Last month, the Missouri
Supreme Court threw out the state legislature’s limits on punitive damages,
saying they don’t apply to a $1 million verdict a jury awarded to Lillian
Lewellen. Lewellen received the judgment in 2012 after she was defrauded by a
car dealer.
After a jury ordered the
defendant to pay Lewellen $1 million in punitive damages, a judge cut the
judgment in half, citing a state law that capped some punitive damage awards at
$500,000.
The Supreme Court restored the
judgment because Lewellen had filed her claim as a common law fraud, which has
existed in Missouri since the first state constitution was written. Because of
that, the legislature cannot limit a jury’s ability to set punitive damage
amounts, the court ruled in a unanimous decision.
Punitive damage caps remain in
place for causes of action created by the Missouri legislature, such as human
rights cases and awards for some deceptive merchandising practices.
In other tort reform news, a
story by The Los Angeles Times, reported
on a new study led by Michael B. Rothberg of the Cleveland Clinic and published
in the Journal of the American Medical Association, aimed to measure how much
defensive medicine there is, and how much it costs.
The researchers' conclusion is
that defensive medicine accounts for about 2.9% of healthcare spending. In
other words, out of the estimated $2.7-trillion U.S. healthcare bill, defensive
medicine accounts for $78 billion.
The minimal impact of defensive
medicine on healthcare costs demonstrates the injustice of the stringent limits
on malpractice lawsuits advocated by doctors and insurance companies.
"Pain-and-suffering" or
“mental anguish” damage caps and other stratagems to discourage malpractice
lawsuits benefit mostly insurers. Their impact falls disproportionately on
women and families with infants, because their economic damages, which remain
subject to jury awards, are hard to estimate and typically underestimated.
As for "frivolous
lawsuits," defined as cases that should never have been brought at all,
they are a lot rarer than most tort reform advocates admit. Studies have
documented that the vast majority of them don't yield a payment to the
plaintiff. The converse is a bigger problem -- genuinely injured patients who cannot
get redress because the courthouse doors have been shut to them. The victims
there are often lower-income or unemployed patients.
