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Until the California Supreme Court Takes a Gander, the California Cap on Non-economic Damages Will Stay Firmly in Place

Written by:  Patricia I. James**

Summary: The MICRA cap referred to in Post #7 is again being challenged in a case filed in the California Court of Appeal. However, I don’t think it has the power to determine its constitutionality. That falls in the realm of the California Supreme Court.

Post #7, entitled “Here’s Why the California Cap on Non-economic Damages is Archaic,” set forth the caps in all of the states. This issue is being revisited due to the filing of an appeal by the family of a man who died after surgery in 2008. The appeal challenges the constitutionality of MICRA, the Medical Injury Compensation Reform Act, enacted in 1975.

My information regarding this case comes from an article in the Huffington Post, which came to it courtesy of California Watch. This article, written by Bernice Yeung, states that a San Francisco Superior Court found Bernard Millman, an anesthesiologist, partially liable for the death of 63-year-old attorney Gary Gavello. After the operation, Millman ordered post-operation drugs and left Gavello with a nurse and nursing assistant before he awoke from the medication. At some point after that, Gavello stopped breathing.

The jury awarded Gavellos’s wife and three children $2.9 million for lost wages and $1 million for their emotional loss (non-economic damages). Since Millman was found to be 20 percent liable for Gavello’s death, the court adjusted the $1 million award to $50,000, or 20 percent of the $250,000 cap.

You will remember that, in Post #7, I had written,”consider the following scenario: a spouse dies from medical negligence. There is a surviving spouse and four children. All of them are entitled up to a cap of $250,000. What I mean by that is “all of them together.” They do not receive $250,000 each. Subject to proof, the most that all five can receive is the cap of $250,000. This is as opposed to Kansas and Texas which allow $250,000 to EACH PARTY against the Defendants.”

In the Gavello case, Dan Smith, attorney for the Gavello family, stated that “the harm to severely injured medical malpractice plaintiffs from MICRA is illustrated by the pending Gavello case. There, a mother and three sons suffered the death of their husband and father due to medical malpractice and under the statute as it was applied by the trial judge, these four individuals received … $12,5000 each for the (emotional) loss of their husband and father.”

So, now, rather than my hypothetical, you have a real case showing how the non-economic cap is applied.

Also, in Post #7, I had written, “if the [deceased] spouse was a high wage earner, certainly there could be a large recovery if he or she was younger and had quite a few years ahead to earn money. However, if the spouse was making minimum wage, was retired or, for whatever reason, had not been working in a long time, that recovery could be a pittance.”

Similarly, in this article, Carmen Balber of Consumer Watchdog, stated that “by limiting damages in a medical malpractice lawsuit to provable economic damages – like salary or actual medical bills – and limiting any sort of additional punishment to $250,000 for noneconomic damages, it impacts most severely seniors because they have no income and are retired, or children because they are not wage earners.”

Again, the Gavello appeal challenges the constitutionality of MICRA. The most recent case I found addressing that issue is Stinnett v. Tam, 198 Cal.App.4th 1412 (2011). In that case, the surviving spouse sued, among others, Tony Tam, M.D. and Modesto Surgical Associates for the wrongful death of her husband, Stanley Stinnett, due to professional negligence. The trial court reduced the jury’s award of $6 million in noneconomic damages to $250,000. Her appeal contended, among other things, that the MICRA cap is now unconstitutional “since the classification incorporated in the MICRA cap has lost its rationality,” as the medical malpractice insurance crisis that precipitated the adoption of the MICRA cap in 1975 “has long since ceased to exist,” and the cap operates more harshly than in 1975 since it does not adjust for inflation.”

The Stinnnetts submitted a declaration by Jay Angoff, a Missouri lawyer who has been heavily involved in the medical malpractice insurance industry. Essentially, he stated that the situation that existed in 1975 when MICRA was enacted no longer existed since insurance rates were declining, more insurers were writing coverage, claims payments were decreasing and insurance profits had been excessive for at least a decade. Further, insurers in states that did not have an economic cap had prospered.

An eye-opening argument was set forth in the declaration of the Gavello family’s economist, Phillip H. Allman, “who stated that inflation had eroded the value of $250,000 in 1975 to a present value in 2008 of approximately $58,857.”  Interestingly, although the defendants filed objections to the declaration of Mr. Angoff, no objections were filed to Mr. Allman’s declaration.

I am not going into an in-depth analysis of the Stinnett case because, frankly, I think you would probably lose interest. This is not a law school class. Suffice it to say that it would appear that the Gavello family is raising the same arguments that were raised in the Stinnett case which were soundly rejected by the Court of Appeal in the latter case.

However, one telling statement by the court was that, although it is a judicial responsibility to determine the constitutionality of a statute, the California Supreme Court had already determined the constitutionality of MICRA in Fein v. Permanente Medical Group, 38 Cal.3d 137 (1985). Therefore, the appellate court was bound to follow its precedent which “are binding upon and must be followed by all the state courts of California.” Stinnett, supra, at page 1431.

Thus, it would appear to me that the only chance that the Gavello family has is, if the Court of Appeal rules against them (and I do not see how it cannot), the California Supreme Court will accept the case for review. One of the grounds for review by the California Supreme Court is to settle important questions of law. Certainly, since Fein was in 1985, and if the state supreme court did accept the Gavello case, it just might be successful. We can only hope.

**No portion of this Post is intended to constitute legal advice.  The views expressed are solely those of the author.