Court of Appeals Removes Non-Economic Damage Cap

WHA: Court decision risks patient access to health care

July 07, 2017

A three-judge panel of the Wisconsin Court of Appeals on July 5 released an opinion in Ascaris Mayo v. IPFCF holding that Wisconsin’s $750,000 cap on non-economic damages in medical malpractice cases is unconstitutional for all injured patients because the Legislature lacked a rational basis for enacting the non-economic damage cap. It is expected the decision will be appealed and heard by the Wisconsin Supreme Court.

The case does not impact economic damages, and unlike successful plaintiffs in non-medical liability suits who must rely on the solvency of the defendant to recover economic damages, Wisconsin patients who are injured by medical malpractice are guaranteed recovery of an unlimited amount of economic damages through the Injured Patient and Family Compensation Fund (IPFCF) funded by provider assessments.

The Court of Appeals decision overturns the non-economic damage cap passed with significant bipartisan support in the Legislature and signed into law by Governor Jim Doyle in 2006. WHA, together with the Wisconsin Medical Society and American Medical Association filed a joint amicus brief with the Court of Appeals in 2015 supporting the constitutionality of the non-economic damage cap.

Within two hours of the decision, WHA issued a press release expressing concern about the impact of the decision on future physician shortages and patient access to health care should the decision be upheld by the Wisconsin Supreme Court. That press release appears here.

“WHA fought hard several years ago to enact bipartisan legislation establishing the current cap,” said WHA President/CEO Eric Borgerding. “The Legislature held multiple hearings and received ample, credible supporting information as it debated this important public policy that impacts the accessibility of health care throughout Wisconsin. We are frustrated the Court of Appeals dismissed the multiple sources of information supporting the Legislature’s rational basis of the non-economic damage cap both when it was enacted in 2006 and today.” 

“WHA will file an amicus brief with the Supreme Court and is working with other partners who share our concerns with the Court of Appeals’ decision,” said Borgerding.

In writing the Court of Appeals’ majority opinion, Judge Joan Kessler wrote, “We are left with literally no rational factual basis in the record before us which supports the Legislature’s determination that the $750,000 limitation on noneconomic damages is necessary or appropriate to promote any of the stated legislative objectives.”

The Court of Appeals decision overturns the lower court decision in this case by Milwaukee County Circuit Court Judge Jeffrey Cohen that found the non-economic damage cap generally constitutional but unconstitutional for the particular plaintiff in this case. Judge Cohen reached a different conclusion than the Court of Appeals regarding whether the Legislature had a rational, factual basis for establishing the non-economic damage cap.

“[T]he Court has conducted a thoughtful examination of the statutory scheme and determined that the Cap is rationally related to the Legislature’s goals,” stated Judge Cohen in the 2014 lower court decision in this case on the facial constitutionality of the caps. “Studies, reports, and testimony were considered by the Legislature, which then saw fit to advance four specific goals supported by this evidence. That some studies were inconclusive is not enough to show there is no rational basis here. Plaintiffs must disprove the basis for every ‘plausible policy reason’ for the challenged classification. Having reviewed the documentation on which the Legislature relied, the Court cannot say that the goals articulated are ‘wholly irrelevant.’ The documents on which the Legislature relied contain evidence to reasonably support each goal.”

Relatedly, the U.S. House of Representatives last week passed a bill that would cap non-economic damages in medical malpractice lawsuits at $250,000 and is modeled off of California’s non-economic damage cap established in 1975. The Congressional Budget Office concluded the legislation would reduce the federal deficit by almost $50 billion over 10 years by lowering medical liability premiums and reducing defensive medicine. 

Currently, Wisconsin’s noneconomic damage cap is technically now unconstitutional statewide as a result of the Court of Appeals decision. However, should the Wisconsin Supreme Court overturn the Court of Appeals decision, any cases filed between now and a Supreme Court decision upholding the constitutionality of the cap will remain subject to the cap.

This story originally appeared in the July 07, 2017 edition of WHA Newsletter