It was supposed to be a simple shoulder surgery. But after several hours on the table, shortly after the surgeons had closed the wound, the 47-year-old patient went into cardiac arrest. CPR was ineffective, and he died, leaving behind a wife and four children.

For a family, it’s impossible to put a dollar amount on such a loss. But at the time, under California law, this family’s pain and suffering had a maximum value: $250,000.

“This is a 47-year-old man who should live until he’s 77,” said James Heiting, the Riverside plaintiffs’ attorney who took on the family’s medical malpractice case. “He should be the father of those kids and be able to bond with them. He was with his wife for 20 years. It’s just not appropriate.”

And until this year, California’s $250,000 cap on non-economic damages awards in medical malpractice cases hadn’t budged since 1975, when it was first enacted as part of the state’s Medical Injury Compensation Reform Act (MICRA) – not even to keep up with inflation. That amount today equates to about $50,000 in 1975 dollars.

But on Jan. 1 of next year, that’s set to change. Last month, Gov. Gavin Newsom signed AB 35, raising that cap and creating a new tiered system for contingency fees attorneys can collect in medical malpractice cases.

Effective Jan. 1, 2023, the bill raises the cap on pain and suffering damages in those cases to $500,000 for suits involving a wrongful death claim, with that cap increasing by $50,000 each year until it reaches $1 million. For cases that don’t involve a wrongful death claim, the cap starts at $350,000 and increases annually by $40,000 until it reaches $750,000. Once those limits are reached, the law adjusts them for annual inflation by 2 percent starting Jan. 1, 2034.

AB 35 also reforms the tiered cap system on the contingency fees attorneys can collect in medical malpractice cases, tying those limits to the stage of representation at which an amount is recovered, rather than the prior system tying them to the amount itself. Under the new limits, if a settlement is reached before a civil complaint or demand for arbitration is filed, attorneys can collect 25 percent of the recovery amount. If a settlement, judgment, or arbitration is reached after a complaint or demand for arbitration is filed, attorneys can collect 33 percent.

The legislation, which is the result of a consensus between patients’ advocates and medical professionals, withdraws a similar ballot measure, the Fairness for Injured Patients Act, that had qualified for California’s November election and would have raised the damages cap to $1.2 million. California Assembly Majority Leader Eloise Gómez Reyes (D-Colton), who co-authored AB 35, said that the bill “provides a better system for both providers and patients, creating a fair process that will have a real impact on Californians for decades to come.”

The prior limits didn’t just reduce what plaintiffs could recover in a medical malpractice lawsuit – consumer advocates say they also had the effect of preventing plaintiffs from bringing those claims at all. Because medical malpractice lawsuits are a contingency-based and famously expensive area of litigation, Heiting said, the $250,000 cap could often prevent plaintiffs’ lawyers from feeling they could afford to take on a case.

Doctors have long argued that lifting the cap would lead to an increase in frivolous litigation and drive up medical costs. But from Heiting’s perspective, these changes are long overdue.

“It’s so ghastly and so offensive to look at this, and think about the damages that people suffer, and think about the limits that hinder their recovery,” he said. “People don’t think about it until it happens to them.”

‘It’s always a toss-up’

Robert L. Rabin, a professor at Stanford Law School and an expert in tort litigation and legislative compensation schemes, has been keeping an eye on California’s pain and suffering damages cap for decades. Calls to raise that cap have been coming for years, he says.

“It was something that had to happen,” Rabin said. “It’s surprising it took this long.”

Most states that have caps on medical malpractice damages awards have one like California’s, applying only to what plaintiffs can recover for their pain and suffering — grief, humiliation, loss of enjoyment of life – and not to economic damages, like medical expenses and lost income.

After former Gov. Jerry Brown signed MICRA and it took effect in 1975, setting California’s $250,000 cap on those damages, Rabin said there was heavy lobbying by the medical profession to keep it there. There have been numerous efforts to lift that cap over the past 47 years, including a failed ballot measure in 2014.

A Southern California mother who had a jury’s award of more than $4 million in noneconomic damages in her medical malpractice case cut to $250,000 under the cap asked the California Supreme Court last year to recognize a carve-out from the limit for actions against physician assistants practicing under a doctor’s supervision. The mother claimed two physician assistants in a dermatologist’s office failed to timely diagnose her daughter’s malignant melanoma, which caused her daughter to die at age 4. But the state’s high court held in February that the damages cap still applies in those cases (Lopez v. Ledesma (2022) 12 Cal.5th 848).

The cap has had “a substantial effect on personal injury lawyers’ willingness to take medical malpractice cases,” Rabin said. When AB 35 goes into effect next year, he said, plaintiffs’ attorneys who specialize in medical malpractice will be more likely to take those cases on.

“It’s very important to recognize that it’s really expensive to bring medical malpractice cases,” Rabin said. There’s the contingency basis on which they’re brought, meaning the plaintiffs’ lawyers don’t get paid unless they succeed. And in “virtually all cases,” Rabin added, it’s necessary to bring expert witnesses, who often comes with costly fees.

Heiting, the Riverside plaintiffs’ attorney, added that relying so heavily on expert witnesses doesn’t just cost money – it can also cost the case.

“Medical malpractice is always difficult because you have a jury who’s naïve to the issues,” he said. “You have to rely on experts, so it’s always a toss-up. When you throw that in with the money you spend to get there, it makes it tough.”

Consumer advocates also say the cap disproportionately affects people of color, who often receive lower standards of medical care than their white counterparts. The gap has been especially clear in the area of maternal mortality: in 2020, the Centers for Disease Control and Prevention reported that Black women died during childbirth at 2.9 times the rate white women did.

Charles Johnson, the chair of the ballot campaign for the now-withdrawn Fairness for Injured Patients Act, lost his 39-year-old wife Kira, a Black woman, during childbirth when her bladder was lacerated during a C-section at Cedars Sinai Medical Center in Los Angeles. Doctors ignored her symptoms for 10 hours, Johnson says, while his wife was bleeding internally.

When AB 35 passed the Legislature in May, Johnson — who founded the maternal advocacy group 4Kira4Moms after his wife’s death — said in a statement that lifting California’s cap on pain and suffering damages “is about justice for families, especially women of color who experience more medical negligence in a biased health care system and then are denied accountability because of California’s outdated, one-size-fits-all cap.”

“With this compromise, families will finally be able to find an attorney and have their day in court,” Johnson said. “I’m proud that it’s a part of my wife’s legacy that other families will have access to the justice that we’ve been denied.”

Compromise with the doctors’ lobby

As for the medical malpractice defense bar, Rabin says, AB 35 may make it correspondingly “somewhat more likely” that medical professionals will have malpractice cases brought against them.

“It’s not going to mean that doctors are suddenly going to flee the jurisdiction or leave the practice in the areas where there’s a high likelihood of malpractice being brought,” he said — pointing out that pathologists, for example, hardly ever have malpractice cases brought against them, while neurosurgeons have far more. “It depends on the area of practice you’re in.”

AB 35 was opposed by the Union of American Physicians and Dentists, who argued that the bill would increase health care costs and raise the price of medical malpractice insurance premiums, driving physicians out of private practice and worsening existing doctor shortages.

“The current economic situation with runaway inflation is devastating to working families and AB 35 will make it much harder for them to pay for adequate health care,” the union wrote in a statement opposing the bill. “Ultimately, all these increased health care costs will be borne by working families.”

The California Medical Association, which reached a compromise with consumer and patient advocacy groups to support the bill, wrote in a statement of support that “important guardrails” of MICRA remain unchanged under the law. And the bill does contain a provision that some see as a concession to the medical lobby: any statements, writings, or “benevolent gestures” expressing sympathy, regret, or acceptance of fault in medical malpractice cases are “confidential, privileged, and protected,” and can’t be subpoenaed or admitted into evidence in civil suits or proceedings before licensing or disciplinary boards.

That provision doesn’t sit well with Heiting, who says it prevents transparency. He also takes issue with the fact that the legislation provides a higher cap for cases involving wrongful death claims.

“It’s always been my opinion that injuries are worth more than deaths in regard to personal injury cases,” Heiting said. “Serious injuries can be worth millions and millions of dollars because of the long-term suffering of the plaintiff and the long-term need for care…the hell that people go through the rest of their lives.”

Still, after decades of representing medical malpractice plaintiffs, Heiting takes the bill as a long-awaited win for his clients – at least until the state hits the new $750,000 and $1 million ceilings established by the legislation.

“By the time we get there, we’ll be behind the eight ball again,” he said. “Which we are constantly anyway.”

But one thing is for sure, Heiting says.

“You’ll have a lot of cases waiting until January 1, 2023 to file.”

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