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.

Medical Malpractice Claims, Settlements and Verdicts, It’s All in the Numbers

Author: Joel I. Fishbein

Medical malpractice lawyers, claims professionals and risk managers recently received comprehensive information from two sources about the medical claims environment in Pennsylvania during the 2011 year. First, in the 2012 Medical Malpractice Payout Analysis – Southeast Edition, a report released by Diederich Healthcare, we learned that data taken from the National Practitioner’s Data Bank (NPDB) shows that Pennsylvania experienced the 2nd highest dollar amount of medical malpractice claims payouts, with a total of $319,710,250 paid out to 903 claimants in 2011. Second, the Pennsylvania Supreme Court released its medical malpractice filings and jury verdict statistics for 2011.

We see from the report of jury verdicts that, throughout the Commonwealth of Pennsylvania, there were 110 jury verdicts in medical malpractice cases in 2011. Of those, 78 (or 70.9%) resulted in defense verdicts in 2011. Even in Philadelphia, where only 25 cases were tried to verdict in 2011, 14 (or 56%) were in favor of the defendants. However, 7 of the 12 plaintiffs’ verdicts were for more than $1,000,000 and two of them were for greater than $10,000,000. Outside of Philadelphia County, 75.2% of the jury verdicts rendered in 2011 were in favor of the defense, and of the 21 non-Philadelphia plaintiffs’ verdicts, only 9 were for more than $1,000,000.

By comparing the payout analysis to the jury verdict data, we can see that there were approximately 9 times the number of cases settled in 2011 than tried to verdict. Also, by comparing the Pennsylvania Supreme Court’s filing data with its verdict information, it is clear that Allegheny County cases are significantly more likely to settle than be tried to verdict than those in any other county: filings there are relatively high and cases tried to verdict are extraordinarily low.

This information is important when contemplating settlement strategy in current cases and when considering the need for further tort reform.

Tort Reform

The most significant element of tort reform in Pennsylvania was the tightening of the venue rules. The new rules permit actions to be filed only in the county in which the cause of action arose. This eliminated the pattern of plaintiffs filing in Philadelphia County if any defendant had ties to Philadelphia, without regard to the location of the alleged malpractice. As a result of this initiative, there was a dramatic reduction in filings of medical malpractice complaints in Philadelphia County. In 2011, the filings were down 65% from the average for the three years preceding the enactment of the venue reform.

The small number of large verdicts throughout the state suggests that there is no need to adopt caps on damages. However, there is some evidence that the venue rules are being circumvented by the inclusion of Philadelphia defendants in cases with which they have tenuous ties—and then dismissing these defendants before trial. This is resulting in more cases being tried in Philadelphia than was contemplated when the venue rules were changed. Extra attention should therefore be paid by defense attorneys to ensure that the defendants whose ties to Philadelphia justify venue in Philadelphia County are removed, if possible, early enough to permit venue to be transferred the appropriate county before trial. Also, there may be a need for further rule changes or penalties to ensure that plaintiffs are not including Philadelphia defendants solely to contravene the intent of the rule changes.

Settlement Strategy

The claims payout data is not broken down by county, so it is not possible to ascertain what percentage of the settlements that resulted in payouts were for cases filed and properly venued in Philadelphia County, where plaintiffs’ verdicts and higher awards are statistically more likely. It is also not possible to ascertain what percentage of the settlements were reached in counties where the statistical likelihood of a plaintiff’s verdict is extraordinarily low. In any event, all of this raw data is not usually compiled with such specificity. Since it is available, it should be utilized in every case to guide decisions concerning settlement strategy.

Social Media: Key Evidence in a Technology Driven Society

Author: Kimberly A. Potter

“Social media” fifteen years ago was an unknown expression that has now infiltrated most people’s daily lives. The rise of social media outlets brings with it a host of issues forcing traditional legal concepts to evolve to keep pace with technology. The effect that Facebook, Twitter, LinkedIn, or MySpace (just to name a few) has on litigation varies from jurors tweeting during trials and litigants posting potentially revealing images and status updates that cast doubt on their claims to parties making disparaging comments about judges and lawyers regarding their cases on Facebook.

Accessing someone’s Facebook, Twitter, or MySpace records could wield incredible power in pending litigation; particularly when elusive damages are at issue. A claimant’s case could be irretrievably harmed by the discovery of Facebook or Twitter posts showing the claimant engaged in activities suggesting that he or she is not really injured. For instance, a claimant posting about scuba diving or playing golf while simultaneously alleging that he suffers terrible back pain could be quickly discredited by the disclosure of those records.

The question, then, is how does counsel access those records? And, even if those records are discovered, how do you get them admitted at trial?

Obtaining social media records is complicated, to say the least. The national trend is to permit access to those records provided counsel sets forth the traditional discovery notions of relevancy and whether that information will lead to the discovery of admissible evidence. But, given the potentially voluminous quantity of postings and twitters involved in a person’s account, problems then arise over how much data will be turned over, by whom, and whether that information is truly “private.”  Facebook’s user agreement, for instance, provides that even information placed on the private sections of one’s account can become part of other individuals’ profiles and in effect become public. “Facebook users are thus put on notice that regardless of their subjective intentions when sharing information, their communications could nonetheless be disseminated by the friends with whom they share it, or even by Facebook at its discretion.”

At least the argument can be made that a litigant’s Facebook account records pertaining to posts, photographs, and other data is discoverable if relevant to an issue in the litigation or will lead to other admissible evidence. But, even if counsel obtains those records, are they admissible at trial? That issue arises in the context of authenticating that the posts and other data actually belong to that specific person. It becomes prudent, then, to lay the foundation early on in the discovery process that an account belongs to that person and that his or her posts, tweets, etc., were indeed authored by him or her.

In short, a person’s involvement in social media outlets is certainly a relevant consideration when litigating particularly when subjective damage claims are involved. In the poetic words of a federal judge in Texas, it is “voodoo information.”

Clear and Convincing Evidence

Social media is a fast and inexpensive way for companies to disseminate information about its products and services. It also helps businesses connect quickly with their customers by allowing them to give almost instantaneous feedback on any issue. Many times people are more comfortable expressing themselves via Facebook, Twitter or other social media sites since they are communicating daily in their personal lives in an informal way that these mediums facilitate.

This informality, however, makes businesses more susceptible to new areas of cyber risk. Reputational damage is emerging as a significant concern among risk managers as danger lurks in many ways when a company sets up its website, Facebook page or Twitter feed.

We all know that people and companies can be painted with a broad brush, and people tend to remember the negative over the positive, and just one wrong comment can taint a lifetime of hard work to…

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