The California Medical Association (CMA), along with the California Dental Association and the California Hospital Association filed an amicus brief with the California Supreme Court urging the common sense application of our state’s landmark Medical Injury Compensation Reform Act (MICRA), which allows non-economic damage awards up to $250,000 and unlimited economic damage awards for all past and future medical costs, lost wages and earning capacity. This case is just the latest in many legal challenges to MICRA that have been funded by trial lawyer groups from across the country.

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 Second District Court of Appeal rejected all of plaintiff’s constitutional arguments and 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 plaintiff has appealed the appeals court ruling to the California Supreme court, arguing that the “damages” limited by Civil Code section 3333.2 only include those damages awarded by a jury. In other words, the plaintiff argues that while any jury award is limited to $250,000 in non-economic damages, a plaintiff can recover more than $250,000 in non-economic damages if some of that recovery comes from settlements with professional negligence defendants. The plaintiff also asked the high court to review the appellate court’s ruling on MICRA’s constitutionality, but the Supreme Court declined to do so, expressly limiting its review to section 3333.2’s application to settlement proceeds.

In its brief, CMA urges the state's high court to affirm the Court of Appeals' common-sense approach. The brief argues that Section 3333.2 establishes a limitation on the total amount that a plaintiff may recover for non-economic damages from all health care provider defendants as compensation for injury caused by professional negligence. "To hold otherwise would obliterate MICRA’s purpose of reducing the costs of health care litigation," the brief states. "Plaintiff’s interpretation would result in health care providers’ liability and plaintiffs’ non-economic recovery being dependent on whether particular defendants settle or proceed to trial, introducing volatility into a statutory limitation intended to stabilize such awards."

Contact: CMA legal information line, (800) 786-4262 or legalinfo@cmadocs.org.