Caps on noneconomic damages again found to be constitutional; Affordable Care Act approved in reducing economic damages

On July 7, 2016, the Eighth District Court of Appeals released its decision in Jones v. MetroHealth Medical Center upholding the constitutionality of the statutory caps on noneconomic damages in actions against political subdivision [1]. This decision is an important victory for hospitals and health care professionals in the ongoing efforts to maintain the damages caps enacted by legislature in an effort to reform Ohio’s tort system. These caps continue to be subject to challenge by plaintiffs’ counsel, and the statutory cap in R.C. 2323.43, which applies to medical negligence claims, has not yet been decided by an appellate court. But the MetroHealth ruling, and the ruling in Arbino v. Johnson & Johnson, which found R.C. 2315.18 to be constitutional, should aid in defending the constitutionality of the medical negligence damage caps. (The Ohio Hospital Association and Ohio State Medical Association weighed in as amici curiae in the MetroHealth case.)

Damages in cases involving publicly owned and supported hospitals, such as MetroHealth, are governed by R.C. 2744.05(B)(1) and R.C. 2744.05(C)(1), which provides a $250,000 cap on noneconomic damages and offsets for certain collateral benefits. The caps and offsets reduced the jury’s $14.5 million verdict in this action, which involved birth injuries to Alijah Jones, to $3.451 million. The minor plaintiff was 12 years of age at the time of trial and suffers from cerebral palsy, vision impairment and developmental delays after being born at 25 weeks gestation via C-section. The verdict allocated $500,000 for past economic damages, $8 million for future economic damages for the child, $5 million in noneconomic damages to the child and $1 million in noneconomic damages to the mother.

In a post-trial proceeding, the trial court applied the cap on noneconomic damages and reduced the separate awards to the mother and child to $250,000 each. In a detailed opinion, the appellate court rejected the plaintiffs’ arguments that the caps violated due process, equal protection, right to trial by jury and open courts provisions of the Ohio Constitution and upheld the noneconomic damage caps.

R.C. 2744.05(B)(1) provides an offset for collateral sources in cases against political subdivisions. In a post-trial proceeding, the trial court offset the entire $500,000 awarded for past medical expenses, as these had been paid in full by Medicaid and Social Security. The trial court further found that, after the age of 20, the child’s care would be fully covered by Medicare because of his father’s disability. The court heard post-trial evidence that the child could obtain medical insurance under the Affordable Care Act (ACA) until he became eligible for Medicare. His out- of-pocket expenses would be $8,000 per year in insurance premiums plus a yearly out-of-pocket maximum expense of $6,500,or $116,000 for the eight years until he reached Medicare eligibility. The plaintiff did not dispute that the child could obtain coverage under the ACA but argued that the ACA is a target for repeal such that it should not be a basis for setoff. The appellate court rejected the notion that the possibility that government programs might someday come to an end should serve as a basis to deny an offset. The only future medical damages Jones was entitled to recover, as affirmed by the appellate court, were the premiums and out-of-pocket maximum for the years he requires ACA coverage and items Medicare will not cover, including transportation, home care and housing, and the life care plan valued at $2.951 million. While these offsets are only statutorily available in cases against political subdivisions, having case law allowing the ACA to be used as evidence of the plaintiff’s maximum out-of-pocket expense will be useful in cases against private hospitals and health care professionals.

Also of note, the appellate recognized for the first time that a viable fetus has a cause of action for lack of informed consent. The court reasoned that Ohio has recognized that viable, unborn children have been found to have the legal right to seek recovery for injuries caused in utero. Other states have recognized a child’s right to bring a lack of informed consent claim when the mother granted consent on behalf of the child based on the information provided to her, and the appellate court concluded that since an unborn viable child has the right in general to recover for injuries sustained in utero, the cause of action for lack of informed consent should be one of the claims available to the child.