Medical Malpractice Caps in Illinois Held Unconstitutional

By: Martin Healy, Jr. & Dennis M. Lynch

Two and a half years ago Public Act 94-677 was passed by the Illinois General Assembly and signed by Governor Blagojevich. That Act placed a limit on the amount of non-economic damages (disability, pain and suffering, disfigurement and loss of society) a plaintiff would be permitted to recovery in medical malpractice cases to $500,000 in cases against a physician and $1,000,000 in cases against a hospital. Recently, a Cook County Circuit Court Judge ruled that Act was unconstitutional, because it violated the Separation of Powers Provision of the Illinois Constitution.

At the time the Act was passed but before it was signed, this column featured an article arguing that the Governor should not sign the bill into law because it was unconstitutional, and because it would not solve the problem of increasing insurance premiums on the medical profession.

The Act also included other provisions affecting medical malpractice cases, including changes to expert testimony requirements, changes to how jury verdicts could be paid as well as various insurance reforms. However, the Act was written in such a way that if any provision of the Act was found unconstitutional, the whole Act would be considered invalid.

THE ARGUMENTS IN SUPPORT OF THE CAPS

Those in support of the caps assert that by placing limits on the amount of non-economic damages a jury could award, there would be a reduction in insurance premiums a physician or hospital had to pay. If insurance premiums are reduced, the cost of healthcare to patients and their families would be reduced as well. Additionally, the supporters argue that in some, particularly rural, areas of the state where insurance premiums were high, some physicians would not be able to keep their practices open.

Also, it was argued that the caps are reasonable and still allow patients to receive some compensation for their injuries.

THE ARGUMENTS AGAINST CAPS

Those against the caps argue that the caps are not reasonable considering that in some cases there can be a lifetime of extreme disability and pain and suffering. Opponents of the caps also argue that the provision violated the Illinois Constitution's separation of powers provision, the provision forbidding special legislation as well as the right to a trial by jury, the right to due process of law and the right to equal protection under the laws. Essentially, critics of the caps point out that a cap takes away the power of the jury to decide what is fair and reasonable compensation. Instead, if a jury awards more than $500,000 in non-economic damages, that figure would be reduced.

Also, opponents of the caps note that the Act constituted impermissible special legislation. The Illinois Constitution forbids a special law to be passed when a general law can be passed instead. In other words, one group of people cannot receive special treatment or a special benefit to the exclusion of others. Here, doctors and hospitals were given the benefit of a cap on non-economic damages even though other groups of individual or corporate defendants did not receive such a benefit.

THE TRIAL COURT'S DECISION

After hearing extensive arguments from supporters and critics of the Act, the Court found that the cap on non-economic damages was unconstitutional. The Court found that the Act violated the Separation of Powers Clause of the Illinois Constitution because it acts as a legislative remittitur (the right of a judge to lower an unreasonably high verdict) and infringes on the roles of judges in jury trials. The law gives a judge who presides over a trial the right to reduce a damage award from a jury if it amounts to more than fair and reasonable compensation. Thus, the power to reduce a jury verdict is vested in the judiciary on a case by case basis, and not in the legislature to reduce all verdicts over $500,000, irrespective of whether they are unreasonably high or not.

By arbitrarily setting a limit on the amount of damages, the legislature has not only substituted its judgment for that of the jury but it has also substituted its judgment for that of the trial judge. Since the legislation would create a conflict between the judiciary and the legislature, the Court found the Act unconstitutional.

In its decision, the Court noted that twice before the Illinois Supreme Court had struck down legislation which would cap non-economic damages. In 1976 and again in 1997 the Illinois Supreme Court was asked to review legislation which capped non-economic damage awards in medical malpractice cases and in other types of cases, and decided the acts were unconstitutional as violating separation of powers. The Circuit Court further noted that based on those decisions, it could not uphold a cap on non-economic damages, no matter what the circumstances.

Although the Act was challenged on many grounds and contained other provisions, the Circuit Court only ruled on the issue of separation of powers as it related to the damage cap. The Court decided that since the whole Act became invalid as a result of that ruling, it was unnecessary to consider any of the other challenges, or any other provision of the Act.

THE IMPACT OF THE RULING

The ruling by the Circuit Court is really the first step in the judicial process. Since the Circuit Court found a statute unconstitutional, there will be a direct appeal to the Supreme Court of Illinois. There, the Court will independently review the Act.

Even before the Act was declared unconstitutional, or, for that matter, before the Act was passed, there was a dramatic change in medical malpractice litigation. Years ago the Bush Administration began a public attack on trial lawyers. Large corporate and insurance lobbies spent millions advocating restrictions on the rights of malpractice victims. These actions had an effect on juries long before any act restricting victims' rights was passed. The number of verdicts for the plaintiff decreased and the number of complaint filings decreased.

During the last five years, the number of large verdicts (over $5 million) in medical malpractice cases has declined and the percentage of plaintiff's wins has also declined. Recently, the percentage of medical malpractice cases won by the plaintiff dropped to about 29%, winning less than three out of ten cases. A positive note, however, for victims of malpractice is that the numbers seem to leveling off. Recent credible reports indicating the large number who die in hospitals because of medical errors, and the very large number injured because of drug administration errors add new insights to the issue.

It will be some time before the Supreme Court acts, due to the complexity of the case and the number of parties. When the Supreme Court makes a decision, only then will we know for certain whether legislative caps on malpractice recoveries will exist in Illinois under this Act.