California implemented substantive tort reform in the 1970s. The cap on non-economic damages (pain and suffering) has held firm at $250,000 since. And, compared to the rest of the country, professional liability premiums in California have remained “reasonable.”
Last year, enterprising lawyers spearheaded a referendum, Proposition 46, to overturn these caps. The Proposition was labeled Drug and Alcohol testing of Doctors. Medical Negligence Lawsuits. The marketing pitch behind the proposition was clever – pilots and bus drivers are randomly tested for drugs and alcohol. Surely, this list should include physicians. (Buried in the Proposition was– “hey, by the way, let’s raise the cap on non-economic damages.”) The measure failed. For now, there is no state mandated random drug and alcohol testing for doctors. And, the cap on non-economic damages continues at $250k.
In the Godfather III, Michael Corleone shouts the classic line “Just when I thought I was out, they pull me back in.” Rashidi v. Moser [1] strikes the same chord. There, the court ruled that caps on pain and suffering apply only to the jury verdict. Any settlements made with defendants prior to jury trial cannot be used to offset the $250k cap.
The details.
Hamid Rashdi lost vision in one eye after a procedure by Dr. Moser to treat epistaxis. Dr. Moser was sued. So were Cedars Sinai Medical Center and Biosphere Medical, Inc. These two co-defendants settled before trial respectively for $350,000 and $2 million. Dr. Moser rolled the dice, went to trial, and lost. The jury awarded $125,000 for economic damages; $331,250 for past non-economic damages; and $973,750 for future non-economic damages. Applying the law capping non-economic damages, the trial court reduced the award for non-economic damages to $250,000.
Dr. Moser appealed the case, arguing that prior settlements should be used as a further offset to the $250,000 cap. The Appeals Court agreed with his argument and reduced the non-economic damages to $16,655.
Rashdi appealed to the California Supreme Court. It concluded the cap only applied to trial judgments on non-economic damages; and the statute had nothing to say about pre-trial settlements. It continued, the statute was designed to prevent runaway, capricious jury awards. If parties wanted to negotiate before trial, the statute on caps on non-economic damages would not stand on the way. The only workaround is if the trial judgment included a formal apportionment of fault for those who settled.
Moser will be on the hook for $250k in non-economic damages.
What’s the implication? Aren’t we back to where we were before – the cap being $250k? Well, not really. The Supreme Court ruled that if there are multiple defendants, any settlements prior to trial would not count against the cap at trial. Do not be surprised if more defendants are named in lawsuits. The shotgun suit is back. It is true that if all defendants go to trial, the cap will likely hold firm at $250k in aggregate. But, the legal system should be encouraging reasonable settlements, not promoting expensive litigation a defendant’s best position.
One California law firm, Wood, Smith, Henning, and Berman, summarized the likely outcome.
This decision will likely impact future litigation, as it may encourage injured parties to name multiple defendants in actions for damages with the hope of settling with one or more of the defendants and thereby potentially circumventing the MICRA limitations. Plaintiff can still proceed to trial with the non-settling defendant and receive up to an additional $250,000 in non-economic damages. With there being no limitation on non-economic damages for settlements, we may see an overall increase in the number of lawsuits in general, as well as an increase in the degree of frivolity.
What to do? Well, one state – New Jersey – nipped the shotgun lawsuit problem in the bud. There, experts who submit an affidavit of merit against defendant(s) must be in the same specialty. If you sue two different specialties, you’ll need two different affidavits or merit by two different specialists to proceed.
The New Jersey Supreme Court held in Nicholas v. Mynster, 213 N.J. 463 (2013) that N.J.S.A. 2A:53A–41 required that “[w]hen a physician is a specialist and the basis of the malpractice action ‘involves’ the physician’s specialty, the challenging expert must practice in the same specialty.” The plaintiff in Nicholas was required to produce an affidavit of merit by a specialist in each of the two defendant doctors’ specialties despite the overlapping areas of their practice and their treatment of the same condition in the patient.
This paradigm was tested in a recent case where two spine surgeons were sued – one a neurosurgeon; the other an orthopaedic surgeon. [2] There, the plaintiff developed neck swelling and difficulty breathing after spine surgery. The complication was caused by a pharyngeal tear related to endotracheal tube placement.
The patient obtained a single affidavit of merit – from a neurosurgeon. The orthopaedic surgeon defendant argued the expert neurosurgeon was in a different specialty – even though both practiced spine surgery. The court agreed. The case was appealed. Same conclusion. The plaintiff needed to get a second expert, an orthopaedic surgeon, and file a second affidavit of merit.
While this might not be the best case to illustrate the need for two affidavits of merit when both surgeons practice the same functional specialty (spine surgery), the broader implication is clear. If the law incentivizes suing as many defendants as possible, that will be the outcome. If the law forces plaintiffs to focus their litigation energies on the proper parties, judicial economy will result.
[1] Hamid Rashidi v. Franklin Moser —P.3d—(2014) Westlaw citation: 2014 WL 701400 No. S214430 December 15, 2014
[2] Williams v. AtlantiCare Regional Medical Center, 2014 WL 4328205 (N.J.Super.A.D., September 3, 2014) (not designated for publication).
Thanks for the article. Is Dr. Moser a radiologist or ENT?
A radiologist…
The case of a pharyngeal tear “secondary to the endotracheal tube” should not have been allowed to proceed against the neurosurgeon or spine surgeon on the basis that their specialty was not part of the injury….unless there is evidence that they neglected appropriately early detection. A pharyngeal tear is also possible however from cervical spine surgery. I.e., not clear from this example is that the lawsuit was reasonable, to begin with. It may well not have been.
The “captain of the ship” doctrine has routinely affected lawsuits. I am curious who actually placed the endotracheal tube in the second case, the surgeons or the anesthesiologist? if the anesthesiologist placed the tube, then it would appear that he/she would be liable directly for “defective and incompetent” placement. If the anesthesiologist is a direct employee of the hospital, that would explain why the hospital is being sued, and the hospital is just accepting an employee’s liability. If the anesthesiologist who placed the tube is NOT an employee of the hospital, he/she would likely be the target of the suit.
Then there is the issue of who had the deepest pockets. Most hospitals have deeper pockets than individual surgeons. If the anesthesiologist was not a direct employee of the hospital, then he/she was lucky that that the hospital accepted the liability. I consider that unlikely.
Also, a pharyngeal tear can be repaired surgically, and I believe that it likely was in this case. I wonder who paid for that surgery?
There are some interesting questions about the second case. I wonder if the actual documents shed any light on these questions?
It is often confusing for lawyers, even experienced ones to decide whom to sue. Often less experienced counsel will tend to use the shotgun because of this confusion and to lessen the risk of their own exposure for missing the correct target. More experienced firms usually have consultants who will help them make the decision that has the best likelihood of a successful conclusion. Just because you sue more venues doesn’t necessarily mean a juicy settlement. Instead, it can actually lesson the odds, because your resources have to be spread over a wider base. Resources always cost money.
Whenever your name is on the chart, there is always exposure for you, no matter which state you live in.
Michael M. Rosenblatt, DPM
And as a corollary to every name on the chart can be sued, every patient is a potential litigant. The federal government feels that “defensive medicine” is not a significant problem which is why tort reform was off the table during the Affordable Care Act run up (or was it just to protect the American trial lawyers?) but I beg to differ. Every day in the ICU I order tests to cover myself that could very likely be skipped based on my clinical judgement. But having been sued, I have no intention to repeat the experience if I can help it. If they really want to streamline health care and save money, reign in the lawyers (with all due respect to the lawyers on our side, Jeff).
Dr. Dultz is correct to order tests that are not always “necessary.” The decision that was made on the possibility for tort reform/no tort reform was made politically, by a Democrat dominated Congress that was bought and paid for by trial lawyers.
Since Dr. Dultz had/has no control over that exigency, he must do what he can do to protect himself. Any different choice is irresponsible. He cannot single-handedly change the status quo. Nor should he try. It is like farting in the wind.
The trial lawyers made it clear to Obama that if he even considered tort reform in his healthcare plan, they would spend millions to oppose it. This fact has nothing to do with its necessity. Trial and personal injury lawyers (who usually cannot tolerate to be in each others’ presence) will get together like long-lost brothers to fight tort reform.
That is the only glue that holds them together. While I respect and appreciate defense lawyers, it is vital to play their game by their rules. This means…unless you actually paid a lawyer for his/her services…if they are representing someone else, like a malpractice insurance company, they can turn against you and throw you under the bus in a second. And they will, depending on circumstances. Their world turns on who pays them.
This is a difficult and strange concept for physicians, who do not drop patients, even if they are not paid directly by them. Best to know their rules.
Michael M. Rosenblatt, DPM
Greetings all. I presume Biosphere is the medical device company that manufactured the epistaxis-embolization device that was deployed. Why would they settle for $2million when the non-economic damages for Rashidi was closer to $1million? Has there never been precedence for the “value” of a blind eye?
During residency, there was a case of tongue necrosis that resulted from inadvertent embolization of the lingual artery while treating epistaxis. Who knew the device company could be liable even if the medical device is not defective? No wonder why medical devices are so costly.
The $350k settlement of the facility is an unusual number since the hospital’s pockets are deep. I presume in CA the hospitals do not have the same caps on torts like physicians.
The initial Appeals reduction of Moser’s fee from $250k to $16.5k doesn’t make sense: if the cap is 250, and if the non-economic settlement was over a million, shouldn’t the Appeals Court have dropped Moser’s fine to zero?
No matter how big the shotgun is, it seems that in CA, if you’re hit with a malpractice suit, the settlement or the judgement should be well below the $1mil coverage most physicians have. It’s the multimillion dollar suits and settlements that can be practice-killers.
Healthy 2015.
🙂
Do we know whether Dr. Moser did a provocative test before embolizing? Even if the patient is under anesthesia, there are ways to do this.
JH
And Happy New Year to all.
The court record (appellate) suggests the patient was “asleep” and awoke after the surgery blind in one eye. Hard to tell what actually happened from a procedural standpoint based on the limited public record.