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Posted by Kirsten Daughdril

In a landmark decision, the Georgia Supreme Court unanimously held that a statutory cap on non-economic damages in medical malpractice cases is unconstitutional.

The case of Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, 2010 Ga. LEXIS 272 (March 22, 2010) arose after the plaintiff suffered permanent disfigurement following cosmetic procedures. The plaintiff brought a medical malpractice suit against the health care provider seeking compensatory damages of medical expenses and non-economic damages for pain and suffering.

At trial, in addition to economic damages (future and past medical expenses), the jury awarded the non-economic damages of $900,000 for plaintiff’s pain and suffering. The award of non-economic damages in excess of $350,000 triggered O.C.G.A. § 51-13-1 which mandated that the non-economic damages award be reduced to $350,000. However, the plaintiff successfully argued to the trial court that the damages caps in O.C.G.A § 51-13-1 were unconstitutional.

On appeal, the Georgia Supreme Court unanimously affirmed the trial court and held that the damages caps set forth in O.C.G.A. § 51-13-1 infringed on the constitutional right to a jury trial.

The statute at issue, O.C.G.A. § 51-13-1, provides, in pertinent part:

In any verdict returned or judgment entered in a medical malpractice action, including an action for wrongful death, against one or more health care providers, the total amount recoverable by a claimant for noneconomic damages in such action shall be limited to an amount not to exceed $350,000, regardless of the number of defendant health care providers against whom the claim assert or the number of separate causes of action on which the claim is based.

Non-economic damages are defined as:

Damages for physical and emotional pain, discomfort, anxiety, hardship, distress, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium, injury to reputation, and all other nonpecuniary losses of any kind or nature.

The Court reviewed the legislative history of O.C.G.A. § 51-13-1 and noted that it had been enacted as part of the Tort Reform Act of 2005. The impetus behind its enactment was to curb the cost of liability insurance and, therefore, “promote predictability and improvement in the provision of health care services and health care liability claims” and “assist in promoting the provision of health care liability insurance by insurance providers” Atlanta Oculoplastic Surgery v. Nestlehutt, 2010 LEXIS 272 *4 (March 22, 2010).

To reach its holding, the Court first analyzed O.C.G.A. § 51-13-1 within the context of the Georgia Constitution, and concluded that medical malpractice claims were encompassed in the Constitution’s protection of “trial by jury,” and that a determination of damages, including non-economic damages, by the jury was an “attendant right” of the “trial by jury.” Nestlehutt, at *11.

Specifically, the Georgia Constitution provides that “[t]he right to trial by jury shall remain inviolate.” Ga. Const. of 1983, Art. I, Sec. I, par. XI (a). However, the Constitution only protects “cases as to which there existed a right to jury trial at common law or by statute at the time of the adoption of the Georgia Constitution in 1798.” Id., at *5 (quoting Benton v. Georgia Marble Co., 258 Ga. 58, 66 (1848)). A review of historical references demonstrated the “clear existence of medical negligence claims as of the adoption of the Georgia Constitution of 1798.” Id. at *7. Accordingly, the Court concluded that the Constitution’s “trial by jury” encompassed medical malpractice causes of action and, therefore, protected such causes of actions from any infringement.

The Court next found that the right to a determination of damages by a jury is included in the right to a trial by jury. Here, the Court primarily relied on the Supreme Court’s holding that “the right to a jury trial includes the right to have a jury determine the amount of damages, if any, awarded to the [plaintiff].” Id. at *9 (quoting Feltner v. Columbia Pictures Tele., Inc., 523 U.S. 340, 353 (III) (1998) (Emphasis in original)).

Additionally, citing historical references, the Court concluded that non-economic damages have “long been recognized as an element of total damages in tort cases, including those involving medical negligence.” Id. at *10. Accordingly, it held that the right to a jury trial includes the right to a determination of non-economic damages.

Having found that Georgia Constitution protected these rights, the Court considered whether the damage caps on non-economic damages in O.C.G.A. § 51-13-1 infringed on these rights. In determining that it did, the Court held that the cap “clearly nullifies the jury’s findings of fact regarding damages and thereby undermines the jury’s basic function.” Id. at *12. Therefore, the caps on non-economic damages in O.C.G.A. § 51-13-1 were unconstitutional. The Court observed that other states, Oregon, Alabama, Washington and Florida, had reached similar conclusions.

In reaching its holding, the Court rejected a number of arguments. Specifically, the Court refused to compare punitive damage caps to non-economic damage caps on the basis that punitive damages are not awarded based on a finding of fact of “actual damages suffered” by the plaintiff; rather, they are to punish the defendant. The Court also distinguished a court’s authority to reduce a damages award, remittitur, from non-economic damages caps. The court reasoned that “[u]nlike damage caps, which are automatically triggered, when a damages award exceeds the threshold amount . . . judicial remittitur is a carefully circumscribed power, the exercise of which is authorized only in the limited circumstance where the ‘jury’s award of damages is clearly so . . . excessive as to any party as to be inconsistent with preponderance of the evidence.’ ” Id. at *16.

Having found that O.C.G.A. § 51-13-1 was unconstitutional, the Court held that its ruling applied retroactively from enactment. The general rule in Georgia is that “an unconstitutional statute is wholly void and of no force and effect from the date it was enacted.” Id. at *18 (quoting City of Atlanta v. Barnes, 276 Ga. 449, 452 (2003)). The Court found that none of the three exceptions to the general rule were applicable to this statute. First, the relatively brief existence of damage caps in Georgia, the “considerable litigation” in other states of similar caps, and the voiced concerns over the constitutionality of caps at the time of enactment weighed against a surprise factor over the Court’s ruling. Id. at *19. Second, retroactive application would “advance the operation of [its] holding” by giving no effect to the constitutional statute for any period of time. Id. at *20. Third, the Court “did not find that retroactive application will result in substantial inequitable results” under the facts of the case. Id. at *21.

The Supreme Court’s decision in this case puts a damper on tort reform and may send Georgia legislators back to the drawing board.