From the desk of Jeff Eberhard: Back in 1987, the Oregon legislature enacted a limit on noneconomic damages of $500,000 in personal injury cases, but soon after that the Oregon Supreme Court held in two cases that those limits were unconstitutional under the Oregon Constitution. In the following case, the Court revisits those prior decisions, ultimately determining they were decided wrongly. See the discussion below regarding how this applies to the $500,000 non-economic damages cap.
Claims Pointer: This case involves the Oregon tort cap for public bodies. However, the net effect is that Oregon’s $500,000 limit on noneconomic damages in personal injury cases is enforceable. This is a significant change that will benefit insurers and self-insured entities, among many others. The Horton case involved a medical malpractice claim following a botched surgery on a six-month-old boy. The Oregon Supreme Court held that the cap on damages of Oregon Tort Claims Act was constitutional, despite years of cases going the other way. The Court re-examined the Oregon Constitution and its own prior decisions, ultimately determining that, among other things, the right to a jury trial under Article I, section 17, of the Oregon Constitution is “procedural” rather than “substantive,” meaning that the legislature could define the elements of a claim or the extent of damages available for a claim. In short, the Court determined the legislature’s limit to claims for person injury was constitutional under Article I, section 17.
NOTE: Our next update on this case will address the Court’s analysis under the Remedy Clause of the Oregon Constitution as to when the tort cap is enforceable.
Horton v. OHSU, 359 Or 168 (2016).
In this medical malpractice case, a six-month-old boy developed a cancerous mass on his liver. Two doctors from Oregon Health & Science University (“OHSU”) participated in an operation to remove the mass but inadvertently transected blood vessels going to the child’s liver, requiring a liver transplant, removal of his spleen, additional surgeries, and lifetime monitoring due to the risks resulting from the doctors’ acts. The child’s mother, Lori Horton (“Horton”), brought suit against the physicians and OHSU.
At trial, OHSU and one of the physicians, Dr. Harrison (“Harrison”), admitted liability for the child’s injuries, and the case went to the jury to determine the amount of damages. The jury awarded economic damages of $6,071,190 and noneconomic damages of $6,000,000. OHSU and Harrison filed a motion to reduce the jury’s verdict to $3,000,000 pursuant to the Oregon Tort Claims Act. The trial court granted the motion as to OHSU, ruling that because sovereign immunity applied to OHSU, the legislature could constitutionally limit the damages for which OHSU was liable. However, the trial court denied the motion as to Harrison, ruling that the Tort Claims Act limit as applied to Harrison violated the Oregon State Constitution’s remedy clause of Article I, section 10, and the jury trial clauses of Article I, section 17, and Article VII (Amended), section 3. The trial court then entered a limited judgment against Harrison for all the damages the jury had awarded, and Harrison filed a direct appeal to the Oregon Supreme Court.
Before discussing the specifics of the appeal, let us first provide some background. The Horton case involves an exception to the principle that states have “sovereign immunity” from being sued. In 1989, the Tort Claims Act limited government liability for all damages (economic and noneconomic) to $200,000 for injury claims. In response to the Court’s opinion in Clarke v. OHSU, 343 Or 581 (2007), the Oregon legislature increased the cap to $3,000,000 for claims against the state and provided for incremental increases in the cap over time. However, the more important statute was adopted in 1987, and it placed a $500,000 cap to noneconomic damages (that is, subjective, nonmonetary losses such as pain, mental suffering, emotional distress, humiliation, and so on) for all claims arising out of bodily injury, death, or property damage. In a previous Oregon Supreme Court case, Greist v. Phillips, 322 Or 281 (1995), the Court held that because a plaintiff had no claim for wrongful death when the Oregon constitution was adopted in 1857, there was no corresponding constitutional right to a jury trial for such a claim. According to the Court, because wrongful death actions are “purely statutory,” they exist only in the form and with the limitations chosen by the legislature. The statutory cap on noneconomic damages was thus constitutional as applied to wrongful death suits. However, this ruling was limited to cases involving claims for which there was no related common law claim in 1857. In later decisions, the statutory cap was held unconstitutional as applied to claims that existed in 1857—one such claim being claims for bodily injury. See Lakin v. Senco Products, 329 Or 62 (1999); Smothers v. Gresham Transfer, Inc., 332 Or 83 (2001); Klutschkowski v. PeaceHealth, 354 Or 150 (2013). Following Horton, however, the cap is now enforceable in claims for personal injury. See also Rains v. Stayton Builders Mart, Inc., 359 Or 610 (May 26, 2016).
Returning to the Horton case—in it, the Court reviewed its prior holding in Lakin v. Senco Products, 329 Or 62 (1999), that the statutory cap interfered with the Oregon Constitution that provides fact issues must be determined by a jury. Because the right to a jury trial was absolute, limiting the jury’s ability to determine damages was necessarily unconstitutional.
To arrive at its holding, the Lakin Court made three conclusions: first, the right to a jury trial guaranteed by Article 1, section 17, has the same meaning today that it did in 1857 (the year Oregon’s constitution was adopted); second, in 1857, the extent of a party’s damages in an individual case was a question of fact for the jury, and legislatures could not interfere with the jury’s fact-finding function; and third, the legislature’s authority to limit a jury’s factual findings was no greater than a trial court’s. Although a trial court of 1857 had authority to set aside a jury’s verdict where it was contrary to the weight of the evidence, the court could do so only if it provided the option of a new trial. Thus, neither a trial court nor the legislature could unilaterally limit a jury’s award of noneconomic damages in “civil cases in which the right to jury trial was customary in 1857, or in cases of like nature.”
The Horton Court addressed each of these points in turn, beginning with the last one, that the legislature had no authority to unilaterally limit a jury’s damages award if the cause of action existed in 1857. According to the Horton Court, the fact a judge cannot reweigh the amount of damages in an individual case does not mean the legislature cannot enact a statute specifying as a matter of law the nature and extent of damages that are available in a class of cases. A damages cap is not a legislative attempt to reweigh a jury’s factual findings; rather, it is a legal limit on damages that applies generally in a class of cases. In sum, the legislature does have the authority to define as a matter of law the nature and extent of damages generally available in a class of cases.
Next, the Horton Court discussed the Lakin Court’s second conclusion, that damages are solely an issue of fact for the jury. While the Horton Court agreed that the jury determines damages, it disagreed that the jury had free rein to determine damages without legal limits. In the past, courts have limited damages by limiting the class of persons to whom a defendant owes a duty, and they have used concepts such as proximate cause to limit the extent of the damages for which a defendant can be held responsible. Oregon law limits a defendant’s liability to the foreseeable damages their negligence caused. Thus, legal limits on a jury’s assessment of civil damages have been and remain an accepted feature of Oregon law. While statutory damage caps differ from other legal limitations of a jury’s authority in that they specify a limit on damages as a matter of law rather than describing that limit generally by using a phrase such as “foreseeable damages,” they do not differ in principle, as they both limit the extent of damages a jury can award in a class of cases. Because the legislature was not attempting to determine the amount of damages a defendant’s act caused in an individual case, the Lakin court was wrong that damages are solely an issue of fact for the jury.
Finally, the Horton court looked to the Lakin Court’s first conclusion that the right to a jury trial under Article I, section 17, of the Oregon State Constitution means the same thing today as it meant in 1857, and so only legal limitations on damages that existed in 1857 were constitutionally valid. The Court pointed out that limits on the extent of a defendant’s damages in 1857 are quite different than they are today. For example, in 1857, an individual owed no “general duty” to the public to avoid causing harm, only particular duties. Given the right to a jury trial applied equally to plaintiffs and defendants, if legal limits on liability were frozen in time as they existed in 1857, defendants would be able to invoke the right to a jury trial to argue against any expansion of claims or damages beyond those that existed in 1857.
Ultimately, the Horton court determined that Lakin could not be reconciled with other decisions of the Supreme Court on the same constitutional provision, and Lakin was overruled. Thus, while Article I, section 17 provides a procedural right to have a jury rather than a judge decide claims and defenses customarily tried to a jury when Oregon adopted its constitution in 1857, as well as cases “of like nature,” it does not impose a substantive limit on the legislature’s authority to define the elements of a claim or the extent of damages available for a claim.
The Court did not, however, leave their decision at that. Rather, they noted that a tort cap may be unenforceable if it violates some other provision of the Oregon or federal constitution. The court specifically referenced the remedy clause found in Article I, section 10, of the Oregon Constitution as presenting a possible limitation on the legislature’s authority to alter or adjust a plaintiff’s right to a remedy. We will take up the Court’s discussion of Article I, section 10, in our next case update.
Case updates are intended to inform our clients and others about legal matters of current interest. They are not intended as legal advice. Readers should not act upon the information contained in this article without seeking professional counsel.