Ark. Court Calls on Legislature to Look at Charitable Immunity

A woman lost her appeal challenging a verdict in favor of a not-for-profit hospital, but the state Supreme Court said in deciding the case Jan. 18, 2007, that a legal doctrine protecting charities for more than a century in Arkansas needs to be re-examined by lawmakers.

Charitable immunity protects agencies, trusts and other organizations created exclusively to carry out charity work from liability for the actions of a person working for the organization.

But charitable immunity has been challenged in recent years in the courts, particularly by those embroiled in sex abuse lawsuits against archdioceses of the Roman Catholic church. Last year, the New Jersey Supreme Court ruled charitable immunity could be used for negligence claims only, not from claims that are based on “willful, wanton or grossly negligent conduct.”

In the Arkansas case, Mary Sowders was injured in January 2002 as employees of St. Joseph’s Mercy Medical Center at Hot Springs pushed her in a wheelchair to a waiting car. Later that year, she sued the hospital, claiming the employees were negligent and failed to safely transport her. St. Joseph’s claimed it was protected under charitable immunity.

A Hot Spring County court allowed Sowders to look into the hospital’s self-insurance through the Sisters of Mercy Health System, but ultimately dismissed her claim.

In an opinion by Chief Justice Jim Hannah, the court found that the hospital’s self-insurance program did not meet the legal definition of insurance. Even if a lawsuit against the hospital went forward, St. Joseph’s would have no legal obligation to pay any judgment under charitable immunity, Hannah wrote.

“We add that, while we are unable to reach the issue in this case, we again call on the General Assembly to consider whether the charitable immunity doctrine should be abolished,” Hannah wrote.

In a dissenting opinion, Associate Justice Robert L. Brown wrote Sowders “has been whipsawed by the decisions of this court and is now left without a remedy.”

“It is true that Mary Sowders could have filed suit against the individual employees and collected at least some amount from the liability pool,” Brown wrote. “It is St. Joseph’s contention that there is no such thing as institutional negligence … I disagree. Not having appropriate procedures, rules or protocols in place for situations like those experienced by Mary Sowders can be laid directly at the feet of the hospital and not its employees.”

As of Jan. 18, no legislative bills had been filed addressing charitable immunity. Speaking to reporters, Gov. Mike Beebe said he had yet to read the case, but wanted to take a look at it.

“Certainly the whole idea of charities and non-profits being immune is a time-honored tradition that predates even Arkansas,” the former attorney general said. “But then you’ve got such a blur now between not-for-profits in legal standings and delivering services such as hospitals.”