July 18, 2005
On Wisconsin! (In Defense of Ferdon)
Posted by Christine Hurt

As I mentioned a few posts below, the Wisconsin Supreme Court held last week that a $350,000 cap on noneconomic damages in medical malpractice negligence actions was unconstitutional under the Equal Protection clause of the state constitution.  The opinion left viable the same cap for wrongful death actions.

Bloggers have already looked askance at the opinion:  see Ann Althouse and David Bernstein.

Let me present the other side.  In this opinion, the majority analyzes the claim from an equal protection point of view.  The cap treats two groups dissimilarly:  med mal victims whose damages are greater than the cap, and victims whose damages are lower.  The majority shows that statistically the victims in the former group are disproportionately children because of their greater life expectancy.  However, the majority acknowledges that these groups are not suspect classes of individuals and the rights involved (Wisconsin constitutionally-protected right to a trial, right to a remedy) are not fundamental.  So, the majority acknowledges that rational basis scrutiny is the proper level of scrutiny.  Here's where the fun begins.

The majority strikes down the cap under rational basis review. 

The dissent argues that because of this result, the majority must have been using intermediate review in rational basis clothing.  As an outsider not in love with the logic of Con Law jurisprudence, I find it interesting to read a jurist come so close to saying that legislation cannot fail under rational basis review.

So, how does the majority find that the cap is arbitrary?  The majority looks at the "findings" section of the legislation and tests these findings.  The first is that caps will decrease medical malpractice premiums and that lower premiums will lower overall health care costs.  Putting aside whether lower premiums would lower health care costs, let's focus on that aim.  The court focused on whether the noneconomic damages cap was rationally designed to further that goal of decreasing medical malpractice premiums.

The majority looked at many sources, including the Wisconsin Commissioner of Insurance, which reports every two years on whether the 1995 cap has had an impact on malpractice rates.  I cannot find a copy report on the Wisconsin website, but the majority cites the report as saying that the caps have not affected med mal premiums.  The opinion cites themost recent version of the Report as stating "it would be difficult to draw any conclusions from premium numbers based solely on the enactment of Wisconsin Act 10" and "no direct correlation can be drawn between the caps enacted in 1995 and current rate changes taking place in the primary market today."  The court, finding no correlation, finds that "it is not reasonable to conclude that the $350,000 cap has its intended effect of reducing medical malpractice premiums" and concludes that the cap "is not rationally related to the legislative objective of lowering medical malpractice insurance premiums."

I don't teach Con Law, but I do teach Torts, and I spend one day on the tort crisis issue.  I challenge my students to argue pro and con with evidence, not generalizations.  In preparing for that class, I read the empirical data.  I read the law review articles that analyze the empirical data.  The empirical analyses that are important here are the analyses that purport to find some correlation between damage caps and malpractice premiums.  Everything I have looked at says "no."  The GAO said no.  Numerous law review articles say "no."  The most recent study by Bernard Black, Charles Silver, David A. Hyman, and William M. Sage of claims and premiums in Texas (1988-2000) seems to conclude that the post-1999 spike in premiums was not related to any accompanying increase in med mal payouts.

Prof. Bernstein, however, wonders where the line is to determine what is rational.  "The ceiling (on non-economic damages) won't have a large effect? Perhaps. Won't have a noticeable effect? It's possible. Is not "rationally related?" Only because the court seems to define "rationally related" as "having a guaranteed large effect."

I don't agree with the characterization that the majority claimed that the legislation would have to have a "guaranteed large effect."  The majority concluded that the legislation had no discernible effect on its stated goals.  Prof. Bernstein seems to argue that the legislation would be rationally related if the legislation would not have even a "noticeable effect."  Is that the level of rational basis scrutiny?  As long as the legislation has or could have an effect greater than zero, even if not noticeable?  That is quite a bit of deference there.  I would hope that rational basis scrutiny would require some estimation that the legislation would effect its goals to a noticeable degree.  If the Con Law scholars out there say "nope," then I'll just shake my head and be quiet.

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ยป Wisc. high court on med-mal, cont'd from PointOfLaw Forum ...
"The "baldly activist" decision (as Ted called it the other day) striking down damage caps draws blog ..." [more] (Tracked on July 18, 2005 @ 21:12)
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