Fla. Justices Could Chill Doc Malpractice Suits, Attys Fear
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Law360, Miami (June 7, 2016, 2:13 PM ET) -- Medical malpractice cases coming before the Florida Supreme Court on Thursday could transform the landscape for such litigation in the state by cementing lawmakers' power to cap attorneys' fee awards in cases against public facilities, which patient attorneys contend would slash citizens' access to court.

The state's high court will hear oral arguments in two high-profile cases debating the constitutionality of statutes that allow a claims bill to limit an attorneys' fee award and that cap noneconomic damages in medical malpractice cases.

In the fee award case, plaintiffs firm Searcy Denney Scarola Barnhart & Shipley PA is fighting for the $3.75 million in attorneys' fees the firm says it's owed for work representing the family of Aaron Edwards, who has cerebral palsy after a birth accident in 1997, in a malpractice suit against Lee Memorial Hospital.

A jury awarded the family $31 million in 2007, but because Lee Memorial is a public hospital, it was liable for just $200,000 under the sovereign immunity damage limitations in state law. After a public campaign to get the family more money, the state Legislature passed a claims bill directing the hospital to pay $15 million into a trust for Edwards that limited the attorneys' fee award to $100,000.

Florida's Fourth District Court of Appeal last year ruled that the claims bill was constitutional, butasked the state's highest court to weigh in on the case.

For plaintiffs attorneys, the Legislature's actions and the Fourth District's ruling, if upheld, could make them think twice before taking on malpractice cases against public facilities that could be considered arms of the state, according to Jessie Harrell of Creed & Gowdy, who authored an amicus brief backing Searcy Denney for the Florida Justice Association.

And that hesitation on the part of attorneys could make it difficult for the average citizen to find an attorney, particularly those who are seriously injured, she said. Attorneys won't be willing to take on those difficult cases — which involve paying tens of thousands of dollars to experts and investing countless hours — if the odds of getting paid at the end are so slim.

"What we're saying is that Florida citizens have a constitutional right to access the court system, and if the Legislature is allowed to rewrite the contract that citizens have entered with their attorneys, no attorneys are going to be able to take the case," Harrell said. "It's unconstitutional to allow the Legislature to put in this limitation."

But the state, in its own brief, said private parties cannot contractually bind the Legislature in the exercise of its power over claims bills. The state noted that the contingent fee contract in the Edwards case included a clause stating that if a defendant is entitled to sovereign immunity, the fee amount could be limited by law. The state said that is exactly what happened.

The Florida Legislature, in its own amicus brief, said that neither the Edwards family nor their attorneys have a legal entitlement to funds over $200,000. The Legislature noted that on average only 25 percent of claims bills get passed each year.

"When the Legislature, in an act of grace, authorizes payment to compensate a claimant or claimants, it has a duty to be mindful of the funds of the state and its instrumentalities and the available resources necessary to meet its obligations," the Legislature said.

On Thursday, the high court will also hear the challenge to the statutory noneconomic damages cap stemming from the case of Susan Kalitan, who had outpatient surgery in 2007 in the North Broward Hospital District to treat carpal tunnel syndrome. The surgery required general anesthesia, and during intubation, her esophagus was perforated.

She complained of excruciating pain in her chest and back but was sent home with pain relief drugs. When a neighbor found her unresponsive the next day, she was rushed into surgery and kept in a drug-induced coma for several weeks. She had to undergo intensive therapy to be able to eat again and to regain mobility.

A jury found in her favor and awarded $4,718,011 in total damages, including noneconomic damages of $2 million for past pain and suffering and $2 million for future pain and suffering, according to the opinion. The trial judge reduced the noneconomic damages by close to $2 million because of the statutory cap and cut the damages by another $1.3 million, as the hospital's share of the liability was capped at $100,000 because of its status as a sovereign entity.

The Fourth District declared the statute unconstitutional, applying the same test the Florida Supreme Court used in Estate of McCall v. United States, in which the court concluded that the cap on noneconomic damages for medical malpractice cases does not pass the rational basis test because it arbitrarily reduces medical malpractice claimants' rights to full compensation when there are multiple claimants.

But the state and tort reform groups said the appeals court misinterpreted the McCall decision and expanded it to such an extent that any other caps could be struck down.

"The personal injury medical malpractice noneconomic damages caps are not the only caps in jeopardy," the Florida Justice Reform Institute and the Florida Hospital Association said in an amicus brief. "Indeed, other essential damages caps in Florida law would be subject to constitutional challenges should this court affirm the erroneous analysis of Kalitan."

William Large of the Florida Justice Reform Institute said statutory caps on noneconomic damages help restore some predictability to damage awards, which ultimately benefits consumers who would otherwise have increased health care costs.

The cap was passed in 2003 as part of a legislative package intending to alleviate a medical malpractice insurance crisis in the state. According to Holland & Knight LLP's Mark Delegal, who helped author the amicus brief with Large, malpractice insurance rates were increasing about 25 percent a year at that point. By 2006, they had started to come down.

He pointed out that the damages cap isn't the only thing that drove rates down — California, which had implemented tort reform in 1976 but changed nothing since then, and New Jersey, which has no damages caps whatsoever — also saw decreases in medical malpractice activity and lower rates.

"The caps are a contributing factor for reduced frequency in the number of lawsuits against medical providers," Delegal said. "It's not the only factor, but it is a contributing factor."

Kalitan is urging the high court to reject the hospital's argument that the McCall decision applies only to multiple claimant cases and argues that the caps do not bear a rational relationship with the stated objective of reducing malpractice premiums.

The majority in McCall also held "that even if the alleged medical malpractice crisis ever existed, it no longer does," Kalitan said. "This reasoning by a majority of this court applies to make the caps unconstitutional whether there is a single claimant or multiple claimants."

She argues that the caps also are unconstitutional because they limit access to the courts and violate the right to trial by jury, because caps applied to a verdict deprive the plaintiff of the damages awarded by the jury.

Searcy Denney is represented by Christian D. Searcy and Jack P. Hill of Searcy Denney Scarola Barnhart & Shipley PA, George A. Vaka of Vaka Law Group PL, and Edna L. Caruso PA.

Florida is represented by Rachel Nordby of the Florida Attorney General's Office.

Kalitan is represented by Crane A. Johnstone and Scott P. Schlesinger of Schlesinger Law Offices PA and Philip M. Burlington and Nichole J. Segal of Burlington & Rockenbach PA.

North Broward Hospital is represented by Thomas Heath of Heath & Carcioppolo Chtd. and Thomas A. Valdez and Jeffrey R. Creasman of Quintairos Prieto Wood & Boyer PA.

The cases are Searcy Denney Scarola Barnhart & Shipley PA et al. v. State of Florida, case number SC15-1747, and North Broward Hospital District et al. v. Kalitan et al., case number SC15-1858, in the Supreme Court of Florida.

--Editing by Katherine Rautenberg and Kelly Duncan.

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