Wisconsin Supreme Court Reverses Circuit & Appellate Courts, Rules State’s Noneconomic Damage Cap Constitutional

On June 27, the Wisconsin Supreme Court ruled that the state’s $750,000 cap on noneconomic medical liability damages is constitutional.

“Today’s Court decision preserves Wisconsin’s balanced medical liability system that has been instrumental in attracting physicians to communities across Wisconsin, while providing assurance to injured patients that they will receive payment for the full amount of a jury’s award of medical expenses, lost wages and other economic losses,” said Eric Borgerding, Wisconsin Hospital Association president and chief executive. “Enacted with bipartisan support and signed by Gov. Doyle in 2006, Wisconsin’s balanced system includes a unique guarantee of a full and uncapped payment of awarded economic damages, as well as capped, subjective noneconomic damages. As Wisconsin continues to work to address current and future physician workforce shortages, that balanced medical liability system is just as important today as it was in 2006.”

The five-to-two decision in Mayo v. Wisconsin Injured Patients & Families Compensation Fund stems from a case filed by Ascaris Mayo, whose four limbs developed gangrene and had to be amputated after doctors failed to diagnose her with a septic infection. Mayo and her husband sued Wyatt Jaffe, MD, and physician assistant Donald Gibson, Infinity Health Care Inc., ProAssurance Wisconsin Insurance Co. and the Wisconsin Injured Patients & Families Compensation Fund for medical malpractice and failure to provide proper informed consent.

The initial jury trial in circuit court found that neither Jaffe nor Gibson was negligent, but that both failed to provide Mayo with proper informed consent about her diagnosis and treatment choices. She was awarded $25.3 million — $15 million of which were for noneconomic damages, while her husband received $1.5 million for loss of consortium and companionship of his wife.

After the verdict, the Wisconsin Injured Patients & Families Compensation Fund filed a motion to reduce the noneconomic portion of the jury award to the $750,000 statutory cap on noneconomic damages imposed by state law. The Mayos responded by moving for entry of judgment on the verdict on the grounds that the application of the cap would violate their constitutional rights, claiming the noneconomic damage cap is facially unconstitutional because it violates the equal protection rights of catastrophically injured patients, specifically arguing that there is no rational basis linking the amount of the current noneconomic damages cap to the Wisconsin Legislature’s purposes for enacting the cap.

The circuit court ruled that the cap was not facially unconstitutional but agreed that it was unconstitutional specifically as applied to the Mayos because it violated their right to equal protection and due process. The court ruled that application of the cap would reduce the Mayos’ jury award by 95 percent; there is no rational basis to deprive Mayo of the money the jury found necessary to compensate her for her injuries; reducing the jury award wouldn’t further the cap’s purpose of balancing affordable healthcare with adequate compensation to malpractice victims; the Wisconsin Injured Patients & Families Compensation Fund could afford to pay the award; and applying the cap in Mayo’s case would not service the legislative purpose of “policing high or unpredictable economic damage awards.” The Wisconsin Injured Patients & Families Compensation Fund appealed that ruling.

In 2017, a three-judge Wisconsin Court of Appeals unanimously affirmed the lower court’s decision.

“Here, the $750,000 cap on noneconomic damages has the practical effect of imposing devastating costs only on the few who sustain the greatest damages and creates a class of catastrophically injured victims who are denied the adequate compensation awarded by a jury, while the less severely injured malpractice victims are awarded their full compensation,” wrote Judge Joan Kessler for the unanimous three-judge panel. “We are not concluding that all caps on noneconomic damages are unconstitutional. We can only conclude that the amount of this cap was arbitrarily selected because, based on the record before us, it is unrelated factually to the goals of the statute of which it is a part.”

The appellate decision was again repealed, and the Wisconsin Supreme Court sided with the state’s patient compensation fund, concluding that to overturn the noneconomic damage cap would invade “the province of the legislature.”

“In creating the $750,000 cap for noneconomic damages, the legislature undertook substantial investigative efforts to assure that any future legislation in regard to a cap would be constitutionally appropriate,” wrote Chief Justice Patience Rogensack for the majority. “The legislature carefully set out its objectives, stating that ‘[t]he objective of the treatment of this section is to ensure affordable and accessible healthcare for all of the citizens of Wisconsin while providing adequate compensation to the victims of medical malpractice.’

“The Mayos were treated the same under the cap as any other persons for whom the jury has awarded noneconomic damages in excess of $750,000,” Rogensack continued. “The cap applies regardless of how much in excess of $750,000 the award; how drastic the injury suffered; the gender, age, or race of the plaintiff; or the extent of a healthcare provider’s culpability. The Mayos certainly are very sympathetic plaintiffs because of the severe injuries that Ascaris Mayo has suffered. However, were we to construe the cap based on our emotional response to her injury, we would be substituting our policy choice for that of the legislature.” We predict we will see medical malpractice insurance in Wisconsin continue its downward pricing trend with this latest court ruling.

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