Wisconsin Court’s Foolish Inconsistency on Medical Malpractice

Published July 20, 2006

“A foolish consistency is the hobgoblin of little minds,” as Ralph Waldo Emerson famously wrote. But what about foolish inconsistencies?

Much has been written about the battles that have been going on in the past year between the Wisconsin state legislature and the four-judge liberal majority of the Wisconsin Supreme Court–and even within the court itself–over caps on medical malpractice non-economic damages (such as pain and suffering and loss of consortium).

Until last year, the court was controlled by conservatives. Due to a change in the membership of the court, it is now controlled by liberals. The result has been inconsistency and uncertainty, a situation compounded by the court recently.

In 1995, for example, the legislature capped non-economic damages for patients who survive medical malpractice incidents at $350,000, as adjusted for inflation. On July 14, 2005, however, the court’s liberal majority held that cap unconstitutional, enabling juries to award non-economic damages to surviving patients and their families in unlimited amounts. It is unclear whether this decision applies only to cases filed after that date, or also to cases pending as of that date, or even retroactively so that cases already closed or settled can be reopened and damages awards increased. These issues will have to be determined by the court in the future.

The legislature responded to the court’s July 2005 decision by enacting a bill this year capping non-economic damages for surviving patients and their families at $750,000. Gov. Jim Doyle signed that law on March 22, 2006. The bill specifically applies only to incidents of medical malpractice occurring after that date, not to cases now pending or previously resolved. It is likely the court in the future will be asked to determine whether this $750,000 cap, too, is unconstitutional. If the court so holds, it will again have to determine whether its potential ruling applies to past or future cases.

The most recent decision by the court’s liberals, in July 2006, concerned legislative caps for non-economic damages in medical malpractice cases brought by the estates and families of patients who do not survive medical malpractice incidents. The legislature had capped such damages at $350,000 ($500,000 in the case of a minor child). In 2004, the conservative majority of the court held this amount could not be “stacked”–in other words, that damages recoverable by the estate and a second claim by the surviving spouse for wrongful death were cumulatively limited to $350,000 in total. The liberal majority of the court, however, in July 2006 overruled the 2004 decision, holding the damages could in fact be “stacked” for a total of $700,000. Again it is unclear what cases will be affected by the new ruling.

And although the court’s recent decision did not address whether the $350,000/$500,000 caps are constitutional (because the plaintiff did not raise this issue), it hinted they might be. The court noted it very well may be irrational and thus unconstitutional that a surviving victim’s non-economic damages are uncapped while a non-surviving victim’s damages are capped. But it did not expressly make this ruling.

The court denied the change in its composition had anything to do with this decision. According to the three dissenting judges, however, the recent ruling is a classic case of judicial activism; they noted, in part, that the majority opinion “is based on its own policy choice about what is best for Wisconsin, rather than giving deference to the acts of the legislature that created an occurrence-based classification for all noneconomic damages that result from medical malpractice.”

This summary of the current inconsistent state of non-economic damages caps law is, believe it or not, grossly oversimplified. Even now, medical malpractice lawyers are pondering the significance of further details in the law which only they would find of interest … especially if they are being paid for their pondering by the hour.

And that’s precisely the point. When the state of the law is uncertain, everyone suffers. This is true especially for medical malpractice insurers, whose legal fee defense costs will increase. And insurers will have difficulty determining what reserves to establish to pay claims when they are not sure whether non-economic damages are now or will be capped or uncapped. Prudence would dictate the highest possible reserves be established. That, in turn, will increase medical malpractice premiums, driving physicians out of Wisconsin and driving health care costs up.

A foolish inconsistency.

Maureen Martin ([email protected]), an attorney, is senior fellow for legal affairs at The Heartland Institute, a nonprofit organization that promotes free-market solutions to social and economic problems.