Tort Reform on Trial: Houston Case Challenges Noneconomic Damage Cap
By Joey Berlin Texas Medicine June 2020

Without the cap, what is tort reform, exactly?

Texas physicians hope they won’t have to answer that question. But a couple that won a 2019 negligence lawsuit is taking aim at the centerpiece of the state’s 2003 medical liability reforms: the $250,000 cap on noneconomic damages.

 During the 2003 debates, the Texas Medical Association helped lawmakers settle on that number as a fair figure for compensating injured patients and keeping physicians out of bankruptcy – or from leaving Texas. Access to care in Texas has vastly improved since the law passed. (See “Coming of Age,” September 2018 Texas Medicine, pages 14-21, www.texmed.org/comingofage.)

But in Joplin v. Leggett, a patient and his wife are claiming the limit violates their right to a jury trial under the U.S. Constitution. More than $13 million is at stake in the lawsuit – and collectively much more for Texas physicians who face future negligence suits.

In April, a Harris County judge rejected that argument and upheld the noneconomic cap. But the Texas Alliance for Patient Access (TAPA), which helps represent the physician in the case, told Texas Medicine it expects the court challenge to continue: The plaintiffs’ legal team includes a Washington, D.C.-based attorney who has successfully worked to overturn caps in several other states.

Austin internist Howard Marcus, MD, chair of TAPA’s board, says if the noneconomic damage cap disappears, “that would be a big problem, because it would create the same situation we had before.” He’s referring to the pre-2003 days when negligence awards were unlimited, trial attorneys had a field day, and physicians found liability coverage hard to afford or even come by.

“No insurance system can manage the probability of runaway noneconomic judgments such as is illustrated in Joplin v. Leggett,” Dr. Marcus said. “If you’re going to need to cover the possibility of infinite judgments, you need infinite premiums.”

Albert Gros, MD, a past chair of TMA’s Council on Legislation and retired Austin obstetrician-gynecologist, remembers those days well, too. TMA, which has defended tort reform in prior court challenges, is monitoring the case.

Removing the cap “would really, greatly weaken the effectiveness of the tort reform legislation. That is probably the lynchpin of the whole package,” he said. “No one argues that plaintiffs should be entitled to economic damages if there is a finding against the defendant. But the whole cause of the problem back in the early 2000s was the idea that there could be some runaway verdicts grossly out of proportion to the magnitude of the damage.”

 Attorney General Ken Paxton also weighed in on the case in defense of the cap.

Constitutional challenge

Texas’ tort reform came into being not only as a result of state legislation, but also a voter-approved constitutional amendment that ratified the Texas Legislature’s right to establish the noneconomic damage cap. The $250,000 limit has survived earlier court challenges at both the state and federal levels.

In this case, Bryan Joplin and his wife, Janice, sued Phillip Leggett, MD, for alleged negligence over complications following a surgery he performed on Mr. Joplin at Houston Northwest Hospital in August 2013. A Harris County jury awarded the Joplins $11.68 million in November 2019, all but about $333,000 of it in noneconomic damages. Interest brings the total award to more than $13.3 million.

Typically, after the jury makes its finding, the judge adjusts the noneconomic portion of that award down to the $250,000 cap, plus any interest that applies. But the Joplins asked the court for a final judgment with unlimited noneconomic damages, claiming that Texas’ cap violated the Seventh Amendment of the U.S. Constitution.

For those who don’t remember their school lessons on the Bill of Rights, the Seventh Amendment preserves the right of trial by jury, saying “no fact tried by a jury shall otherwise be reexamined” in court.

The Joplins argued the Seventh Amendment should apply to the states through the 14th Amendment of the Constitution, which says in part that “[n]o state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States.”

“Even though the Texas Constitution authorizes the state legislature to set limitations on liability for health care providers … the Constitution of the United States stands as the ‘supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding,’” the Joplins’ court filings say, quoting the Constitution.

They claim the Seventh Amendment’s “right to a jury trial preserves the jury’s role as the judges of damages as it existed under the common law, and … legislated caps that diminish that constitutionally consecrated responsibility, such as the ones at issue here, must be held null and void.”

In other words, changing a jury verdict by applying the noneconomic damages cap violates the Joplins’ constitutional rights.

Dr. Leggett’s court filings say the U.S. Supreme Court already decided that the Seventh Amendment doesn’t apply to state court cases. Even if it did, Dr. Leggett’s side contended, applying the damage cap doesn’t violate someone’s right to a trial by jury.

The Harris County court’s “application of the … cap after the jury’s verdict does not reexamine the jury’s fact findings on damages, but merely applies the legislature’s prior determination that a physician, like Dr. Leggett, is limited in civil liability to $250,000 for noneconomic damages awarded to a claimant, like the Joplins, in a health care liability claim,” the physician’s court documents say. “As the United States Supreme Court has instructed, causes of action may be legislatively and constitutionally taken away, so there is nothing unconstitutional about the legislature, rather than the Court, limiting or completely removing remedies” in a case.

In the state’s brief, Attorney General Paxton and other officials pointed out that four federal appeals courts have found that noneconomic damage caps in medical negligence cases don’t violate the Seventh Amendment.

“The argument that damages caps abolish the right to a jury has been consistently rejected because by imposing damages caps, the state legislatures did not eliminate the jury’s fact-finding role but only limited the available [damages] based upon the jury’s finding,” the state wrote. “Caps do not require the judge to substitute her judgment for the jury’s. The judge is merely applying the law to the facts as found.”

Court upholds cap

In April, the Harris County district court ruled in favor of Dr. Leggett, applying the cap so that the final judgment would include only $250,000 in noneconomic damages.

Finding that the cap doesn’t violate the Seventh Amendment, Judge Tanya Garrison wrote that the court “did not lightly reach this conclusion.” She too said “ample federal cases” had upheld caps that were similar, if not identical, to Texas’ cap against a Seventh Amendment-based challenge.

“Those cases, almost unanimously, hold that damage caps do not violate the right to trial by jury,” Judge Garrison wrote.

A TAPA attorney representing Dr. Leggett declined to comment for this story in April because Judge Garrison’s decision hadn’t yet been finalized.

Attorneys for the Joplins did not return messages from Texas Medicine. The Joplins’ legal team includes Washington, D.C. attorney Robert Peck, president and founder of the Center for Constitutional Litigation, who during his career has successfully overturned tort reform legislation in several states, including Florida, Illinois, and Ohio.

The recently retired OB-Gyn Dr. Gros says overturning Texas’ $250,000 cap “would definitely gut” the tort reform law.

He recalls that for specialties like his, liability insurance rates pre-tort reform made it “an economic impossibility” to sustain a practice. A TMA physician survey, which backs up his recollections, played a key role in passing the reforms. The 2003 survey found that liability pressures caused half of Texas physicians to stop providing certain services over the previous two years, and 62% had started denying or referring high-risk cases.

“We did have a number of physicians change their modes of practice. We had a number of physicians that would restrict the types of patients and cases they would take. We would have physicians that would modify their practice patterns because of the threat of malpractice litigation. [We’ve seen] that physicians have benefited greatly by being able to [not] have to worry so much about the extreme costs and risks involved with these high-risk practice environments.”

Undoing the cap and its benefits, he warned, “would be to the detriment of all medical consumers.”