Recent Supreme Court Decisions Significantly Alter Medical Malpractice Law

WDC Journal Edition: Summer 2005
By: Guy J. DuBeau - Axley Brynelson LLP

During this last term, the Wisconsin Supreme Court handed several decisions which will fundamentally change the way in which medical malpractice cases are defended. The stakes have gone up. The range of claims against hospitals has expanded, while the range of claims hospitals can bring has shrunk. The procedural safeguards available to practitioners have been curtailed. This article seeks to summarize these recent developments so that counsel can begin to think about how best to use what protections remains for providers.

By far the biggest and most widely reported development came in the case of Ferdon v. Wisconsin Patients' Compensation Fund.-1 In that case, the court held the provisions of secs. 655.017 and 893.55(4)(d) Stats., which capped the potential award of non-economic damages in medical malpractice actions, unconstitutional on equal protection grounds.-2 The caps, which have been in place since 1996, survived a previous challenge in Guzman v. St. Francis Hospital.-3 In Guzman, the caps came before the supreme court on bypass from the Court of Appeals, which divided 3-3 on their constitutionality and, accordingly, vacated the bypass order-4. Accordingly, the case was remanded to the Court of Appeals, which upheld their constitutionality.-5

On revisitation of the issue in Ferdon, the supreme by a 4-3 margin, found the caps violative of equal protection.-6 While in one breath acknowledging the deference due to legislative enactments, the court concluded that it should not be a "rubber stamp" for what it believed to be infirm legislation.-7 Capitalizing on an analysis first presented in a 1972 law review article, the court embraced what is effectively a new standard of review in Wisconsin, “rational basis with teeth.”-8 According to the court, this standard “simply requires the court to conduct an inquiry to determine whether legislation has more than a speculative tendency as the means for furthering a valid legislative purpose.”-9 The court identified five legislative purposes underlying the caps and then, in an analysis spanning over 80 paragraphs, concluded that those purposes were not served by the existing legislation.-10

The nature of available claims also expanded in Preston v. Meriter Hospital.-11 That case involved a woman who came to the hospital in active labor with her baby at a little over twenty-three weeks of gestational age.-12 She had been leaking amniotic fluid over a period of days.-13 After screening her, her physicians came to the conclusion that the child would not be viable.-14 The child was born and the hospital provided the family comfort care and counseling for the next few hours after which the child, named Bridon, died.-15 No attempt was made to treat Bridon.-16

The plaintiffs commenced suit, originally articulating several different theories.-17 One claim they stated was an action under EMTALA, the federal anti-dumping statute.-18 They claimed the child was a patient, separate from the mother, and when it was born, it had effectively come to the emergency department for treatment.-19 When this occurs, under EMTALA, the patient is owed first a screening and then possible stabilization if the hospital decides not to treat.-20 The plaintiffs originally claimed theirs was a failure to stabilize claim, but eventually argued that Bridon was never screened and thus there was an actionable EMTALA violation.-21 The court agreed and this decision can be read for the narrow, but potentially significant, holding that irrespective of how a patient comes to a hospital, he or she is coming to the emergency room and EMTALA applies.-22

Meriter Hospital found itself on the short end of another action considered by the court this term. In Meriter Hospital v. Dane County, the hospital sought recovery for the costs of care rendered to a prisoner under sec. 302.38. -23 That section requires the county sheriffs provide reasonable medical care to prisoners in their custody.-24 Under a previous interpretation of the statute, the court ruled this could be accomplished by providing care at the jail or by transferring to a hospital.-25

In this case, a prisoner, Mr. Gibson, fell gravely ill and the sheriff finally determined he needed to be transferred. By the time he arrived at Meriter, he was in septic shock and experiencing multi organ failure.-26 He was eventually hospitalized for 34 days.-27 Unbeknownst to Meriter, however, on the third day of the hospitalization, the sheriffs deputies successfully orchestrated the dropping of all charges against the prisoner, as well as the parole hold.-28 When it came time to collect for the hospitalization, the sheriff balked at paying the entire bill and indicated it would only pay for the first three days under the theory that Mr. Gibson ceased being a prisoner under its control at that time.-29 The court found this procedure acceptable and, while recognizing the result to be harsh, found that it was compelled by the unambiguous language of the statute requiring prisoners to be "held."-30

Practitioners also lost an assumed procedural safeguard this term. Many practitioners had taken the position that the privilege not to render broad standard of care opinions identified in ex rel Burnett v. Alt, applied to them as party defendants as well.-31 Not so, ruled the court in Carney-Hayes v. Northwest Wisconsin Home Care.-32 Carney-Hayes involved a nurse named as a party defendant and who, at her deposition, was asked broad standard of care opinions by plaintiffs' counsel.-33 She was instructed not to answer and, on a motion to compel, the trial court ruled she had to.-34 Interlocutory appeal was taken and accepted by the Court of Appeals and then bypass was had to the supreme court.-35

That court ruled that party practitioner can be compelled to give standard of care opinions to the extent that the subject matter implicated their treatment of the patient.-36 The court did recognize the potential for mischief this ruling created by giving plaintiffs incentive to name as many defendants as possible for the purpose of obtaining their standard of care opinions.-37 It made clear that no person may be named as a party for this purpose and instructed trial courts to be willing to conduct an independent examination of the reasonableness and good faith of naming parties and seeking their opinions if challenged.-38

Lastly, practitioners obtained some measure of relief in Lagerstrom v. Myrtle Werth Hospital, even though the provider at issue did not fair well under that specific case.-39 Lagerstrom involved a direct constitutional challenge to sec. 893.55(7), Stats., which makes collateral source evidence admissible in medical malpractice trials.-40 The court proffered its interpretation of the statute and, based on that interpretation, concluded that the constitutional issues did not arise.-41 The Court was explicit that the evidence allowable under 893.55(7) encompasses all forms of collateral benefit, despite language suggesting it encompassed only compensation paid directly to the plaintiff.-42 Similarly, the Court ruled the statute is applicable to wrongful death actions, despite language limiting it to payments for "bodily injury."-43 Accordingly, all collateral source evidence comes into evidence in all med mal actions.

The Court accepted that there is distinction between admissibility of collateral source evidence and abrogation of the collateral source rule in med mal cases.-44 The Court made a point of noting that "the modification of the collateral source rule is a modification of the rule of evidence to allow evidence of the other payments; it is not an explicit modification of the substantive collateral source rule . . . “-45 This, practically, allowed the Court to conclude that principles of subrogation which are preserved by the statute "trump other considerations."-46 The court thus concluded that the statute "requires courts to instruct juries to consider collateral source payments only in determining the reasonable value of the medical services rendered," but the trial courts should also instruct juries that they "must not reduce the reasonable value of the medical services on the basis of collateral source payments."-47

Lagerstrom also addressed an issue of broader importance in all wrongful death cases. At trial, the jury found the conduct complained of was a cause of death, but nevertheless did not award the estate anything for funeral bills, presumably because there was strong evidence the deceased was very near death regardless.-48 The court’s holding was straightforward. If causation on a death claim is established, then the defense has to pay the funeral expenses.-49

Ultimately, it may not yet be clear what the full scope of the decisions coming down this term is with respect to the defense of health care providers. It is certain that the landscape has changed and the effects will be felt for years to come.

Guy DuBeau, AB 1985, MS, 1987, JD 1991, is a partner in the litigation group of Axley Brynelson, LLP. He is the chair of the group's health care subcommittee and handled
the Lagerstrom case through the trial court and argument to the state
supreme court.

1- 2005 WI 125.

2- Id at para. 10.

3- 2001 WI App 21, 240 Wis. 2d 559, 623 N.W.2d 776.

4- 2000 WI 34, para. 3, 234 Wis. 2d 170, 609 N.W.2d 166.

5- See 2001 WI App 21, supra.

6- 2005 WI 125, at para. 10.

7- Id., at para 185.

8- Id., at paras. 78-80, referencing, Gerald Gunther, In Search of Evolving Doctrine on a Changing Court: A Model for a Newer Equal Protection, 86 Harv. L. Rev. 1, 18-19 (1972).

9- Id., at para. 78.

10- Id. at paras. 85-176

11- 2005 WI 122.

12- Id. at para. 6.

13- Id.

14- Id. at para. 10.

15- Id. at para. 7

16- Id.

17- Id. at para. 8

18- Id.

19- See id. at paras. 10-11.

20- Id.

21- Id.

22- Id. at para. 38.

23- 2004 WI 145.

24- Sec. 302.38, Stats.

25- Swatek v. Dane County, 192 Wis. 2d 47, 531 N.W.2d 45 (1995).

26- Id. at para. 4.

27- Id. at para. 5.

28- See id. at paras. 6-7.

29- Id at para. 8.

30- Id. at para. 15.

31- See 224 Wis. 2d 72, 589 N.W.2d 81 (1999).

32- 2005 WI 118.

33- Id. at paras. 9-11.

34- Id. at para. 11.

35- Id. at para. 1.

36- Id. at para. 49.

37- Id. at para .42.

38- Id.

39- 2005 WI 124.

40- See sec. 893.55(7), Stats.

41- Id. para. 22.

42- Id. at para. 29.

43- Id.

44- Id. at para. 48.

45- Id.

Id.

Id. at paras. 72, 74.

Id. at 91.

Id. at para. 96