Indiana’s Medical Malpractice Act, which currently “caps” a plaintiff’s total recovery at $1.25 million for an injury or death caused by an act of medical malpractice, has been challenged on both federal and state constitutional grounds several times since it was enacted in 1975. It appears, from a decision issued by the Court of Appeals on October 25, 2011, that it will soon face another. Timothy W. Plank v. Community Hospitals of Indiana and State of Indiana.

Timothy Plank’s wife, Debra, died after doctors at Community Hospital in Indianapolis failed to diagnose her small bowel obstruction in time. Mr. Plank brought a medical malpractice action against the doctors and the hospital. The doctors were dismissed prior to trial, and the case proceeded to verdict against Community Hospital. The jury returned a verdict of $8.5 million. As is routine in cases which result in a verdict in excess of the $1.25 million cap, the hospital filed a motion after the verdict to reduce the judgment to $1.25 million. Plank objected and sought a hearing in the trial court in order to present evidence on the issue of whether the damages cap violated the Indiana Constitution. The trial court, citing a 1980 case in which the Indiana Supreme Court had upheld the constitutionality of the damages cap, refused to hold a hearing, and Plank appealed.

The Court of Appeals reversed the trial court’s denial of a hearing at which Plank could introduce evidence to challenge the constitutionality of the damages cap. The Court noted that the Supreme Court opinion on which the trial court relied utilized evidence of the “general economic conditions of the health and insurance industries” to conclude that the damages cap was rationally related to the legitimate public purposes of the Malpractice Act. The Court of Appeals acknowledged that these conditions may have changed in the 21 years since that Supreme Court opinion was issued, and that an evidentiary hearing might well be required for Plank to sustain his burden to show that the Act was unconstitutional. Instead, the Court of Appeals cited an intervening Supreme Court case that held “preferential legislative treatment for a classification which was proper when enacted may later cease to satisfy the requirements of Section 23 [of the Indiana Constitution] because of intervening changes in social or economic conditions.” Thus, the Court of Appeals’ opinion raises the prospect that the Act, which was held constitutional on the basis of general economic conditions in the healthcare and insurance industries, could now be held unconstitutional because those conditions have changed in the intervening years. The Court of Appeals also rejected the idea that if changing conditions have eroded the constitutional basis for the damages cap, it was the responsibility of the Legislature, not the courts, to address that changed circumstance. The Court of Appeals remanded the case to the trial court to hold an evidentiary hearing at which Plank would be given the opportunity to show that the damages cap is no longer rationally related to the legitimate legislative objective of addressing “an emergency which threatened the availability of the professional services of physicians and other health care providers to the people of Indiana.”

So, what happens now? It is likely that this case represents a real threat to the statutory scheme for medical malpractice cases in Indiana. The plaintiff’s case on appeal was supported by both the Washington D.C. Center for Constitutional Litigation, a law firm affiliated with the American Association for Justice, formerly the Association of Trial Lawyers of America. The Center for Constitutional Litigation assists by providing appellate legal support in cases involving “access to justice” in courts around the country. On the other side, both the Indiana State Medical Association and the Indiana Hospital Association filed amicus curiae briefs in support of the constitutionality of the damages cap in the Court of Appeals case, and are further expected to support the cap’s constitutionality as the case moves forward. It is likely that a petition will be filed to transfer the case to the Indiana Supreme Court, which will then have the ability to quash the plaintiff’s attempt to present evidence of unconstitutionality, affirm the Court of Appeals order of a hearing, and/or provide additional guidance on the constitutional issue. Stay tuned.