Lid Upheld on Non-Economic Awards for Medical Malpractice

In a decision expected to slow spiraling insurance premiums for physicians in California, a federal appeals court has upheld the constitutionality of California’s $250,000 limit on damages for pain and suffering caused by medical malpractice.

The decision by the U.S. 9th Circuit Court of Appeals reversed a ruling by a federal judge in Los Angeles that said the limit was unconstitutional.

The lower court had said the state’s limit treated medical malpractice victims with pain and suffering losses differently than other victims, while not actually achieving the goal of lowering malpractice insurance.

The ruling by the three-member federal panel comes in the wake of a recent state Supreme Court decision that also upheld the $250,000 limit.

Dr. Clarence Avery of San Leandro, president of the California Medical Assn., said he was “gratified” by the federal appeals court decision.

‘Moderate Increases’

“To a high degree, I think the ruling will help stabilize (and) moderate increases (of premiums),” he said.

Some physicians, especially those in so-called “high-risk” specialties such as gynecology and obstetrics, pay as much as $35,000 a year for malpractice insurance, Avery said.

Without the help of legislated limits on malpractice awards, some physicians in New York and Florida pay premiums approaching $100,000 a year, he said.

The $250,000 limit, which applies to no other type of injury cases, was a key provision of the state’s 1975 medical malpractice law sponsored by doctors in an attempt to curb their rising insurance costs.

All of the major provisions of the law have been upheld by the state high court in the last year, including measures to pay large judgments in installments and cut them off if the victim dies, to bar lawsuits against doctors by worker’s compensation insurers to recover amounts paid to malpractice victims and to limit attorneys’ fees in malpractice cases.

Negligent Anesthesia

The recent federal appeals court ruling came in a Los Angeles case involving Scott Hoffman, a victim of negligent anesthesia during surgery in May, 1981, to repair a tendon in his finger at the Wadsworth Veterans Administration Medical Center in West Los Angeles.

Hoffman suffered brain damage and was confined to bed. His doctors said he suffers painful body spasms.

After fault was admitted, U.S. District Judge Edward Rafeedie awarded Hoffman $3,180,000 in damages for economic losses and another $1 million for non-economic damages, a category that includes pain and suffering.

In ruling the limit unconstitutional, Rafeedie said high insurance premium costs are not caused by large damages for pain and suffering, which are awarded only to a very few people.

Case Reviewed

In reviewing the case, however, the federal appeals court decided that the Legislature acted reasonably in adopting the limit.

Assigned to the appeals panel for the case, U.S. District Judge William J. Jameson of Montana wrote in reversing the lower-court ruling:

”. . . The Legislature had found that the rising cost of medical malpractice insurance was threatening to curtail the availability of medical care and creating the real possibility that many doctors would practice without insurance, leaving patients who might be injured by such doctors with the prospect of uncollectible judgments.

“The amount of settlement and verdict payments will directly affect insurance premiums,” Jameson said, adding, “It was reasonable for the lawmakers to believe that placing a ceiling on non-economic damages would help reduce malpractice insurance premiums.”