Oregon Supreme Court Strikes Down Noneconomic Damage Cap

Oregon

The Oregon Supreme Court last month invalidated statutory limits on noneconomic damages for personal injury claims. The high court ruled that the cap enacted by the legislature in 1987 violates the legal remedy clause of the Oregon Constitution. The decision affirmed an appeals court’s reversal of a trial court ruling on an award for a plaintiff who sustained catastrophic injuries after being run over by a garbage truck.

According to the 5-2 decision, the cap violated Article I, Sec. 10, of the state constitution, commonly referred to as “the remedy clause,” which states “every man shall have remedy by due course of law for injury done him in his person, property or reputation.”

In the case Busch v. McInnis Waste Systems Inc., the initial trial court reduced a $10.5 million noneconomic damage award to $500,000 in keeping with Oregon’s noneconomic damage limit. A court of appeals reversed the trial court, determining that the statute violated the remedy clause of the Oregon Constitution because it results in a “bare reduction” of noneconomic damages awards for “grievously injured” plaintiffs without a quid pro quo benefit. The Oregon Supreme Court agreed.

“In enacting the damages cap, the Legislature left defendants’ common-law duty of care intact, but deprived injured plaintiffs of the right to recover damages assessed for breach of that duty … ” Chief Justice Martha Walters wrote for the court majority. “The Legislature must act for a reason sufficient to counterbalance the substantive right that [the remedy clause] grants. That right assures that people who are injured in their person, property or reputation have a remedy for those injuries. Oregon law has long recognized and protected that substantive right.”

Attorneys for the Oregon Medical Associa-tion, the American Medical Association and the American College of Obstetricians & Gynecol-ogists filed an amicus curiae brief in support of the noneconomic damage cap.

“The limit on noneconomic damages for personal injury actions is constitutional; it is an appropriate, not arbitrary, action by the legislature to further an important public interest, and it should not be disturbed by the court,” wrote the attorneys representing the healthcare organizations. “The legislature must be given latitude to enact reforms to address the changing needs and circumstances of our healthcare system, including how patients injured by medical negligence are compensated. The rule of law announced will affect possibilities for continued healthcare reform, and, as evidence before the legislature just this year showed, the very availability of healthcare for those who need it most.

“The defendant in this case happens to be the owner of a garbage truck; however, it could very well be another type of essential service provider such as a doctor, dentist, or day care provider. The rule of law framed in this case will affect how ORS 31.710(1) is applied in negligence actions against medical providers, and many others. There are real implications, not just in litigated claims and exposure, but in Oregonians’ access to essential services, including healthcare.”

While the court in its ruling noted that its decision is limited to circumstances that this case presented, and that it expressed no opinion on whether damages caps in other cases comply with the section of the Oregon constitution in question, the decision in Busch v. McInnis Waste Systems Inc. marks a continued erosion of tort reforms at the hands of the state judiciary. Last year, the Oregon Supreme Court declared a portion of the state’s pre-litigation medical malpractice review panel process under the Utah Health Care Malpractice Act unconstitutional, determining that it violated the separation of powers doctrine (see MLM, August 2019).

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