Appeals court upholds often-cited medical liability damages cap


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  • September 26, 2012

In a victory for doctors, a Texas appeals court has upheld as constitutional the state’s $250,000 noneconomic damages cap in medical liability cases.

The decision is the first time an appellate court has validated the limit under the state’s constitution. A federal court in March upheld the cap under the U.S. Constitution.

The ruling strengthens Texas’ 2003 tort reform package and protects doctors from high insurance premiums, said Rocky Wilcox, vice president and general counsel for the Texas Medical Assn. The TMA was not involved in the case.

“It’s good that the courts are following what the law says,” he said. “Physicians are under stress already because of the limits on how much they can receive [from] Medicare and Medicaid and other state programs. Because of the cap, most are still able to practice, and we don’t have these escalating” premium rates.

The case involves a negligence lawsuit brought by David Fritzgerald against several physicians and Infectious Disease Doctors, P.A., a medical group serving the Dallas area. Fritzgerald underwent ulcer surgery in 2003 at then-RHD Memorial Medical Center in Dallas. He experienced complications after the surgery and was treated for an intra-abdominal infection by Meenakshi S. Prabhakar, MD, an infectious disease specialist employed by Infectious Disease Doctors, according to court records.

Dr. Prabhakar prescribed antibiotics to Fritzgerald for what he believed was peritonitis, documents show. Fritzgerald’s condition deteriorated, and it was later discovered he had methicillin-resistant Staphylococcus aureus. A lack of blood flow to Fritzgerald’s extremities led to the amputation of his arms and legs.

He sued the hospital, Dr. Prabhakar and others involved in his treatment. Dr. Prabhakar denied any wrongdoing. Fritzgerald settled with the hospital and others before trial.

A jury found Dr. Prabhakar negligent in Fritzgerald’s care and awarded Fritzgerald $5 million for noneconomic damages and $5 million for future medical expenses. The court reduced the $5 million noneconomic damages award to $250,000 in accordance with the state’s cap.

Fritzgerald appealed to the Court of Appeals, 5th District of Texas at Dallas. He argued that the reduction violated the state and federal constitutions. Dr. Prabhakar cross-appealed. He said the trial court erred by ordering him to pay the jury award in one lump sum, rather than in periodic payments.

Because Dr. Prabhakar carried only $200,000 in insurance, the remainder of the verdict would come from his personal accounts, according to court documents. Texas tort reform law says a trial court is required to order all or part of future medical expenses be made in periodic payments if a physician-defendant requests such payments.

In its Aug. 24 opinion, the appeals court said Dr. Prabhakar had successfully shown at trial that he had adequate personal funds to cover the economic damages award, thus allowing the periodic payments. The court also found the noneconomic damages cap valid.

“Texas voters approved a constitutional amendment giving the Texas Legislature authority to determine the limit of liability for all damages and losses, however characterized, other than economic damages, of a provider of medical or health care,” the court said. “The plain language of the constitutional amendment evidenced an intent of the voters of Texas to authorize the Legislature to limit noneconomic damages despite any other constitutional provision to the contrary.”

Defending caps elsewhere

Texas is the latest state to address caps on damages. In August, the Supreme Court of Mississippi declined to answer whether the state’s noneconomic damages cap in civil cases is constitutional. After hearing oral arguments and reviewing legal briefs, the state high court said it didn’t have enough information to decide the limit’s validity. The decision left the cap intact.

In July, the Supreme Court of Missouri struck down the state’s $350,000 noneconomic damages cap, ruling the limit unconstitutional.

Courts have upheld other caps. In March, the Supreme Court of Louisiana reaffirmed the state’s $500,000 limit on total medical liability damages.

The Texas decision shows the unfairness of award limits to plaintiffs’ rights, said Linda Turley, Fritzgerald’s attorney.

“We feel very strongly that the one-size-fits-all caps that limit noneconomic loss, no matter what the injury is, are unconstitutional because the jury is basically eliminated from the decision process,” she said.

At this article’s deadline, the case had not been appealed to the Texas Supreme Court. However, Turley said she has asked the appeals court to reconsider its ruling on the periodic payment issue.

It is burdensome for physicians to pay future medical expenses in lump sums, said R. Brent Cooper, Dr. Prabhakar’s attorney. If a patient dies, the funds would not be returned, he said.

“We were very pleased at the decisions regarding the caps and the periodic payments,” Cooper said. “We’ve had prior success with the cap, and we’re happy the court followed other decisions, which upheld the cap. This case will carry a lot of weight with trial courts and other courts in Texas.”