The Damages of Caps in Nebraska

• Publication year: 2021

99 Nebraska L. Rev. 209. The Damages of Caps in Nebraska

The Damages of Caps in Nebraska

Comment ^[*]

TABLE OF CONTENTS

I. Introduction .......................................... 210

II. Background on the NHMLA Damage Cap ............. 211
A. General Information on the Nature of Damages in Nebraska ......................................... 211
B. The History of NHMLA ........................... 212

III. Argument ............................................. 215
A. Interjurisdictional Precedent ....................... 215
1. Fifty-State Survey of Caps ..................... 215
a. Interjurisdictional Legislative Caps ......... 216
i. Punitive Damage Caps ................. 217
ii. Medical Malpractice Caps .............. 218
b. Interjurisdictional Judicial Action on Caps. . 220
i. Right to a Jury ......................... 220
ii. Open Courts ........................... 222
iii. Equal Protection ....................... 222
iv. Separation of Powers ................... 223
v. Special Legislation ..................... 223
2. Interjurisdictional Summary ................... 224
B. Theories of Unconstitutionality .................... 225
1. Nebraska Constitution ......................... 225
a. Right to a Jury ............................ 228
b. Open Courts ............................... 231
c. Equal Protection ........................... 234
d. Special Legislation ......................... 236
e. Takings Clause ............................ 239
f. Timing Arguments ......................... 241

1

2. Economic Damages Distinction ................. 242
a. Economic Versus Noneconomic Damages Generally .................................. 242
b. Nebraska's Near-Precedent on Economic Damage Distinctions ...................... 244
c. Severability of the NHMLA Cap ............ 245
d. Doctrine of Constitutional Avoidance ....... 246
e. Conclusion on Distinguishing Economic from Noneconomic Damages .................... 247

IV. Recommendations ..................................... 247
A. Court Action ...................................... 247
1. Conformity with Other States .................. 247
2. Constitutional Reconsideration ................. 248
3. Novel Approaches with the Courts ............. 249
B. Legislative Action ................................. 250
1. Pure Removal of the Cap ...................... 250
2. Increasing and Aligning Cap ................... 251
3. Removal of Economic Damages Application ..... 252
4. Adjustment for Inflation ....................... 252

V. Conclusion ............................................ 252

I. INTRODUCTION

Nebraska holds the embarrassing distinction of likely being one of the two harshest states in the country in its treatment of citizens injured at the hands of malpractice. Under current Nebraska law, if you are injured by a medical professional's negligence, you will not recover more than $2.25 million. The Nebraska Hospital Medical Liability Act (NHMLA) imposes insurmountable obstacles to even a modest recovery for a seriously injured person in Nebraska. At a time when unfettered medical costs in America are proliferating egregiously, the possibility for a personal-injury plaintiff to sustain multi-million-dollar special or economic damages is not only conceivable-it is increasingly likely. Because these damages include the ascertainable impact of injury upon a plaintiff, including future medical expenses and lost wages, there are an increasing number of plaintiffs in Nebraska who will inevitably suffer economic losses well in excess of Nebraska's cap on damages. This reality says nothing of general damages that may flow from such an injury.

This Comment will first, in Part II, establish the history and purpose of the damage cap under NHMLA in Nebraska. Part III will then assess the constitutionality of Nebraska's NHMLA damage cap, after looking to how some of Nebraska's sister states have treated their caps. In particular, Part III will flesh out the unique harshness of Nebraska's application of the damage cap to both noneconomic and economic damages. Part IV will propose some practical recommendations

2

for the courts, legislators, and practitioners. Specifically, Part IV will summarize some of the inconsistencies and flaws in Nebraska law, particularly when compared to other jurisdictions. Lastly, Part V will conclude by reiterating the unfortunate impact Nebraska's NHMLA damage cap will have on many of Nebraska's most misfortunate claimants, while also reminding readers that there is opportunity for change.

II. BACKGROUND ON THE NHMLA DAMAGE CAP

A. General Information on the Nature of Damages in Nebraska

As a brief forward to the discussion of the NHMLA damage cap, one must understand the distinctions between types of damage awards in Nebraska. Nebraska generally recognizes two categories of damages relevant to the discussion herein: economic and noneconomic damages. It is important to recognize the distinction between economic (oftentimes special) damages and noneconomic (or general) damages. Both economic and noneconomic damages may be pleaded as either special or general damages depending on their nature. ^[1] For example, general damages may include future medical expenses, and special damages may include past medical expenses, both of which are also an economic damage. ^[2] However, because for pleading purposes special damages are often thought of as those with an objective ascertainable value, some general economic damages are oftentimes erroneously colloquially branded as special damages. Consequently, within the Nebraska courts "the cases do not agree on the standard for classifying damages as general or special." ^[3]

Because "[t]he distinction between [general and special damages] is unclear," ^[4] this Comment will use the terms "economic" and "noneconomic" damages for the sake of clarity. As succinctly captured by Judge Gerrard in a concurrence discussed in more detail herein: ^[5]

Economic damages include the cost of medical care, past and future, and related benefits, i.e., lost wages, loss of earning capacity, and other such losses. Noneconomic losses include claims for pain and suffering, mental anguish, injury and disfigurement not affecting earning capacity, and losses which cannot be easily expressed in dollars and cents. ^[6]

3

To the extent any quoted or referenced material herein may confuse the distinction, this Comment will acknowledge and resolve any relevant distinctions.

B. The History of NHMLA

The Nebraska Hospital Medical Liability Act was, in large part, a response to a pair of malpractice cases resolved in the fourteen years preceding the Act's inception. In Spath v. Morrow, the Nebraska Supreme Court adopted the Discovery Rule to revive a medical negligence victim's latent injury claim, ^[7] and in a confidential case represented by one of the NHMLA bill's opponents, a jury issued one of Nebraska's largest awards of $650,000. ^[8] NHMLA was originally introduced in 1976 as Legislative Bill (LB) 703 ^[9] and later amended into LB 434. ^[10] LB 703 was conceived in response to the medical lobby's asserted fears of "skyrocketing" insurance rates for medical providers (which would necessarily be passed on to consumers) and was accompanied by grim warnings of a mass retirement or exodus of providers from the state. ^[11] The bill's statement of purpose provides in part:

The enacting of this bill into law will reverse the trend toward higher malpractice insurance rates and should assist in holding down the total cost of health care. Failure to enact this type of legislation could result in the loss of professional services that are presently available to the citizens of this state. ^[12]

At the first hearing on LB 703, the very first question of the bill's sponsor involved the application of the damage cap. Senator Cavanaugh interrupted Senator Schmit's introduction of the bill to ask about § 19, which as originally drafted would have only permitted re-

4

covery of economic damages. ^[13] Indeed, in recognizing the departure from traditional tort damages that include noneconomic damages such as pain and suffering, Senator Schmit expressed, "The only recovery for pain and suffering would be as to how it refers or relates to actual economic loss." ^[14] When pressed again, Senator Schmit continued:

I feel, Senator Cavanaugh, that in order to find some method whereby we can find a reasonable solution to the rates for malpractice, there has to be some kind of limitation, and that is the limitation we provide under the bill, which I believe pretty effectively limits any so-called wild settlements for pain and suffering. It must be related to economic loss, and I feel it's a valid limitation. ^[15]

Section 19 of the bill was completely stricken from the final draft, demonstrating the Legislature's rejection of a law that would award only economic damages, and instead, favoring the allowance of recovery for pain and suffering, though potentially limited. ^[16] Testimony in front of the...