For decades, Florida has had an alternate dispute resolution mechanism for medical malpractice cases designed to avoid the uncertainty, expense, and the amount of time associated with medical malpractice cases, which typically take years to resolve and are particularly expensive. Under the statutory scheme provided by the legislature in Sections 766.207 and 766.209, Florida Statutes, at the conclusion of the presuit screening period, either side may offer to enter into voluntary binding arbitration, in which the claimant is awarded damages by an arbitration panel, and liability is not an issue. In order to encourage prospective defendants to enter into arbitration, the legislature provided that non-economic damages would be limited to $250,000 if the offer were accepted and $350,000 if the offer were rejected (the “Arbitration Caps”). Case law has interpreted the Arbitration Caps to apply on a per claimant basis.
In University of Miami v. Echarte, 618 So.2d 189 (Fla. 1993), the Florida Supreme Court held that 766.207 and 766.209 are constitutional. In Echarte the Supreme Court enumerated the benefits claimants received from arbitration:
The claimant benefits from the requirement that a defendant quickly determine the merit of any defenses and the extent of its liability. The claimant also saves the costs of attorney and expert witness fees which would be required to prove liability. Further, claimant who accepts a defendant’s offer to have damages determined by an arbitration panel receives the additional benefits of: 1) the relaxed evidentiary standard for arbitration proceedings . . .; 2) joint and several liability of multiple defendants in arbitration; 3) prompt payment of damages after the determination by the arbitration panel; 4) interest penalties against the defendant for failure to promptly pay the arbitration award; and 5) limited appellate review of the arbitration award.
The Supreme Court subsequently distinguished these benefits provided by arbitration from the medical malpractice caps of Section 766.118, Florida Statutes, which the Court struck down in 2014 on equal protection grounds:
In upholding the constitutionality of the cap in medical malpractice arbitration proceedings, this Court in Echarte noted that arbitration provided commensurate benefits in exchange for the cap, such as saving the expense of attorney’s fees and expert witnesses. Conversely, under section 766.118, survivors received absolutely no benefit whatsoever from the cap on non-economic damages but only arbitrary reductions based on the number of survivors.
Estate of McCall v. U.S., 134 So.3d 894, 904 (Fla. 2014).
On June 28, 2018 Miami Dade Circuit Judge Jose M. Rodriguez refused to apply the arbitration caps of Sections 766.207 and 766.209, declaring that they are unconstitutional and violate equal protection. In Defranko v. Poole, case number 16- 16511-CA-15, Eleventh Judicial Circuit, Miami Dade County, Florida, a jury awarded $500,000 in non-economic damages and the defendants moved to reduce the award to $350,000 on the grounds that their previous offers to arbitrate had been rejected and the arbitration caps applied.
In his June 28, 2018 order, Judge Rodriguez held that the arbitration caps imposed by Sections 766.207 and 766.209 violate equal protection on the basis of “doctrinal developments” since Echarte. The court cited McCall and N. Broward Hosp. Dist. v. Kalitan, 219 So.3d 49 (Fla. 2017), in which the Supreme Court held that the Section 766.118 caps for non-economic damages were unconstitutional in wrongful death cases and personal injury cases, respectively. In so holding, the Supreme Court noted that after the enactment of the 766.188 caps in 2003, medical malpractice premiums significantly decreased, calling into question the continued need for these Arbitration Caps.
Judge Rodriguez’ Order noted that in Kalitan, the Supreme Court cited the dissent in Echarte which asserted that Sections 766.207 and 766.209 violate equal protection because it was not apparent “how singling out the most seriously injured medical malpractice victims for less than full recovery bears any rational relationship to the Legislature’s stated goal of alleviating the financial crisis in the medical liability insurance industry.” Echarte, 618 So.2d at 198 (Barket, CJ, dissenting). Therefore, Judge Rodriguez reasoned in his Order:
It is thus unclear how Echarte remains binding precedent on the issue of equal protection. Echarte, after all, was fundamentally premised upon the existence of a medical malpractice insurance crisis, which in McCall and Kalitan, the Florida Supreme Court found had subsided. . . . [T]he McCall and Kalitan Courts reached this conclusion by rejecting the Legislature’s 2003 finding that a crisis existed. The Court is therefore unlikely to again accept the Legislature’s 1988 findings on this issue as it did in Echarte.
Consequently, Judge Rodriguez’s order denied the defendant physician’s motion to reduce the non-economic damages owed on the grounds that the Arbitration Caps of Section 766.207 and 766.209, Florida Statutes “are unconstitutional as they violate the Florida Constitution’s guarantee of equal protection under the law.”
According to press reports, the defense has indicated that it is considering whether to appeal the ruling. If there is an appeal, this will be an important case to follow as the Supreme Court’s ultimate ruling may have profound implications for the medical malpractice dispute resolution process as it currently exists in Florida.
For more information, please contact shareholder Dr. Andrew Sauer at asauer@smithhulsey.com.
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