and (d) of this Code section, the aggregate amount of noneconomic damages recoverable under such subsections shall in no

event exceed $1,050,000.00.

Id.

25. Ga. S. Bill 3, Reg. Sess., 2005 Ga. Laws 1 (codified in scattered sections of titles 9, 24, 33, 43, and 51 of the O.C.G.A.).

26. Id.

27. Id. § 1, 2005 Ga. Laws at 1.

28. Id. § 1, 2005 Ga. Laws at 1-2.

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legislature posited that creating stricter limitations on medical malpractice claims and awards would increase "predictability and improvement in the provision of quality health care services and the resolution of health care liability claims and [would] thereby assist in promoting the provision of health care liability insurance by insurance providers."²⁹ One of the arguments made by the bill's sponsor, Senator Preston Smith, was that MAG Mutual, Georgia's largest physician insurer, agreed to continue to honor a 10% rollback of insurance premiums if the bill were enacted.³⁰

Capping noneconomic damages in medical malpractice lawsuits was one controversial reform measure that the legislature adopted in SB 3.³¹ The history of the noneconomic damage caps in the Georgia Tort Reform Act can be traced back to a failed tort reform effort in 2004: House Bill 1028 (HB 1028).³² The failure of HB 1028 was largely due to concern about an amendment capping...