Nevada’s Tortured Tort Reform
In an effort to thwart a perceived “crisis” and based on fear concocted by media campaigns designed to shift the focus from the real problem, the citizens of the State of Nevada passed a ballot initiative capping noneconomic damages in medical malpractice actions. See NRS 41A.035. This cap is unconstitutional under both the provisions of the United States and Nevada Constitutions. The courts should declare the noneconomic damage cap unconstitutional.
A. The Problem
NRS 41A.035 and related provisions, collectively sometimes referred to as “tort reform” were enacted to address the perceived problem of skyrocketing medical malpractice insurance rates coupled with the belief that such rates were either driving physician’s out of practice, limiting their practices, or completely leaving the State of Nevada. The urgency of the need for action and the perception presented was that in some way this problem was immediate and causally connected to recent unreasonably high jury verdicts creating losses for insurers which justified unreasonable rate increases for medical malpractice insurance.
The “problem” is not a creature of the twenty first century that has recently morphed from a single cell into a full blown tumor. Rather, the “problem” has existed for decades. For instance, in September 1976, the Legislative Commission of the Legislative Counsel Bureau, State of Nevada published Bulletin No. 71-1, entitled “The Problem of Medical Malpractice Insurance.” This bulletin grew out of Senate Concurrent Resolution No. 21 (1975), wherein the study was commissioned. The Resolution states,
WHEREAS, There is a nationwide problem of doctors and health care providers obtaining malpractice insurance with many of the insurance carriers getting out of malpractice coverage and others increasing premiums by several hundred percent; and…
WHEREAS, The malpractice problem in Nevada is presently in a state of transition with the exact dimensions of a number of problems unclear;…The bulletin found that the “so-called malpractice crisis” began in the early 1970′s, with the twin problem of high costs of premiums and decreasing availability of insurance.
B. The Historical Causes
It is important to have a general understanding of the “causes” of the alleged crisis in order to evaluate whether the proposed “solution” is rationally related to the interest sought to be protected. In the 1976 Bulletin, the Commission identified a number of potential causes. First, the Commission found that there was no one single “cause.” Among the causes, the Commission included: (a) malpractice itself; (b) the media; (c) national litigiousness; (d) contingency fees; (e) the imposition of no fault insurance; (f) Stock market losses; (g) Inadequate underwriting; and (h) jury verdicts.
While these are not all of the causes, they represent the most frequently discussed. However, the Commission did conclude that the leading cause of the medical malpractice crisis was medical malpractice itself. A decade later, the Legislative Commission revisited the crisis, publishing a “Study of Insurance Against Medical Malpractice,” Bulletin No. 87-18, Legislative Commission of the Legislative Counsel Bureau, State of Nevada, August 1986. (Addendum IV). This bulletin recognized that between the years 1976 and 1983, nationally medical malpractice insurance rates rose only 51%. However, once again the cycle flowed resulting in dramatic increases in 1984 and 1985. Id. This again piqued legislative interest. This time, in addition to the causes previously discussed, the Commission stated, “the insurance industry is at least partially responsible.”
C. The Historical Solutions
As far back as the 1976 Commission study, solutions to the alleged crisis were being proposed. One of the proposed solutions included “tort reform.” These reforms included limitation on jury verdicts. Id. However, as early as this report, the evidence suggested that statistical probability of Plaintiff success was so low that any such limitation would have almost no real impact on insurance rates and availability. The 1976 bulletin states, “only 8 percent of all claims ever go to trial. Only 6 of that 8 percent go all the way to verdict.” Of those, only 17 percent were in favor of Plaintiffs.”
D. The Twenty First Century Problem
With an historical perspective and understanding, we are brought to the instant crisis which lead to the ultimate initiative enactment of NRS