Wisconsin Supreme Court Rules Plaintiffs Entitled to Receive “Phantom Damages”

The Spring 2012 edition of the Federalist Society’s State Court Docket Watch features an article authored by Madison Chapter President Andrew Cook. The article, Wisconsin Supreme Court Rules Plaintiffs Entitled to Receive “Phantom Damages,” analysis of the high court’s unanimous decision in Orlowski v. State Farm Mutual Auto. Ins. Co.

Part I of the article begins with a discussion of previous Wisconsin Supreme Court decisions applying the collateral source rule in personal injury cases where the plaintiff’s medical expenses were written off by the medical provider. Part II concludes by discussing the Wisconsin Supreme Court’s latest decision in Orlowski, which extends the collateral source rule to underinsured motorist claims.

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Health Care Law in the Supreme Court Event a Success

Over 60 people gathered at the Madison Club this afternoon to hear Dr. Robert Levy and Michael D. Leffel analyze the  issues involved with the legal challenge to the Patient Protection and Affordable Care Act, better known as ObamaCare.

If you missed the event you missed a lively discussion that hit on everything from Wickard v. Filburn and Gibbons v. Ogden to forced celery consumption and the government’s powers during an alien invasion.

The Madison Chapter of the Federalist Society has applied for Wisconsin CLE credit for this event. Supplemental reading materials are available by clicking here.

Click here for video of the event from Wisconsin Eye.

Photos from the event:

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Background Reading for Health Care Law in the Supreme Court Event

The Madison Chapter’s Health Care Law in the Supreme Court event is coming up soon! As always, we’ve pulled together some background information for attendees to look through before or after the event.

The Case Against President Obama’s Health Care Reform, A Primer for Nonlawyers by Robert Levy.

Source materials and analysis from SCOTUSblog.com.

The Federalist Society has a plethora of information available about healthcare reform and the legal challenge to the Patient Protection and Affordable Care Act, better known as ObamaCare on its website. Here are links to the materials that caught our eye, but there is a lot more out there!

Any suggestions from readers for additional resources?

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Shout-Out from Proof & Hearsay for Upcoming Healthcare Event

Milwaukee Journal Sentinel’s Bruce Vielmetti gave the Madison Chapter a shout-out on the Journal Sentinel’s Proof & Hearsay blog.

Proof & Hearsay is a great way to get legal news in Wisconsin. Are there other sources our readers turn to for the latest Wisconsin legal news?

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Split Opinion Clouds Physician Liability Law

The Wisconsin Supreme Court on April 17, issued a split decision which greatly expands the liability of physicians in medical liability cases. The case involved the scope of a physician’s duty to inform a patient, often referred to as “informed consent.”

The Wisconsin Supreme CourtThe three-Justice majority decision was authored by Chief Justice Shirley Abrahamson, joined by Justice Ann Walsh Bradley and Patrick Crooks. Justice David Prosser, Jr. authored a concurring opinion. Justice Patience Roggensack, joined by Justices Annette Ziegler and Michael Gableman, dissented.

As explained by the dissent, the majority decision greatly expands liability for physicians. According to the dissent, the three-Justice majority decision, along with Justice Prosser’s concurring opinion, imposes strict liability for a missed diagnosis through the informed consent law. The dissenting opinion argues that this is contrary to the controlling statute (Wis. Stat. § 448.30) and long-standing precedent.

Facts

The plaintiff, Thomas Jandre, was hospitalized after coffee he was drinking began coming out of his nose, and after he began drooling and slurring his speech. The left side of Jandre’s face also drooped.

Jandre was evaluated in the emergency room by the defendant, Dr. Therese Bullis. Dr. Bullis diagnosed Jandre with having Bell’s palsy. Dr. Bullis’s full diagnosis also included the possibility of a stroke. After arriving at her diagnosis, Dr. Bullis ordered a CT scan, which could rule out a hemorrhagic stroke and brain tumors. The results of the scan were normal; however, the CT scan could not detect an ischemic stroke.

Dr. Bullis listened to Jandre’s carotid arteries with a stethoscope in an effort to detect whether Jandre suffered an ischemic stroke event. Dr. Bullis had the option of also ordering a carotid ultrasound to assess Jandre’s carotid arteries, but she chose not to. This is typically more reliable than listening with a stethoscope.

Based on Jandre’s symptoms and tests performed, Dr. Bullis ruled out an ischemic stroke event and came to a final diagnosis of a mild form of Bell’s palsy. Dr. Bullis informed Jandre of this diagnosis, prescribed medication, and sent him home with instructions to see a neurologist for follow-up care.

Eleven days later, Jandre suffered a full blown stroke. A carotid ultrasound performed at the hospital revealed that Jandre’s right internal carotid artery was 95 percent blocked.

Jandre sued Dr. Bullis alleging she negligently diagnosed Jandre as having Bell’s palsy, when he had initial symptoms of a stroke. Jandre also sued Dr. Bullis for negligently failing to inform him about the possibility of having a carotid ultrasound to diagnose whether he had a blocked carotid artery that had caused a stroke.

Trial Court and Court of Appeal Decision

The jury issued a verdict finding that Dr. Bullis was not negligent in her diagnosis of Jandre’s ailment. However, the jury then determined that Dr. Bullis was negligent in fulfilling her duty to obtain informed consent. Specifically, the jury found that Dr. Bullis was negligent in failing to inform Jandre of the availability of a non-invasive diagnostic tool (a carotid ultrasound) that had the potential to rule out a stroke.

The court of appeals affirmed the circuit court decision.

Supreme Court Decision

As noted above, Supreme Court was divided, evidenced by the three differing opinions. Below is an analysis of the three opinions.

First is a discussion of the three-Justice decision authored by Chief Justice Abrahamson, joined by Justices Bradley and Crooks. This is followed by a summary of Justice Prosser’s concurring opinion. Last is a discussion of Justice Roggensack’s dissent, joined by Justices Ziegler and Gableman, sharply criticizing the three-Justice majority decision.

Three-Justice Majority Decision

In a lengthy 76-page decision, the Chief Justice Abrahamson ultimately concluded that:

“applying the reasonable patient standard, we conclude that under the circumstances of the present case Dr. Bullis had a duty to inform Jandre…of the availability of an alternative, viable means of determining whether he had suffered an ischemic stroke event rather than an attack of Bell’s palsy.

A jury could have determined under the facts and circumstances of the present case that Dr. Bullis should have known that information about another available non-invasive diagnostic tool was information a reasonable patient in Jandre’s position would have wanted in order to decide intelligently whether to follow Dr. Bullis’s recommendations.”

Justice Prosser Concurring Opinion

In a separate concurring opinion, Justice Prosser writes that although the “lead opinion provides a trenchant argument for affirmance… I am unable to join the opinion because of the reservations I have about the direction we are going.”

Ultimately, Justice Prosser recommends that it’s time for a “thorough review” of current administrative rules implementing Wis. Stat. § 448.30 by “a blue ribbon committee, including but not limited to medical professionals, so that physicians are given clear guidance as to their obligations under this statute.”

Dissenting Opinion

Justice Roggensack, joined by Justices Ziegler and Gableman, penned a strongly-worded dissenting opinion attacking the majority’s decision.

According to the dissent, the lead decision “when combined with Justice Prosser’s concurrence that affirms the court of appeals decision, holds a physician strictly liable for a missed diagnosis, contrary to the legislative directive in Wis. Stat. § 448.30 and or long-standing precedent.”

Justice Roggensack further notes that the three-Justice majority decision failed to garner the necessary four votes to carry out its ultimate reasoning. According to the dissent, the three-Justice majority attempted to expand the statute by:

“requir[ing] that whenever there is a claim that the correct diagnosis of a patient’s ailment was not made, a physician would be liable for failing to tell a patient about all potential diagnoses and all potential tests that could have been employed to evaluate whether different ailment were the source of the patient’s symptoms.”

According to the dissent:

[the majority’s reasoning] “would be an entirely new concept that the legislature did not codify when it enacted § 448.30. Accordingly, I conclude that § 448.30 is not implicated in this malpractice action because there was no failure to inform the patient about the risks and benefits of the treatment and procedures that the physician employed.”

The dissent further explained the jury’s first finding, that Dr. Bullis was not negligent in her care and treatment of Jandre, was inconsistent with its second finding that Dr. Bullis was negligent in regard to her duty to obtain informed consent from Jandre. As a result of the jury’s inconsistent verdicts, the dissenting opinion would remand the case for a new trial on whether Dr. Bullis was negligent in her care and treatment of Jandre.

The case is Jandre v. Wisconsin Injured Patients and Families Compensation Fund, et al., 2012 WI 39.

This post, authored by Hamilton Consulting’s Andrew Cook, originally appeared on the Wisconsin Civil Justice Council’s blog.

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Health Care Law in the Supreme Court

The Federalist Society for Law & Public Policy Studies

Madison, WI Chapter

Presents:

Health Care Law in the Supreme Court

Panel Includes:

Robert A. Levy, Chairman, Cato Institute

 Michael D. Leffel, Partner, Foley & Lardner

 

Monday, April 30, 2012

11:30 a.m. – 1:00 p.m.

Madison Club, 5 East Wilson Street, Madison, WI

$15.00 for Federalist Society members

$20.00 for non-members

 (Lunch included – see payment options below)

CLE Pending

Please RSVP by Thursday, April 26 to:

Andrew Cook – cook@hamilton-consulting.com or 608.219.4632

About this event: The U.S. Supreme Court recently held oral arguments spanning three days in one of the most highly anticipated cases in the modern era, Florida v. U.S. Department of Health and Human Services, a consolidated series of challenges to the Patient Protection and Affordable Care Act, better known as the ObamaCare case.

This panel of experts will analyze the issues before the Court, and give their impressions of the oral arguments. Please join us for what promises to be an important and educational preview of the critical issues facing the Supreme Court before it renders its decision this summer.

 

About the speakers:

Robert A. LevyRobert A. Levy is chairman of the Cato Institute’s board of directors. He joined Cato as senior fellow in constitutional studies in 1997 after 25 years in business. He also sits on boards of the Institute for Justice, the Federalist Society, and the George Mason University School of Law. He founded CDA Investment Technologies, a major provider of financial information and software, and was its CEO until 1991. Levy clerked for Judge Royce C. Lamberth on the U.S. District Court in Washington, D.C., and for Judge Douglas H. Ginsburg on the U.S. Court of Appeals for the D.C. Circuit. From 1997 until 2004, Levy was an adjunct professor of law at Georgetown University. He has written numerous articles on investments, law, and public policy. His writing has appeared in the New York Times, Wall Street Journal, USA Today, Washington Post, National Review, and many other publications. Levy has also discussed public policy on national radio and TV programs, including ABC’s Nightline, CNN’s Crossfire, Fox’s The O’Reilly Factor, MSNBC’s Hardball, and NBC’s Today Show. His latest book, co-authored with William Mellor, is The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom. Levy received his Ph.D. in business from the American University and his J.D. degree from the George Mason University School of Law.

Michael D. Leffel  Michael D. Leffel is a partner with Foley & Lardner LLP and is the chair of the firm’s Class Action Working Group. He is a member of the firm’s Appellate and Business Litigation & Dispute Resolution Practices.  He has served as counsel for clients in fourteen cases before the United States Supreme Court, and has represented parties in numerous cases before courts of appeals at both the state and federal level. He has also represented clients before various regulatory agencies and in congressional investigations.  Prior to joining Foley & Lardner, Mr. Leffel worked for Wilmer, Cutler & Pickering in Washington, D.C., where he was awarded the John H. Pickering award for his commitment to pro bono representation.  Mr. Leffel is a graduate of the University of Michigan Law School (J.D., cum laude, 1997) and was the managing editor of the Michigan Law Review.  After graduation from law school, Mr. Leffel served as a law clerk for the Honorable Karen Nelson Moore, United States Court of Appeals for the Sixth Circuit.

Background Reading

*Pay at the door or pay in advance by sending check made out to The Federalist Society and mailing it to:

Andrew Cook

The Hamilton Consulting Group, LLC.

10 East Doty Street, Suite 500

Madison, WI  53703

**Tables of eight can also be purchased.**

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High Court Rules that Owners of Property Destroyed by a Forest Fire Are Entitled to Double Damages

In a 6-1 decision authored by Justice Annette Ziegler, the Wisconsin Supreme Court held that if an owner’s property is destroyed by a forest fire that is caused by negligence of another person, then the property owner automatically is entitled to double damages. Chief Justice Abrahamson, along with Justices Crooks, Prosser, Roggensack, and Gableman joined the majority. Justice Bradley dissented from the majority decision. The case is Heritage Farms v. Markel Ins. Co., 2012 WI 26.

Facts

The case involved a forest fire that extensively damaged nearby property owned by Heritage Farms, Inc. The fire started by the defendant was extinguished, but weeks later flared up and escaped the defendant’s property and entered onto Heritage Farms’ property.

Heritage Farms’ owners were awarded $568,422 in compensatory damages in a previous decision after it was determined that the defendant’s negligence led to the forest fire.  Heritage Farms then brought a separate motion against the defendant seeking double damages, along with costs for legal representation.

Decisions by the Trial Court and Court of Appeals

The issue before the trial court was whether Heritage Farms was automatically entitled to double damages, or whether the statute grants the court discretion when deciding whether to award double damages.

The statute states that an owner “whose property is injured or destroyed by forest fires, may recover, in a civil action, double the amount of damages suffered, if the firest occurred through willfulness, malice or negligence.” (Wis. Stat. § 26.21(1)).

The trial court held that the statute allowed the court to exercise discretion in deciding whether to award double damages. The trial court decided that the defendant’s conduct did not warrant punishment, and therefore did not grant Heritage Farms double damages.

The court of appeals upheld the lower court, ruling that the decision to award double damages under the statute is subject to the circuit court’s discretion. The court noted that the legislature used the permissive word “may” in the statute in describing the property owner’s right to recover double damages in the event that a forest fire result from willfulness, malice, or negligence.

Wisconsin Supreme Court Decision – Statute Mandates Double Damages

The Wisconsin Supreme Court reversed, holding that property owners are entitled to double damages. The court reasoned that, “once it is determined that the forest fire occurred through willfulness, malice, or negligence, the property owner is entitled to double damages as a matter of course.”

The court further held that their ruling should apply retroactively, not prospectively, thereby ensuring that Heritage Farms received the full double damages.

Interest on Judgments

The court further held that the plaintiff was entitled to interest on the double damages from the date of the jury’s verdict (October 13, 2006). At the time the lawsuit was brought, the interest on judgments was 12 percent.

The defendant argued that the 12 percent interest was unconstitutional because the high interest rate is so severe and so far removed from the national prime lending rate that it tends to “chill” defendants from properly defending their claims on appeal.

The court rejected this claim and said that the legislature was the proper branch of government to determine the proper interest rate. The court noted that the legislature this session in fact changed the interest on judgments from 12 percent to the federal reserve prime rate, plus one percent. This law, 2011 Wisconsin Act 69, was championed by the Wisconsin Civil Justice Council and was introduced by Gov. Walker as part of his numerous civil justice reforms.

Dissent

Justice Bradley dissented, arguing that the legislature did not intend that the award of double damages in these types of cases be mandatory. Instead, the legislature’s use of the word “may” signaled its intent that the courts are to exercise discretion when deciding whether to award double damages.

This post originally appeared on the Wisconsin Civil Justice Council’s blog.

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