Pennsylvania Punitive Damages Reform Update

Author: Marc L. Penchansky

As we reported in January, the Pennsylvania House approved legislation that would cap punitive damages to 200% of what a jury awards a claimant for compensatory damages. The bill applies to claims filed against personal care homes, assisted living communities and long-term care nursing facilities. The bill would not apply to cases involving allegations of intentional misconduct.

The Judicial Committee of the Pennsylvania Senate is currently considering the bill. A question has been raised by some members of the bar about whether Article III, Section 18 of the Pennsylvania Constitution restricts the power of the General Assembly to limit the award of punitive damages to Plaintiffs who suffered injuries or death due to the actions or omissions of a personal care home, assisted living community or long-term care nursing facility. Section 18 provides that the General Assembly may not “limit the amount to be recovered for injuries resulting in death, or for injuries to persons or property. . . .”

Initially, it is important to note that the Medical Care Availability and Reduction of Error Act (MCARE) already limits the award and payment of punitive damages. MCARE limits the award of punitive damages against an individual physician to 200 percent of compensatory damages. 40 P.S. § 505(d). Further, twenty-five (25) percent of the award of punitive damages is paid to the MCARE fund and not the plaintiff. See id. at 505(e).

Yet, some concern clearly exists among legislators that such limits do violate Section 18. H.B. 199 introduced during the 2009 Session of the General Assembly sought to amend Section 18 to include the following language: “The General Assembly may enact laws limiting the amount of recovery for noneconomic damages and punitive damages in medical malpractice actions.”

Article 18 precludes limitations on the “amount to be recovered for injuries . . .” Punitive damages do not compensate the Plaintiff for injuiries, but, as the nomenclature suggests, these damages punish the defendant and seek to deter similar behavior by the Plaintiff or others similarly situated. See Colodonato v. Consolidated Rail Corp., 504 Pa. 80, 470 A.2d 475 (1983). The Supreme Court of Pennsylvania explained that “[d]amages awarded in a negligence action compensate a plaintiff for his or her losses. Punitive damages, in contrast, are not awarded to compensate the plaintiff for her damages but rather to heap an additional punishment on a defendant who is found to have acted in a fashion which is particularly egregious.” Phillips v. Cricket Lighters, 584 Pa. 179, 189-90, 883 A.2d 439 (2005) (citing G.J.D. by G.J.D. v. Johnson, 552 Pa. 169, 713 A.2d 1127, 1129 (1998)).

As further evidence that the General Assembly does not consider punitive damages to be compensatory was their willingness in the MCARE Act to direct a quarter of the punitive award to the Commonwealth’s malpractice insurance fund. 40 P.S. § 505(e). Clearly, the State could not take for themselves damages that compensate the victim for their losses.

Pennsylvania ranked second among the states in medical malpractice payouts in 2011. Pennsylvania health care providers are looking for relief from these high payouts. The political climate for tort reform is often unpredictable, so McCumber Daniels will continue to monitor any progress with this bill and report it here.

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