July 10, 2017 – A state appeals court has ruled that Wisconsin's $750,000 cap on noneconomic damages in medical malpractice actions is facially unconstitutional because it imposes illogical burdens on catastrophically injured patients.
In Mayo v. Wisconsin Injured Patients and Families Compensation Fund, 2014AP2812 (July 5, 2017), a three-judge panel explained that the cap denies equal protection to severely injured victims “who have been awarded damages exceeding the cap, yet always allows full damages to the less severely injured malpractice victims.”
Two judges, Judges Joan Kessler and Kitty Brennan of the District I Appeals Court, found the cap facially unconstitutional. One judge, Judge William Brash III, found the cap unconstitutional, but only as-applied to the plaintiff who was injured.
Ascaris Mayo visited a Milwaukee emergency room and a physician diagnosed her with an infection but did not inform her of the infection or send her off with antibiotics, although she met the criteria for Systematic Inflammatory Response Syndrome (SIRS).
The next day, the untreated infection caused a septic infection, which caused organ failure and dry gangrene that required amputation of all extremities.
Mayo and her husband sued Dr. Wyatt Jaffe and others, alleging medical negligence and a failure to provide proper informed consent. She was not informed of the diagnosis or the availability of antibiotics to treat the condition, but was told to see a specialist.
As an initial matter, the court addressed the constitutionality of Wis. Stat. section 893.55(4)(d)1, which sets a $750,000 cap on noneconomic damages in medical malpractice actions. Noneconomic damages compensate for the following: “pain and suffering; humiliation; embarrassment; worry; mental distress; noneconomic effects of disability including loss of enjoyment of the normal activities, benefits and pleasures of life and loss of mental or physical health, well-being or bodily functions; loss of consortium, society and companionship; or loss of love and affection.”
The circuit court ruled that section 893.55(4)(d)1 was unconstitutional as-applied to Mayo and her husband, but did not rule that the statute was facially unconstitutional.
Ultimately, after finding negligence on the part of the doctor and his physician’s assistant, a jury awarded Ascaris Mayo $15 million in noneconomic damages. The jury also awarded her husband $1.5 million for loss of society and companionship.
The Wisconsin Injured Patients and Families Compensation Fund, which provides secondary coverage for medical malpractice claims, moved to reduce the award. The court again ruled that the cap was unconstitutional as-applied to the Mayos.
Both parties appealed, and two judges concluded that the cap is unconstitutional on its face; that it always operates unconstitutionally.
The majority noted that in a 2005 case, the Wisconsin Supreme Court struck down, as facially unconstitutional, a $350,000 cap on noneconomic damages. The supreme court acknowledged several stated goals in enacting the cap – to keep the costs of medical insurance down and keep young doctors in Wisconsin – but ultimately ruled against it.
That is, the supreme court ruled that the legislature had no rational basis for shifting the economic burden from insurance companies and negligent healthcare providers to injured patients.
In response, the legislature increased the cap to $750,000, which was $50,000 more than the award at issue in the 2005 case. Again, the legislature expressly stated its policy reasons for implementing the cap, including to ensure affordable health care.
But like the supreme court, a two-judge majority found no rational basis to conclude that the cap does what the legislature says it is supposed to do.
“Like our supreme court in Ferdon, the record before us does not demonstrate any correlation between medical malpractice premiums and caps on noneconomic damages,” wrote Judge Joan Kessler.
“Ferdon noted that the Wisconsin Insurance Commissioner failed to see a link between noneconomic damages and medical malpractice premiums. Other jurisdictions, and even many medical malpractice insurers, have also failed to establish such a connection.”
As for other stated legislative purposes for the cap, the majority said they do nothing “to establish a rational connection between the limit on noneconomic damages selected and the objectives the legislature cited in support of that limit.”
For instance, the legislature had noted that the cap would protect the financial integrity of the fund but as of 2014, the fund held more than one billion dollars and “has only paid approximately 11% of filed malpractice claims since its inception over 40 years ago.”
Judge William Brash III agreed that the statute is unconstitutional, but only applied to Mayo. “I believe that the legislature has established a reasonable basis for the damages cap statute, and I therefore find it to be facially constitutional,” he wrote.
However, it is unconstitutional in its enforcement against Mayo, Brash noted, in part because it reduces the amount of her award by more than 95 percent.
“This highlights the disparity in applying the cap to a severely injured patient such as Ascaris, as compared to applying the cap in cases where a patient is less severely injured and receives a lower award, but is able to collect the entire amount of the award because it falls under the cap’s limits,” Judge Brash noted.
“The primary goal of the legislature in enacting the cap was to regulate against excessively high or unpredictable damages awards. This is neither. As noted above, there are no arguments that it is excessive or out of proportion with Ascaris’s injuries.”