November 28, 2014

MICRA constitutionality might be early test of the “new” Supreme Court

The Supreme Court on Tuesday granted review in Hughes v. Pham.  A group who supported review is touting the court’s action as a decision to “review the constitutionality of [what the group characterizes as] the state’s arbitrary 39-year-old damages cap of $250,000 in medical malpractice cases.”  That’s wrong . . . at least for now.

The constitutionality of Civil Code section 3333.2 — the limit on noneconomic damages in healthcare professional negligence cases enacted as part of the 1975 Medical Injury Compensation Reform Act (MICRA) — is not currently before the court in Hughes, but it could be before spring.  If that happens, it will be a harbinger of change at the Supreme Court due to the court’s three newest justices, all appointed by Governor Brown.

The Hughes petition for review raises the constitutional issue, but, in granting review in Hughes, the court clearly did not agree to decide that issue.  In fact, the court did not agree to decide any issue in Hughes at all.  Hughes is a grant-and-hold case; action on the matter is deferred pending disposition of Rashidi v. Moser, S214430, and the eventual “action” on a grant-and-hold case is usually not a written opinion.  Moreover, the court will not decide the constitutional issue in Rashidi, either.  Indeed, the court is expressly avoiding that issue there:  the Court of Appeal upheld the constitutionality of the cap in a published opinion and the Rashidi plaintiff’s petition for review raised the constitutional issue, but the court specifically limited the case to an issue about how the damage cap is applied, thereby presuming the statute’s constitutionality.

But, just because Hughes‘s status as a grant-and-hold case means the court normally would not issue an opinion in the matter does not mean that the status won’t change.  The court can, and occasionally does, un-hold a case and order briefing, hold oral argument, and issue an opinion.  If that happens in Hughes, the court could decide the constitutionality of the MICRA damage cap in that case.  And it might happen.  Some history tells why.

Actually, the Supreme Court already decided the constitutionality of the MICRA cap.  It upheld the law almost 30 years ago in Fein v. Permanente Medical Group (1985) 38 Cal.3d 137.  Within the last ten years, however, plaintiffs lawyers have renewed their attack on the cap in court with somewhat different constitutional arguments.  So far, they’ve been unsuccessful.  For example (and a disclosure), Horvitz & Levy filed an amici curiae brief supporting the cap five years ago in a case raising the same constitutional issues as in Hughes.  In that case, the Court of Appeal upheld the MICRA cap’s constitutionality in an unpublished opinion and the Supreme Court denied review.  (The plaintiffs’ bar has also failed to raise the amount of the cap legislatively, most recently winning only 33 percent of the vote for a ballot initiative.)

Three years ago, however, when the Court of Appeal again rejected constitutional attacks on the MICRA cap, in Stinnett v. Tam (2011) 198 Cal.App.4th 1412, the Supreme Court again denied review, but Justices Kathryn Werdegar and Goodwin Liu voted to hear the case.

In Stinnett, the court was two votes short of review.  Within the next two months, there will be two new justices on the court — Mariano-Florentino Cuéllar and Leondra Kruger — who could join with Justices Werdegar and Liu in voting to decide the constitutional issue.  And the first opportunity to do so would be un-holding Hughes.  That could happen after a decision in Rashidi,  which was argued in October, or even before then.

A change in court personnel can profoundly affect the outcome of cases.  The court’s MICRA jurisprudence itself is a prime example.  When the Supreme Court first reviewed the constitutionality of MICRA, examining a part of that statutory scheme other than the damages cap, the court initially struck down the law in a 4-3 decision.  (American Bank and Trust Co. v. Community Hospital (1983) 190 Cal.Rptr. 371.)  There were three pro tem justices on the case; two voted with the majority and one with the dissenters.  Soon after the decision, Governor Brown (in his first stint as governor) appointed Joseph Grodin to the court, replacing one of the pro tems who had been in the majority.  Justice Grodin voted with the three dissenters to rehear the case and he and those three formed a new majority to uphold MICRA.  (American Bank & Trust Co. v. Community Hospital (1984) 36 Cal.3d 359.)

Legal observers have been discussing how Governor Brown (in his second two terms as governor) could reshape the Supreme Court.  An early indication of that impact will come when his three appointees this time around — Liu, Cuéllar, and Kruger — vote whether to treat Hughes as a typical grant-and-hold or to use that case as the vehicle to reevaluate the constitutionality of MICRA’s damage cap.

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