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Three States Address Capping Noneconomic Damages

Attorneys with AARP Foundation Litigation filed AARP's briefs in three cases addressing fair compensation for injuries suffered by older and low-income people. At issue were monetary caps on damages enacted by state legislatures over the vigorous opposition of AARP state offices. The three cases came before the state supreme courts of Georgia, Kansas and Missouri.

The cases all address state laws capping noneconomic damages. Noneconomic damages are intended to compensate a victim for damages, such as pain and suffering, which are more difficult to measure than medical bills or lost wages. A damaged face, for instance, may result in a $100,000 in actual economic damages (costs of healing treatments, etc.) but result in permanent emotional harm based on the embarrassment caused by scarring and disfigurement.

If an older person with a limited income is hurt, or even killed, as a consequence of another person's negligence, the damages recoverable for that injury or wrongful death claim will be limited if the case took place in a state that had caps on noneconomic damages. These caps discriminate against older people by preventing them from fully and fairly vindicating their rights through the legal process.

Georgia's top court was the first to rule, and it resoundingly invalidated the law. The next day, the Supreme Court of Missouri issued a more limited ruling that also found that state's law unconstitutional, but only because it limited recovery retrospectively. Although two judges urged the court to go the extra step, the majority stopped short of ruling, as Georgia's court had done, that laws limiting noneconomic damages are inherently unconstitutional.

The Georgia Decision

In 2005, the Georgia legislature enacted limits on tort claims after intense legislative debate. The law limited noneconomic damages to $350,000.

Betty Nestlehutt suffered permanent and dramatic facial damage — which included open sores on her face that required dozens of treatments to heal and left her with permanent scarring and discoloration — because of negligent plastic surgery. A jury awarded Nestlehutt and her husband $115,000 in economic damages and $900,000 in non-economic damages.

The court in Nestlehutt v. Atlanta Oculoplastic Surgery refused to cap noneconomic damages, finding that the state law capping damages to $250,000 violated the state constitution. Specifically, the appeals court found that the law compelling a judge to reduce jury-determined noneconomic damages violated the Georgia Constitution's right to a jury trial and the separation of powers doctrine among the various branches of government; the appeals court also found that the statute violated Equal Protection principles that require all parties to be treated the same.

The Georgia Supreme Court ruled that by nullifying a jury's finding of fact regarding damages, the law undermined the jury's basic function and therefore violated critical protections embodied in the state's constitution. The court first examined the history of the right to a jury trial from English law through colonial law, and as it was embodied in the state's constitution. Concluding that there did exist at the time of the enactment of the Georgia constitution a "right to a jury trial for claims involving the negligence of a health care provider, with an attendant right to the award of the full measure of damages, including noneconomic damages, as determined by a jury," the court then turned to the specifics of the 2005 law.

The court found that any effort to statutorily cap jury awards for economic or noneconomic damages violated the Georgia constitution. "The very existence of the caps, in any amount, is violative of the right to trial by jury," wrote the court. Because it is based on the state's constitution, the ruling can be appealed no further.

The Missouri Decision

James and Mary Klotz brought a medical malpractice lawsuit against his surgeon and the hospital after James Klotz had a pacemaker implanted following a heart attack. However, the implanted pacemaker caused a drug-resistant staph infection that became so severe that Klotz, now 69 years old, lost his right leg, left foot, kidney and most of his hearing. A Missouri jury found that the hospital was negligent in failing to change an IV and that the physician was negligent in implanting the pacemaker. The jury awarded the Klotzs $2.5 million, half of which was for noneconomic damages. But the trial court in Klotz v. St. Anthony's Medical Center found that it was statutorily bound to apply a law similar to Georgia's, and reduced noneconomic damages to the statutory cap of $350,000.

The Missouri Supreme Court ruled that because the Klotzs' dispute arose before the law went into effect, they could not now be penalized by the legislated caps on damages. Two judges would have gone further.

A carefully written concurrence considered the history of jury trials in the state, and how that history affected caps on noneconomic damages as a whole. "The limit on noneconomic damages violates the right to trial by jury; it overrules the jury's determination of a factual issue," The judge urged the court to "restore the right to trial by jury to its traditional and vital place in our constitutional system."

Another judge agreed. "It takes money to prove medical negligence. Few lawyers will  take a complex case of medical negligence on behalf of a poor person whose damages are disproportionately noneconomic … As compelling as the state's interest in quality health care is, I cannot see the necessity of providing that care on the backs of the most disadvantaged victims of medical negligence."

AARP's Amicus Briefs

AARP's briefs in these cases and the Miller v. Johnson case still pending before the Kansas Supreme Court argue that caps on noneconomic damages discriminate against older people, women, racial minorities, children and other people with limited incomes in three key ways: (1) because these groups tend to have smaller future earnings their economic damages (lost wages, etc.) are lower, making the noneconomic damages even more important; (2) caps on noneconomic damages also send a dangerous message that no matter how egregious or repulsive is the injury perpetrated on a victim, the cost to the wrongdoer for mental anguish, emotional harm and other noneconomic suffering will never exceed a specified monetary cap; and (3) a cap on damages effectively denies access to justice for many older people because most attorneys who represent low-income victims in personal injury cases do so on a contingency fee basis and cannot afford to take the case if the noneconomic damages are unreasonably limited.

These caps on noneconomic damages are some of the early efforts at reforming the tort system and very heavy-handedly affect the older retired workers and low income populations in a grossly disproportionate manner. They are discriminatory and don't focus on reducing errors and enhancing patient safety. The state AARP offices in Georgia, Kansas and Missouri opposed these laws consistent with AARP public policy that states "To be effective in the long run, approaches to address problems in the current medical malpractice system must both significantly reduce the number of preventable medical injuries and offer appropriate compensation for people who are injured despite improved safety efforts." AARP Policy Book 2009-2010, at ppg 7-14, 7-15.  

The Georgia, Kansas and Missouri cases have far-reaching implications for older people in the three states, and will send an important message to other states grappling with the same questions. Georgia's ruling in particular is an encouraging first decision. While Missouri's did not go as far as the Georgia decision, the concurrence referenced that decision favorably and noted the constitutional wording was the same in both state constitutions.