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[Opinion]

ALL-DAMAGES CAP ON HEALTH CARE LIABILITY WRONGFUL DEATH AND SURVIVAL CLAIMS

POINT: THE CAP IS UNCONSTITUTIONAL
By Gavin McInnis


In 2003, when the Texas Legislature enacted chapter 74 of the Texas Civil Practice and Remedies Code, it imposed caps on noneconomic damages in all health care liability claims.1 It also imposed caps on “all damages, including exemplary damages,” in wrongful death or survival actions on health care liability claims.2 This death cap includes economic damages, except for “expenses of necessary medical, hospital, and custodial care.”3 To ensure that the damage caps would withstand judicial scrutiny on constitutional grounds, the Legislature also put Proposition 12 on the ballot,4 asking Texas voters to approve a “constitutional amendment concerning civil lawsuits against doctors and health care providers, and other actions, authorizing the legislature to determine limitations on non-economic damages.”5 By doing so, state lawmakers ultimately rendered the “all damages” cap in wrongful death and survival actions unconstitutional to the extent it applies to economic damages. In effect, the Legislature was “hoisted by its own petard.”6

Before Chapter 74 and Proposition 12
The Texas Supreme Court in 1988 determined that the statutory damage limitations contained in sections 11.02 and 11.03 of article 4590i (the Medical Liability and Insurance Improvement Act of Texas)7 were unconstitutional when applied to damages in common law medical malpractice actions (health care liability claims).8 However, the court determined in 1990 in Rose v. Doctors Hosp.9 that because a wrongful death cause of action is “conferred by statute, not by the common law, ... the open courts provision [of the Texas Constitution] does not apply to [a] wrongful death claim,” and it upheld the damage caps under sections 11.02 and 11.03 in a statutory wrongful death health care liability case.10 In 2000, the holding in Rose was extended to statutory survival health care liability claims in Horizon/CMS Healthcare Corp. v. Auld.11

Sections 11.02 and 11.03 of article 4590i and Rose and Auld were the law on the issue of damage caps in statutory wrongful death and survival health care liability cases in Texas until 2003.

Section 74.303(a) and Proposition 12
In 2003, the 78th Legislature repealed article 4590i.12 In its stead, the legislators enacted chapter 74 of the Texas Civil Practice and Remedies Code.13 Section 74.303(a) provides that in a wrongful death or survival action on a health care liability claim, “the limit of civil liability for all damages, including exemplary damages, shall be limited to an amount not to exceed $500,000 for each claimant. ...”14 While, on its face, section 74.303(a) places a limit on “all damages” in wrongful death and survival actions as deemed permissible by Rose and Auld, Texas voters clearly determined that any such limitation on damages by the Legislature cannot include a limitation on “economic damages.”

In September 2003, Texas voters adopted Proposition 12, adding section 66 to article III of the Texas Constitution, which reads in relevant part:

Sec. 66. (a) In this section “economic damages” means compensatory damages for any pecuniary loss or damage. The term does not include any loss or damage, however characterized, for past, present, and future physical pain and suffering, mental anguish and suffering, loss of consortium, loss of companionship and society, disfigurement, or physical impairment.

(b) Notwithstanding any other provision of this constitution, the legislature by statute may determine the limit of liability for all damages and losses, however characterized, other than economic damages, of a provider of medical or health care with respect to treatment, lack of treatment, or other claimed departure from an accepted standard of medical or health care or safety, however characterized, that is or is claimed to be a cause of, or that contributes or is claimed to contribute to, disease, injury, or death of a person. This subsection applies without regard to whether the claim or cause of action arises under or is derived from common law, a statute, or other law, including any claim or cause of action based or sounding in tort, contract, or any other theory or any combination of theories of liability. The claim or cause of action includes a medical or health care liability claim as defined by the legislature.

(d) ... this section applies to a law enacted by the 78th Legislature, Regular Session, 2003, and to all subsequent regular or special sessions of the legislature.15

In construing section 66, courts must be mindful that “the fundamental rule for the government of courts in the interpretation or construction of a Constitution is to give effect to the intent of the people who adopted it.”16 “Where its terms are plain and definite, that which the words declare is the meaning of the instrument. In such cases there is no room for construction; the words of the instrument lie before the court already molded to their use, and its province extends no further than the enforcement of the language as written.”17 Thus, when interpreting the state constitution, courts must “rely heavily on its literal text and give effect to its plain language.”18

The literal text and plain language of section 66 establishes the unequivocal intent of Texas voters to authorize the Legislature to limit damages and losses, other than economic damages, in a health care liability claim.19 The fact that the amendment expressly states that it applies to statutory claims or causes of action and to death claims necessarily means that the holdings in Rose and Auld that excused the article 4590i damage caps from constitutional scrutiny in statutory wrongful death and survival cases are no longer applicable. Finally, the fact that the amendment specifies that it applies to any laws enacted by the 78th Legislature demonstrates the intent of Texas voters that the constitutional prohibition against limits on economic damages applies to the provisions of chapter 74.

“Where a power is expressly given and the means by which, or the manner in which, it is to be exercised is prescribed, such means or manner is exclusive of all others.”20 The language of section 66 grants the Legislature the power to limit damages in a “health care liability claim” “sounding in tort” that involves the “death of a person” and which “arises under or is derived from ... a statute,” and it prescribes the exclusive manner in which those damages can be limited, e.g., by a statute that determines “the limit of liability for all damages and losses, however characterized, other than economic damages.”21 In other words, the voters of Texas clearly and unambiguously determined that economic damages cannot be limited by the Legislature in a statutory wrongful death or survival health care liability claim. Thus, to the extent that the damage limitation contained in section 74.303(a) of the Texas Civil Practice and Remedies Code places a limit on economic damages, section 74.303(a) is inconsistent with and violative of article III, section 66 of the Texas Constitution.22

Implications for Wrongful Death Plaintiffs
Invariably, defense counsel and insurance carriers take the position in health care liability wrongful death actions that compensatory damages for pecuniary loss—such as loss of care, maintenance, support, services, advice, counsel, and reasonable contributions of a pecuniary value23—fall within the section 74.303(a) “all damages” death cap. These compensatory damages, however, are, by constitutional definition, “economic damages”24 that cannot be capped.

Thus, in a wrongful death health care liability case where the decedent had a significant earning capacity, the plaintiff’s counsel should not write off the surviving family’s multi-million dollar pecuniary loss of support and any other pecuniary damages to the death cap. Instead, defense counsel and the insurance carrier should be reminded that Texas voters expressed their will that such pecuniary loss cannot be capped. If nothing else, this will give defense counsel and the carrier pause during settlement negotiations as they evaluate the very real risk of uncapped economic damages they face if the case proceeds to trial.

As of the date of this article, the author has located no Texas appellate case that discusses the interplay between the constitutional prohibition of caps on economic damages and the “all damages” death cap contained in section 74.303(a).

Article III, section 66 is the classic example of application of the old adage, “Be careful what you ask for, lest it come true.” The Legislature wanted Texas voters to allow it to cap noneconomic damages and that is precisely what they allowed it to do, while also making it absolutely clear that economic damages cannot be limited.TBJ

Notes

1. Tex. Civ. Prac. & Rem. Code § 74.301.

2. Tex. Civ. Prac. & Rem. Code § 74.303(a).

3. Tex. Civ. Prac. & Rem. Code § 74.303(c).

4. Ballot Language for the September 13, 2003 Constitutional Amendment Election, http://www.sos.state.tx.us/elections/voter/2003sepconsamend.shtml.

5. Tex. H.J.R. Res. 3, 78th Leg., R.S. (2003).

6. “Injured by the device that you intended to use to injure others.” http://www.phrases.org.uk/meanings/hoist-by-your-own-petard.html.

7. Tex. Rev. Civ. Stats. Ann. art. 4590i (Vernon Supp. 1987).

8. Lucas v. United States, 757 S.W.2d 687, 692 (Tex. 1988).

9. 801 S.W.2d 841 (Tex. 1990).

10. Id. at 845.

11. 34 S.W.3d 887, 902 (Tex. 2000).

12. See Act of June 2, 2003, 78th Leg., R.S., ch. 204, § 10.09, 2003 Tex. Gen. Sess. Laws 884.

13. See Tex. Civ. Prac. & Rem. Code § 74.001 et seq.

14. Tex. Civ. Prac. & Rem. Code § 74.303(a). Section 74.303(b) provides that the amount set forth in section 74.303(a) shall be increased “by a sum equal to the amount of such limit multiplied by the percentage increase or decrease in the consumer price index [between August 29, 1977, and the final judgment], as published by the U.S. Bureau of Labor Statistics of the U.S. Department of Labor, that measures the average changes in prices of goods and services purchased by urban wage earners and clerical workers’ families and single workers living alone. ...”

15. Tex. Const. art. III, § 66(a), (b), and (d) (emphasis added).

16. Cox v. Robison, 150 S.W. 1149, 105 Tex. 426, 1151 (Tex. 1912).

17. Id.

18. Patton v. Porterfield, 411 S.W.3d 147, 156 (Tex. App.—Dallas 2013, pet. denied) quoting Stringer v. Cendant Mortg. Corp., 23 S.W.3d 353, 355 (Tex. 2000).

19. Tex. Const. art. III, § 66(b). See Prabhakar v. Fritzgerald, 2012 WL 3667400, at *11 (Tex. App.—Dallas 2012, no pet.)(“The plain language of the constitutional amendment evidenced an intent of the voters of Texas to authorize the legislature to limit noneconomic damages. ...”)

20. Ferguson v. Wilcox, 119 Tex. 280, 28 S.W.2d 526, 532 (1930).

21. See Tex. Const. art. III, § 66(b).

22. Compare Lucas, 757 S.W.2d at 692 (holding that the damage limitations in sections 11.02 and 11.03 of article 4590i when applied to common law medical practice claims were inconsistent with and violative of article I, section 13 of the Texas Constitution and unenforceable).

23. See Texas Pattern Jury Charge 81.3 (“‘Pecuniary Loss’ means the loss of the care, maintenance, support, services, advice, counsel, and contributions of a pecuniary value, that [the plaintiff], in reasonable probability, would have received from [the decedent] had he lived.”)

24. Tex. Const. art. III, § 66(a) (“‘economic damages’ means compensatory damages for any pecuniary loss or damage”).

Gavin McIInis

GAVIN McINNIS is an attorney with the Wyatt Law Firm in San Antonio and represents plaintiffs in traumatic personal injury cases. McInnis handles the firm’s appellate work, as well as any complex legal arguments in trial courts. He is a member of the Texas Trial Lawyers Association and a fellow of the Texas Bar Foundation.

The views expressed in this article are those of the author and do not necessarily represent the policy, position, or views of, and should not be attributed to, the State Bar of Texas.

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