January 26th, 2018

A NY Court’s Thin Reasoning on Punitive Damages

Yesterday I covered the extraordinary case of a New York appellate court upholding a punitive damage award against a doctor. The doctor, it seems, thought it would be a great idea to destroy evidence after a six-year-child she was caring for died.

This was extraordinary because it was the first time we allowed punitive damages for the spoliation of evidence that was designed to evade liability — as opposed to punitive damages for the conduct that actually caused the injury.

But in doing the analysis of “how much is too much” that comes with punitive damage awards, the Appellate Division (Second Department) cited some dicta from a United States Supreme Court decision that doesn’t actually stand for the proposition for which the New York court was using it.

In the case I wrote about yesterday, Gomez v. Cabatic, there was a punitive damage award of $7.5M. The trial court reduced this as excessive to $1.2M. (New York courts don’t actually reduce big awards or increase small awards, but rather, orders new trials unless the party will accept $x instead.)

From there the appellate court further reduced the award to $500K. (The underlying verdict for medical malpractice and wrongful death was $400,000 in pain and suffering and $100,000 in monetary loss.) The court used a 1:1 ratio of punitive:compensatory.

There were three guideposts that the US Supreme Court used to evaluate the question of how much is constitutional from a due process perspective (from BMW v. Gore), which our was used in Gomez:

The degree of reprehensibility of the conduct;
The ratio between punitive award and plaintiff’s actual harm, and
The legislative sanctions provided for comparable misconduct.

Essentially, the New York court simply doubled the compensatory damages to find a decent number for punitive.

But in doing so, it cited to State Farm v. Campbell, in which Justice Kennedy gave three different views of the formula to use. The New York court simply plucked out this one:

“[I]n practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process”

The problem with that plucking is that both State Farm v. Campbell and Gore v. BMW were commercial cases. Gore dealt with punitive damages against a car dealer that repainted a new car that had been damaged, but had failed to disclose it. The compensatory damages were just $4,000 and the punitive damages were $4M. And State Farm dealt with Campbell causing a terrible auto collision, and State Farm acting in bad faith in defending its insured. The personal injuries of the victims were not at issue, but rather, the contract between State Farm and Campbell.

The Gomez case, by sharp contrast, dealt with the child that died and is therefore most definitely a personal injury case, of the medical malpractice variety.

And Justice Kennedy noted that, in determining State Farm, “The harm arose from a transaction in the economic realm, not from some physical assault or trauma; there were no physical injuries…”

The problem inherent in the Second Department’s decision in Gomez is that it it simply cited the single-digit ratio formula and seemed to set down a benchmark by citing to State Farm, whereas State Farm was clear that no benchmark was possible.

Justice Kennedy had discussed the amorphous nature of the standard:

Nonetheless, because there are no rigid benchmarks that a punitive damages award may not surpass, ratios greater than those we have previously upheld may comport with due process where “a particularly egregious act has resulted in only a small amount of economic damages.” Ibid.; see also ibid. (positing that a higher ratio might be necessary where “the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine”). The converse is also true, however. When compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee. The precise award in any case, of course, must be based upon the facts and circumstances of the defendant’s conduct and the harm to the plaintiff.

Now it might be perfectly rational for New York’s court to look at the three BMW guideposts and conclude that a 1:1 ratio is sufficient because the underlying damages were $500K. Even using the single-digit ratio formula would have permitted the court to go as high as $4.5M.

But setting that “single-digit ratio” down as a marker is a mistake, I think, as that is most certainly not what the Supreme Court intended.

It’s worth noting two additional points:

First is that the U.S. Supreme Court ultimately let stand a 97:1 ratio for punitive:compensatory damages in Philip Morris v. Williams, and that was after the State Farm decision; and

Second, if the defendant asks to appeal this to New York’s top court (she does not do so as of right, but needs permission) she may face a cross-appeal by the plaintiff seeking to reinstate a higher punitive damage award.

January 25th, 2018

Doctor Hit for Punitive Damages After Destroying Records in Child’s Death

Six-year-old Claudialee Gomez Nicanor died. And when her family’s lawyer asked the child’s doctor for her medical records, she destroyed the originals. That’s a problem.

Last week in a case of first impression in New York, our Appellate Division (Second Department) upheld an award of punitive damages in a medical malpractice case — not for the conduct that led to the death, but rather, for the effort to evade liability.

Little Chaudialee had Type 1 Diabetes and died from diabetic ketoacidosis, which results when the body can’t produce enough insulin. (It is Type 2 diabetes that’s often related to excess weight.)

The underlying medical malpractice case dealt with Dr. Arlene B. Mercado‘s failure to diagnose and treat the diabetes. The doctor is a pediatric endocrinologist and the child had arrived in her office via her pediatrician.

Mercado saw Claudialee three times, October 31, 2009, November 14, 2009, and December 12, 2009. Meanwhile, the pediatrician saw Claudialee in late November 2009, and on January 9, 2010. But:

“On January 21, 2010, Claudialee returned home from school complaining that she was tired and did not feel well, and brought with her a note from the school nurse describing her symptoms. The child vomited that evening and said that she had a stomach ache. The next day, after having tried, unsuccessfully, to have Claudialee seen by Cabatic, the child’s mother took Claudialee to a hospital. Claudialee remained hospitalized until her death on January 24, 2010.”

After the child died, and after the lawyers asked for the records, the good doctor thought it would be a great idea to type up the scribbled notes she originally made and destroy the originals for the November and December visits.

The problem is that on the last visit to Mercado on December 12th, the family was told to bring her back on February 13th. And they had the appointment card showing it.

The typed notes, however, claimed something else: That the child was to come back in just four weeks (before the child was ultimately hospitalized). Those are the same notes that were typed up after the child had died and after the lawyers asked for the records:

“Q. Now, you told us that you created the typed written part for the Halloween, the 10/31 visit after you got the letter from my office, did you do all three of them at the same time?

“A. Yes.

“Q. So this one was done without the help of any squiggly notes; is that right?

“A. No.

“Q. No?

“THE COURT: You had notes?

“THE WITNESS: I have like piece of paper, but after typing—

“THE COURT: Where is it[?]

“THE WITNESS:—I throw them out. After typing I will throw them out.

“THE COURT: Four months later you throw them out?

“THE WITNESS: Yes.”

The doctor also gave conflicting claims as to when she typed up the first set of notes, which was important because the typed version included information not reflected in the handwritten record of that visit.

The underlying malpractice claim was that the doctor committed malpractice by “not teaching the child’s family about symptoms of diabetes—such as weight loss, tiredness, lightheadedness, excessive thirst, and excessive urination—and by not recommending that Claudialee’s family perform home testing to measure the child’s blood sugar and ketones.”

The doctor was also faulted for assuming that the child was developing type 2 diabetes and not even considering that the child was developing type 1 diabetes.

The jury found that Mercado was negligent, that the negligence caused injury and death, and awarded $400,000 in pain and suffering and $100,000 in monetary loss. (New York is one of only a few states that does not allow an award to grieving families for the loss of a family member.)

But this was the kicker: $7.5M in punitive damages. While that award was reduced by the trial court to $1.2M, and further reduced by the Appellate Division to $500K, it was the very issue of punitive damages for the destruction of evidence in order to evade liability that lit up the decision.

The court was firm (and unanimous) in stating — and this is the entire point of this post — that punitive damages serve to deter the wrongful conduct of destroying records to evade liability.

[W]e now hold that where, as here, a plaintiff recovers compensatory damages for a medical professional’s malpractice, a plaintiff may also recover punitive damages for that medical professional’s act of altering or destroying medical records in an effort to evade potential medical malpractice liability. Allowing an award of punitive damages for a medical professional’s act of altering or destroying medical records in an effort to evade potential medical malpractice liability will serve to deter medical professionals from engaging in such wrongful conduct, punish medical professionals who engage in such conduct, and express public condemnation of such conduct.

And the fact that there might be also be disciplinary action should not deter a court from submitting this to the jury. As the court noted:

However, the possibility of other consequences, such as professional disciplinary action or spoliation sanctions, should not preclude medical professionals from being subject to punitive damages for altering or destroying medical records in an effort to evade potential medical malpractice liability. … the present case illustrates that the availability of disciplinary proceedings is not sufficient to protect plaintiffs from such conduct, since Mercado was clearly not deterred by the possibility of such disciplinary action.

Finally, the court rejected the argument that there was no damage from the destruction of the records, since the plaintiff was able to prevail despite it. In other words, the defendant argued that there should be no penalty for her action. The court was not amused at this request for immunity from wrongful conduct:

We also reject Mercado’s contention that punitive damages cannot be recovered because her destruction of original records did not prevent the plaintiff from successfully prosecuting this action. The fact that the plaintiff was able to prove the medical malpractice cause of action against Mercado, despite Mercado’s destruction of original records, should not insulate Mercado from liability for punitive damages. Undesirable results likely would flow from a conclusion that punitive damages cannot be awarded for the destruction of medical records in an effort to evade liability where a plaintiff is able to establish liability nonetheless; specifically, medical professionals fearing malpractice liability might feel emboldened to alter or destroy medical records, knowing that they will face no added liability in tort. Indeed, it has been observed that “[i]f the act of altering and destroying records to avoid liability is to be tolerated in our society, we can think of no better way to encourage it than to hold that punitive damages are not available” in such circumstances.”

Going forward, this case won’t be limited to medical malpractice cases. I foresee this case being used and cited in any kind of case dealing with spoliation of evidence. For such cases all deal with the same concept of punishing a party for trying to evade liability by destroying evidence.

While one tool in the judge’s toolbox is simply to strike the answer of a defendant for having engaged in such practices, that merely puts plaintiffs where they otherwise would have been anyway had the malfeasance not taken place. There was no downside. Now there is.

The case is Gomez v. Cabatic

See follow-up (1/26/18): A NY Court’s Thin Reasoning on Punitive Damages

January 19th, 2018

Lavern’s Law Will Save New Yorker’s Money (Updated!!!)

Lavern Wilkinson, who lost her chance for justice before she even knew she had that chance.

Dear Gov. Cuomo:

A couple of weeks ago I wrote a piece about why you should sign Lavern’s Law, which has been sitting on your desk for weeks now as the only bill out of 600+ that you’ve failed to act on from last year’s legislative session.

But in my list of reasons to sign a bill that starts the statute of limitations in failure-to-diagnose-cancer cases from the date the malpractice is discovered (as opposed to when the malpractice happens) I neglected to mention one thing.

Lavern’s Law will save taxpayer funds. As it stands now, if someone loses the right to sue before they ever even knew that malpractice occurred, there’s a pretty good chance that Medicaid will pay out much of the medical expenses. And those kinds of expenses can add up.

But if suit is permitted then much of the money can be recovered from the people actually responsible for the unnecessarily diminished health of the patient. Medicaid often recoups money paid out from such lawsuits.

And the best part, from Medicaid’s perspective, is that a private attorney is doing all the work. There is virtually no cost to the state other than contacting us every so often to find out the status of the suit, and settling up if the recovery is partial.

So the question is — aside from the moral and public policy issues I already addressed — who should bear responsibility for the medical costs of malpractice? The party that was negligent? Or the taxpayers?

There are reasons this bill enjoyed wide support from both Democrats and Republicans and why similar laws exist in 44 states. Yes, that’s right, even deep red states have such laws.

But not New York.
———-

Updated (1/30/18)! Gov. Cuomo has agreed to sign Lavern’s Law and it will happen today!

As with many laws, there is an issue of, “When does this become effective?” The very powerful health care lobby was concurred that malpractice from 5 years ago — if it hadn’t been discovered until after the statute of limitations had expired — would now become actionable.

The bill was, therefore, tinkered with a bit for past acts of malpractice, so that it would no longer allow patients to revive already-expired claims that occurred up to seven years prior. Instead, a patient could file for a cancer claim that expired within the last 10 months and file the claim for an additional six months.

But on the whole, a big victory for civil justice. The Daily News, which has long championed this legislation, has an editorial celebrating the event, writing:

It took too long — indeed, far longer than the time stingily allotted Lavern — but first the Assembly, then the Senate had the wisdom to open New York’s lawsuit window despite opposition from the hospital lobby.

The version of the legislation to earn Cuomo’s signature will include adjustments to be passed this week at the governor’s insistence. Albany being Albany, the bill that passed both houses of the state’s Legislature wasn’t good enough for the governor, so Cuomo brokered a deal with legislative leaders to force through amendments.

Oddly, the law will only cover malpractice related to cancer. Why? Malpractice comes in all forms. Fix that, stat.

It’s also a shame that Cuomo doesn’t dare open the door to past patients, beyond 10 months ago.

Still, take comfort that Lavern smiles down on all who trust their lives to medical professionals sometimes fatally imperfect. Her law and legacy demand they do better.

January 12th, 2018

Phony Lawyer Awards

Last week Mockingbird Marketing made an announcement: That Lucy Davis had become a Lawyer of Distinction. Hey! I’ve received those offers too!

The problem? Lucy isn’t a lawyer. Lucy is a dog. The four-legged woof-woof kind.

Mockingbird (which builds websites for lawyers) put up its satirical posting to show the worthlessness of many lawyer “awards” — they put in an application for their dog and it was accepted.

To practicing attorneys, this comes as no surprise. We are besieged by such companies doling out awards like fun-sized Halloween candy, with of course, a nice fancy plaque to hang in your office. Or maybe a crystal “trophy.” No, they aren’t free.

And that’s pretty much how it’s easy to figure out the difference between a phony award and a real one: Did the lawyer pay for the “honor?”

To my knowledge, these are all private companies that are unaffiliated with any recognized bar association.

I wrote about one such company a few years ago, marketing the Million Dollar Advocates Forum. I wasn’t particularly nice about it.

So, below are some of the groups/companies that have “invited” me in the past couple years aside from Lawyers of Distinction, as I tossed their ~~literature~~ marketing materials into a pile in a corner of my office. And no, I will not give them links — you can demonstrate your own Google-fu by researching if you like:

First up, simply because it’s on top of the pile, is America’s Top 100 High Stakes Litigators. The annual membership is $300. Nice badge they give you, huh?

Next up is the American Institute of Personal Injury Attorneys — “10 Best Attorney” for New York. It’s $295 for 2018, as per its website. And I love the disclaimer on their About Us page regarding warranties of merchantability and fitness for a particular purpose. Nice plaque.

Then there is Corporate Vision, which “selected” me for its 2017 Legal Excellence Awards as “Best Law Firm 2017.” This comes with a pitch to be in Corporate Vision, whatever that is, along with profiles, interviews, a nice crystal trophy, digital logos, etc. The price wasn’t in the pitch, but this sure as hell didn’t look like a non-profit.

I was also “selected” as of one of AI Magazine‘s “One to Watch in Law.” Woo-hoo. It comes with a “bespoke crystal trophy” and digital winner’s logo. Never mind that my practice has nothing to do with artificial intelligence. All for just £185. You read that right. That is British pounds. No, I’m not admitted to practice law in Great Britain.

Next up, the American Society of Legal Advocates. Sounds impressive! And I was selected as eligible for the Top 100 Litigation lawyers in New York! (What, no top 10?). It comes with a plaque and an electronic badge. All for just $200 each year.

Rue Rawlings’ Best Attorneys of America — Limited to the Top 100 attorneys in New York. The dues are $1,000.

National Association of Distinguished Counsel — Top One Percent. Annual membership is $300.

Trial Lawyers Board of Regents Litigator Awards — The fee is $1,500 if they “certify” you for inclusion. I confess to being a bit uneasy putting this company on the same list, as its marketing materials are very impressive and they ask for certification of certain verdicts and settlements. Nevertheless, if there is a fee to join, that makes it a club with a name, and not (to me) an actual award. Awards don’t have strings attached.

Some folks may ask about SuperLawyers, which I’ve written about before. I remain unclear how valuable that honor is, and while it isn’t a non-profit for sure (sold to Thomson West in 2010) they’ve never demanded a fee to be listed.

Finally, there is the never-ending solicitations from plaque companies, looking to assist you in making your award look nice and fancy on your ego wall. (For what it’s worth, my office wall is mostly family pics.)

Bottom line for the consumer: There are a lot of companies out there hustling “awards” designed to make lawyers look good to potential clients with fancy badges, plaques and crystal trophies.

Don’t be razzle-dazzled. You’ve been warned.

January 2nd, 2018

Will Gov. Cuomo Sign Lavern’s Law?

Yes, a real case. Yes, the x-ray hangs in my office.

There is one bill on Gov. Andrew Cuomo’s desk from last year. Just. One. Bill.

There were 606 bills that passed by both of New York’s legislative houses. All have been signed, or vetoed.

Except for Lavern’s Law. A law that Cuomo previously stated that he supported and would sign.

It was finally sent to the Governor during the holiday week for signature. He has 30 days to sign it.

As I bang on this keyboard, it sits on his desk.

Lavern’s Law, for those that don’t know, mimics the law in 44 other states, extending the statute of limitations in certain medical malpractice cases from the time the discovery of malpractice was made, or could reasonably have been made, instead of when it occurred

In the final hours dickering over the bill last June, it was watered down to apply only to cancer cases, leaving all other “failure to diagnose” cases, where the patient didn’t even know s/he was victimized, hanging out in the cold.

But still, even in its watered down state, it is something for those that have not only been victimized by malpractice, but didn’t even find out until the time to bring suit had expired.

As I previously described it:

The law is named for Lavern Wilkinson, who went to Kings County Hospital on February 2, 2010 with chest pain. A radiologist saw a suspicious mass on the x-ray. But Wilkinson wasn’t told.

When it was found again two years later when her complaints worsened, the 15-month statute of limitations had expired. As per the Daily News summary of the incident:

A chest X-ray found the cancer had spread to both lungs, her liver, brain and spine. The disease was now terminal.

She left behind family including an autistic daughter.

Lavern Wilkinson, who lost her chance for justice before she even knew she had that chance.

The bill passed the Assembly. Then it passed the Senate 56-6, that being the tougher of the two houses.

Why hasn’t the bill been signed?

It can’t be due to insurance premiums because, after all, the state’s largest insurer is being sold to Warren Buffet because it’s so damn profitable.

And at just 2 ½ years for suits against non-governmental medical facilities, we already have one of the shortest statutes of limitations in the country (and 15 months against governmental facilities) since we have no date of discovery statute.

And with some of the lowest legal fees for attorneys, the medical community has already been granted widespread de facto immunity for most acts of malpractice — since taking smaller suits simply isn’t financially economical.

And it can’t be because of a lack of caps on malpractice cases, because we not only have them, but have had them for over 200 years.

New York has become, with some of the best medical care in the world, one of the absolute worst places with respect to finding justice when that care goes wrong.

And all this happens despite medical liability insurance premiums and premiums continuing to plummet, and the costs of insurance as a percentage of healthcare costs likewise continuing to drop. From a Public Citizen study in 2017 (The Medical Malpractice Scapegoat), look at these three charts:

Under what justification does a state close the courthouse doors on its citizens before they even knew they were injured?

Under what logic do we grant further immunity to those that commit preventable harms?

For what public policy reason do we continue to withhold justice?

This bill enjoys widespread support among voters, as demonstrated by the overwhelming vote in the Senate.

It is long past time that New York get a date of discovery law. There are no reasons not to do it.

Gov. Cuomo, please sign that bill.

See also (1/19/18): Lavern’s Law will also save New Yorkers money