In an important ruling last month, the Missouri Supreme Court recognized the right of the people to have a say in how civil liability should affect key aspects of their lives, from the health care they receive to their jobs. In this particular ruling, the Court upheld the right of the Missouri General Assembly to enact commonsense limits on certain types of damages in medical malpractice cases, but the ruling has implications far beyond this case. It allows the people, acting through the legislature, to provide a critical check on litigation abuse.
The case before the Missouri Supreme Court this summer involved a 2015 law enacted in a bi-partisan fashion by the legislature and signed by then-Governor Nixon to set upper limits on emotion-based damages in medical liability cases. Under the law, plaintiffs could recover unlimited out-of-pocket costs, which are objective economic losses including the costs of care, lost wages and future medical expenses. Their emotion-based damages, for which there are no objective guideposts, were limited to $400,000 in most cases and $700,000 in catastrophic cases. The law adjusts these numbers every year for inflation, so they are even higher today.
Outer limits on emotion-based awards are common. About two-thirds of the states have legislative limits on these damages. Measuring emotional harm has proven to be extremely difficult, inherently subjective and highly variable. Many plaintiffs’ lawyers, particularly in Missouri, have become highly skilled at driving up these damages over the past several decades in search of “jackpot justice.” For example, the median award in medical liability cases grew 250 percent from 1992 to 2005 alone. These verdicts often do not reflect the facts of a given case.
This extra money is not free. Excessive verdicts can interfere with the ability of people to get what they need—here, a well-functioning health care system. When liability is too high, insurance rates for doctors and defensive medicine go up. Doctors, particularly specialists, avoid risky procedures or leave a state in search of a more stable legal environment to practice medicine. Missouri residents had experienced all of these problems. The people’s representatives fixed this health care crisis by, among other things, enacting these liability limits.
The 2015 law, though, was not the first time the General Assembly sought to limit emotion-based damages in medical malpractice lawsuits. They thought they fixed the problem of runaway verdicts ten years earlier in 2005. But the Missouri Supreme Court struck down that law, saying the legislature could not limit emotion-based damages the way they did it in 2005. So, the General Assembly in 2015 enacted the damage limits in a different way. This summer the state Supreme Court approved the new law.
This ruling is important because it provides a clear pathway for the General Assembly and governor to fix excessive liability that harms people’s lives. It is the same pathway used earlier this year when Missouri enacted a law sponsored by Sen. Tony Luetkemeyer (Parkville) to protect small businesses and other employers in the state from improper liability over Covid-19. This law recognizes that an employer should be liable if it purposefully puts a person’s health in danger, but not for general societal risks it cannot control.
It also is the pathway used to create workers compensation and other important programs that protect people and their jobs. For too long, as Bloomberg News reported several years ago, parts of Missouri have had “a reputation for fast trials, favorable rulings, and big awards.” Indeed, St. Louis has been repeatedly named a Judicial Hellhole by the American Tort Reform Association. People from around the country file their lawsuits there, sometimes targeting Missouri companies that had no part in causing their alleged injury as an excuse to file in the state, because they believe they can get more money in Missouri than in their home states
When the scales of justice tilt too far out of balance, the General Assembly now has the green light to steady those scales. It, along with the courts, can ensure the civil liability system remains a public good. Justice means making sure people who are wrongfully injured can be fairly compensated, while at the same time protecting the courts from being unfairly manipulated and local businesses paying more than they should. Plaintiffs’ lawyers were understandably upset by this ruling, but it is the people—not them—who should say how the courts are run.
Phil Goldberg co-chairs the Public Policy Practice of Shook Hardy & Bacon LLP and manages the firm’s Washington, D.C. office. He filed an amicus brief with the Supreme Court of Missouri in support of the legislation limiting noneconomic damages in medical negligence claims on behalf of the American Medical Association and the Missouri State Medical Association.