Michigan's non-economic damages cap ruled constitutional; the cap applies to EMTALA claims

The federal appellate court also holds that state law peer review privileges do not apply to EMTALA actions filed in federal court.

Robert A. Bitterman, MD, JD, FACEP, Contributing Editor; President, Bitterman Health Law Consulting Group, Inc., Charlotte, NC; Vice President, Emergency Physicians Insurance Co., Inc., Auburn, CA

The case of Smith v. Botsford General Hospital1 contains a number of fascinating aspects and lessons for hospital-based emergency providers.

Kelly Smith was a 33-year-old 600-pound man injured in a high-speed SUV rollover accident. Emergency medical services took him to Botsford General Hospital in Detroit, Michigan. The emergency physician diagnosed and treated Smith for an open comminuted left femur fracture. Botsford then transferred Smith, stating the patient's size precluded its ability to assess the patient with a CT scan and its operating room lacked the facilities to hold the patient's weight if surgery became necessary. During the ambulance ride, Smith's condition deteriorated further, and 21 minutes into the transfer he died from extensive blood loss.1

Smith's family sued Botsford in federal district court, claiming the hospital transferred Smith before stabilizing his emergency medical condition in violation of federal law, EMTALA.2 Botsford admitted that the patient had an emergency medical condition, but asserted it had stabilized the patient prior to transfer and that the patient's death could be attributed to his morbid obesity and his alcohol and cocaine use.

Plaintiffs sued the hospital under EMTALA, rather than under ordinary state malpractice law, intentionally to circumvent Michigan's cap on non-economic damages.

The Evidence

Interestingly, since the only theory of liability was the EMTALA 'failure to stabilize' claim, the court would not allow any 'standard of care' evidence or questioning of the expert witnesses. For example, the plaintiff could not assert that the hospital should have given fluids at more than 100cc/hour, or when Smith's blood pressure was mid 70s that blood should have been administered prior to transfer. What the physicians and hospital should have done is a standard-of-care issue, not an EMTALA stabilization issue. Instead, the experts could only explain the nature of the patient's injuries, interpret the clinical and laboratory data, and then opine to the jury on whether the patient was stable, as that term is defined by law, at the time of transfer. Under EMTALA to 'stabilize' means:

"with respect to an emergency medical condition … to provide such medical treatment of the condition as may be necessary to assure, within reasonable medical probability, that no material deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility."3

In other words, was it likely, within reasonable medical probability, that the patient would arrive safely at the receiving hospital, or was it foreseeable that the patient would materially deteriorate in route?

The plaintiff contended that due to the amount of blood loss from an open comminuted femur fracture in a restless patient thrashing around for 3 hours in the ED, an tracheal tube in the right main stem bronchus, a Hbg level of 11.6 with a base deficit in a major trauma patient with known sleep apnea, the hemodynamic ramifications of tachycardia in the 130s, respiratory rates in the low 30s, blood pressure dropping in the low 70s for more than 2 hours and entirely unobtainable at the time of transfer, pale and 'extremely cool extremities', zero urine output for the entire ED stay, and EMS's concerns at the time of transport (see below) … it was entirely foreseeable, certainly within reasonable medical probability, that the patient would materially deteriorate during a 30-minute transfer.

The hospital countered that Smith had been stable and that it had fully expected he would arrive safely at the receiving hospital and that his alcohol (level was 110 mg/dL) and cocaine use contributed to his unexpected demise. (The autopsy found evidence of cocaine use, but also determined that the sole cause of death was hemorrhagic shock due to blood loss from the femur fractures.)

The plaintiffs questioned why the hospital, if it thought the patient was so stable, didn't give the patient any intravenous pain medications? Botsford claimed that it didn't administer medicine to control the patient's pain or agitation out of concern for his airway (though the patient already had a secure airway due to the tracheostomy tube in place to treat his sleep apnea).

Expert Testimony

Defendant's emergency medicine expert testified that Smith's chronic alcoholism contributed to his death, and that his opinion stemmed from conversations with one of Smith's deceased relatives, who had once consulted the physician regarding Smith's drinking problems. However, neither the expert, who had a great deal of malpractice testimony experience, nor the defense counsel disclosed the information until it came out on cross-examination by the plaintiff, and they conceded that outside this personal knowledge no other admitted evidence supported the expert's opinion concerning Smith's chronic alcoholism.1

The federal rules of evidence impose an affirmative obligation on all parties to disclose in advance of trial "the data or other information considered by [its expert] in forming his opinions."4 Furthermore, experts are not supposed to use personal knowledge to form their opinions, but instead rely on the record and their training, experience, and expertise alone. Consequentially, the judge excluded the witness's entire testimony, leaving the hospital without an emergency physician expert to support its case.1

Botsford complained that exclusion of its emergency expert was highly prejudicial to its case and fundamentally unfair. However, the court stated that striking the expert's testimony was "not fundamentally unfair" to Botsford, given that the federal rules of civil procedure, authorizes—indeed, directs—exclusion of the witness as the primary sanction for such a disclosure violation.5 The court could have imposed a less stringent sanction, but declined due to the nature of the violation and its conclusion that the expert's testimony was "largely cumulative" of the defense's toxicology expert.1

Admissibility of Evidence

Findings of Government Investigations. Plaintiffs reported Botsford to the Centers for Medicare and Medicaid (CMS), the federal agency charged with the regulatory enforcement of EMTALA, with the intent to later obtain the government's investigation materials to use to their advantage in preparation for trial or in settlement negotiations. At the conclusion of CMS's investigation, its findings become public information available via the Freedom of Information Act.6 CMS determined that the hospital did not violate EMTALA, therefore, in a turnabout the hospital attempted to introduce the government's findings into evidence at trial. The court disallowed the evidence, however, declaring it 'untrustworthy' as defined by the federal evidence rules7 for a number of reasons, such as the plaintiffs were not a party to the hearing or able to cross-examine witnesses or the physician reviewer did not have all the relevant data at the time of his review.

Typically, it's the plaintiffs who want to introduce CMS reports that a hospital violated EMTALA to sway the jury with an 'official' government judgment against the hospital. The courts usually do not allow use of CMS's finding against hospitals at trial because there is no due process in CMS's proceeding. The hospitals really can't challenge CMS or they loose their Medicare and Medicaid funding for years while the process unfolds. Hospitals, therefore, simply write a 'Plan of Correction' to come into compliance with the law, as mandated by CMS, to avoid bankruptcy and get CMS 'off its back.' (But an Alabama district court recently did allow the plaintiff to use CMS's report at trial, Henderson v. Medical Center Enterprise, 2006 U.S. Dist. LEXIS 57898.)

Peer Review Materials or Incident Reports. Plaintiffs subpoenaed an EMS incident report that was written immediately after Smith died. The report was extremely damaging to the hospital's case. For example, it noted that the patient kept saying 'I can't breathe… I can't breath.' and that he was uncooperative, agitated, pale, cool, and that one of the two IV units (D5 and water) wasn't running. At one point, the medic asked the physician for the second time if he believed the patient should be transported. Further-more, the medics were instructed to delay transporting the patient while they waited 15 minutes for the patient's x-rays to be copied. The medic wrote that during this time that she repeatedly told the emergency physician and nursing staff about uncontrolled hemorrhaging from the wound, uncontrolled movement of the fracture sites, and expressed concern that no blood pressure could be obtained and that no blood was being administered. She even asked the physician if there was any way he could stop the bleeding or sedate Smith to stop his agitation or the movement of his fractured leg. The physician's alleged response was 'There is not much I can do at this time; he needs to get to the [accepting hospital].'

Both the EMS agency and Botsford argued vigorously that the report was inadmissible and privileged as 'peer review' material under Michigan law.8 However, the court determined, consistent with federal common law precedent, that state law privileges do not apply in cases brought under federal law, such as EMTALA,9 and allowed the report into evidence.

The court also noted that "the incident report was made by a neutral party who, presumably, was objective in stating Smith's condition", and that "since the objective reasonableness of Smith's transfer by Botsford is the crux of this case, production of the incident report is particularly relevant."10 Interestingly, the medics were later sued by the plaintiffs in state court for their role in Smith's care, most remarkably for not refusing to transport Smith based on what they knew of his condition at that time.

Jury Verdict

After 15 days of trial, the jury sided with Smith's family, deciding that Smith was not stable, as defined by EMTALA, at the time of transfer. The jury returned a verdict for $35,000 in economic damages and $5,000,000 in non-economic damages for Smith's pain and suffering and for the loss of love and companionship to his next of kin.

Michigan had enacted tort reform, which placed a cap on non-economic damages for medical malpractice at $359,000.11 However, the judge ruled that an EMTALA claim was not a medical malpractice action, and therefore Michigan's non-economic damages cap did not apply.

With a mere $4,641,000 at stake, Botsford naturally appealed the judge's ruling regarding applicability of the cap to damages recovered under EMTALA.1

Appeal to the Federal Sixth Circuit Court of Appeals

The Sixth Circuit needed to determine whether the plaintiff's EMTALA failure-to-stabilize claim "sounds in medical malpractice" i.e., would it constitute a malpractice claim or an ordinary negligence claim under Michigan law (ordinary negligence claims do not come under the cap law).2 The court needed to make three determinations: (1) whether the claim is being brought against someone who, or an entity that, is capable of malpractice; (2) whether the claim pertains to an action that occurred within the course of a professional relationship'; and (3) whether the claim raises questions of medical judgment beyond the realm of common knowledge and experience.1

Clearly Botsford was an entity capable of malpractice and that the claim occurred within the course of a professional relationship. Therefore, the court only needed to decide if the claim raised questions of medical judgment beyond the realm of common knowledge and experience.

Smith argued that the EMTALA claim was not a malpractice action on the ground that it did not raise questions of "medical judgment" because violation of EMTALA requires no breach of the professional standard of care — the hallmark of traditional malpractice claims. However, the court identified the need for expert testimony as the key distinguishing feature of claims involving medical judgment:

"If the reasonableness of the health care professionals' action can be evaluated by lay jurors, on the basis of their common knowledge and experience, it is ordinary negligence. If, on the other hand, the reasonableness of the action can be evaluated by a jury only after having been presented the standards of care pertaining to the medical issue before the jury explained by experts, a medical malpractice claim is involved."12

On this basis, the Sixth Circuit had no difficulty holding that EMTALA's failure-to-stabilize claim would constitute a malpractice action under Michigan law. It decided that "compliance with EMTALA's stabilization requirements entails medical judgment (assuring "within reasonable medical probability, that no material deterioration of the condition is likely"), which can be understood, as this case exemplifies, only through expert testimony."13

Thus, the court concluded that Michigan's cap on malpractice damages limited plaintiff's non-economic damages to $359,000, provided the cap survived a constitutional challenge.

Michigan's Non-Economic Damages Cap

Plaintiff's last argument was that Michigan's cap law14 violates the Seventh Amendment Right to Jury Trial and the Equal Protection Clause. The court quickly rejected both assertions, agreeing with other courts that had found medical malpractice caps constitutional.15 It summarily dismissed the Seventh Amendment argument by noting that "The jury's role as factfinder is to determine the extent of a plaintiff's injuries, not to determine the legal consequences of its factual findings" and "If a legislature may completely abolish a cause of action without violating the right of trial by jury, we think it permissibly may limit damages recoverable for a cause of action as well."16,17

Plaintiff's equal-protection challenge fared no better. The court determined that a limitation on a common law measure of recovery is a classic example of an economic regulation, subject only to limited 'rational basis' review, and does not violate any fundamental right. Under a rational basis standard, a statute is valid if it 'rationally furthers a legitimate governmental interest.'18 It also noted that the statute deserves 'a strong presumption of validity,' and should be upheld it 'if there is any reasonably conceivable state of facts that could provide a rational basis for the classification.'1,19

"The purpose of the damages limitation was to control increases in health care costs by reducing the liability of medical care providers, thereby reducing malpractice insurance premiums, a large component of health care costs. Controlling health care costs is a legitimate governmental purpose. By limiting at least one component of health care costs, the non-economic damages limitation is rationally related to its intended purpose."19

Thus, plaintiff's equal-protection argument failed. The court held the Michigan's non-economic damages cap survived rational-basis scrutiny and serves a legitimate state interest in controlling health care costs. (Compare the reasoning of the Michigan courts and the Sixth Circuit Court of Appeals on the constitutionality of non-economic damages caps with that of the Wisconsin Supreme Court as discussed in the September issue of ED Legal Letter.)

The Sixth Circuit affirmed the judgment in all respects but remanded the case to the original district court for reduction of the non-economic damages to $359,000 in accordance with Michigan law.20

Final Judgment by District Court – July 2006

The lower court was to simply enter judgment according to the Sixth Circuit's direction, but the plaintiff tried one last maneuver to increase the amount of damages recoverable: Smith asked the court to apply a special "higher cap" available under Michigan's cap law, and revise the judgment of non-economic damages up to $641,000, instead of $359,000.14,21

Any one of three exceptions to Michigan's $359,000 cap on non-economic damages can boost the award to the higher amount.14 Smith argued that the exception under Mich. Comp. Law. §600.1483(1)(b) applied, which states:

"(b) The plaintiff has permanently impaired cognitive capacity rendering him or her incapable of making independent, responsible life decisions and permanently incapable of independently performing the activities of normal, daily living."14

Since death tends to cause these things, Smith pleaded for damages under the higher cap. However, the court found that Smith erred by not raising the issue at the proper time during the legal proceedings and therefore waived her rights to invoke the higher cap.21

Therefore, the saga ended with Smith awarded $35,000 in economic damages and $359,000 in non-economic damages.


1. Smith v. Botsford General Hospital, 419 F.3d 513 (6th Cir. 2005).

2. Smith sued under EMTALA, 42 U.S.C. §1395dd, for damages available under Michigan's Wrongful Death Act, Mich. Comp. Laws §600.2922.

3. 42 U.S.C. §1395dd(e)(3)(A).

4. Fed. R. of Civ. P. 26(a)(2)(B).

5. Fed. R. Civ. P. 37 authorizes exclusion of an expert witness for a Fed. R. Civ. P. 26 violation. See Roberts v. Galen of Virginia, Inc., 325 F.3d 776, 782 (6th Cir. 2003).

6. 5 U.S.C. 532.

7. Fed. R. of Evid. 803(8).

8. Mich. Comp. Laws, Section 333.20175(6).

9. Fed. R. Evid. 501; and see for example Burrows v. Red Bud Community Hospital District, 187 F.R.D. 606 (N.D. Cal. 1998).

10. Smith v. Botsford General Hospital, Case No. 00-71459, Memorandum and Orders of U.S. District Court Judge Avern Cohn, September 28, 2000.

11. Mich. Comp. Laws §600.1483. The statute actually caps damages at $280,000, but the number changes as a result of yearly inflation adjustments. This case occurred in 2003, and the adjustment applicable then capped damages at $359,000.

12. See Bryant v. Oakpointe Villa Nursing Ctr., 684 N.W.2d 864 (Mich. 2004).

13. Smith v. Botsford, 419 F.3d 513 (6th Cir. 2005), quoting 42 U.S.C. §1395dd(e)(3)(A); (emphasis added).

14. Mich. Comp. Laws §600.1483. The statute actually caps non-economic damages at $280,000.00 but this number changes as a result of yearly adjustment. The 2003 adjustment, applicable at the time of trial, capped damages at $359,000.

15. Joining the majority of courts addressing the issue in finding that EMTALA's incorporation of state law extends to caps on damages. E.g., Power v. Arlington Hosp. Assoc., 42 F.3d 851, 862 (4th Cir. 1994); Valencia v. St. Francis Hosp. & Health Ctr., 03-cv-0252-LJM-WTL, 2004 U.S. Dist. LEXIS 7929, at *7 (S.D. Ind. Mar. 1, 2004) (agreeing with Power and listing cases); Barris v. County of Los Angeles, 972 P.2d 966, 973 (Cal. 1999) (same); Hughes v. PeaceHealth, No. A123782 (Or. Ct. Appropriate. Mar. 15, 2006). But see Cooper v. Gulf Breeze Hosp., Inc., 839 F. Supp. 1538, 1542-43 (N.D. Fla. 1993) (discussing the differences between medical malpractice and EMTALA and declining to apply state procedural requirements applicable to malpractice claims), and Jeff v. Universal Health Services, Inc., No.04-1507 (E.D. La. July 27, 2005) 2005 U.S. Dist. LEXIS 17819.

16. Smith v. Botsford, 419 F.3d 513 (6th Cir. 2005), quoting Boyd v. Bulala, 877 F.2d 1191 (4th Cir. 1989).

17. See also Phillips v. Mirac, Inc., 685 N.W.2d 174, 180 (Mich. 2004), echoing the reasoning in Boyd and finding a cap on damages lawful under the Michigan constitution's analogous jury right.

18. LensCrafters, Inc. v. Robinson, 403 F.3d 798, 806 (6th Cir. 2005).

19. Quoting Zdrojewski v. Murphy, 657 N.W.2d 721, 739 (Mich. Ct. App. 2002), a Michigan appellate court addressing an equal-protection challenge to Mich. Comp. Laws §600.1483 which concluded that the statute satisfies the rational basis test.

20. Smith v. Botsford, 419 F.3d 513 (6th Cir. 2005). Smith filed a petition for rehearing en banc, which was denied on November 22, 2005. The U.S. Supreme Court denied certiorari.

21. Smith v. Botsford General Hospital, 2006 U.S. Dist. LEXIS 48154 (July 17, 2006)