Wednesday, January 26, 2011

State of the Union: Nobody’s Perfect

On Monday I wrote about the Wikileaks controversy and the conditions of Pfc. Bradley Manning’s confinement. Despite criticizing the government (and, implicitly, the Obama administration) and agreeing with Glenn Greenwald (one of the administration’s harshest critics on the left), I was accused of, among other things, “reflexively defending” Pres. Obama. Note to self: Next time you agree with Glenn Greenwald, try to agree harder.

Sigh.

So I wonder what I’ll be accused of when I criticize Pres. Obama this time. Let’s see what happens …

Now, to people who aren’t in the legal field, this may seem like picking nits; but really, it’s not. Listening to last night’s State of the Union address, the following comment by Pres. Obama struck me as, well, wrong:

The health insurance law we passed last year will slow these rising costs, which is part of the reason that nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year — medical malpractice reform to rein in frivolous lawsuits.

Yeah, that’s right. I said it. The President is wrong to support “medical malpractice reform,” and he’s wrong to suggest that it will “bring down [health care] costs.”

As to the latter point, there’s little debate that proposed medical malpractice “reform” would hardly scratch the surface of the federal budget deficit. In October 2009, the Congressional Budget Office estimated that capping damages in medical malpractice suits would save the federal treasury a whopping $54 billion over ten years, and would reduce the overall cost of health care by 0.5%. When you consider that the federal budget deficit for 2011 alone is projected to reach $1.5 trillion, saving $54 billion over ten years is essentially meaningless. And when you consider that last December’s tax cut compromise added an estimated $4o00 billion to the 2011 deficit – or nearly 7½ times the projected savings from malpractice “reform” over ten years – that $54 billion really is meaningless.

So, no, “medical malpractice reform to rein in frivolous lawsuits” will not “bring down [health care] costs,” as the President said last night. Not in any meaningful way.

But aside from the cost issue, there’s another fundamental reason why the President is wrong to support malpractice “reform” – it’s basically unconstitutional. Or if it’s not, it’s skating on some very thin constitutional ice.

First of all, negligence (and that’s what medical malpractice is: a species of professional negligence) is a creature of state, not federal, law. Add to that the fact that the states, not the federal government, are primarily responsible for testing, licensing and disciplining doctors and other health care providers within their borders, and its plain to see that the federal government’s role in dictating the outcome of medical malpractice cases is and ought to be (you’ll pardon the expression) negligible.

But let’s assume, for the sake of discussion, that Congress’ medical malpractice reform would only apply to cases brought in federal court. There is, as it turns out, a narrow category of malpractice cases that can be brought in federal court because, although malpractice claims arise under state law, the federal courts “have original jurisdiction of all civil actions where the matter in controversy exceeds the sum of $75,000, exclusive of costs, and is between … citizens of different states.” 28 U.S.C. § 1332(a)(1). So, if you are injured by a doctor or hospital in another state, you could sue them in federal court in their state under federal “diversity jurisdiction.” But the percentage of medical malpractice cases filed in federal court is small in relation to the aggregate number of malpractice cases overall; and, more importantly, as to cases filed in federal court there’s this problem:

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

That’s the little known Seventh Amendment to the U.S. Constitution, and it guarantees litigants in federal court the right to a jury trial in “common law” cases like negligence, including medical malpractice. Meaning that if a medical malpractice case is brought in federal court under diversity jurisdiction, the plaintiff has the right to a trial by jury.

So, what does that mean for malpractice “reform”? Well, the function of a jury is to determine the facts of the case; to apply the law, as set out in the court’s jury instructions, to those facts; and then to render a verdict based upon the application of the law to the facts. And if the jury renders a verdict for the plaintiff, its job – the jury’s job – is to determine the amount of damages that will reasonably compensate the plaintiff for the injury he or she suffered. And so, it seems to me, Congress cannot simply enact a statute that circumscribes a federal jury’s power to award damages as it sees fit without violating the Seventh Amendment’s guarantee of the right to trial by jury, because that’s the bread and butter of what juries do.

Which does not mean that a jury’s award of damages cannot be challenged or limited. Judges have the inherent authority to reduce jury awards that “shock the conscience” or bear no reasonable relation to the actual injury suffered by the plaintiff. See, e.g., Norfolk Beverage Co., Inc. v. Kwang Ja Cho, No. 990528 (Va. Sup. Ct. March 3, 2000), slip. op. at pp. 8-9 (.pdf file), quoting Smithey v. Sinclair Refining Co., 203 Va. 142, 146, 122 S.E.2d 872, 875-76 (1961):

“[I] f it appears that the verdict is so excessive as to shock the conscience of the court and to create the impression that the jury has been influenced by passion, corruption or prejudice, or has misconceived or misunderstood the facts or the law, or if the award is so out of proportion to the injuries suffered to suggest that it is not the product of a fair and impartial decision, then it becomes the plain duty of the judge, acting within his legal authority, to correct the injustice.”

See also Jackson v. Magnolia Brokerage Co., 742 F.2d 1305 (11th Cir. 1984) (discussing the “shocks the conscience” standard for judicial review of a federal jury verdict). Moreover, in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003), the Supreme Court held that the Due Process Clause of the Fourteenth Amendment prohibits “grossly excessive or arbitrary” punitive damage awards. But the point is, there is no authority that I’m aware of that enables Congress to override the Seventh Amendment by limiting a federal jury’s power to award what it thinks are appropriate damages in any common law case, including medical malpractice cases.

Unlike most of the provisions of the Bill of Rights, however, the Seventh Amendment does not apply to the states. Minneapolis & St. Louis R.R. Co. v. Bombolis, 241 U.S. 211 (1916). So, does that mean that Congress could enact a statute imposing limits on verdicts rendered by juries in state court cases involving medical malpractice? Well, no, because every state in the union has its own constitutional guarantee of the right to jury trials in common law cases brought in their own courts, and Congress cannot simply override not only state negligence laws but state constitutional rights with a stroke of a pen. In other words, Congress cannot simply enact a law that purports to dictate what state juries can award in state law cases brought in state courts, where those states’ constitutions guarantee the right to trial by jury.

What Congress could do, I suppose, is exercise its authority under the Supremacy Clause and, in effect, usurp the entire field of medical malpractice law, much like it did when it enacted the Employee Retirement Income Security Act of 1974 (“ERISA”). Without going into excruciating detail, ERISA establishes the rules for, among other things, the establishment of employer-sponsored health insurance plans, and in so doing Congress preempted state laws governing lawsuits against insurance companies for denials of health insurance claims. So, if you have health insurance through your employer under ERISA, and your health insurer denies a claim you submit to it, you cannot sue under your state’s law – you can only sue under ERISA.

But that type of preemption, while constitutional, ordinarily occurs when Congress establishes a comprehensive regulatory scheme that essentially occupies the entirety of a particular area of the law. So if Congress wants to take over medical malpractice law in its entirety – to override the existing malpractice laws of all 50 states – it can do so, and in the process it can set limits on the amount of money a jury can award an injured plaintiff. That, however, involves a whole lot more than just putting limits on jury awards; and, more to the point, would trammel one of the few areas where federalism still exists and still makes sense in our legal system.

So, there it is: When the President says that he supports medical malpractice “reform,” he’s just plain wrong.

But as I’ve noted before, this is just a disagreement. It doesn’t mean the President has sold out, or stabbed me in the back, or that he’s “no better than Bush” as many of his liberal critics like to say. It’s just one are where he’s wrong – as compared to the many, many areas where he’s right.

That doesn’t stop me from saying he’s wrong when I’m pretty darned sure he’s wrong. It just means I’m not going to engage in hyperbole or pearl-clutching in the process.

© 2011 David P. von Ebers. All rights reserved.

2 comments:

  1. Okay, there's the legal case against it. I've got two more reasons: 1) It hasn't been shown to work in the several states in which it's been tried (Texas and California are two of them, I think) and 2) it's Clintonian triangulation (co-opting a Republican idea as your own) of a non-working idea (see 1).

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  2. Off topic: thinking about everyone in your area. I am going outside now to try to sculpt away some of the ice from our driveway. I think the tires might be frozen to the ground...

    I think your part of the country received a stronger storm, however...

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