SOURCE: The Wichita Eagle

In a major decision that figures to change the landscape of personal injury litigation in Kansas, the state’s supreme court on Friday ruled that caps on certain damages that juries can award are unconstitutional.

The court ruled that limits imposed by the Kansas Legislature on noneconomic damages — jury awards that account for pain, suffering, mental anguish and loss of enjoyment of life following an injury — violate a person’s right to a jury trial under the Kansas Constitution’s Bill of Right.

The high court issued the ruling in a Sedgwick County case filed by a woman who was hurt in November 2010 when a semi-truck rear-ended the car she was riding in. Diana K. Hilburn sued Enerpipe Ltd., alleging the crash was the result of the truck driver’s negligence and the company was liable.

At trial, a jury awarded Hilburn $335,000 in damages including $33,490.86 for medical expenses and $301,509.14 for noneconomic damages such as pain, suffering, emotional anguish and loss of enjoyment of life.

But a district court judge reduced the award by more than $51,000 to bring it in line with the state’s then-$250,000 award cap, which legislators passed in 1988 to cut the cost of malpractice insurance for physicians and rein in large jury awards.

The state’s current noneconomic damages cap for personal injury cases is $325,000.

Hilburn appealed the district court’s decision to reduce her award to the Court of Appeals, arguing that capping the damages in her case wasn’t reasonable or necessary to protect public interest. She also argued that Kansas law doesn’t provide an adequate alternative remedy for taking away her constitutional right to have a jury decide how much money she deserved. The Appeals Court rejected her arguments.

On Friday the Supreme Court reversed that decision, ruling 4-2 that the cap did in fact intrude on the jury’s ability to award to a plaintiff whatever damages they saw fit to compensate them for their injuries.

Writing for the majority, Justice Carol Beier said that a specific legal test the high court used in 2012 to uphold the cap in a medical malpractice case “overlooked long-standing limitations on the Legislature’s power to modify the common law; overestimated the persuasive force of prior Kansas cases; and shortcut the necessary cost-benefit evaluation necessary when examining whether to keep or jettison originally erroneous precedent.”

Justice Caleb Stegall largely agreed with the majority opinion, calling it a “difficult constitutional call.”

Justices Marla Luckert and Dan Biles dissented, writing in a joint opinion that laws and regulations requiring the cap and motor carrier liability insurance were “reasonably necessary in the public interest to promote the public welfare” and that legislators had provided an adequate alternative remedy for Hilburn.

Chief Justice Lawton Nuss did not participate in the decision.

Thomas Warner, the Wichita personal injury attorney who represented Hilburn, said she “is very happy” with the ruling.

“It was never about the money in this case. It was always about the constitutional right,” he said.

The attorney for Enerpipe was not immediately available for comment on the court’s decision.

The ruling stands to change of personal injury litigation in Kansas. It’s too early to tell how lawmakers might respond to the high court’s decision or how plaintiffs’ attorneys might use it to challenge similar caps in medical malpractice cases.

State law currently forbids the court from telling jurors about the cap on noneconomic damages and instructs the judge to decrease awards above it.

Wichita personal injury attorney Blake Shuart called Friday’s decision a “long overdue” ruling that helps “restore fairness in the court system.”

“This opinion places important decisions back in the hands of Kansas juries, where they belong,” he said.

Dan Murray, state director of the National Federal of Independent Business, a small business advocacy organization, was disappointed by the ruling.

“Small businesses are especially vulnerable to bogus and abusive litigation,” he said in a prepared statement. “One overzealous jury award could be enough to put a small business out of business.”

Kansas Chamber of Commerce President and CEO Alan Cobb agreed.

“For Kansas businesses, this creates great uncertainty and could force them to close their doors and lay off employees because of one frivolous lawsuit. The economic domino effect of that would be disastrous for Kansas families and their communities,” Cobb said in a prepared statement.

“This decision also puts Kansas at a competitive disadvantage with states who do limit noneconomic damages. On behalf of its members and tens of thousands of employees, the Kansas Chamber calls on the Kansas Legislature to not let this decision stand unchallenged. To do so, would once again be ceding its responsibilities to another state branch of government.”

Sen. Rick Wilborn, R-McPherson and chair of the Senate Judiciary Committee, said it was too early to predict how the legislature might respond to the court’s decision.

“Those caps were put on years ago to control costs in the insurance arena, to put some predictability back in insurance rates,” Wilborn said. “And any time you add to loss cost, you can anticipate in time as the awards mount, that insurance rates will increase. It’s that simple.”

Wilborn said plaintiffs could still recover whatever juries awarded in economic damages.

“There’s still economic damages that are awarded based on fact and based on actual damages,” Wilborn said. “To say there’s a cap on the whole thing is false. It’s purely on noneconomic damages and it helps mitigate runaway juries and it still doesn’t impact the other part of the award.”