Oregon, Indiana courts weigh in on side of consumers in tort `reform' cases.

Consumers recently scored two significant victories in their battle against tort "reform" laws. In July, the Supreme Court of Oregon scuttled a state law that limited recovery for noneconomic damages for bodily injury in civil cases to $500,000, finding that it "eviscerates" the state constitution's guarantee of a trial by jury. (Lakin v. Senco Products, Inc., No. S44110 (Or. July 15, 1999).) Within days of that decision, the state legislature introduced a bill to amend the constitution to limit damages recovered in all civil actions.

Just one week before the Oregon court's decision, the Indiana Supreme Court declared a two-year statute of limitations for medical malpractice cases unconstitutional as applied to a woman whose breast cancer went undiagnosed for three years after a doctor told her a suspicious lump was not malignant. The court said the law unfairly immunizes medical care providers from malpractice liability when a patient's disease or condition has a long latency period that prevents discovery of the malpractice until after the limitations period has run. (Martin v. Richey, No. 53S04-9805-CV-271 (Ind. July 8, 1999).)

ATLA President Richard Middleton Jr. hailed the decisions, which he said restored the right of consumers to seek redress for injuries caused by negligence or misconduct. ATLA's Legal Affairs Department played a significant role in both cases.

In the Oregon case, plaintiffs John and Ann Marie Lakin sued the manufacturer of a pneumatic nail gun that John had used in 1990. When he pressed the trigger, the gun discharged three nails instead of one. The first went into the wood; the second hit the first, causing the firing end of the gun to recoil into John's face; and the third shot into his brain.

The injury and subsequent surgery to remove damaged parts of John's brain left him partially paralyzed and suffering from diminished mental and emotional capacities. He requires constant care.

Allegations against the manufacturer, Senco Products, Inc., included failure to warn and strict liability. A jury awarded John economic damages of $3.3 million and noneconomic damages of $2 million. Ann Marie received $876,000 in noneconomic damages for loss of consortium. The jury also awarded the Lakins $4 million in punitive damages for Senco's "wanton disregard for the health, safety, and welfare of others."

Applying the state's damages cap, the trial court then reduced each plaintiff's noneconomic damages award to $500,000. The court of appeals reversed, and the company sought review in the state supreme court. The high court sent the case back to the trial court to restore the original verdicts, finding the damages cap violated the state constitution's guarantee that "in all civil cases the right of trial by jury shall remain inviolate."

Tracing the origins of the right to trial by jury to the Magna Carta, the court found no authority "for the proposition that the drafters of [the state constitution] would have tolerated interference with a jury's award of noneconomic damages in a case such as this as long as the interference originated in the legislature and not in the court."

The court also found that the cap undermined the authority of judges to reduce awards deemed excessive based on the facts and evidence of a case.

"A statutory cap fundamentally is different from the doctrine of judicial remittitur. First, the legislative cap is mandatory, not discretionary," the court said. "Additionally, the statutory cap is not contingent on a factual finding that the award is excessive as a matter of law. The reduction is mandated even though the jury is correctly instructed, its findings are supported by the evidence as a matter of law, and no legal error is present in the record."

The court also noted that under the remittitur doctrine, if a "judge decided that the jury had rendered an improper damages verdict, the prevailing party had the right to have a second jury decide damages. Under the cap, plaintiffs are denied a second jury trial."

The court rejected arguments that the legislature has plenary power to change the common law, relying on arguments made by ATLA in its amicus brief.

Based on these findings, the court concluded that cap should be scrapped. "Limiting the effect of a jury's noneconomic damages verdict eviscerates `trial by jury' as it was understood [when the state constitution was drafted]," the court said, "and, therefore, does not allow the common-law right of jury trial to remain `inviolate.'"

A few days after the Oregon court's decision, the state legislature approved Senate Bill 1340, which asks voters in the May 2000 primary election to decide whether to amend the constitution to allow a $500,000 cap on damages in civil actions. A July 19 Oregon Senate Judiciary Committee report on the bill noted that the amendment was necessary in light of the Lakin decision.

Kathryn Clarke, the Lakins's Portland, Oregon, attorney and former cochair of ATLA's Legal Affairs Committee, described the legislature's action as "appalling" but said she is thrilled with the supreme court's unanimous opinion. "Lakin gives [plaintiff lawyers[ one more case, one more excellent decision, to point to. We're finally beginning to carry some ground" on tort "reform" and trial-by-jury issues, she said.

Indiana case

The Indiana decision arose out of a medical malpractice case brought by Melody Martin against gynecologist Robert Richey, who Martin claimed had failed to timely diagnose her breast cancer.

In 1991, Martin went to Richey complaining of a lump in her right breast. Richey performed a needle aspiration of the lump, which tested negative for cancer. Three years later, Martin had a mammogram, which revealed an abnormal mass in the same place where she had felt the lump. A biopsy resulted in a diagnosis of breast cancer. The breast was surgically removed, and Martin underwent four months of chemotherapy.

The trial court granted summary judgment for Richey, finding that Martin had filed her claim too late. The statute of limitations in Indiana's Medical Malpractice Act requires malpractice claims to be filed within two years after the alleged misconduct occurs, and Martin filed suit more than three years after seeing Richey.

Ned Miltenberg of ATLA's Legal Affairs Department wrote the amicus brief for the Indiana Trial Lawyers Association, which made a novel argument about the rights at stake in the case. The argument so intrigued the court that it invited the amicus to argue.

Relying on the ATLA argument, the Indiana Supreme Court found that the statute's application in this case violated the state constitution. The statute violates the Privileges and Immunities Clause, the court said, because it is not uniformly applicable to all malpractice victims. Under the statute, medical negligence victims who are unable to discover their injury and the medical malpractice that caused it before the expiration of the two-year period runs are treated differently than other medical negligence victims because the former group can never seek legal redress for the alleged wrongdoing.

"Plaintiff cannot be foreclosed from bringing her malpractice suit when, unlike many other medical malpractice plaintiffs, she could not reasonably be expected to discover the asserted malpractice and resulting injury within the two-year period given the nature of the asserted malpractice and of her medical condition," the court said.

The statute also failed to pass muster under the state constitution's rarely invoked Open Courts Clause, which guarantees a "remedy by due course of law" to "every person for injury done to him in his person, property, or reputation." The statute violates that clause in cases like this one where a plaintiff could not have known or discovered within the limitations period that she had sustained an injury as a result of malpractice.

"To hold otherwise, would be to require a plaintiff to bring a claim for medical malpractice before becoming aware of her injury and damages, an essential element of any negligence claim, and this indeed would be boarding the bus to topsy-turvy land," the court said.

Although the court did not specify in its decision how long after discovery a plaintiff would have to file suit, it declared in a decision handed down later the same day that a reasonable time period would be two years. (Van Dusen v. Stotts, No. 03S00-9711-CV (Ind. July 8, 1999).)