Damage caps may need to be pled.

Byline: David Ziemer

The Seventh Circuit suggested on June 24 that any applicable cap on damages may need to be pleaded in federal court as an affirmative defense in the answer to a complaint.

Eleven-year-old Davita Carter, whose father is a Marine veteran and is entitled to treatment at government expense, had surgery at Bethesda Naval Hospital in Maryland to correct severe scoliosis of the spine.

The surgery left her a paraplegic, and she brought suit for medical malpractice under the Federal Tort Claims Act in the Central District of Illinois, where she lives.

Carter filed her complaint in March 2000 and the government's answer, which did not mention the damages cap, was filed in May. Eventually, Carter learned that the government planned to invoke Maryland's damage cap on noneconomic damages, and in November 2001, about six weeks before the trial, asked the judge to rule that the cap was inapplicable, but he declined.

The district judge granted summary judgment for Carter on the issue of liability and then conducted a bench trial on damages that resulted in a finding that the plaintiff had sustained $3.4 million in economic damages (past and future medical expenses plus lost future earnings) and another $15.5 million in noneconomic damages (permanent disability, disfigurement, physical and emotional pain and suffering, and loss of enjoyment of life).

Consistent with its earlier ruling, however, the judge reduced the award for noneconomic damages to $530,000, the maximum allowed under Maryland law. Carter appealed, but the court of appeals affirmed, in a decision by Judge Richard A. Posner.

Governing Law

The court first held that Maryland law, which contains the noneconomic damage cap, applies, rather than Illinois law, which does not. Under 28 U.S.C. 1346(b), the Act authorizes the imposition of tort liability on the federal government "under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred."

"[T]he law of the place where the act or omission occurred," has been interpreted to mean the entire law of the place, and the court concluded that the damage cap is a substantive rule of law, and thus, the Maryland cap applies.

Forfeiture

The court then held that the government did not forfeit the damage cap by failing to plead it as an affirmative defense in its answer to the complaint.

The court noted that there is a split...