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Wisconsin Supreme Court Holds State�s Non-Economic Damages Cap For Medical Malpractice Victims Is Unconstitutional


HLD, v. 33, n. 8 (August 2005)

Wisconsin Supreme Court Holds State's Non-Economic Damages Cap For Medical Malpractice Victims Is Unconstitutional

The Wisconsin Supreme Court invalidated July 13 the state's $350,000 non-economic damages cap in medical liability actions on the ground the statutory limit violates the equal protection guarantees of the Wisconsin Constitution. In striking down the statutory limit on non-economic damages, the high court found no rational basis for providing the most seriously injured medical malpractice victims less than full compensation for their injuries. According to the majority's opinion, such caps have not been shown to lower medical malpractice insurance premiums and healthcare costs in general. The high court emphasized its decision was limited to the particular statutory cap at issue, leaving intact all other state laws capping non-economic damages in various contexts, including in medical malpractice actions involving wrongful death.

The case arose in connection with a medical malpractice action brought on behalf of Matthew Ferdon, who has a partially paralyzed and deformed right arm from injuries suffered at birth. A jury awarded Ferdon $700,000 in non-economic damages and $403,000 for future medical expenses. The Wisconsin Patients Compensation Fund (Fund) moved to have the non-economic damages award reduced to $410,322, the amount of the state statutory cap of $350,000 adjusted for inflation. See Wis. Stat. �� 655.017 and 893.55(4)(d). The Fund is responsible for paying medical malpractice claims that exceed statutory primary insurance thresholds.

The Wisconsin Supreme Court found the $350,000 non-economic damages cap ran afoul of the state constitution's equal protection guarantees under a rational basis review. According to the high court, the statutory cap results in two classes of medical malpractice victims: those who are fully compensated for their injuries (because their damages fall below the non-economic damages cap) and those who are only partially compensated (because their damages exceed the cap). The high court examined each of the legislative objectives behind the $350,000 non-economic damages gap, finding none of them passed a rational basis review.

"If the legislature's objective was to ensure that Wisconsin people injured as a result of medical malpractice are compensated fairly, no rational basis exists for treating the most seriously injured patients of medical malpractice less favorably than those less seriously injured," the high court said.

The high court acknowledged that the cap on non-economic damages "intuitively appears" rationally related to the legislative goal of lowering medical malpractice insurance costs thereby ensuring the availability of quality healthcare for the state's citizens. But the high court ultimately concluded that the $350,000 ceiling adopted by the legislature did not achieve this goal. "Based on the available evidence from nearly 10 years of experience with caps on non-economic damages in medical malpractice cases in Wisconsin and other states, it is not reasonable to conclude that the $350,000 cap has its intended effect of reducing medical insurance premiums," the high court said.

Moreover, medical malpractice insurance premiums comprise less than 1% of overall healthcare costs, the high court said. Thus, even if the caps reduced liability premiums, this reduction would not translate into lower costs for healthcare consumers, the high court reasoned.

The high court went on to discount links between the $350,000 non-economic damages cap and additional legislative underpinnings including ensuring an adequate supply of physicians in the state and preventing physicians from practicing "defensive medicine."

The high court specified that its holding applied only to the particular $350,000 non-economic damages cap for medical malpractice actions, rejecting the Fund's contention that striking the cap at issue could mean the end of such limits in other contexts. "This 'the sky is falling' argument is unpersuasive" because evaluating other damages caps on equal protection grounds requires a case-by-case examination, the high court said.

Two dissenting opinions attacked the majority's opinion, citing studies supporting the effectiveness of medical malpractice damages caps. According to the dissenters, the cap at issue was not invalid under a rational basis review.

Ferdon v. Wisconsin Patients Compensation Fund, No. 2003AP988 (Wis. July 14, 2005). To read the decision, go to


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