The fate of the $500,000 legislative cap on non-economic damages in Oregon may be headed for the Oregon Supreme Court again in Rains v. Stayton Builders Mart, Inc., the second case to be decided in the Court of Appeals under the new rules announced in 2016 in Horton v. OHSU. Horton changed almost 20 years of Supreme Court precedent. It’s all about noneconomic damages.
What are “non-economic damages”?
If you have been injured by the negligence of a person or corporation in Oregon, a jury may find the negligent party liable to pay economic damages, like lost wages, medical bills, and other injury-related expenses. The jury can also award non-economic damages, which are damages to compensate for pain, suffering, and the loss of enjoyment of life. Insurance companies and their clients like the legislature to limit or “cap” non-economic damages.
The history of non-economic damages caps in Oregon
In the 1980s, some argued that big jury verdicts were driving up insurance rates, and, although later studies proved this to be untrue, many states passed legislation limiting non-economic damages. The Oregon legislature joined this movement, imposing a limit of $500,000. Capping non-economic damages raises serious constitutional concerns, which we’ve explored in more depth in past posts. Caps are a one-size-fits-all solution to cases involving individual people in unpredictable situations. Fortunately, in 1999 the Oregon Supreme Court found that the $500,000 cap on non-economic damages violated Article 1 Section 17 of the state constitution, which guarantees Oregonians a right to a jury trial. The court held that the right to a jury trial includes a right to a jury’s full verdict, meaning that the legislature can’t limit a jury award for non-economic damages to $500,000, or any other amount. For seventeen years following the decision in that case—Lakin v. Senco Products—there was no cap on non-economic damages except in death cases.
Horton v. OHSU: A major change in 2016
The Oregon Supreme Court reversed their Lakin ruling in 2016 in Horton v. OHSU. Medical negligence by doctors at OHSU caused severe injury to a six month old child. The jury awarded a total of $12 million in damages to the child, $6 million economic and $6 million non-economic damages. The Supreme Court’s applied the cap to reduce the $6 million non-economic damages award to $500,000. The Oregon Constitution requires that there be a “substantial remedy” for any injury done to a person. The court found $500,000 to be a “substantial remedy” in light of the fact that the injured child had been granted something in return—the right to sue OHSU, which was otherwise immune because it is a public institution. In short, despite the jury’s $6 million decision, the severely disabled infant received only $500,000 for her lifelong non-economic injuries.
After Horton, important questions remained, among them: How does the non-economic damages cap apply, if at all, where the negligent defendant is not a public body? The Oregon Court of Appeals recently answered that question.
Rains v. Stayton Builders Mart Inc.
The plaintiff in Rains v. Stayton Builders Mart, Inc., Kevin Rains, became paraplegic when he fell through a defective wooden board at his job site. He brought claims for damages against the lumber retailer, Stayton Builders Mart, and the manufacturer, Weyerhaeuser Company. His wife, plaintiff Mitzi Rains, also brought claims for damages to compensate for “loss of consortium,” which are damages for the impact of her husband’s injury on their marriage.
The jury found that Kevin had suffered $5,237,700 in economic damages and $3,125,000 in non-economic damages, and that Mitzi had suffered $1,012,500 in non-economic damages. Because the state of Oregon calculates damages using a comparative-fault scheme, and because Kevin was found to be 25% at fault for his accident, the court ended up entering a limited judgment awarding Kevin a total of $6,272,025 and Mitzi $759,375.
Weyerhaeuser appealed, arguing that the court should have limited the non-economic damages of Kevin and Mitzi to $500,000 apiece under the non-economic damages cap discussed above. The battle over whether these damages should be capped, and over how to apply relevant articles of the state constitution, was appealed all the way up to the Oregon Supreme Court. However, once the Supreme Court issued its ruling in Horton v. OHSU, the legal context changed significantly. The Supreme Court sent the case back down to the Court of Appeals with instructions to decide the case under the Horton ruling.
The Court of Appeals decided that, especially with regard to the “most grievously injured plaintiffs,” capping non-economic damages awards at $500,000 leaves plaintiffs without a full and “substantial” remedy as required by Article 1, Section 10 of the Oregon Constitution. If the cap had been applied to Kevin, his damages would have been reduced from $2,343,750 in non-economic damages to $500,000. Mitzi’s damages would have been reduced by $259,375, from $759,375 to $500,000. The Court of Appeals concluded that to cap their damages at $500,000 would leave Kevin and Mitzi without the full substance of the remedy to which they are constitutionally entitled because neither of them received anything in return.
What will happen next?
Weyerhaeuser has requested an extension of time in which to file a petition for review in the Oregon Supreme Court. If the Supreme Court accepts review it may clarify the application of Horton v. OHSU to cases that do not involve government defendants.