Deliberations are under way in a lawsuit challenging Texas' 250,000 cap on noneconomic damages in medical negligence cases, after U.S. District Judge Lee Yeakel heard arguments last week on whether to uphold the keystone of the medicine-backed 2003 tort reform legislation.
The cap is a centerpiece of the balance that the Texas Medical Association helped lawmakers strike that year between compensating injured patients and keeping physicians out of bankruptcy.
Since then, however, the cap has faced constant legal challenges from those who believe such damages should be unlimited, with TMA stepping in to help defend tort reform as needed.
The latest attempt, filed in November 2020, went to trial on Feb. 9 and could drag on for months – maybe even ending up before the U.S. Supreme Court.
In the lawsuit, David Winnett and more than a dozen other patients and patient representatives argue Texas’ cap on noneconomic damages violates the Seventh Amendment of the U.S. Constitution, which contains the right to a jury trial. Mr. Winnett, a resident of Comal County, alleges he was permanently paralyzed due to complications following spinal surgery. He says in his lawsuit he expects a jury will award him “substantially more than $250,000 in noneconomic damages in connection with his claim.”
In a medical liability suit, economic damages compensate for monetary losses resulting from the alleged negligence, such as medical bills, lost income, and loss of earning capacity. Noneconomic damages are more subjective and may include pain, suffering, and inconvenience.
The physicians and health care organizations being sued for alleged negligence in Winnett et al. v. Frank et al. argue the Seventh Amendment does not apply to state law and, even if it did, a damages cap does not violate it. Texas Attorney General Ken Paxton agreed in an October 2021 filing to dismiss Mr. Winnett’s lawsuit, writing, “The jury is not limited or bound by the statutory thresholds; indeed, the jury is instructed to disregard any damage caps when rendering its decision.”
Attorney General Paxton also argued in court on Feb. 9 that Mr. Winnett and the others behind the suit don’t have legal standing to challenge the cap because none of them have achieved an award beyond the cap that was then reduced as a result of the tort reform legislation.
There are 13 separate cases challenging the cap over similar legal issues.
More recently, the physicians and health care organizations in the Winnett case argued Mr. Winnett’s interpretation of the Seventh Amendment cuts into states’ rights, according to their response filed in early December 2021.
Edinburg internist and TMA President E. Linda Villarreal, MD, says tort reform has transformed the health care landscape in Texas since it passed nearly two decades ago. “We have seen an influx of physicians of all specialties since tort reform, and that has got to be the best thing for our patients,” she said.
Before the $250,000 cap was implemented, the state was in the midst of “a medical malpractice insurance crisis,” according to an October brief filed by the physicians and health care organizations in Winnett. High premiums had priced some Texas physicians out of practice, constraining patients’ access to care. This trend was particularly pronounced among physicians in high-risk specialties because their premiums tend to be the costliest. Once the cap took effect, however, insurance premiums came down, and the number of physicians practicing in Texas grew significantly.
This change has been a boon for places like Hidalgo County, where Dr. Villarreal practices. Prior to 2003, the county didn’t have any neurosurgeons; now, she can name at least half a dozen.
“I've been here long enough that I can attest [to the fact that tort reform] allows our patients to have access to health care that is needed along the border and in many areas of Texas that are rural,” she said, adding that this benefit outweighs any cost to injured patients seeking noneconomic damages in excess of the cap.
If the lawsuit is successful, this progress could be reversed, says Brian Jackson, general counsel for the Texas Alliance for Patient Access, which has coordinated funding for defense of the cap. TMA has contributed to this fund.
Without the cap, he adds, liability premiums would rise, likely causing a migration of physicians who were drawn to Texas post-tort reform. Such a scenario may exacerbate the state’s physician shortage, which is projected to reach 10,330 by 2032, up from 6,218 in 2018, according to the Texas Health and Human Services Commission.
Nixing the cap would also represent a blow to state autonomy, limiting the ability of states to respond to problems such as the medical liability insurance crisis that plagued Texas pre-tort reform, says Mr. Jackson.
“The federal government cannot and should not implement a one-size-fits-all rule for all 50 states in the union, because every state has unique situations,” he added, citing varying rates of health coverage, insurance premiums, and indigence.
Texas’ noneconomic damages cap has survived challenges at both the state and federal levels. Given the stakes, Mr. Jackson expects whichever side loses to appeal.
“We treat every challenge serious[ly] because of the ramifications if you lose,” he said.