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In the Courts

This report’s Points of Light typically comprise noteworthy actions taken by judges and lawmakers to stem abuses of the civil justice system not detailed elsewhere in the report.

UNDER GOVERNOR DESANTIS AND STATE SUPREME COURT, FLORIDA’S LITIGATION CLIMATE CONTINUES TO IMPROVE

Although the work is far from over, Governor Ron DeSantis has turned the state of Florida around, appointing the most conservative Florida Supreme Court in decades – a court that is deferential to legislative efforts to stop lawsuit abuse and poised to correct the course set by the prior activist court.

The Florida Supreme Court Authorizes Immediate Appeals of Decisions Allowing Punitive Damages Claims to Proceed

Florida has a sensible rule that does not allow plaintiffs’ lawyers to threaten defendants with punitive dam- ages unless they have evidence supporting that request. When initially filed, complaints cannot include a demand for punitive damages. Instead, a plaintiff must file a motion for leave to amend the complaint and submit evidence supporting the request. The grant or denial of leave to assert a punitive damages claim can be a “game changer,” as the addition of such a claim to a case exposes a defendant to intrusive financial worth discovery and a potentially large verdict. Such claims are supposed to be brought only after meeting a high bar. But previously, a trial court order granting or denying leave to assert a punitive damages claim was not subject to any type of immediate appellate review, often resulting in punitive damages claims erroneously moving forward. In early 2022, the Florida Supreme Court responded by adopting a rule change that allows a party to seek immediate appellate review of an order granting or denying a motion for leave to assert punitive damages.

The Florida Supreme Court Delivers a Win for Truth in Damages

In a tort action, the measure of a plaintiff’s compensatory damages is supposed to reflect the person’s actual loss. In personal injury cases, the plaintiff’s medical bills represent a significant part of compensatory dam- ages, but invoiced amounts are typically paid at discount rates pursuant to contracts between the plaintiff’s health insurer and medical service providers. Accordingly, the appropriate measure of compensatory dam- ages for past medical expenses is the amount the plaintiff, or the plaintiff’s insurer, has actually paid, or is obligated to pay, not the sticker-price amount initially charged by the medical providers. To allow a plaintiff to recover the full undiscounted amount would result in a windfall of “phantom damages” which the plain- tiff would never be responsible to pay.

A question recently arose with regard to payment of healthcare expenses by Medicare and similar benefits. Under state law, medical benefits paid pursuant to a federal program like Medicare are not considered collateral sources that may be set off from a verdict. In Joerg v. State Farm, the prior iteration of the Florida Supreme Court held that in determining a plaintiff’s future medical expenses, evidence of a plain- tiff’s eligibility for future benefits like Medicare is inadmissible. Enterprising plaintiffs’ attorneys argued that Joerg meant that, in determining a plaintiff’s past medical expenses, a plaintiff should be permitted to intro- duce the gross amount billed by a medical provider, and the defendant may not introduce evidence that the plaintiff’s Medicare benefits in fact paid a discounted amount.

The Florida Supreme Court ended this argument in Dial v. Calusa Palms Master Ass’n, which finally and unequivocally establishes that plaintiffs whose past medical expenses were paid by federal programs such as Medicare can only admit into evidence the amounts actually paid, not the fictitious amounts that no one is actually responsible for paying.

FOURTH CIRCUIT UPHOLDS WV LAW REGULATING DECEPTIVE LAWSUIT ADVERTISEMENTS

The U.S. Court of Appeals for the Fourth Circuit upheld a West Virginia law regulating misleading lawsuit advertising practices, reversing a federal district court decision.

In 2020, the West Virginia Legislature passed the Prevention of Deceptive Lawsuit Advertising and Solicitation Practices Regarding the Use of Medications Act. The Act prohibits specific practices in lawsuit advertisements that give false impressions that they reflect medical or governmental advice. The law also requires informational disclosures to prevent confusion and protect public health. For example, it prohibits the use of phrases such as “health alert” or “public service health announcement,” displaying the FDA logo, or suggesting a product has been recalled when it remains approved for use. The law also required ads targeting prescription drugs to caution viewers not to discontinue a prescribed medication without first consulting their doctors.

A 2019 FDA study shows the real-life consequences of deceptive trial lawyer ads. Researchers found 66 incidents of adverse events following patients discontinuing the use of blood thinner medication (Pradaxa, Xarelto, Eliquis or Savaysa) after viewing a lawsuit advertisement. The median patient age was 70 and 98% stopped medication use without consulting with their doctor. Thirty-three patients experienced a stroke, 24 experienced another serious injury, and seven people died. Dr. Shawn H. Fleming, doctor for one of the deceased, stated before a 2017 U.S. House Judiciary committee hearing, “It’s my opinion that the tone and content of these advertisements imply a qualitative judgment about these medications that are just not true. When you say call 1-800-BAD-DRUG, that clearly implies it’s a bad drug, which runs counter to current medical evidence and also to the FDA’s recommendations.”

A unanimous Fourth Circuit panel rejected a First Amendment challenge mounted by West Virginia plaintiffs’ attorneys to the law. The appellate court found that each of the bill’s prohibitions was tailored to address practices that are “inherently or actually misleading” and that the law’s disclosure requirements were in response to “concrete concerns supported by empirical evidence.” The Court concluded, “The act’s prohibitions and disclosures work together… to protect the health of West Virginia citizens who may be misled into thinking that attorneys are reliable sources of medical advice.”

“It’s my opinion that the tone and content of these advertisements imply a qualitative judgment about these medications that are just not true. When you say call 1-800-BAD-DRUG, that clearly implies it’s a bad drug, which runs counter to current medical evidence and also to the FDA’s recommendations.”

- Dr. Shawn H. Fleming

ARIZONA DEFENDANTS MUST HAVE ‘EVIL MINDS’ FOR PUNITIVE DAMAGE LIABILITY

The Arizona Supreme Court clarified that punitive damages are reserved for “punishing outrageous con- duct” and are inappropriate in cases involving ordinary negligence.

The underlying case involved a fatal highway accident in which a truck driver lost control of his vehicle while driving down a hill in rainy conditions. His truck obstructed the roadway, and another driver struck the plaintiffs’ vehicle while trying to avoid the obstruction.

According to the Arizona Supreme Court, the driver’s negligent conduct – losing control of his truck while travelling down a hill on a slick road – fell well short of the “aggravated, outrageous, malicious or fraudulent” standard required to justify punitive damages. Furthermore, allegations that the driver was speeding, even if proven, would be a “far cry from the outrageous or quasi-criminal conduct sufficient to establish an evil mind.”

The ruling will help ensure that plaintiffs’ lawyers do not misuse punitive damages to threaten or collect nuclear verdicts by portraying defendants as “big corporations” with deep pockets, when they did not engage in malicious conduct.

MARYLAND REJECTS LOSS OF CHANCE DOCTRINE

The Maryland Court of Appeals declined to adopt the “loss of chance” doctrine in July 2022, finding that the doctrine’s relaxed causation framework directly conflicts with the statute’s traditional standard, which requires a plaintiff to show that a defendant’s negligence more likely than not caused the plaintiff’s injury.

The loss of chance doctrine permits a relaxed standard for causation in the medical malpractice context, allowing plaintiffs to recover for the lost chance of a better outcome, such as surviving longer, even if the outcome would likely be the same regardless of a delay in a diagnosis. The state’s top court had previously held that the Maryland Wrongful Death Act does not permit loss of chance claims. The trial court properly applied this precedent to dismiss a claim speculating that had a doctor immediately followed up on abnormal CT scans, his wife, who had metastatic breast cancer, would have lived 30 months longer. Both parties’ experts had agreed that a metastatic breast cancer diagnosis was a “death sentence,” regardless of the discovery timeline.

On appeal, the widower petitioned a Court of Special Appeals panel to disobey stare decisis and find loss of chance doctrine compatible with the state’s wrongful death statute; the panel did not oblige.

Before Maryland’s highest court, the plaintiff reversed course, arguing his claims did not fall under the loss of chance doctrine because he was seeking damages for his wife’s loss of a concrete period of life, rather than her natural life expectancy. Although two judges were persuaded by the plaintiff’s distinction, the majority recognized it as a veiled “collateral attack on our previous loss of chance decisions.” The majority rejected the claim, reaffirming that it is not the judiciary’s role to make sweeping policy changes:

“The General Assembly is best equipped to identify, consider, and reconcile competing policy interests associated with the decision of whether to adopt the loss of chance doctrine. Therefore, any changes to the Wrongful Death Act are best suited to the legislative process in the General Assembly and not from this Court ‘in the guise of statutory construction.’”