Challenging the caps are plaintiff law firms and their organizations, particularly the Michigan Trial Lawyers Association, which lobbied hard but ultimately unsuccessfully against the 1994 legislation. From an outside perspective, it’s easy to see why — every cap dollar saved by insurers, and passed on in the form of lower or stabilized rates to consumers, is directly related to lower trial awards, as well as settlements, for pain and suffering.

Plaintiffs’ lawyers in Michigan, where so-called "punitive damages" in civil suits are prohibited, have often used pain and suffering awards to send a message to civil suit defendants. The mere threat of a large pain and suffering award is enough to drive many insurance companies and corporations to settle rather than try the merits of a lawsuit. In an effort to preserve their ability to recover damages in excess of the cap limits- not to mention to retain the threat and possibility of an unlimited pain and suffering award-personal injury attorneys, in numerous cases currently pending in Michigan courts, are attacking the caps by challenging their constitutionality on various grounds.

Three-Prong Attack

The plaintiff bar, through the Michigan Trial Lawyers Association, has fashioned a three-part attack to the constitutionality of the damage caps that were enacted as part of the 1994 Tort Reform legislation: a separation of powers attack, an equal protection of law attack and a due process attack. This legal strategy was arrived at by analyzing successful constitutional challenges to damage caps in other states and previous successful challenges to arguably analogous laws in the Michigan appellate system. The plaintiffs’ attorneys hope that the Michigan appellate courts will follow the decisions in other states that have struck down similar caps as unconstitutional.

As of the date of the publishing of this article, appellate courts in 21 states have decided the constitutionality of damage caps. Eight states have upheld such constitutionality: California, Indiana, Louisiana, Missouri, Nebraska, South Dakota, Virginia and West Virginia. The appellate courts in 13 other states, on the other hand, have held that damage caps violate equal protection or other constitutional protections: Alabama, Florida, Idaho, Kansas, Montana, New Hampshire, New Mexico, North Dakota, Ohio, South Carolina, Texas, Utah and Washington. The Michigan Trial Lawyers have concentrated on the arguments utilized in these latter 13 states in presenting their challenge to the Michigan caps.

The separation of powers challenge is based on Article III, Section 2 of the Michigan Constitution, which prohibits any person exercising the powers of one branch of government from exercising those powers properly belonging to another branch of government. In a rather technical argument, the plaintiffs’ attorneys charge that the legislature has interfered with the rules of practice of the Michigan court system. The Michigan appellate courts have already held that certain parts of the 1986 Tort Reform, which addressed the qualifications of medical expert witnesses, are unconstitutional because they conflict with the rules of evidence as adopted by the Michigan Supreme Court, and thus infringe upon the Supreme Court's rule-making authority. However, in a more recent Appellate decision in Michigan, the Court of appeals upheld the constitutionality of the "notice" period of the 1993 Tort Reform that must be observed prior to filing a medial malpractice complaint. The plaintiffs’ attorneys argue that the damage caps violate the separation of powers provision of the constitution by conflicting with court rules that allow trial courts to reduce or increase a jury verdict, to grant new trials, and to instruct the jury on the pertinent law before allowing the jury to deliberate. Regarding the new trial and jury instruction rule, the plaintiffs are not likely to be successful because the damage caps do not even arguably interfere with these rules. The argument regarding the caps’ conflict with the rule pertaining to reducing or increasing a jury verdict, on the other hand, has more merit. The plaintiffs submit that a judge’s discretion to increase a jury verdict that he or she feels is too low and does not conform to the evidence is hampered by the artificial caps enacted by the legislature. Thus, according to the Michigan Trial Lawyers, the court rule allowing judges to increase or reduce jury verdicts is unconstitutionally infringed upon by the statue imposing damage caps.

The plaintiffs’ attorneys’ due process arguments focus upon Article I, section 14 of the Michigan Constitution, which guarantees the right to a jury trial. The plaintiffs argue that the damage caps unconstitutionally impose upon the right to a fair jury trial by prohibiting juries to fulfill their functions of deciding the facts of a given case. In this regard, a jury’s traditional duty is to decide the facts of a case, apply the law thereto and arrive at a verdict. This function has been usurped by the legislature, argue the plaintiffs’ attorneys, because the damage caps in medical malpractice and products liability cases prevent an award of non-economic damages in excess of the applicable limits. As the argument goes, the legislature has unfairly concluded that under no factual circumstances should a "victim" of medical malpractice of products liability be awarded compensation for non-economic damages in an amount that exceeds what the legislature, ignorant of the facts of the case, has already determined to be the fixed limit on compensation. The plaintiffs further argue that the legislature does not trust juries to fulfill their constitutional roles of awarding fair compensation to victims. Finally, the plaintiffs claim that the legislature has enlisted the judiciary in a "scheme" to deceive the jury by passing legislation forbidding the courts to inform juries that whatever compensation they may deem fair and just will be negated by the legislature’s own imposed limitation on damages - consequently misleading the jury.

Similarly, plaintiffs’ attorneys continue the theme that the damage caps are unfair by also arguing that the caps deny equal protection of law in violation of Article I, Section 2 of the Michigan Constitution. According to this theory, "victims" of medical malpractice and products liability are treated differently from "victims" of premises negligence, defects in highways, drunken driver and other tortious behavior. For instance, if a drunken drive causes an accident resulting in the loss of the leg of a victim, that individual can recover whatever damages the jury determines is fair. However, if a defective product or a negligent physician causes the loss of a leg, the jury is limited by the caps in awarding damages. The result is discrimination between different classes of individuals who have been injured - medical malpractice and products liability victims versus all others. Additionally, the plaintiffs argue that the caps do not affect those with less serious injuries; thus, the caps discriminate against the most seriously injured.

The plaintiffs’ attorneys accuse the government of attempting to assure the availability of liability insurance at reasonable rates by compelling the most catastrophically injured to underwrite the costs of reducing premiums. They claim that this is a form of "social engineering" in which the legislature has engaged to advance the economic interest of certain groups of citizens, i.e., manufacturers, healthcare providers and their insurers, at the expense of depriving another group of citizens - the catastrophically injured-their right to recover compensation for injuries as determined by juries.

The plaintiffs’ attorneys acknowledge that the legislature has the right to achieve a permissible goal, but only through legitimate and objectively reasonable means. They agree that the legislature may enact laws seeking to lower insurance rates, but they argue that the legislature cannot constitutionally attempt to lower insurance rates by arbitrarily denying one select group of citizens the right to recover damages for one type of injury while other citizens enjoy these same rights. And the plaintiffs’ attorneys point to other appellate court decisions in Michigan and other states that have found as unconstitutional laws that discriminate between similarly situated tort victims.

Finally, the Michigan Trial Lawyers Association stresses that limiting recovery for non-economic loss in medical malpractice cases has no measurable effect whatsoever on medical malpractice insurance premiums or on the overall cost of health care because paid out damage awards constitute only a small portion of the total medical malpractice insurance premium costs and relatively few individuals in medical malpractice cases will suffer non-economic damages in excess of the amount of the caps. The plaintiffs’ attorneys rely upon "unbiased" studies that have shown that the so-called medical malpractice "crisis" is illusory and that the primary influence upon insurance premiums is not the actual payment of claims-which they maintain have remained steady and consistent over time - but rather the influences of the market place upon insurance industry investments.

Individuals tend to assume there’s a constitutional right to very big pain and suffering payments should they be harmed in any way, by almost any thing.