KANSAS NONECONOMIC DAMAGE CAP IN PERSONAL INJURY CASES DECLARED UNCONSTITUTIONAL: NOW WHAT?

By Tyler E. Heffron, member of the firm, with contribution from Greg Gietzen, summer law clerk

On June 14, 2019, in Hilburn v. Enerpipe Ltd., 2019 WL 2479464 (2019), a majority of the Kansas Supreme Court held the noneconomic damage cap in personal injury cases (K.S.A. § 60-19a02) violates Section 5 of the Kansas Constitution. The following is a brief summary of the Hilburn opinion, an analysis of some likely fallout, and suggestions on what should be done by those impacted by this change in Kansas law.

A. FACTS AND BACKGROUND

K.S.A. § 60-19a02 imposed a cap on the amount of noneconomic damages (i.e., pain and suffering damages) that could be recovered in a personal injury case. The cap amount established by the Kansas legislature escalated over time, and in 2019, the cap was $325,000. The cap meant an injured party, for example in an automobile accident, could recover no more than $325,000 for pain and suffering damages.

Section 5 of the Kansas Constitution states, “The right to trial by jury shall be inviolate.” Seven years ago, in Miller v. Johnson, 295 Kan. 636 (2012), a divided Kansas Supreme Court upheld the constitutionality of the cap in a medical malpractice case. In Miller, the Kansas Supreme Court applied what is known as the “quid pro quo” test to evaluate constitutionality of the cap. Under that test, it was determined the Kansas legislature was able to modify the constitutional right to trial by jury by imposing a cap, if doing so was reasonably necessary in the public interest and the cap imposed by the legislature was still an “adequate substitute” for otherwise letting a jury decide the amount of damages.

In 2010, Hilburn was injured while the vehicle she was in was rear-ended by a semi-truck. Hilburn filed a lawsuit in Sedgwick County, Kansas District Court against the owner of the semi-truck, Enerpipe, Ltd., and the matter proceeded to trial on the sole issue of Hilburn’s damages. The jury awarded Hilburn damages of $335,000, consisting of $33,490.86 in medical expenses and $301,509.14 in noneconomic losses (i.e., pain and suffering). The trial court reduced the noneconomic damages awarded by the jury from $301,509.14 to $250,000, in accordance with the cap amount in K.S.A. § 60-19a02 then in effect. Hilburn filed an appeal, arguing the reduction of her damage award under K.S.A. § 60-19a02 was unconstitutional, in particular, that it violated her right to a trial by jury. The Kansas Court of Appeals confirmed the trial court’s reduction of Hilburn’s damages pursuant to K.S.A. § 60-19a02 by following the precedent in Miller. A majority of the Kansas Supreme Court declared K.S.A. § 60-19a02 unconstitutional, finding the cap violated Section 5 of the Kansas Constitution, and ordering the trial court to reinstate the amount of damages awarded to Hilburn by the jury.

B. HOLDING AND REASONING IN HILBURN V. ENERPIPE, LTD.

The majority in Hilburn overruled the application of the quid pro quo test and the relatively recent conclusion in Miller. The Hilburn court abandoned the quid pro quo test because it found: (1) the original application of the test to the right to a jury trial was not well-founded; (2) continued application of the test fostered uncertainty; and (3) when Miller was decided, none of the 19 other states that had considered whether damage caps violate constitutional jury protections employed the test in their analysis.

Several groups filed amicus briefs in the Hilburn case, including the Kansas Chamber of Commerce and Industry, Inc., Kansas Association of Defense Counsel, and Kansas Trial Lawyers Association. The Kansas Attorney General also intervened in the case. The Kansas Attorney General argued the cap should be deemed constitutional on what was characterized as a fact-law or fact-policy distinction. In other words, the Kansas Attorney General argued the right to a jury trial was not violated by the cap, because the jury’s function is to resolve disputed facts, and since the cap is a law, it is the trial court’s function to apply the law (or cap) to the facts resolved by the jury. Fourteen other states addressing the same issue of constitutionality of damage caps have upheld enforcement of the caps under this rationale. The Hilburn court, however, rather quickly dismissed this suggested rationale for upholding constitutionality of the cap by siding with five other states that have struck down caps as unconstitutional and by stating they “simply cannot square a right specially designated by the people as ‘inviolate’ with the practical effect of the damages cap: substituting juries’ factual determinations of actual damages with an across-the-board legislative determination of the maximum conceivable amount of actual damages.”

After rejecting the quid pro quo test and the fact-law rationale followed by other state courts, a majority of the Hilburn court had a relatively easy time finding the cap impaired a jury’s fundamental function. For these reasons, the Hilburn Court held the cap statute, K.S.A. § 60-19a02, violates Section 5 of the Kansas Constitution.

C. WHAT TO EXPECT AND WHAT CAN BE DONE

The Kansas noneconomic damage cap in personal injury cases is now out. So what does this mean? The two Justices dissenting in Hilburn were concerned over this very question and the dissenters believed the majority failed to follow what was believed to be settled law in Kansas following the 2012 decision in Miller. The Hilburn dissenters stated:

The majority’s decision today upends caselaw addressing jury trial limitations imposed in workers compensation, medical malpractice, no fault insurance, and general tort litigation. If nothing else, Kansans have written, negotiated, and executed innumerable insurance policies and indemnity contracts relying on the limitations of the damages caps. As we have recognized, “’[considerations in favor of stare decisis are at their acme in cases involving property and contract rights, where reliance interests are involved.’” (internal quoting authority omitted). Thus, we have generally declined to overrule precedent that would undercut the reliance placed on our past decisions when writing, issuing, and buying policies for such things as automobile insurance. The majority gives little heed to the consequences of changing the rules that underlie these contracts. In doing so, it creates instability. In turn, it undercuts the stare decisis principles on which our system of the rule of law depends.

The dissenters’ concerns and observations are real. The Hilburn decision has already created a perception of instability, leading injured plaintiffs and their legal counsel to be emboldened by what they believe is increased claim value and greater negotiating leverage in personal injury cases. However, time will tell whether the Hilburn decision truly is a game-changer in personal injury cases, because arguably the impact of Hilburn is not widespread.

The noneconomic damage cap, pre-Hilburn, was only implicated in certain personal injury cases—those personal injury cases where the specific facts supported a jury determining the value of pain and suffering was so great that it exceeded the amount of the cap. Those factual scenarios only exist in a certain segment of personal injury cases, not every case. Further, under pre-Hilburn law, a jury was never instructed about the existence of the cap, so the fact the cap is now gone will not change how a jury is instructed during trial and deliberations thereby leaving the jury’s decision-making process unaltered. Moreover, compared to many other states, Kansas juries have historically been relatively conservative in their award of damages, which is a consequence of the honest, fair-minded, measured, realistic, hard-working, and common-sense characteristics of our state’s population. Consequently, given the foregoing practicalities, there is no reason to panic in response to Hilburn.

Despite the foregoing call for calm in the near-term, there is still reason to pay attention to the Hilburn decision, and consider ways it may impact you, your business, and your contracts and decision-making process. Here are a few observations and helpful tips:

  • Injured parties and their legal counsel will undoubtedly try to use the Hilburn decision as a means to argue for increased claim value and negotiating leverage for settlement in personal injury cases. But, remember the burden of proof is still on the plaintiff in a personal injury case—it is plaintiff’s obligation to prove damages in a personal injury case by a preponderance of the evidence. In addition, other limitations on damages in a personal injury case are unaffected by Hilburn. For example, the argument that medical expense damages are limited to the amount actually paid in satisfaction of the medical expenses billed by a medical provider (Martinez v. Milburn Enterprises, Inc. 290 Kan. 572 (2010)) and Kansas law limiting the amount of punitive damages (Smith v. Printup, 254 Kan. 315 (1993) & K.S.A. § 60-3701(e)) both remain unchanged.
  • Review your insurance coverage now. Contact your insurance agent/broker or other advisors to consider whether the amount of insurance coverage you presently have is sufficient to protect you if an accident were to happen. This is applicable to both individuals and businesses, as the elimination of the noneconomic damage cap can arise in any personal injury case, whether it be an industrial accident, personal automobile collision, or otherwise.
  • Carefully review contracts you have entered into or may enter into in the future. Many contracts impose insurance and indemnification requirements, and now is a good time to consider, and discuss with your advisors, whether those requirements are adequate and reasonable.
  • Fallout from Hilburn may cause costs to increase as insurers and businesses seek to alleviate or shift the risk associated with potentially higher jury verdicts. As a result, consumers, insureds, and businesses should be cognizant of their risk-mitigation costs and explore cost-effective insurance and risk mitigation techniques that provide adequate protection.
  • Use this opportunity to place an emphasis on ways to prevent injury-causing events. For individuals, perhaps spend some extra time training a young driver on the rules of the road or enroll them in a driver education program. For businesses, perhaps review safety programs and procedures, employee handbooks and manuals, employee hiring practices and background checks, driver-qualification programs, and the use of business-owned vehicles and equipment.
  • Call your lawyer as soon as an injury causing event occurs to obtain guidance and advice on what to do next.

Triplett Woolf Garretson, LLC is a full-service law firm in Wichita, Kansas, and provides legal services to clients, including individuals and businesses of all sizes throughout Kansas. Tyler E. Heffron, a member of the firm, has nearly fifteen years of experience successfully handling lawsuits in the state and federal courts of Kansas, including defending against cases involving a host of personal injury and wrongful death scenarios, including, without limitation, automobile accidents, motorcycle accidents, truck accidents, pedestrian accidents, product accidents or defects, construction accidents or defects, industrial accidents, and oil and gas/energy accidents. For more information contact Tyler E. Heffron at (316) 630-8100.

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