The Constitutionality of Tort Reform

I’ve written many times about tort reform and how it’s not a means of cost control. It turns out that it’s also not constitutional in some states:

The Missouri Supreme Court yesterday struck down a state law that caps noneconomic damages in medical malpractice cases at $350,000. It declared that the law infringed on a person’s right to trial by jury, which includes the right to have a jury set damages.

The ruling, one of several recent setbacks for proponents of tough tort reform measures, illustrates the risk inherent in passing a federal law that would limit what a victorious plaintiff can receive in noneconomic (pain and suffering) damages. Such a law, supported by organized medicine and Congressional Republicans to curb supposedly frivolous suits and extravagant jury awards, theoretically could be overturned by the US Supreme Court.

The case in question involved a baby who evidently was delivered by cesarean section too late, resulting in significant damage. His mother was awarded about$3.4 million in medical damages and about$1.5 million in non-economic damages. The law reduced that latter amount to $350,000. She sued that this was a infringement on the right of juries to decide matters like these. She won.

Moreover, Missouri isn’t alone:

Before yesterday’s ruling, Missouri was one of roughly 2 dozen states with laws that cap noneconomic damages in malpractice suits at various levels, according to a tally kept by the National Conference of State Legislatures. (A few other states limit punitive damages or total damages of any kind.) Some of these laws have survived constitutional challenges, as was the case in Maryland. In contrast, cap laws in Alabama, New Hampshire, Oregon, Washington, and, most recently, Illinois and Georgia have been tossed into the unconstitutional trash basket.

Not to beat a dead horse, but the law wasn’t so good at reducing malpractice premiums anyway, which is what tort reform is supposed to do. Missouri’s malpractice premiums went up faster than neighboring Iowa’s did after it passed the law. Iowa, of course, has no such cap.

[Cross-posted at The Incidental Economist]