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With the spotlight on the highly publicized “medical malpractice crisis,” a move is being made in the Texas Legislature that could open the door to caps on non-economic damages in all kinds of civil actions. H.J.R. 3, a proposed constitutional amendment considered by the House Civil Practices Committee at a Feb. 19 hearing, would give state lawmakers free reign this year to limit all damages — except those awarded for a pecuniary loss or damage — to plaintiffs with medical liability claims. If the Legislature passes the proposal and voters approve it in November, any damages cap created in the current session would clear a potential constitutional hurdle in the courts. But H.J.R. 3 doesn’t stop there. It also would guarantee that any limits that lawmakers chose to set for non-economic damages after Jan. 1, 2005, would pass constitutional muster. “I think the proponents are using medical malpractice as an opportunity to cap damages in all lawsuits,” says plaintiffs’ attorney Richard Mithoff, a partner in Mithoff & Jacks in Houston. The move is being made to keep the courts from trumping the Legislature on the damages limitation issue. In 1988, the Texas Supreme Court struck down a 1977 law that capped non-economic damages for medical liability claims brought by plaintiffs injured — but not killed — by health-care providers. With Chief Justice Tom Phillips and Justice Raul Gonzalez dissenting, the court held in Lucas v. United States that the cap violated the “open courts” provision of the Texas Constitution. “One wonders whether the drafters of the Texas Constitution intended for the Legislature to enact special laws for the protection of specified classes of tortfeasors,” Justice William Kilgarlin wrote for the majority. “The court’s opinion in Lucas says the Legislature is powerless to act,” says Mike Hull, general counsel for the Texas Alliance for Patient Access, which favors capping damages in medical malpractice suits. Hull, a partner in Austin’s Hull Henricks & MacRae, says the Texas Supreme Court is not in a position to evaluate the public policy merits of a proposal and can say only whether it is constitutional. “Clearly, this is a public policy question; the Legislature is created to address that,” Hull says. Plaintiffs’ attorney Hartley Hampton of Houston says the proposal is “an assault” on the Texas Constitution’s open courts provision. “It’s a radical piece of legislation that is proposed by radical people who want to make radical changes in the infrastructure of our liberty,” says Hampton, a Fibich, Hampton, Leebron & Garth partner who is on the Texas Trial Lawyers Association’s legislative team for this session. Mithoff says the amendment takes away a jury’s right to assess non-economic damages. “It empowers the Legislature to determine a one-size-fits-all cap,” he says. “A broken arm or sprained back will be worth as much as paralysis or a brain injury.” INSURANCE COMPANIES LEAVING State Rep. Joe Nixon, R-Houston, author of the amendment and chairman of the Civil Practices Committee, says a cap is necessary because frivolous medical suits, and unlimited awards for mental anguish and pain and suffering damages have driven liability insurance companies out of Texas. “This has created a crisis whereby doctors and hospitals either cannot afford the immense increases in liability insurance premiums or can’t buy the insurance at any price,” says Nixon, a shareholder in Phillips & Akers. Nixon initially filed the proposed amendment as H.J.R. 39 but says he was asked to refile it as H.J.R. 3; the House Speaker’s Office reserves the numbers 1 through 10 for high priority legislation. It makes sense to cap non-economic damages in medical liability cases because “so much of the doctors’ income is capped by Medicaid, Medicare and reimbursement from insurance,” Nixon says. Brent Cooper, a civil defense attorney who handles medical malpractice cases, says the purpose of the amendment is to create “greater certainty” that a cap on damages will be upheld. If there is greater certainty, more medical liability insurance carriers will return to the Texas market, says Cooper, a shareholder in Cooper & Scully in Dallas. Something has to be done, says Cooper, who contends that an increase in medical liability claims is driving up the premiums doctors have to pay, not bad investments by insurance companies. Mithoff says that capping damages won’t solve doctors’ problems but a limit on the rates insurance companies can charge would. David Beck, a defense lawyer and partner in Houston’s Beck, Redden & Secrest, says he has no problem with the Legislature setting caps on damages in certain areas. Whether there should be caps is a policy question, Beck says. “That’s what we elect our representatives for — to set policy,” he says. Paul Stallings, a Houston partner in Vinson & Elkins and a defense attorney, doesn’t favor amending the constitution so that the Legislature can set limits on damages. “I think it’s bad policy and bad law to deny people’s right to the courthouse, which is what this tends to do,” Stallings says. “I haven’t seen any evidence or studies to mandate that kind of need for that kind of limitation.” Proponents of the amendment cite a Texas Department of Insurance finding that the number of medical liability companies in Texas has dropped from 17 to four since 2000. The proposed cap on non-economic damage awards in medical liability cases is less than the cap provided in the statute — Texas Revised Civil Statutes Annotated Article 4590i �� 11.02-11.03 — that the Texas Supreme Court struck down. The 1977 law capped the damages at $500,000 with a provision that the amount could be adjusted for inflation. Nixon proposed in H.B. 3, a companion measure to the amendment, to cap non-economic damages at $250,000. The Civil Practices Committee took no action on the proposed amendment or the companion bill on Feb. 19. Nixon says it’s up to the committee when it will vote on the measures. Nixon faces a tougher task in winning approval of the amendment than he does with the bill. To be placed on the November constitutional amendment ballot, H.J.R. 3 must be approved by 100 House members and 21 senators.

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