Gavin McInnis 2016-08-25 02:19:51
POINT ALL-DAMAGES CAP ON HEALTH CARE LIABILITY WRONGFUL DEATH AND SURVIVAL CLAIMS MY VIEW THE CAP IS UNCONSTITUTIONAL In 2003, when the Texas Legislature enacted chapter 74 of the Texas Civil Practice and Remedies Code, it imposed caps on noneconomic damages in all health care liability claims.1 It also imposed caps on “all damages, including exemplary damages,” in wrongful death or survival actions on health care liability claims.2 This death cap includes economic damages, except for “expenses of necessary medical, hospital, and custodial care.”3 To ensure that the damage caps would withstand judicial scrutiny on constitutional grounds, the Legislature also put Proposition 12 on the ballot,4 asking Texas voters to approve a “constitutional amendment concerning civil lawsuits against doctors and health care providers, and other actions, authorizing the legislature to determine limitations on non-economic damages.”5 By doing so, state lawmakers ultimately rendered the “all damages” cap in wrongful death and survival actions unconstitutional to the extent it applies to economic damages. In effect, the Legislature was “hoisted by its own petard.”6 Before Chapter 74 and Proposition 12 The Texas Supreme Court in 1988 determined that the statutory damage limitations contained in sections 11.02 and 11.03 of article 4590i (the Medical Liability and Insurance Improvement Act of Texas)7 were unconstitutional when applied to damages in common law medical malpractice actions (health care liability claims).8 However, the court determined in 1990 in Rose v. Doctors Hosp.9 that because a wrongful death cause of action is “conferred by statute, not by the common law, ... the open courts provision [of the Texas Constitution] does not apply to [a] wrongful death claim,” and it upheld the damage caps under sections 11.02 and 11.03 in a statutory wrongful death health care liability case.10 In 2000, the holding in Rose was extended to statutory survival health care liability claims in Horizon/CMS Healthcare Corp. v. Auld.11 Sections 11.02 and 11.03 of article 4590i and Rose and Auld were the law on the issue of damage caps in statutory wrongful death and survival health care liability cases in Texas until 2003. Section 74.303(a) and Proposition 12 In 2003, the 78th Legislature repealed article 4590i.12 In its stead, the legislators enacted chapter 74 of the Texas Civil Practice and Remedies Code.13 Section 74.303(a) provides that in a wrongful death or survival action on a health care liability claim, “the limit of civil liability for all damages, including exemplary damages, shall be limited to an amount not to exceed $500,000 for each claimant. ...”14 While, on its face, section 74.303(a) places a limit on “all damages” in wrongful death and survival actions as deemed permissible by Rose and Auld, Texas voters clearly determined that any such limitation on damages by the Legislature cannot include a limitation on “economic damages.” In September 2003, Texas voters adopted Proposition 12, adding section 66 to article III of the Texas Constitution, which reads in relevant part: Sec. 66. (a) In this section “economic damages” means compensatory damages for any pecuniary loss or damage. The term does not include any loss or damage, however characterized, for past, present, and future physical pain and suffering, mental anguish and suffering, loss of consortium, loss of companionship and society, disfigurement, or physical impairment. b) Notwithstanding any other provision of this constitution, the legislature by statute may determine the limit of liability for all damages and losses, however characterized, other than economic damages, of a provider of medical or health care with respect to treatment, lack of treatment, or other claimed departure from an accepted standard of medical or health care or safety, however characterized, that is or is claimed to be a cause of, or that contributes or is claimed to contribute to, disease, injury, or death of a person. This subsection applies without regard to whether the claim or cause of action arises under or is derived from common law, a statute, or other law, including any claim or cause of action based or sounding in tort, contract, or any other theory or any combination of theories of liability. The claim or cause of action includes a medical or health care liability claim as defined by the legislature. (d) ... this section applies to a law enacted by the 78th Legislature, Regular Session, 2003, and to all subsequent regular or special sessions of the legislature.15 In construing section 66, courts must be mindful that “the fundamental rule for the government of courts in the interpretation or construction of a Constitution is to give effect to the intent of the people who adopted it.”16 “Where its terms are plain and definite, that which the words declare is the meaning of the instrument. In such cases there is no room for construction; the words of the instrument lie before the court already molded to their use, and its province extends no further than the enforcement of the language as written.”17 Thus, when interpreting the state constitution, courts must “rely heavily on its literal text and give effect to its plain language.”18 The literal text and plain language of section 66 establishes the unequivocal intent of Texas voters to authorize the Legislature to limit damages and losses, other than economic damages, in a health care liability claim.19 The fact that the amendment expressly states that it applies to statutory claims or causes of action and to death claims necessarily means that the holdings in Rose and Auld that excused the article 4590i damage caps from constitutional scrutiny in statutory wrongful death and survival cases are no longer applicable. Finally, the fact that the amendment specifies that it applies to any laws enacted by the 78th Legislature demonstrates the intent of Texas voters that the constitutional prohibition against limits on economic damages applies to the provisions of chapter 74. “Where a power is expressly given and the means by which, or the manner in which, it is to be exercised is prescribed, such means or manner is exclusive of all others.”20 The language of section 66 grants the Legislature the power to limit damages in a “health care liability claim” “sounding in tort” that involves the “death of a person” and which “arises under or is derived from ... a statute,” and it prescribes the exclusive manner in which those damages can be limited, e.g., by a statute that determines “the limit of liability for all damages and losses, however characterized, other than economic damages.”21 In other words, the voters of Texas clearly and unambiguously determined that economic damages cannot be limited by the Legislature in a statutory wrongful death or survival health care liability claim. Thus, to the extent that the damage limitation contained in section 74.303(a) of the Texas Civil Practice and Remedies Code places a limit on economic damages, section 74.303(a) is inconsistent with and violative of article III, section 66 of the Texas Constitution.22 Implications for Wrongful Death Plaintiffs Invariably, defense counsel and insurance carriers take the position in health care liability wrongful death actions that compensatory damages for pecuniary loss—such as loss of care, maintenance, support, services, advice, counsel, and reasonable contributions of a pecuniary value23—fall within the section 74.303(a) “all damages” death cap. These compensatory damages, however, are, by constitutional definition, “economic damages”24 that cannot be capped. Thus, in a wrongful death health care liability case where the decedent had a significant earning capacity, the plaintiff’s counsel should not write off the surviving family’s multimillion dollar pecuniary loss of support and any other pecuniary damages to the death cap. Instead, defense counsel and the insurance carrier should be reminded that Texas voters expressed their will that such pecuniary loss cannot be capped. If nothing else, this will give defense counsel and the carrier pause during settlement negotiations as they evaluate the very real risk of uncapped economic damages they face if the case proceeds to trial. As of the date of this article, the author has located no Texas appellate case that discusses the interplay between the constitutional prohibition of caps on economic damages and the “all damages” death cap contained in section 74.303(a). Article III, section 66 is the classic example of application of the old adage, “Be careful what you ask for, lest it come true.” The Legislature wanted Texas voters to allow it to cap noneconomic damages and that is precisely what they allowed it to do, while also making it absolutely clear that economic damages cannot be limited. Notes 1) Tex. Civ. Prac. & Rem. Code § 74.301. 2) Tex. Civ. Prac. & Rem. Code § 74.303(a). 3) Tex. Civ. Prac. & Rem. Code § 74.303(c). 4) Ballot Language for the September 13, 2003 Constitutional Amendment Election, http://www.sos.state.tx.us/elections/voter/2003sepconsamend.shtml. 5) Tex. H.J.R. Res. 3, 78th Leg., R.S. (2003). 6) “Injured by the device that you intended to use to injure others.” http://www.phrases.org.uk/meanings/hoist-by-your-own-petard.html. 7) Tex. Rev. Civ. Stats. Ann. art. 4590i (Vernon Supp. 1987). 8) Lucas v. United States, 757 S.W.2d 687, 692 (Tex. 1988). 9) 801 S.W.2d 841 (Tex. 1990). 10) Id. at 845. 11) 34 S.W.3d 887, 902 (Tex. 2000). 12) See Act of June 2, 2003, 78th Leg., R.S., ch. 204, § 10.09, 2003 Tex. Gen. Sess. Laws 884. 13) See Tex. Civ. Prac. & Rem. Code § 74.001 et seq. 14) Tex. Civ. Prac. & Rem. Code § 74.303(a). Section 74.303(b) provides that the amount set forth in section 74.303(a) shall be increased “by a sum equal to the amount of such limit multiplied by the percentage increase or decrease in the consumer price index [between August 29, 1977, and the final judgment], as published by the U.S. Bureau of Labor Statistics of the U.S. Department of Labor, that measures the average changes in prices of goods and services purchased by urban wage earners and clerical workers’ families and single workers living alone. ...” 15) Tex. Const. art. III, § 66(a), (b), and (d) (emphasis added). 16) Cox v. Robison, 150 S.W. 1149, 105 Tex. 426, 1151 (Tex. 1912). 17) Id. 18) Patton v. Porterfield, 411 S.W.3d 147, 156 (Tex. App.—Dallas 2013, pet. denied) quoting Stringer v. Cendant Mortg. Corp., 23 S.W.3d 353, 355 (Tex. 2000). 19) Tex. Const. art. III, § 66(b). See Prabhakar v. Fritzgerald, 2012 WL 3667400, at *11 (Tex. App.—Dallas 2012, no pet.)(“The plain language of the constitutional amendment evidenced an intent of the voters of Texas to authorize the legislature to limit noneconomic damages. ...”) 20) Ferguson v. Wilcox, 119 Tex. 280, 28 S.W.2d 526, 532 (1930). 21) See Tex. Const. art. III, § 66(b). 22) Compare Lucas, 757 S.W.2d at 692 (holding that the damage limitations in sections 11.02 and 11.03 of article 4590i when applied to common law medical practice claims were inconsistent with and violative of article I, section 13 of the Texas Constitution and unenforceable). 23) See Texas Pattern Jury Charge 81.3 (“‘Pecuniary Loss’ means the loss of the care, maintenance, support, services, advice, counsel, and contributions of a pecuniary value, that [the plaintiff], in reasonable probability, would have received from [the decedent] had he lived.”) 24) Tex. Const. art. III, § 66(a) (“‘economic damages’ means compensatory damages for any pecuniary loss or damage”). COUNTERPOINT OUR VIEW THE CAP IS CONSTITUTIONAL By R. Brent Cooper and Diana L. Faust Section 74.303(a) of the Texas Civil Practice and Remedies Code statutorily caps all damages in a health care liability wrongful death or survival claim—other than those expressly excluded from its application: necessary medical, hospital, or custodial care damages.1 These caps existed and were constitutionally applied under former article 4590i of the Texas Revised Civil Statutes.2 Claimants argue that the literal text of article III, section 66 of the Texas Constitution (added by Texas voters through Proposition 12 in September 2003) limits the application of section 74.303(a) to noneconomic damages. Examining the amendment to discern Texas voters’ intent reveals that it sought to ensure that the cap constitutionally applies to noneconomic damages but also that it sought to leave in place the existing common law at the time of chapter 74’s enactment. Thus, section 74.303(a) means what it says and constitutionally applies to limit noneconomic and economic damages other than those expressly excluded. Discerning Intent of Texas Voters The Texas Constitution derives its force from the people of Texas.3 In construing the language of the constitution, courts must consider “the intent of the people who adopted it.”4 In determining intent, “the history of the times out of which it grew and to which it may be rationally supposed to have direct relationship, the evils intended to be remedied and the good to be accomplished, are proper subjects of inquiry.”5 Courts discern intent by considering the amendment in its entirety, as well as its history, nature, and objective.6 Courts rely on the constitution’s literal text, liberally and equitably construed, while striving to give constitutional provisions the effect their makers and adopters intended.7 In particular, a remedial constitutional provision is to be construed liberally to carry out its purposes,8 and provisions are to be construed in light of the common law and the conditions as they existed at the time of adoption.9,10 Chapter 74, Proposition 12, and Section 66 Amendment Dire conditions existed at the time Texas voters adopted article III, section 66 in 2003. In May 1977, the Legislature passed article 4590i, a series of medical liability reforms that included a cap on noneconomic damages.11 In 1988, the Texas Supreme Court declared the noneconomic-damages cap unconstitutional12 but held a “wrongful death” cap constitutional when applied on a per-defendant basis.13 Before Proposition 12 in 2003, the only damages caps that had been constitutionally upheld in medical liability cases were those applied in wrongful death and survival claims. As a result, medical liability litigation increased, as did the frequency and severity of awards just five years after enactment of reforms in 1995.14 Plus, a mandated insurance rate rollback in effect since 1996 was lifted,15 resulting in an increase in insurance rates that pushed Texas into a well-documented medical liability crisis.16 In June 2003, the Legislature enacted the Medical Malpractice and Tort Reform Act of 2003. The purpose of this comprehensive package, in large part, was to alleviate the medical liability crisis.17 The act’s centerpiece was a cap on noneconomic damages, limiting a health care provider or physician’s exposure to $250,000, codified in section 74.301. Economic loss—such as past and future medical expenses, lost wages, and custodial care—remained uncapped, except in the context of wrongful death and survival claims. Nothing in the legislative history evidences any intent to repeal the cap in these cases. To ensure constitutionality of section 74.301, House Joint Resolution 3 proposed a constitutional amendment authorizing the Legislature to determine limitations on noneconomic damages.18 The Texas Secretary of State put HJR 3’s purpose and text on the ballot for Texas voters as Proposition 12: HJR 3 would immediately authorize the Legislature to limit noneconomic damages assessed against a provider of medical or health care and, after January 1, 2005, to limit awards in all other types of cases. The proposed amendment will appear on the ballot as follows: “The constitutional amendment concerning civil lawsuits against doctors and health care providers, and other actions, authorizing the legislature to determine limitations on non-economic damages.”19 Texas voters passed Proposition 12, adding HJR 3 to the Texas Constitution at article III, section 66. Plainly expressed, the purpose of the amendment was not to restrict any legislative authority; it only authorized the Legislature to limit liability for noneconomic damages in all health care liability claims. Section 66 provides, in relevant part: LIMITATION ON LIABILITY FOR NONECONOMIC DAMAGES. (a) In this section “economic damages” means compensatory damages for any pecuniary loss or damage. The term does not include any loss or damage, however characterized, for past, present, and future physical pain and suffering, mental anguish and suffering, loss of consortium, loss of companionship and society, disfigurement, or physical impairment. (b) Notwithstanding any other provision of this constitution, the legislature by statute may determine the limit of liability for all damages and losses, however characterized, other than economic damages, of a provider of medical or health care with respect to treatment, lack of treatment, or other claimed departure from an accepted standard of medical or health care or safety, however characterized, that is or is claimed to be a cause of, or that contributes or is claimed to contribute to, disease, injury, or death of a person. This subsection applies without regard to whether the claim or cause of action arises under or is derived from common law, a statute, or other law, including any claim or cause of action based or sounding in tort, contract, or any other theory or any combination of theories of liability. The claim or cause of action includes a medical or health care liability claim as defined by the legislature.20 Ignoring the express purpose of the amendment, health care liability claimants argue that the literal text found in subsection (b)’s language—“may determine the liability for all damages and losses, however characterized, other than economic damages”—means that the intent of Texas voters was to limit damages and losses “other than economic damages,” such that economic damages are now unlimited. Again, voter approval of Proposition 12 affirmed the Legislature’s authority to cap noneconomic damages in health care lawsuits. Intent of the Amendment The House Research Organization bill analysis found that HJR 3’s intent was to ensure that the Legislature would have the authority to limit noneconomic damages in all cases, without fear of those limitations being overturned by the courts. It recognized that: (1) a crisis existed in the cost and availability of medical professional liability insurance caused by increases in damages and size of awards; (2) a key solution to the crisis would be enactment of a $250,000 cap on noneconomic damages; and (3) legislative authority to cap such damages is needed because the previous caps had been held unconstitutional as violating the open courts provision of the Texas Constitution in cases other than statutory wrongful death and survival cases.21 Consistent with its history and the common law, floor debate on HJR 3 emphasized that article 4590i’s prior limitations on damages were constitutionally applied in wrongful death and survival actions.22 The amendment, titled “Limitation on Liability for Noneconomic Damages,” defines economic damages to exclude noneconomic damages.23 Subsection (b) authorizes the Legislature to determine the limit of liability for noneconomic damages of a physician or health care provider in all medical liability claims, and subsection (d) applies the amendment to section 74.301.24 The amendment’s text plainly does nothing to restrict the Legislature’s authority to enact limitations on economic damages in wrongful death or survival health care liability claims, such as section 74.303(a). The interpretation of Texas voters’ intent to mean that economic damages cannot be limited through section 74.303(a) finds no support when applying the rules for interpreting constitutional amendments. Voters’ approval of Proposition 12 made clear their intent to only authorize the Legislature to cap noneconomic damages. Neither the amendment’s language nor legislative history supports an intent to limit the Legislature’s authority to cap all wrongful death and survival damages that were previously constitutionally capped under article 4590i. Notes 1) Tex. Civ. Prac. & Rem. Code Ann. §§ 74.303(a), (c) (West 2011). 2) See Rose v. Doctors Hosp., 801 S.W.2d 841, 845 (Tex. 1990); Horizon/CMS Healthcare Corporation v. Auld, 34 S.W.3d 887, 902 (Tex. 2000). 3) Edgewood Indep. Sch. Dist. v. Kirby, 777 S.W.2d 391, 394 (Tex. 1989). 4) Id. (citing Director of Dep’t of Agriculture and Env’t v. Printing Indus. Ass’n, 600 S.W.2d 264, 267 (Tex.1980); Smissen v. State, 71 Tex. 222, 9 S.W. 112, 116 (1888)). 5) Edgewood, 777 S.W.2d at 394 (citing Markowsky v. Newman, 134 Tex. 440, 136 S.W.2d 808, 813 (1940)). 6) Vinson v. Burgess, 773 S.W.2d 263, 269 (Tex. 1989); Hall v. Baum, 452 S.W.2d 699, 702 (Tex. 1970). 7) Doody v. Ameriquest Mortgage Co., 49 S.W.3d 342, 344 (Tex. 2001); Brown Cty. Water Improvement Dist. No. 1 v. Austin Mill & Grain Co., 135 Tex. 140, 138 S.W.2d 523, 525 (1940). 8) Ferguson v. Wilcox, 119 Tex. 280, 28 S.W.2d 526 (1930). 9) Jones v. Ross, 141 Tex. 415, 173 S.W.2d 1022, 1024 (1943). 10) In re Nestle USA, Inc., 387 S.W.3d 610, 618 (Tex. 2012, orig. proceeding) (citing In re Allcat Claims Serv., L.P., 356 S.W.3d 455, 466 (Tex. 2011)). 11) Act of May 30, 1977, 65th Leg., R.S., ch. 817, § 1, sec. 11.02(a), repealed by Act of June 2, 2003, 78th Leg., R.S., ch. 204, § 10.09, 2003 Tex. Gen. Laws 847, 884. 12) Lucas v. United States, 757 S.W.2d 687, 692 (Tex. 1988). 13) House Research Organization, Bill Analysis, Tex. H.J.R. 3, 78th Leg., R.S., p.1-2 (2003) (emphasis added). See Rose, 801 S.W.2d at 845; Auld, 34 S.W.3d at 902. 14) Michael S. Hull, et al., House Bill 4 and Proposition 12: An Analysis with Legislative History, Part One, 36 Tex. Tech L. Rev. 1, 26-28 (2005). 15) Id. 16) Id. 17) Hull, et al., 36 Tex. Tech L. Rev. 1, 4-6; Act of June 2, 2003, 78th Leg., R.S., ch. 204, § 10.11, 2003 Tex. Gen. Laws 847, 875. 18) Tex. H.J. Res. 3, 78th Leg., R.S. (2003). 19) Texas Secretary of State, Ballot Language for September 13, 2003 Constitutional Amendment Election, at Proposition 12—HJR 3, http://www.sos.state.tx.us/elections/voter/2003sepconsamend.shtml (last visited July 24, 2016) (emphasis added). 20) Tex. Const. art. III, § 66. 21) Tex. H.J.R. 3, 78th Leg., R.S., pp. 2, 3-4. 22) H.J. of Tex., 78th Leg. R.S. 1062-63, 1070-71 (2003). 23) Tex. Const. art. III, § 66(a). 24) Id. §§ 66(b), (d). GAVIN MCINNIS is an attorney with the Wyatt Law Firm in San Antonio and represents plaintiffs in traumatic personal injury cases. McInnis handles the firm’s appellate work, as well as any complex legal arguments in trial courts. He is a member of the Texas Trial Lawyers Association and a fellow of the Texas Bar Foundation. R. BRENT COOPER is a shareholder with Cooper & Scully, where he focuses his practice on commercial litigation, insurance litigation, and appellate practice. He has been honored by the State Bar of Texas Insurance Law Section as a True Texas Legend. Cooper is certified in personal injury trial law by the Texas Board of Legal Specialization. DIANA L. FAUST, a shareholder with Cooper & Scully, focuses on all aspects of appellate practice in state and federal courts. Faust is certified in civil appellate law by the Texas Board of Legal Specialization. The views expressed in this article are those of the authors and do not necessarily represent the policy, position, or views of, and should not be attributed to, the State Bar of Texas.
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