Georgia Supreme Court Rules Medical Awards Cap Unconstitutional

The Georgia Supreme Court has struck a cap on medical malpractice awards imposed in 2005 as part of a package of legislative tort reforms.

The state’s high court said the law limiting noneconomic damages in medical malpractice cases violates the constitutional right to a trial by jury.

The decision applies retroactively.

The court acknowledged that its ruling might be at odds with those in other states but commented that those decisions are governed by “less comprehensive constitutional jury trial provisions.”

All seven justices concurred in whole or in part with the decision, which was written by Chief Justice Carol Hunstein.

Noting that the Georgia Constitution states plainly that “[t]he right to trial by jury shall remain inviolate,” the court said that this right includes the determination of noneconomic awards by a jury.

The case was one involving complications from laser resurfacing and facelift surgery performed in 2006 by Harvey P. Cole, M.D., of Atlanta Oculoplastic Surgery on Betty Nestlehutt that caused permanent disfigurement. A jury returned a verdict of $1,265,000, comprised of $115,000 for past and future medical expenses; $900,000 in noneconomic damages for Nestlehutt’s pain and suffering; and $250,000 for Mr. Nestlehutt’s loss of consortium. Atlanta Oculoplastic then moved to have the state law, which would have reduced the jury’s noneconomic damages award by $800,000 to the statutory limit of $350,000, declared unconstitutional.

The law enacted in 2005 provides that the total amount recoverable by a claimant for noneconomic damages shall be limited to no more than $350,000. In addition to capping noneconomic damages against health care providers, the statute also limits noneconomic damages awards against a single medical facility to $350,000; limits such awards to $700,000 for actions against more than one medical facility; and limits such awards to $1,050,000 for actions against multiple health care providers and medical facilities.

The damages caps were intended to help address what the General Assembly determined to be a crisis in the medical liability insurance market that made it difficult for health care providers to buy affordable liability insurance. The Legislature intended the provisions of the Tort Reform Act to “promote predictability and improvement in the provision of quality health care services and the resolution of health care liability claims and . . . thereby assist in promoting the provision of health care liability insurance by insurance providers.”

The Georgia court noted that as with all torts, the determination of damages rests with the jury and that noneconomic damages are recognized as an element of total damages in tort cases, including those involving medical negligence.

According to the court, the noneconomic damages caps unconstitutionally infringe on this right to trial by requiring the court to reduce a noneconomic damages award determined by a jury that exceeds the statutory limit.

“[T]he law clearly nullifies the jury’s findings of fact regarding damages and thereby undermines the jury’s basic function,” Chief Justice Hunstein wrote.

The fact that the law permits full recovery of noneconomic damages up to the “significant amount” of $350,000 is not sufficient to make it constitutional. If the Legislature may cap awards at $350,000, then it could also cap the recovery at some other figure, “perhaps $50,000, or $1,000, or even $1,” the court said.

“The very existence of the caps, in any amount, is violative of the right to trial by jury,” the decision states.

The court turned aside the claim that the limits on noneconomic suffering are constitutional just as limits on punitive damages are. The court said that unlike the measure of actual damages suffered, punitive damages are not really a “fact” tried by the jury. Because a punitive damages awards are meant as a punishment and do not constitute a finding of fact, potential limitations on punitive awards do not implicate the jury trial right, the court said.

The plaintiff had also argued that statutes authorizing double or treble damages attest to the validity of the caps on noneconomic damages. But the state’s high court dismissed this argument, finding that “treble damages do not in any way nullify the jury’s damages award but rather merely operate upon and thus affirm the integrity of that award.”

The court also rejected as unfounded the argument that the noneconomic damages caps pose no greater threat to the right to jury trial than the courts’ exercise of their remittitur power, the power to reduce a damages award deemed excessive. Unlike damages 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,” the court said.

Also, the court noted, as it has previously ruled, the Georgia remittitur statute does not violate the right to jury trial “precisely because it does not confer on the courts the unfettered authority to alter jury verdicts.”

Regarding the retroactivity of the ruling, the court noted that there may be exceptions to the general rule that an unconstitutional statute is wholly void from the date it was enacted if applying it retroactively would bring about “unjust results.” However, the medical awards cap law does not qualify as an exception, the court said. The court noted that it has declined to find “substantial inequitable results in cases involving far more compelling instances of hardship,” citing a case in which it required the city of Atlanta to refund millions of dollars in taxes paid.