In a published opinion, the Second District Court of Appeal has upheld the constitutionality of California’s landmark Medical Injury Compensation Reform Act (MICRA), flatly rejecting challenges raised on numerous legal theories.

In this case, Rashidi v. Moser, M.D., the plaintiff settled with two defendants and then went to trial against the physician. The jury awarded the plaintiff $125,000 in economic damages and $1,325,000 in non-economic (subjective pain and suffering) damages. After trial, the trial court judge reduced the non-economic damages portion of the award to $250,000, in accordance with MICRA.

The plaintiff appealed, asserting that MICRA’s cap on non-economic damages (Cal. Civ. Code 3333.2) violates California's constitutional guarantees of trial by jury, separation of powers and equal protection of the laws. The court rejected all of these arguments.

Relying on “settled, well-reasoned authority” from the California Supreme Court, the appeals court stated that MICRA’s $250,000 cap “on the recovery of non-economic damages is rationally related to the objective of reducing the costs of medical malpractice litigation and in that way restraining the costs of medical malpractice insurance premiums.” Rejecting all of plaintiff’s constitutional arguments, the court found that MICRA’s non-economic damages cap does not interfere with the jury’s decision, applies equally to all plaintiffs and represents a proper exercise of legislative authority.

The court also held that MICRA’s non-economic damages cap is to be applied before offsets from pre-trial settlement proceeds. In this case, plaintiff reached pretrial settlements totaling $2,350,000 with the hospital and medical device manufacturer, an amount significantly higher than the total amount of damages found by the jury at the later trial. Relying on the language of the MICRA statute, the appeals court noted that MICRA prohibits a plaintiff from recovering more than $250,000 in non-economic damages from all health care providers in the same action and does not distinguish between settlement dollars and court judgments; rather, MICRA addresses a plaintiff’s total recovery for non-economic damages. Accordingly, the court held that MICRA’s non-economic damages cap is to be applied first before offsets from settlement proceeds, thereby preventing the circumvention of the MICRA statute.

The California Medical Association, along with the California Dental Association, the California Hospital Association and the American Medical Association, filed an amicus brief in this case with the California Court of Appeal defending the constitutionality of MICRA. This case is just the latest in many legal challenges to MICRA that have been funded by trial lawyer groups from across the country.