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112th Congress                                             Rept. 112-39
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
                 HELP EFFICIENT, ACCESSIBLE, LOW-COST, 
                 TIMELY HEALTHCARE (HEALTH) ACT OF 2011

                                _______
                                

                 March 17, 2011.--Ordered to be printed

                                _______
                                

       Mr. Smith of Texas, from the Committee on the Judiciary, 
                        submitted the following

                              R E P O R T

                             together with

            DISSENTING VIEWS AND ADDITIONAL DISSENTING VIEWS

                         [To accompany H.R. 5]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 5) to improve patient access to health care services 
and provide improved medical care by reducing the excessive 
burden the liability system places on the health care delivery 
system, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     7
Background and Need for the Legislation..........................     8
Hearings.........................................................    63
Committee Consideration..........................................    63
Committee Votes..................................................    63
Committee Oversight Findings.....................................    79
New Budget Authority and Tax Expenditures........................    79
Congressional Budget Office Cost Estimate........................    80
Performance Goals and Objectives.................................    87
Advisory on Earmarks.............................................    87
Section-by-Section Analysis......................................    87
Dissenting Views.................................................    88
Additional Dissenting Views......................................   119

                             The Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purpose.
Sec. 3. Encouraging speedy resolution of claims.
Sec. 4. Compensating patient injury.
Sec. 5. Maximizing patient recovery.
Sec. 6. Punitive damages.
Sec. 7. Authorization of payment of future damages to claimants in 
HEALTH care lawsuits.
Sec. 8. Definitions.
Sec. 9. Effect on other laws.
Sec. 10. State flexibility and protection of States' rights.
Sec. 11. Applicability; effective date.

SEC. 2. FINDINGS AND PURPOSE.

  (a) Findings.--
          (1) Effect on health care access and costs.--Congress finds 
        that our current civil justice system is adversely affecting 
        patient access to health care services, better patient care, 
        and cost-efficient health care, in that the health care 
        liability system is a costly and ineffective mechanism for 
        resolving claims of health care liability and compensating 
        injured patients, and is a deterrent to the sharing of 
        information among health care professionals which impedes 
        efforts to improve patient safety and quality of care.
          (2) Effect on interstate commerce.--Congress finds that the 
        health care and insurance industries are industries affecting 
        interstate commerce and the health care liability litigation 
        systems existing throughout the United States are activities 
        that affect interstate commerce by contributing to the high 
        costs of health care and premiums for health care liability 
        insurance purchased by health care system providers.
          (3) Effect on federal spending.--Congress finds that the 
        health care liability litigation systems existing throughout 
        the United States have a significant effect on the amount, 
        distribution, and use of Federal funds because of--
                  (A) the large number of individuals who receive 
                health care benefits under programs operated or 
                financed by the Federal Government;
                  (B) the large number of individuals who benefit 
                because of the exclusion from Federal taxes of the 
                amounts spent to provide them with health insurance 
                benefits; and
                  (C) the large number of health care providers who 
                provide items or services for which the Federal 
                Government makes payments.
  (b) Purpose.--It is the purpose of this Act to implement reasonable, 
comprehensive, and effective health care liability reforms designed 
to--
          (1) improve the availability of health care services in cases 
        in which health care liability actions have been shown to be a 
        factor in the decreased availability of services;
          (2) reduce the incidence of ``defensive medicine'' and lower 
        the cost of health care liability insurance, all of which 
        contribute to the escalation of health care costs;
          (3) ensure that persons with meritorious health care injury 
        claims receive fair and adequate compensation, including 
        reasonable noneconomic damages;
          (4) improve the fairness and cost-effectiveness of our 
        current health care liability system to resolve disputes over, 
        and provide compensation for, health care liability by reducing 
        uncertainty in the amount of compensation provided to injured 
        individuals; and
          (5) provide an increased sharing of information in the health 
        care system which will reduce unintended injury and improve 
        patient care.

SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

  The time for the commencement of a health care lawsuit shall be 3 
years after the date of manifestation of injury or 1 year after the 
claimant discovers, or through the use of reasonable diligence should 
have discovered, the injury, whichever occurs first. In no event shall 
the time for commencement of a health care lawsuit exceed 3 years after 
the date of manifestation of injury unless tolled for any of the 
following--
          (1) upon proof of fraud;
          (2) intentional concealment; or
          (3) the presence of a foreign body, which has no therapeutic 
        or diagnostic purpose or effect, in the person of the injured 
        person.
Actions by a minor shall be commenced within 3 years from the date of 
the alleged manifestation of injury except that actions by a minor 
under the full age of 6 years shall be commenced within 3 years of 
manifestation of injury or prior to the minor's 8th birthday, whichever 
provides a longer period. Such time limitation shall be tolled for 
minors for any period during which a parent or guardian and a health 
care provider or health care organization have committed fraud or 
collusion in the failure to bring an action on behalf of the injured 
minor.

SEC. 4. COMPENSATING PATIENT INJURY.

  (a) Unlimited Amount of Damages for Actual Economic Losses in Health 
Care Lawsuits.--In any health care lawsuit, nothing in this Act shall 
limit a claimant's recovery of the full amount of the available 
economic damages, notwithstanding the limitation in subsection (b).
  (b) Additional Noneconomic Damages.--In any health care lawsuit, the 
amount of noneconomic damages, if available, may be as much as 
$250,000, regardless of the number of parties against whom the action 
is brought or the number of separate claims or actions brought with 
respect to the same injury.
  (c) No Discount of Award for Noneconomic Damages.--For purposes of 
applying the limitation in subsection (b), future noneconomic damages 
shall not be discounted to present value. The jury shall not be 
informed about the maximum award for noneconomic damages. An award for 
noneconomic damages in excess of $250,000 shall be reduced either 
before the entry of judgment, or by amendment of the judgment after 
entry of judgment, and such reduction shall be made before accounting 
for any other reduction in damages required by law. If separate awards 
are rendered for past and future noneconomic damages and the combined 
awards exceed $250,000, the future noneconomic damages shall be reduced 
first.
  (d) Fair Share Rule.--In any health care lawsuit, each party shall be 
liable for that party's several share of any damages only and not for 
the share of any other person. Each party shall be liable only for the 
amount of damages allocated to such party in direct proportion to such 
party's percentage of responsibility. Whenever a judgment of liability 
is rendered as to any party, a separate judgment shall be rendered 
against each such party for the amount allocated to such party. For 
purposes of this section, the trier of fact shall determine the 
proportion of responsibility of each party for the claimant's harm.

SEC. 5. MAXIMIZING PATIENT RECOVERY.

  (a) Court Supervision of Share of Damages Actually Paid to 
Claimants.--In any health care lawsuit, the court shall supervise the 
arrangements for payment of damages to protect against conflicts of 
interest that may have the effect of reducing the amount of damages 
awarded that are actually paid to claimants. In particular, in any 
health care lawsuit in which the attorney for a party claims a 
financial stake in the outcome by virtue of a contingent fee, the court 
shall have the power to restrict the payment of a claimant's damage 
recovery to such attorney, and to redirect such damages to the claimant 
based upon the interests of justice and principles of equity. In no 
event shall the total of all contingent fees for representing all 
claimants in a health care lawsuit exceed the following limits:
          (1) Forty percent of the first $50,000 recovered by the 
        claimant(s).
          (2) Thirty-three and one-third percent of the next $50,000 
        recovered by the claimant(s).
          (3) Twenty-five percent of the next $500,000 recovered by the 
        claimant(s).
          (4) Fifteen percent of any amount by which the recovery by 
        the claimant(s) is in excess of $600,000.
  (b) Applicability.--The limitations in this section shall apply 
whether the recovery is by judgment, settlement, mediation, 
arbitration, or any other form of alternative dispute resolution. In a 
health care lawsuit involving a minor or incompetent person, a court 
retains the authority to authorize or approve a fee that is less than 
the maximum permitted under this section. The requirement for court 
supervision in the first two sentences of subsection (a) applies only 
in civil actions.

SEC. 6. PUNITIVE DAMAGES.

  (a) In General.--Punitive damages may, if otherwise permitted by 
applicable State or Federal law, be awarded against any person in a 
health care lawsuit only if it is proven by clear and convincing 
evidence that such person acted with malicious intent to injure the 
claimant, or that such person deliberately failed to avoid unnecessary 
injury that such person knew the claimant was substantially certain to 
suffer. In any health care lawsuit where no judgment for compensatory 
damages is rendered against such person, no punitive damages may be 
awarded with respect to the claim in such lawsuit. No demand for 
punitive damages shall be included in a health care lawsuit as 
initially filed. A court may allow a claimant to file an amended 
pleading for punitive damages only upon a motion by the claimant and 
after a finding by the court, upon review of supporting and opposing 
affidavits or after a hearing, after weighing the evidence, that the 
claimant has established by a substantial probability that the claimant 
will prevail on the claim for punitive damages. At the request of any 
party in a health care lawsuit, the trier of fact shall consider in a 
separate proceeding--
          (1) whether punitive damages are to be awarded and the amount 
        of such award; and
          (2) the amount of punitive damages following a determination 
        of punitive liability.
If a separate proceeding is requested, evidence relevant only to the 
claim for punitive damages, as determined by applicable State law, 
shall be inadmissible in any proceeding to determine whether 
compensatory damages are to be awarded.
  (b) Determining Amount of Punitive Damages.--
          (1) Factors considered.--In determining the amount of 
        punitive damages, if awarded, in a health care lawsuit, the 
        trier of fact shall consider only the following--
                  (A) the severity of the harm caused by the conduct of 
                such party;
                  (B) the duration of the conduct or any concealment of 
                it by such party;
                  (C) the profitability of the conduct to such party;
                  (D) the number of products sold or medical procedures 
                rendered for compensation, as the case may be, by such 
                party, of the kind causing the harm complained of by 
                the claimant;
                  (E) any criminal penalties imposed on such party, as 
                a result of the conduct complained of by the claimant; 
                and
                  (F) the amount of any civil fines assessed against 
                such party as a result of the conduct complained of by 
                the claimant.
          (2) Maximum award.--The amount of punitive damages, if 
        awarded, in a health care lawsuit may be as much as $250,000 or 
        as much as two times the amount of economic damages awarded, 
        whichever is greater. The jury shall not be informed of this 
        limitation.
  (c) No Punitive Damages for Products That Comply With FDA 
Standards.--
          (1) In general.--
                  (A) No punitive damages may be awarded against the 
                manufacturer or distributor of a medical product, or a 
                supplier of any component or raw material of such 
                medical product, based on a claim that such product 
                caused the claimant's harm where--
                          (i)(I) such medical product was subject to 
                        premarket approval, clearance, or licensure by 
                        the Food and Drug Administration with respect 
                        to the safety of the formulation or performance 
                        of the aspect of such medical product which 
                        caused the claimant's harm or the adequacy of 
                        the packaging or labeling of such medical 
                        product; and
                          (II) such medical product was so approved, 
                        cleared, or licensed; or
                          (ii) such medical product is generally 
                        recognized among qualified experts as safe and 
                        effective pursuant to conditions established by 
                        the Food and Drug Administration and applicable 
                        Food and Drug Administration regulations, 
                        including without limitation those related to 
                        packaging and labeling, unless the Food and 
                        Drug Administration has determined that such 
                        medical product was not manufactured or 
                        distributed in substantial compliance with 
                        applicable Food and Drug Administration 
                        statutes and regulations.
                  (B) Rule of construction.--Subparagraph (A) may not 
                be construed as establishing the obligation of the Food 
                and Drug Administration to demonstrate affirmatively 
                that a manufacturer, distributor, or supplier referred 
                to in such subparagraph meets any of the conditions 
                described in such subparagraph.
          (2) Liability of health care providers.--A health care 
        provider who prescribes, or who dispenses pursuant to a 
        prescription, a medical product approved, licensed, or cleared 
        by the Food and Drug Administration shall not be named as a 
        party to a product liability lawsuit involving such product and 
        shall not be liable to a claimant in a class action lawsuit 
        against the manufacturer, distributor, or seller of such 
        product. Nothing in this paragraph prevents a court from 
        consolidating cases involving health care providers and cases 
        involving products liability claims against the manufacturer, 
        distributor, or product seller of such medical product.
          (3) Packaging.--In a health care lawsuit for harm which is 
        alleged to relate to the adequacy of the packaging or labeling 
        of a drug which is required to have tamper-resistant packaging 
        under regulations of the Secretary of Health and Human Services 
        (including labeling regulations related to such packaging), the 
        manufacturer or product seller of the drug shall not be held 
        liable for punitive damages unless such packaging or labeling 
        is found by the trier of fact by clear and convincing evidence 
        to be substantially out of compliance with such regulations.
          (4) Exception.--Paragraph (1) shall not apply in any health 
        care lawsuit in which--
                  (A) a person, before or after premarket approval, 
                clearance, or licensure of such medical product, 
                knowingly misrepresented to or withheld from the Food 
                and Drug Administration information that is required to 
                be submitted under the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 301 et seq.) or section 351 of the 
                Public Health Service Act (42 U.S.C. 262) that is 
                material and is causally related to the harm which the 
                claimant allegedly suffered; or
                  (B) a person made an illegal payment to an official 
                of the Food and Drug Administration for the purpose of 
                either securing or maintaining approval, clearance, or 
                licensure of such medical product.

SEC. 7. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN 
                    HEALTH CARE LAWSUITS.

  (a) In General.--In any health care lawsuit, if an award of future 
damages, without reduction to present value, equaling or exceeding 
$50,000 is made against a party with sufficient insurance or other 
assets to fund a periodic payment of such a judgment, the court shall, 
at the request of any party, enter a judgment ordering that the future 
damages be paid by periodic payments, in accordance with the Uniform 
Periodic Payment of Judgments Act promulgated by the National 
Conference of Commissioners on Uniform State Laws.
  (b) Applicability.--This section applies to all actions which have 
not been first set for trial or retrial before the effective date of 
this Act.

SEC. 8. DEFINITIONS.

  In this Act:
          (1) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system that provides for the resolution of health care lawsuits 
        in a manner other than through a civil action brought in a 
        State or Federal court.
          (2) Claimant.--The term ``claimant'' means any person who 
        brings a health care lawsuit, including a person who asserts or 
        claims a right to legal or equitable contribution, indemnity, 
        or subrogation, arising out of a health care liability claim or 
        action, and any person on whose behalf such a claim is asserted 
        or such an action is brought, whether deceased, incompetent, or 
        a minor.
          (3) Compensatory damages.--The term ``compensatory damages'' 
        means objectively verifiable monetary losses incurred as a 
        result of the provision of, use of, or payment for (or failure 
        to provide, use, or pay for) health care services or medical 
        products, such as past and future medical expenses, loss of 
        past and future earnings, cost of obtaining domestic services, 
        loss of employment, and loss of business or employment 
        opportunities, damages for physical and emotional pain, 
        suffering, inconvenience, physical impairment, mental anguish, 
        disfigurement, loss of enjoyment of life, loss of society and 
        companionship, loss of consortium (other than loss of domestic 
        service), hedonic damages, injury to reputation, and all other 
        nonpecuniary losses of any kind or nature. The term 
        ``compensatory damages'' includes economic damages and 
        noneconomic damages, as such terms are defined in this section.
          (4) Contingent fee.--The term ``contingent fee'' includes all 
        compensation to any person or persons which is payable only if 
        a recovery is effected on behalf of one or more claimants.
          (5) Economic damages.--The term ``economic damages'' means 
        objectively verifiable monetary losses incurred as a result of 
        the provision of, use of, or payment for (or failure to 
        provide, use, or pay for) health care services or medical 
        products, such as past and future medical expenses, loss of 
        past and future earnings, cost of obtaining domestic services, 
        loss of employment, and loss of business or employment 
        opportunities.
          (6) Health care lawsuit.--The term ``health care lawsuit'' 
        means any health care liability claim concerning the provision 
        of health care goods or services or any medical product 
        affecting interstate commerce, or any health care liability 
        action concerning the provision of health care goods or 
        services or any medical product affecting interstate commerce, 
        brought in a State or Federal court or pursuant to an 
        alternative dispute resolution system, against a health care 
        provider, a health care organization, or the manufacturer, 
        distributor, supplier, marketer, promoter, or seller of a 
        medical product, regardless of the theory of liability on which 
        the claim is based, or the number of claimants, plaintiffs, 
        defendants, or other parties, or the number of claims or causes 
        of action, in which the claimant alleges a health care 
        liability claim. Such term does not include a claim or action 
        which is based on criminal liability; which seeks civil fines 
        or penalties paid to Federal, State, or local government; or 
        which is grounded in antitrust.
          (7) Health care liability action.--The term ``health care 
        liability action'' means a civil action brought in a State or 
        Federal court or pursuant to an alternative dispute resolution 
        system, against a health care provider, a health care 
        organization, or the manufacturer, distributor, supplier, 
        marketer, promoter, or seller of a medical product, regardless 
        of the theory of liability on which the claim is based, or the 
        number of plaintiffs, defendants, or other parties, or the 
        number of causes of action, in which the claimant alleges a 
        health care liability claim.
          (8) Health care liability claim.--The term ``health care 
        liability claim'' means a demand by any person, whether or not 
        pursuant to ADR, against a health care provider, health care 
        organization, or the manufacturer, distributor, supplier, 
        marketer, promoter, or seller of a medical product, including, 
        but not limited to, third-party claims, cross-claims, counter-
        claims, or contribution claims, which are based upon the 
        provision of, use of, or payment for (or the failure to 
        provide, use, or pay for) health care services or medical 
        products, regardless of the theory of liability on which the 
        claim is based, or the number of plaintiffs, defendants, or 
        other parties, or the number of causes of action.
          (9) Health care organization.--The term ``health care 
        organization'' means any person or entity which is obligated to 
        provide or pay for health benefits under any health plan, 
        including any person or entity acting under a contract or 
        arrangement with a health care organization to provide or 
        administer any health benefit.
          (10) Health care provider.--The term ``health care provider'' 
        means any person or entity required by State or Federal laws or 
        regulations to be licensed, registered, or certified to provide 
        health care services, and being either so licensed, registered, 
        or certified, or exempted from such requirement by other 
        statute or regulation.
          (11) Health care goods or services.--The term ``health care 
        goods or services'' means any goods or services provided by a 
        health care organization, provider, or by any individual 
        working under the supervision of a health care provider, that 
        relates to the diagnosis, prevention, or treatment of any human 
        disease or impairment, or the assessment or care of the health 
        of human beings.
          (12) Malicious intent to injure.--The term ``malicious intent 
        to injure'' means intentionally causing or attempting to cause 
        physical injury other than providing health care goods or 
        services.
          (13) Medical product.--The term ``medical product'' means a 
        drug, device, or biological product intended for humans, and 
        the terms ``drug'', ``device'', and ``biological product'' have 
        the meanings given such terms in sections 201(g)(1) and 201(h) 
        of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1) 
        and (h)) and section 351(a) of the Public Health Service Act 
        (42 U.S.C. 262(a)), respectively, including any component or 
        raw material used therein, but excluding health care services.
          (14) Noneconomic damages.--The term ``noneconomic damages'' 
        means damages for physical and emotional pain, suffering, 
        inconvenience, physical impairment, mental anguish, 
        disfigurement, loss of enjoyment of life, loss of society and 
        companionship, loss of consortium (other than loss of domestic 
        service), hedonic damages, injury to reputation, and all other 
        nonpecuniary losses of any kind or nature.
          (15) Punitive damages.--The term ``punitive damages'' means 
        damages awarded, for the purpose of punishment or deterrence, 
        and not solely for compensatory purposes, against a health care 
        provider, health care organization, or a manufacturer, 
        distributor, or supplier of a medical product. Punitive damages 
        are neither economic nor noneconomic damages.
          (16) Recovery.--The term ``recovery'' means the net sum 
        recovered after deducting any disbursements or costs incurred 
        in connection with prosecution or settlement of the claim, 
        including all costs paid or advanced by any person. Costs of 
        health care incurred by the plaintiff and the attorneys' office 
        overhead costs or charges for legal services are not deductible 
        disbursements or costs for such purpose.
          (17) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, American Samoa, the Northern 
        Mariana Islands, the Trust Territory of the Pacific Islands, 
        and any other territory or possession of the United States, or 
        any political subdivision thereof.

SEC. 9. EFFECT ON OTHER LAWS.

  (a) Vaccine Injury.--
          (1) To the extent that title XXI of the Public Health Service 
        Act establishes a Federal rule of law applicable to a civil 
        action brought for a vaccine-related injury or death--
                  (A) this Act does not affect the application of the 
                rule of law to such an action; and
                  (B) any rule of law prescribed by this Act in 
                conflict with a rule of law of such title XXI shall not 
                apply to such action.
          (2) If there is an aspect of a civil action brought for a 
        vaccine-related injury or death to which a Federal rule of law 
        under title XXI of the Public Health Service Act does not 
        apply, then this Act or otherwise applicable law (as determined 
        under this Act) will apply to such aspect of such action.
  (b) Other Federal Law.--Except as provided in this section, nothing 
in this Act shall be deemed to affect any defense available to a 
defendant in a health care lawsuit or action under any other provision 
of Federal law.

SEC. 10. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

  (a) Health Care Lawsuits.--The provisions governing health care 
lawsuits set forth in this Act preempt, subject to subsections (b) and 
(c), State law to the extent that State law prevents the application of 
any provisions of law established by or under this Act. The provisions 
governing health care lawsuits set forth in this Act supersede chapter 
171 of title 28, United States Code, to the extent that such chapter--
          (1) provides for a greater amount of damages or contingent 
        fees, a longer period in which a health care lawsuit may be 
        commenced, or a reduced applicability or scope of periodic 
        payment of future damages, than provided in this Act; or
          (2) prohibits the introduction of evidence regarding 
        collateral source benefits, or mandates or permits subrogation 
        or a lien on collateral source benefits.
  (b) Protection of States' Rights and Other Laws.--(1) Any issue that 
is not governed by any provision of law established by or under this 
Act (including State standards of negligence) shall be governed by 
otherwise applicable State or Federal law.
  (2) This Act shall not preempt or supersede any State or Federal law 
that imposes greater procedural or substantive protections for health 
care providers and health care organizations from liability, loss, or 
damages than those provided by this Act or create a cause of action.
  (c) State Flexibility.--No provision of this Act shall be construed 
to preempt--
          (1) any State law (whether effective before, on, or after the 
        date of the enactment of this Act) that specifies a particular 
        monetary amount of compensatory or punitive damages (or the 
        total amount of damages) that may be awarded in a health care 
        lawsuit, regardless of whether such monetary amount is greater 
        or lesser than is provided for under this Act, notwithstanding 
        section 4(a); or
          (2) any defense available to a party in a health care lawsuit 
        under any other provision of State or Federal law.

SEC. 11. APPLICABILITY; EFFECTIVE DATE.

  This Act shall apply to any health care lawsuit brought in a Federal 
or State court, or subject to an alternative dispute resolution system, 
that is initiated on or after the date of the enactment of this Act, 
except that any health care lawsuit arising from an injury occurring 
prior to the date of the enactment of this Act shall be governed by the 
applicable statute of limitations provisions in effect at the time the 
injury occurred.

                          Purpose and Summary

    The HEALTH Act is modeled on California's legal reforms, 
which have been the law in that state for over 30 years. The 
HEALTH Act's reforms include a $250,000 cap on noneconomic 
damages, limits on the contingency fees lawyers can charge, and 
authorization for courts to require periodic payments for 
future damages instead of lump sum awards that prevent 
bankruptcies in which plaintiffs would receive only pennies on 
the dollar. The HEALTH Act also includes provisions creating a 
``fair share'' rule, by which damages are allocated fairly, in 
direct proportion to fault, and reasonable guidelines--but not 
caps--on the award of punitive damages. Finally, the HEALTH Act 
will accomplish reform without in any way limiting compensation 
for 100% of plaintiffs' economic losses (anything to which a 
receipt can be attached), including their medical costs, their 
lost wages, their future lost wages, rehabilitation costs, and 
any other economic out of pocket loss suffered as the result of 
a health care injury. The HEALTH Act also does not preempt any 
state law that otherwise caps damages.

                Background and Need for the Legislation

    The HEALTH Act's reforms are necessary to help improve 
health care, make it more affordable, and save taxpayer money 
while reducing the Federal deficit.
    The HEALTH Act, modeled after California's decades-old and 
highly successful health care litigation reforms, addresses the 
current crisis in health care by reining in unlimited lawsuits 
and thereby making health care delivery more accessible and 
cost-effective in the United States. California's Medical 
Injury Compensation Reform Act (``MICRA''), which was signed 
into law by Governor Jerry Brown in 1976, has proved immensely 
successful in increasing access to affordable medical care. 
Overall, according to data of the National Association of 
Insurance Commissioners (with the latest data available from 
2008), the rate of increase in medical professional liability 
premiums in California since 1976 has been a relatively modest 
387%, whereas the rest of the United States has experienced a 
1,089% rate of increase, a rate of increase 281% larger than 
that experienced in California, as shown in the following 
chart:


    By incorporating MICRA's time-tested reforms at the Federal 
level, the HEALTH Act will make medical malpractice insurance 
affordable again, encourage health care practitioners to 
maintain their practices, and reduce health care costs for 
patients. Its enactment will particularly help traditionally 
under-served rural and inner city communities, and women 
seeking obstetrics care.
    MICRA's reforms, which have been the law in California for 
over 30 years, include a $250,000 cap on noneconomic damages, 
limits on the contingency fees lawyers can charge; and 
authorization for courts to require periodic payments for 
future damages instead of lump sum awards that prevent 
bankruptcies in which plaintiffs would receive only pennies on 
the dollar. The HEALTH Act also includes provisions creating a 
``fair share'' rule, by which damages are allocated fairly, in 
direct proportion to fault, and reasonable guidelines--but not 
caps--on the award of punitive damages. Finally, the HEALTH Act 
will accomplish reform without in any way limiting compensation 
for 100% of plaintiffs' economic losses (anything to which a 
receipt can be attached), including their medical costs, their 
lost wages, their future lost wages, rehabilitation costs, and 
any other economic out-of-pocket loss suffered as the result of 
a health care injury. The HEALTH Act also does not preempt any 
state law that otherwise caps damages.
    Enactment of the HEALTH Act will not result in more medical 
malpractice cases being brought in Federal court than would be 
brought in Federal court otherwise. The Supreme Court has held 
that a ``federal standard'' does not confer Federal question 
jurisdiction in the absence of Congressional creation of a 
Federal cause of action.\1\
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    \1\See Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 813 
(1986).
---------------------------------------------------------------------------
    Finally, many state supreme courts have judicially 
nullified reasonable litigation management provisions enacted 
by state legislatures, many of which sought to address the 
crisis in medical professional liability that reduces patients' 
access to health care. Consequently, in such states, passage of 
Federal legislation by Congress may be the only means of 
addressing the state's current crisis in medical professional 
liability and restoring patients' access to health care. Laws 
passed by states that have already provided for, or may in the 
future provide for, different limits on damages in health care 
lawsuits will be preserved under the HEALTH Act, as the HEALTH 
Act provides that ``No provision of this Act shall be construed 
to preempt . . . any state law (whether effective before, on, 
or after the date of the enactment of this Act) that specifies 
a particular monetary amount of compensatory or punitive 
damages (or the total amount of damages) that may be awarded in 
a health care lawsuit, regardless of whether or not such 
monetary amount is greater or lesser than is provided for under 
this Act. . . .'' Some states have limited noneconomic damages 
in medical malpractice actions, but at levels higher than 
$250,000. Some states place aggregate limits on medical 
malpractice awards.

                 THE HUGE COSTS OF DEFENSIVE MEDICINE 
                       ARE PASSED ON TO TAXPAYERS

    The American medical lawsuit system is broken. According to 
one study, 40 percent of claims are meritless, in that either 
no injury or no error occurred in the case. Attorneys' fees and 
administrative costs eat away 54% of the compensation that 
should be paid to plaintiffs. And completely meritless claims 
(which are nonetheless successful approximately one in four 
times) account for nearly a quarter of total administrative 
costs.\2\
---------------------------------------------------------------------------
    \2\``Claims, Errors, and Compensation Payments in Medical 
Malpractice Litigation,'' David Studdert et al., New England Journal of 
Medicine (May 11, 2006).
---------------------------------------------------------------------------
    Under current rules, health care workers seek to avoid 
these costs to themselves by conducting many additional costly 
tests and procedures and shifting those costs to taxpayers. As 
one physician explained, ``Just one successful lawsuit against 
a physician for a missed diagnosis can damage his ability to 
maintain his credentials, cost him . . . in increased liability 
insurance, jeopardize his financial assets, and even end his 
career. Why risk our own money when we can use somebody else's 
to protect us, even if it costs millions?''\3\
---------------------------------------------------------------------------
    \3\Panda Bear, MD, ``How I Am Learning to Throw Money Away with 
Both Hands and a Big Shovel'' (February 5, 2008).
---------------------------------------------------------------------------

                   DEFENSIVE MEDICINE IS WIDESPREAD, 
                    AND THE SOLUTION IS TORT REFORM

    ``Defensive medicine'' is widely practiced. Skyrocketing 
medical liability insurance rates have distorted the practice 
of medicine. Costly, but unnecessary, tests have become routine 
as doctors try to protect themselves from frivolous lawsuits. 
Indeed, according to a Harvard University research study, 40% 
of medical malpractice lawsuits filed in the United States lack 
evidence of medical error or any actual patient injury.\4\
---------------------------------------------------------------------------
    \4\Available at http://www.hsph.harvard.edu/faculty/articles/
litigation.pdf.
---------------------------------------------------------------------------
    A survey released in 2010 found defensive medicine is an 
issue for all physicians. The results, published in the 
Archives of Internal Medicine, found that 91% of the 1,231 
doctors who responded to their survey ``reported believing that 
physicians order more tests and procedures than needed to 
protect themselves from malpractice suits.'' That view was held 
by the vast majority of generalists (91%), medical specialists 
(89%), surgeons (93%) and other specialists (94%). The survey 
asked two questions: ``Do physicians order more tests and 
procedures than patients need to protect themselves from 
malpractice suits?'' And, ``Are protections against unwarranted 
malpractice lawsuits needed to decrease the unnecessary use of 
diagnostic tests?'' Overall, 91 percent of doctors surveyed 
agreed with both statements.\5\
---------------------------------------------------------------------------
    \5\See Tara F. Bishop, MD, Alex D. Federman, MD, MPH, Salomeh 
Keyhani, MD, MPH, ``Physicians' Views on Defensive Medicine: A National 
Survey'' Arch. Intern. Med. 2010; 170(12): 1081-1083.
---------------------------------------------------------------------------
    According to a 2008 survey conducted by the Massachusetts 
Medical Society, 83 percent of physicians reported that they 
practice defensive medicine.\6\ Another study in Pennsylvania 
put the figure at 93 percent.\7\
---------------------------------------------------------------------------
    \6\``Investigation of Defensive Medicine in Massachusetts,'' 
Massachusetts Medical Society (November 2008).
    \7\David Studdert et al., ``Defensive Medicine Among High-Risk 
Specialist Physicians in a Volatile Malpractice Environment,'' JAMA 
(June 1, 2005) at 2609-2617.
---------------------------------------------------------------------------
    Defensive medicine is widespread in specialty medical 
fields as well. According to another report:

        [A] survey from Emergency Physicians Monthly 
        [concludes] many tests performed in the ER [emergency 
        room] are deemed unnecessary to good patient care. 
        Here's how doctors responded to the following question: 
        ``Given that in a typical shift of eight hours you see 
        an average of two patients per hour (16 patients/
        shift), could you have eliminated any of the following 
        tests and/or treatments without compromising the 
        quality of care? If so, how many of each?'' The results 
        of the survey showed how many times ER doctors 
        prescribe which types of tests unnecessarily to avoid 
        unlimited lawsuits:

        
        

        As you can see, laboratory tests and CT scans comprised 
        the greatest proportion of unnecessary tests.\8\
---------------------------------------------------------------------------
    \8\KevinMD.com ``How Much Unnecessary Testing Goes On in the ER?'' 
(September 30, 2009).

    The same survey found that the HEALTH Act's limit on 
noneconomic damages is essential to reducing defensive 
medicine: ``The survey also found that non-economic caps are 
these physicians' preferred choice of malpractice reform, with 
84 percent of emergency physicians calling them a `non-
negotiable part of health reform.'''\9\
---------------------------------------------------------------------------
    \9\KevinMD.com ``How Much Unnecessary Testing Goes On in the ER?'' 
(September 30, 2009). And in 2003, the Florida Governor's Select Task 
Force on Health Care Professional Liability Insurance made its official 
recommendations to Governor Bush. The Task Force concluded as follows: 
``the most important [recommendation] is a cap on noneconomic damages 
in the amount of $250,000.'' Governor's Select Task Force on Healthcare 
Professional Liability Insurance (January 29, 2003) at xvi (Executive 
Summary).
---------------------------------------------------------------------------
    Another report on defensive medicine in the ER summarized 
ER doctors' incentives as follows:

        The fear of missing something weighs heavily on every 
        doctor's mind. But the stakes are highest in the ER, 
        and that fear often leads to extra blood tests and 
        imaging scans for what might be harmless chest pains, 
        run-of-the-mill head bumps and non-threatening 
        stomachaches. Many ER doctors say the No. 1 reason is 
        fear of malpractice lawsuits. ``It has everything to do 
        with it,'' said Dr. Angela Gardner, president of the 
        American College of Emergency Physicians.\10\
---------------------------------------------------------------------------
    \10\Lindsey Tanner, ``Fear Can Drive ERs To Do Tests to Excess,'' 
Associated Press (June 21, 2010).

    As one Newsweek reporter described the personal experience 
---------------------------------------------------------------------------
of individual doctors:

        When I asked physicians which medical procedures were 
        costly and commonly performed but did not help (at 
        least some) patients, I expected more of them to 
        justify almost everything they do. Some did. But as the 
        Newsweek article on ``medicine we can live without'' 
        showed, many physicians couldn't get their nominees to 
        me fast enough, so eager were they to spread the word 
        about how much stupid, useless medical care there is.

        The reason for that isn't surprising: doctors hate 
        practicing defensive medicine--that is, ordering tests, 
        surgeries, or other procedures not because the doctor 
        knows it will help the patient but to protect the 
        physician from lawsuits. . . .

        [M]ore typical was Angela Gardner, president of the 
        American College of Emergency Physicians, who had a 
        list as long as my arm of procedures ER docs perform, 
        often for no patient benefit. They include following a 
        bedside sonogram (looking for ectopic pregnancy, for 
        instance) with an ``official'' sonogram (because if 
        something is missed it's easier to defend yourself to a 
        jury if you've ordered the second one); a CT scan for 
        every child who bumped his or her head (to rule out 
        things that can be diagnosed just fine by observation); 
        X-rays that do not guide treatment, such as for a 
        simple broken arm; CTs for suspected appendicitis that 
        has been perfectly well diagnosed without it (ORs won't 
        accept patients for an appendectomy without a CT); and 
        . . . well, there were more. But in short, Gardner told 
        me, ``I think there is plenty we could cut out without 
        hurting patients in any way.''

        So why don't they? Because although doctors may hate 
        practicing defensive medicine, they do it so they don't 
        get sued. We've known that for a long time, but a 
        recent survey of physicians is so replete with horror 
        stories I can't resist sharing them. . . .

        Nationwide, physicians estimate that 35 percent of 
        diagnostic tests they ordered were to avoid lawsuits, 
        as were 19 percent of hospitalizations, 14 percent of 
        prescriptions, and 8 percent of surgeries. . . . All 
        told, it adds up to $650 billion in unnecessary care 
        every year.

        And now for those horror stories. The ER, said one doc 
        in the Jackson survey, ``should have a CT head scanner 
        at the entrance door,'' since ``every patient gets a 
        head CT.''

        Another ER doc said he ``routinely admit[s] low-risk 
        chest pain patients because I know at some point in my 
        career, one of them will go home and die from a heart 
        attack. I will admit hundreds to avoid that one death 
        (and possible lawsuit).'' Another said he ordered 52 CT 
        scans in one 12-hour shift: ``That's $104K in one 
        day.'' And another: ``Any patient who presents to the 
        ER and mentions the magic words `chest pain,' unless 
        they are well known by the physician, is guaranteed to 
        undergo multiple blood tests, ECGs, stress tests, 
        perhaps CT scans, and will incur charges of several 
        thousand dollars. A very large percentage of these 
        patients will have very low probability of having 
        ischemic chest pain, yet all patients will undergo 
        testing to prevent `something from being missed' in the 
        name of defensive medicine.''

        Like other physicians, this one bemoaned what he has to 
        do to appease patients, such as a ``paranoid new mom 
        [who] insists her child needs a head CT after they 
        bumped their head . . . to rule out a head bleed. So to 
        appease the lawyers and hospital administration and 
        everyone else, I have to consciously sedate a perfectly 
        normal 15-month-old and put them at terrible risk just 
        to prove to a mother that children don't get head 
        bleeds from falling over and bumping their heads!'' 
        (That ``terrible risk'' refers to the fact that CTs 
        deliver a lot of radiation and thus increase the risk 
        of cancer.) And an anesthesiologist described how he 
        orders ``lab tests, X rays, cardiac consultations, and 
        stress tests, [as well as] pregnancy tests . . . most 
        often to cover our butts.''

        Obstetricians really sounded off. One described having 
        to admit to the hospital ``pregnant patients with 
        complaints such as stomach pain, cramps, excess vaginal 
        discharge, headache, etc.'' almost solely for defensive 
        reasons: ``You can't afford to give them any reason to 
        point to you if their baby isn't perfect.''\11\
---------------------------------------------------------------------------
    \11\Sharon Begley, ``Block That CT Scan!--Despite the massive 
overhaul of health care passed by Congress, many costs will remain 
high, thanks to doctors' fears of potential lawsuits,'' Newsweek (March 
22, 2010).

---------------------------------------------------------------------------
    And, according to a recent survey of heart doctors:

        A substantial number of heart doctors--about one in 
        four--say they order medical tests that might not be 
        needed out of fear of getting sued, according to a new 
        study . . . [A]bout 24 percent of the doctors said they 
        had recommended the test in the previous year because 
        they were worried about malpractice lawsuits . . . The 
        study was released Tuesday by the journal Circulation: 
        Cardiovascular Quality and Outcomes.\12\
---------------------------------------------------------------------------
    \12\Stephanie Nano, ``Heart Doctors Admit They Order Unnecessary 
Tests Out of Fear of Being Sued,'' Associated Press (April 14, 2010).

    Moreover, according to the Massachusetts Medical Society, 
and White Coat Notes, a publication of the Boston-area medical 
---------------------------------------------------------------------------
community:

        The fear of being sued is driving Massachusetts 
        physicians to order many tests, procedures, referrals 
        to specialists and even hospitalizations for consumers 
        that aren't needed and drive up health costs by more 
        than $1.4 billion a year, according to a new study that 
        is the first of its kind.

        The Massachusetts Medical Society surveyed 900 of its 
        members, including family doctors, obstetricians and 
        gynecologists and general surgeons, who reported 
        practicing so-called ``defensive medicine.''

        The report found that 83 percent of physicians surveyed 
        reported practicing defensive medicine and that an 
        average of 18 to 28 percent of tests, procedures and 
        referrals and consultations, and 13 percent of 
        hospitalizations were ordered solely out of fear of 
        being sued.\13\
---------------------------------------------------------------------------
    \13\Kay Lazar, ``Doctors' Practice of `Defensive Medicine' 
Widespread, Costly,'' White Coat Notes (November 17, 2008).

    A recent Gallup survey of American physicians found the 
fear of lawsuits was the driver behind 21 percent of all the 
tests and treatments ordered by doctors, which equates to 26 
percent of all health care dollars spent. That comes to a 
staggering $650 billion.\14\ According to a study of medical 
liability costs and the practice of medicine in Health Affairs, 
overuse of imaging services alone, driven by fear of lawsuits, 
costs as much as $170 billion a year nationally.\15\
---------------------------------------------------------------------------
    \14\``Price: Cutting Medical Costs without Obamacare,'' Washington 
Times, 3/18/10.
    \15\``Addressing the New Health Care Crisis: Reforming the Medical 
Litigation System to Improve the Quality of Care 11,'' Office of the 
Assistant Secretary for Planning and Evaluation, U.S. Department of 
Health and Human Services, 2003.
---------------------------------------------------------------------------
    The medical lawsuit crisis affects nurses as well. Nearly 
half of nurses say they are prohibited or discouraged from 
providing needed care by rules set up to avoid lawsuits.\16\
---------------------------------------------------------------------------
    \16\``Fear of Litigation Study, The Impact on Medicine,'' Harris 
Interactive (April 11, 2002).
---------------------------------------------------------------------------

                      DEFENSIVE MEDICINE IS COSTLY

    How much money does defensive medicine waste? As was 
recently reported:

        The latest estimate of the costs of defensive medicine, 
        from an analysis just published in Health Affairs: 
        $45.6 billion annually (in 2008 dollars), accounting 
        for more than 80% of the $55.6 billion total yearly 
        cost of the medical liability system. The authors from 
        Harvard University and the University of Melbourne 
        explain that their analysis doesn't attempt to estimate 
        social costs or benefits of the malpractice system, 
        such as damage to physicians' reputations or any 
        deterrent effect it may provide. . . . [Their 
        conclusions] include estimates of defensive medicine 
        costs both for hospitals ($38.8 billion) and for 
        physicians ($6.8 billion), calculated by looking at 
        costs in high- and low-liability environments. The 
        thought is that the difference represents [increased] 
        spending due to fear of being sued--i.e. defensive 
        medicine. . . . The total costs of the medical 
        liability system constitute about 2.4% of total health-
        care spending, the authors write. That's ``not 
        trivial,'' they write, and because some of these costs 
        ``stem from meritless malpractice litigation,'' flaws 
        in the system are worth addressing.\17\
---------------------------------------------------------------------------
    \17\Katherine Hobson, ``How Much Does Defensive medicine Cost? One 
Study Says $46 Billion,'' Wall Street Journal Health Blog (September 7, 
2010).

    A new study by the Pacific Research Institute estimates 
that defensive medicine costs $191 billion a year,\18\ while a 
separate study by PricewaterhouseCoopers puts the number even 
higher--$239 billion.\19\ That follows another study by 
PricewaterhouseCoopers that found, ``While the bulk of the 
premium dollar pays for medical services, those medical 
services include the cost of medical liability and defensive 
medicine. . . . Defensive tests and treatment can pose 
unnecessary medical risks and add unnecessary costs to 
healthcare.''\20\
---------------------------------------------------------------------------
    \18\Available at http://www.heartland.org/custom/semod_policybot/
pdf/26161.pdf.
    \19\PricewaterhouseCoopers' Health Research Institute, The Price of 
Excess: Identifying Waste in Healthcare Spending (New York: 
PricewaterhouseCoopers 2008), endnote 18, at 18.
    \20\``The Price of Excess: Identifying Waste in Healthcare 
Spending,'' PricewaterhouseCoopers, 2008.
---------------------------------------------------------------------------

          THE CONSENSUS IS THAT DEFENSIVE MEDICINE CAUSED BY 
                  UNLIMITED LAWSUITS IS A REAL PROBLEM

    President Obama himself acknowledged the harm caused by 
defensive medicine, stating ``I want to work with the AMA so we 
can scale back the excessive defensive medicine that reinforces 
our current system, and shift to a system where we are 
providing better care, simply--rather than simply more 
treatment.''\21\ The President himself weighed in on the issue 
in more detail, writing in the New England Journal of Medicine 
that ``the current tort system does not promote open 
communications to improve patient safety. On the contrary, it 
jeopardizes patient safety by creating an intimidating 
liability environment.''\22\ And in his 2011 State of the Union 
Address, President Obama said ``I'm willing to look at other 
ideas to bring down costs, including one that Republicans 
suggested last year: medical malpractice reform to rein in 
frivolous lawsuits.'' Although the Associated Press has written 
that ``Republicans may be forgiven if [the President's] offer 
makes them feel like Charlie Brown running up to kick the 
football, only to have it pulled away, again,''\23\ the 
President should fulfill his promise and support time-tested 
reforms that have proven successful for over three decades in 
California.
---------------------------------------------------------------------------
    \21\Text: Obama's AMA Speech on Health Care (CBS News) (June 15, 
2010).
    \22\``Making Patient Safety the Centerpiece of Medical Liability 
Reform, '' Sen. Barack Obama and Sen.
    Hillary Clinton, New England Journal of Medicine (May 25, 2006).
    \23\Associated Press, ``Fact Check: Obama and His Imbalanced 
Ledger'' (January 26, 2011).
---------------------------------------------------------------------------
    A survey conducted for the bipartisan legal reform 
organization ``Common Good,'' whose Board of Advisors included 
Eric Holder, who is now President Obama's Attorney General, 
found that more than three-fourths of physicians feel that 
concern about malpractice litigation has hurt their ability to 
provide quality care in recent years. When physicians were 
asked, ``Generally speaking, how much do you think that fear of 
liability discourages medical professionals from openly 
discussing and thinking of ways to reduce medical errors?'' an 
astonishing 59% of physicians replied ``a lot.''\24\
---------------------------------------------------------------------------
    \24\See Harris Interactive, ``Common Good Fear of Litigation Study: 
The Impact of Medicine,'' Final Report (April 11, 2002) (``Executive 
Summary'') at 30 (Table 17), available at www.ourcommongood.com/
news.html.
---------------------------------------------------------------------------
    President Obama's own doctor of over two decades also 
supports medical tort reform. David Scheiner was Obama's doctor 
from 1987 until he entered the White House; he vouched for the 
then-candidate's ``excellent health'' in a letter last year. As 
was recently reported in Forbes magazine:

        [Dr. Scheiner is] still an enthusiastic Obama 
        supporter, but he worries about whether the health care 
        legislation currently making its way through Congress 
        will actually do any good, particularly for doctors 
        like himself who practice general medicine. ``I'm not 
        sure [Obama] really understands what we face in primary 
        care,'' Scheiner says. . . .

        Scheiner is critical of Obama's pick for Health and 
        Human Services secretary--Kansas Gov. Kathleen 
        Sebelius, who used to work as the chief lobbyist for 
        her state's trial lawyers association. . . .

        Scheiner says he never thought it was appropriate to 
        talk about health policy with Obama, especially once he 
        became a U.S. Senator. The one exception was medical 
        malpractice reform. ``I once briefly talked to him 
        about malpractice, and he took the lawyers' position,'' 
        he says. . . .

        Scheiner, like most others in his profession, thinks 
        that it should be harder to sue doctors and that awards 
        should be capped. He says that he and other doctors 
        must order too many tests and imaging studies just to 
        avoid being sued.\25\
---------------------------------------------------------------------------
    \25\David Whelan, ``Obama's Doctor Knocks ObamaCare,'' Forbes.com 
(June 16, 2009).
---------------------------------------------------------------------------
The Congressional Budget Office (CBO)
    On October 9, 2009, the Congressional Budget Office 
announced that a legal reform package modeled on the HEALTH Act 
would reduce the Federal budget deficit by an estimated $54 
billion over the next 10 years.\26\ CBO recognizes that civil 
justice reforms also have an impact on the practice of 
``defensive medicine.'' Defensive medicine is when doctors 
order more tests or procedures than are truly necessary just to 
protect themselves from frivolous lawsuits. Studies show that 
defensive medicine does not advance patient care or enhance a 
physician's diagnostic capabilities.
---------------------------------------------------------------------------
    \26\See http://cboblog.cbo.gov/?p=389.
---------------------------------------------------------------------------
    The billions of dollars in savings from tort reform could 
be used to provide health insurance for the uninsured without 
raising taxes or penalties on those who already have insurance 
policies.
    According to another CBO report, ``CBO estimates that, 
under [the HEALTH Act], premiums for medical malpractice 
insurance ultimately would be an average of 25 percent to 30 
percent below what they would be under current law.''\27\ Lower 
health care lawsuit liability premiums would reduce health care 
costs for everyone and increase the supply of vital doctors.
---------------------------------------------------------------------------
    \27\Congressional Budget Office Cost Estimate of H.R. 4600 (the 
HEALTH Act) (September 24, 2002).
---------------------------------------------------------------------------
    Further, according to another CBO report, ``analysis [of 
the HEALTH Act] indicated that certain tort limitations, 
primarily caps on awards . . . effectively reduce average 
premiums for medical malpractice insurance. Consequently, CBO 
estimates that, in states that currently do not have controls 
on malpractice torts, [the HEALTH Act] would significantly 
lower premiums for medical malpractice insurance from what they 
would otherwise be under current law. . . .''\28\
---------------------------------------------------------------------------
    \28\Congressional Budget Office Cost Estimate of H.R. 4600 (the 
HEALTH Act) (September 24, 2002).
---------------------------------------------------------------------------
The Government Accountability Office (GAO)
    The Government Accountability Office (GAO) found that 
rising litigation awards are responsible for skyrocketing 
medical professional liability premiums. The report stated that 
``GAO found that losses on medical malpractice claims--which 
make up the largest part of insurers' costs--appear to be the 
primary driver of rate increases in the long run. . . .''\29\ 
The GAO also concluded that insurer profits ``are not 
increasing, indicating that insurers are not charging and 
profiting from excessively high premium rates'' and that ``in 
most states the insurance regulators have the authority to deny 
premium rate increases they deem excessive.''\30\
---------------------------------------------------------------------------
    \29\General Accounting Office, ``Medical Malpractice Insurance,'' 
GAO-03-702 (June 2003) at ``Highlights,'' 4, and 25 (emphasis added).
    \30\Id. at 32.
---------------------------------------------------------------------------
The National Commission on Fiscal Responsibility and Reform
    The National Commission on Fiscal Responsibility and 
Reform, which was created by President Obama, supports health 
care litigation reform in its final December 2010 report. As 
the Commission states in a report that was endorsed by 61% of 
its members (by a vote of 11-7):

        Most experts agree that the current tort system in the 
        United States leads to an increase in health care 
        costs. This is true both because of direct costs--
        higher malpractice insurance premiums--and indirect 
        costs in the form of over-utilization of diagnostic and 
        related services (sometimes referred to as ``defensive 
        medicine''). The Commission recommends an aggressive 
        set of reforms to the tort system.

        Among the policies pursued, the following should be 
        included: 1) Modifying the ``collateral source'' rule 
        to allow outside sources of income collected as a 
        result of an injury (for example workers' compensation 
        benefits or insurance benefits) to be considered in 
        deciding awards; 2) Imposing a statute of limitations--
        perhaps one to three years--on medical malpractice 
        lawsuits; 3) Replacing joint-and-several liability with 
        a fair-share rule, under which a defendant in a lawsuit 
        would be liable only for the percentage of the final 
        award that was equal to his or her share of 
        responsibility for the injury; 4) Creating specialized 
        ``health courts'' for medical malpractice lawsuits; and 
        5) Allowing ``safe haven'' rules for providers who 
        follow best practices of care.

        Many members of the Commission also believe that we 
        should impose statutory caps on punitive and non-
        economic damages, and we recommend that Congress 
        consider this approach and evaluate its impact.\31\
---------------------------------------------------------------------------
    \31\The National Commission on Fiscal Responsibility and Reform, 
``The Moment of Truth'' (December 2010) at 34-35.

The New York Times
    According to the New York Times:

        The fear of lawsuits among doctors does seem to lead to 
        a noticeable amount of wasteful treatment. Amitabh 
        Chandra--a Harvard economist whose research is cited by 
        both the American Medical Association and the trial 
        lawyers' association--says $60 billion a year, or about 
        3 percent of overall medical spending, is a reasonable 
        upper-end estimate.

        Perhaps the best-known study of defensive medicine--by 
        Dr. Mark McClellan, who later ran Medicare in the Bush 
        administration, and Daniel Kessler--compared cardiology 
        treatment in states that had capped malpractice awards 
        in the 1980s and early '90s with those that didn't. In 
        the states without caps, stenting and other treatments 
        were more common, but the outcomes were no better. . . 
        .

    [T]he researchers in the field tend to agree about the 
scale of the problem--and how much malpractice reform might 
accomplish. . . . Dana Goldman, director of the Schaeffer 
Center for Health Policy at the University of Southern 
California, adds: ``It is one of the things we need to address 
if we want to bend the cost curve.''\32\
---------------------------------------------------------------------------
    \32\David Leonhardt, ``Medical Malpractice System Breeds More 
Waste,'' The New York Times (September 23, 2009).

    The New York Times also reported that Uwe E. Reinhardt, an 
economist at Princeton University, has written that the massive 
costs of lawsuit abuse in the United States distinguishes it 
---------------------------------------------------------------------------
from other countries:

        Health-services researchers call the difference between 
        these numbers [the health care spending of different 
        countries], ``excess spending.'' That term [conveys] a 
        difference driven by factors other than G.D.P. per 
        capita. Prominent among these other factors are: . . . 
        higher treatment costs triggered by our uniquely 
        American tort laws, which in the context of medicine 
        can lead to ``defensive medicine''--that is, the 
        application of tests and procedures mainly as a defense 
        against possible malpractice litigation, rather than as 
        a clinical imperative.\33\
---------------------------------------------------------------------------
    \33\Uwe E. Reinhardt, ``Why Does U.S. Health Care Cost So Much? 
(Part I),'' The New York Times (November 14, 2008).

    We know that our medical liability costs are at least twice 
those in other developed countries\34\ and make up 10 percent 
of all tort cases. That's the macro perspective, but what about 
the physicians, hospitals or other health care providers on the 
wrong end of a lawsuit? They can expect to pay an average of 
$26,000 to defend a case that is dropped before trial and as 
much as $140,000 if the case actually goes to court, regardless 
of the merits.\35\ So, even when good doctors win their 
lawsuits, which happens the vast majority of the time, they 
still lose. They lose valuable patient time, money, and peace 
of mind while watching their professional reputations impugned.
---------------------------------------------------------------------------
    \34\Manhattan Institute's Center for Legal Policy study (2008).
    \35\``Reviving Tort Reform,'' Investor's Business Daily, 11/15/10.
---------------------------------------------------------------------------
USA Today
    The USA Today editorial board also recently came out 
supporting tort reform, stating:

        A study last month by the Massachusetts Medical Society 
        found that 83% of its doctors practice defensive 
        medicine at a cost of at least $1.4 billion a year. 
        Nationally, the cost is $60 billion-plus, according to 
        the Health and Human Services Department. [And a] 2005 
        study in the Journal of the American Medical 
        Association found 93% of Pennsylvania doctors practice 
        defensive medicine. The liability system is too often a 
        lottery. Excessive compensation is awarded to some 
        patients and little or none to others. As much as 60% 
        of awards are spent on attorneys, expert witnesses and 
        administrative expenses. . . . The current system is 
        arbitrary, inefficient and results in years of 
        delay.\36\
---------------------------------------------------------------------------
    \36\USA Today editorial, ``Our View on `Defensive' Medicine: 
Lawyers' Bills Pile High, Driving Up Health Care Costs,'' USA Today 
(December 29, 2008).

    The editors of USA Today concluded that ``one glaring 
omission'' from the health care law ``was significant tort 
reform, which was opposed by trial lawyers and their Democratic 
allies. CBO estimates that restricting malpractice suits would 
save $54 billion over 10 years by curbing tests and procedures 
that patients don't really need. So why not add it?''\37\
---------------------------------------------------------------------------
    \37\USA Today editorial, ``Don't try to repeal the new health care 
law--improve it'' (November 18, 2010) at 9A.
---------------------------------------------------------------------------
The American Medical Association
    Discussing the need for tort reform, the President of the 
American Medical Association said ``If the [health care] bill 
doesn't have medical liability reform in it, then we don't see 
how it is going to be successful in controlling costs.''\38\
---------------------------------------------------------------------------
    \38\Carrie Budoff Brown, ``Trial Lawyers Plan Tort Reform Fight,'' 
Politico (March 16, 2009).
---------------------------------------------------------------------------
The Director of Pediatric Neurosurgery at Johns Hopkins
    One of the nation's top surgeons, with credibility and 
acclaim the world over for the pioneering surgeries he has and 
his personal story of overcoming hardship, recently severely 
criticized the dominant health care legislation before 
Congress. Benjamin Carson, director of pediatric neurosurgery 
at the Johns Hopkins Medical Institutions in Baltimore, 
Maryland, and recipient of numerous awards including the 
Presidential Medal of Freedom, criticized in a recent interview 
the approach of the current bills for their mandate, creation 
of a ``public option,'' and lack of malpractice liability 
reform. He pointed to excessive litigation, pointing out how 
much malpractice insurance and other forms of ``defensive 
medicine'' to protect against lawsuits add to medical costs. In 
the interview with a local television station, Carson insisted 
that tort reform must go ``hand in hand'' as part of any true 
health care reform. According to Dr. Carson, ``We have to bring 
a rational approach to medical litigation.'' ``We're the only 
nation in the world that really has this problem. Why is it 
that everybody else has been able to solve this problem but us? 
Simple. Special interest groups like the trial lawyers' 
association. They don't want a solution.''\39\
---------------------------------------------------------------------------
    \39\John Berlau, ``'Gifted Hands' Surgeon Rips Into Obamacare,'' 
BogGovernment.com, available at http://biggovernment.com/2009/10/14/
gifted-hands-surgeon-rips-into-obamacare/.
---------------------------------------------------------------------------
The Wall Street Journal
    As summarized by Kimberly Strassel in the Wall Street 
Journal:

        Tort reform is a policy no-brainer. Experts on left and 
        right agree that defensive medicine--ordering tests and 
        procedures solely to protect against Joe Lawyer--adds 
        enormously to health costs. The estimated dollar 
        benefits of reform range from a conservative $65 
        billion a year to perhaps $200 billion. In context, Mr. 
        Obama's plan would cost about $100 billion annually. 
        That the president won't embrace even modest change 
        that would do so much, so quickly, to lower costs, has 
        left Americans suspicious of his real ambitions.

        It's also a political no-brainer. Americans are on 
        board. Polls routinely show that between 70% and 80% of 
        Americans believe the country suffers from excess 
        litigation. The entire health community is on board. 
        Republicans and swing-state Democrats are on board. 
        State and local governments, which have struggled to 
        clean up their own civil-justice systems, are on board. 
        In a debate defined by flash points, this is a rare 
        area of agreement. Former Democratic Sen. Bill Bradley, 
        in a New York Times piece, suggested a ``grand 
        bipartisan compromise'' in which Democrats got 
        universal coverage in return for offering legal reform.

        The only folks not on board are a handful of powerful 
        trial lawyers, and a handful of politicians who receive 
        a generous cut of those lawyers' contingency fees. The 
        legal industry was the top contributor to the 
        Democratic Party in the 2008 cycle, stumping up $47 
        million. The bill is now due, and Democrats are 
        dutifully making a health-care down payment.

        During the markup of a bill in the Senate Health 
        Committee, Republicans offered 11 tort amendments that 
        varied in degree from mere pilot projects to measures 
        to ensure more rural obstetricians. On a party line 
        vote, Democrats killed every one.\40\
---------------------------------------------------------------------------
    \40\Kimberly A. Strassel, ``The President's Tort Two-Step,'' The 
Wall Street Journal (September 11, 2009).

        Since President Obama signed the health care bill into 
        law, the bipartisan co-chairs of the President's own 
        deficit reduction commission, Erskine Bowles and Alan 
        Simpson, recommended that Congress enact a law to ``Pay 
        lawyers less and reduce the cost of defensive 
        medicine'' by ``[e]nact[ing] comprehensive medical 
        malpractice liability reform to cap non-economic and 
        punitive damages and make other changes in tort 
        law.''\41\
---------------------------------------------------------------------------
    \41\Co-Chair Proposal, at 32, available at http://
www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/
CoChair_Draft.pdf.
---------------------------------------------------------------------------
The Reagan Administration
    President Ronald Reagan established a special task force to 
study the need for tort reform. That task force, called the 
Tort Policy Working Group, consisted of representatives of ten 
Reagan Administration agencies and the White House. The final 
report of that task force concluded as follows: ``In sum, tort 
law appears to be a major cause of the insurance availability/
affordability crisis which the federal government can and 
should address in a variety of sensible and appropriate ways.'' 
The Reagan task force specifically recommended: ``eliminate 
joint and several liability,''\42\ ``provide for periodic 
payments of future economic damages,''\43\ ``schedule [limit] 
contingency fees''\44\ of attorneys, and ``limit non-economic 
damages to a fair and reasonable amount.''\45\ Indeed, 
regarding the limit on non-economic damages, the report 
concluded:
---------------------------------------------------------------------------
    \42\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 64.
    \43\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 69.
    \44\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 72.
    \45\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 66.

        Recommendation No. 4: Limit non-economic damages to a 
---------------------------------------------------------------------------
        fair and reasonable amount.

        Non-economic damages such as pain and suffering, mental 
        anguish and punitive damages are inherently open-ended. 
        They are entirely subjective, and often defy 
        quantification . . . Moreover, because such damages are 
        essentially subjective, awards for similar injuries can 
        vary immensely from case to case, leading to highly 
        inequitable, lottery-like results. Accordingly, such 
        damages are particularly suitable for a specific 
        limitation.\46\
---------------------------------------------------------------------------
    \46\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 66.

    All of these recommended reforms are part of the HEALTH 
Act. The report also contains an extensive discussion of the 
harmful effects tort law has on ``medical malpractice'' 
insurance,\47\ and a discussion and charts describing the 
impact of rising malpractice jury awards.\48\
---------------------------------------------------------------------------
    \47\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 21-24.
    \48\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 36-37, 39-40.
---------------------------------------------------------------------------

            THE FURTHER HIDDEN COSTS OF DEFENSIVE MEDICINE: 
               MORE RADIATION AND NO ADVICE BY TELEPHONE

    Defensive medicine entails additional hidden costs. As was 
reported recently:

        The result [of defensive medicine] can be extra costs, 
        and potential harm--including side effects from 
        unneeded drugs and increased risk of future cancer from 
        excessive radiation.

        No one tells patients after a CT scan that the test 
        ``just imparted three years of radiation to your body 
        as well as significant stress on your kidney, and 
        Medicare just got charged lots of money.''\49\
---------------------------------------------------------------------------
    \49\Lindsey Tanner, ``Fear Can Drive ERs To Do Tests to Excess,'' 
Associated Press (June 21, 2010).

---------------------------------------------------------------------------
    As explained by another doctor:

        Of course there is far more to defensive medicine than 
        obstetric procedures. Many CT scans are entirely 
        unnecessary, and in fact expose patients to radiation 
        that may contribute to one in fifty cancers. But woe to 
        the emergency room doc who didn't immediately scan the 
        head of a trauma patient. Unnecessary blood tests, 
        biopsies, and specialist referrals are all done to 
        ``spread the blame'' and make lawsuits defensible.

        Defensive medicine costs you more than money. When was 
        the last time you asked for telephone advice? Doctors 
        are very, very leery of giving meaningful advice over 
        the phone, because we can't take the risk of this kind 
        of conversation in front of a jury:

        Attorney: You mean you refilled the medicine without 
        performing another physical exam? If you had seen the 
        patient in person, you would have found the cancer 
        earlier!

        Doctor: The medicine had nothing to do with cancer! I 
        was just trying to help the patient! It's expensive to 
        make them come in every month for a refill!

        Anytime we tell anyone anything, any kind of advice, 
        doctors must consider the risk of a lawsuit. Everything 
        we say and do is supposed to be documented, too--to 
        defend ourselves. Every wonder why the doc spends so 
        much time scribbling in the chart, instead of talking 
        to you? It's not because we like writing. It's because 
        every single day we're reminded that the chart is our 
        only defense.

        Do you think this hasn't increased health care costs? 
        Do you think it hasn't affected the relationships 
        doctors have with patients?

        The current medical malpractice system is a 
        disgrace.\50\
---------------------------------------------------------------------------
    \50\Roy Benaroch, MD, ``Health Care Costs: Defensive Medicine,'' 
The Pediatric Insider (2010).
---------------------------------------------------------------------------

               DEFENSIVE MEDICINE CAUSES ALL THOSE HARMS 
                      WITHOUT ADDING ANY BENEFITS

    Two top economic researchers have concluded: ``[P]hysicians 
from states enacting liability reforms that directly reduce 
malpractice pressure experience lower growth over time in 
malpractice claims rates and in real malpractice insurance 
premiums. [Also], physicians from reforming states report 
significant relative declines in the perceived impact of 
malpractice pressure on practice patterns.''\51\ One of those 
economists is Mark McClellan, who worked on health policy 
issues in President Clinton's Treasury Department and who has 
been described by Senator Ted Kennedy as having ``impressive 
credentials both as a physician and as an economist.''\52\ 
These economists conducted two extensive studies using national 
data on Medicare populations and concluded that patients from 
states that adopted direct medical care litigation reforms, 
such as limits on damage awards, incur significantly lower 
hospital costs while suffering no increase in adverse health 
outcomes associated with the illness for which they were 
treated. In sum, the studies concluded that in states with 
medical litigation reforms in place, there was an average 
reduction of 4.3% in hospital costs for patients in managed 
care programs,\53\ and an average reduction of 7.4% in hospital 
costs for patients in non-managed care programs.\54\ They have 
thereby quantified the cost of ``defensive medicine,'' in which 
doctors perform tests and prescribe medicines that are not 
necessary for health in order to avoid patients' future claims 
that they suffered adverse health effects because the doctor 
didn't do more. Former Senator George McGovern has written that 
``Legal fear drive[] [doctors] to prescribe medicines and order 
tests, even invasive procedures, that they feel are 
unnecessary. Reputable studies estimate that this `defensive 
medicine' squanders $50 billion a year, enough to provide 
medical care to millions of uninsured Americans.''\55\ Reducing 
defensive medicine will save tens of billions more of taxpayer 
dollars.
---------------------------------------------------------------------------
    \51\See Daniel P. Kessler and Mark B. McClellan, ``The Effects of 
Malpractice Pressure and Liability Reforms on Physicians' Perceptions 
of Medical Care,'' 60 Law and Contemporary Problems 1: 81-106 (1997), 
at 105.
    \52\Marc Kaufman, ``Bush Adviser Tabbed for FDA,'' Washington Post 
(September 25, 2002) at A25.
    \53\Daniel P. Kessler and Mark B. McClellan, ``Medical Liability, 
Managed Care, and Defensive Medicine,'' National Bureau of Economic 
Research (NBER) Working Paper 7537 (February 2000) at 16.
    \54\Daniel P. Kessler and Mark B. McClellan, ``Do Doctors Practice 
Defensive Medicine?'' The Quarterly Journal of Economics (May 1996) at 
386 (``Our analysis indicates that reforms that directly limit 
liability, caps on damage awards . . . and collateral source rule 
reforms--reduce hospital expenditures by 5 to 9 percent within three to 
five years of adoption. . . .''). The researchers in this study 
analyzed populations in predominantly non-managed care programs in the 
mid-1980's, and found that, of the populations studied with two 
different types of illnesses, direct health care litigation reforms 
would reduce hospital expenditures by 5.8% and 8.9% several years after 
their adoption. Id. at 367, 382.
    \55\See George McGovern and Alan Simpson, ``We're Reaping What We 
Sue,'' Wall Street Journal (April 17, 2002) at A20.
---------------------------------------------------------------------------

             REDUCING UNLIMITED LAWSUITS WILL HELP REDUCE 
                             MEDICAL ERRORS

    The best evidence about medical injuries comes from two 
large studies of hospital records, which both concluded that 
under one percent of hospital charts showed negligent medical 
injury.\56\ Nevertheless, the litigation reforms in the HEALTH 
Act will reduce the incidence of medical malpractice because 
the threat of potentially infinite liability in an unregulated 
tort system prevents doctors from discussing medical errors and 
looking for ways to improve the delivery of health care.
---------------------------------------------------------------------------
    \56\D. Mills, J. Boyden, and D. Rubsamen, ``Report on the Medical 
Insurance Feasibility Study,'' (San Francisco: Sutter Publications 
1977, sponsored jointly by the California Medical Association and 
California Hospital Association); A. Localio, et al., ``Relation 
Between Malpractice Claims and Adverse Events Due to Negligence,'' New 
Engl. J. Med. 325:245-251 (1991).
---------------------------------------------------------------------------
    The HEALTH Act would largely dispel that fear and allow 
doctors to freely suggest improvements in medical care. The 
medical journal Annals of Medicine detailed reports of medical 
errors. As has been reported, ``[c]reating a series of articles 
on [medical] mistakes was the idea of Dr. Robert M. Wachter, 
associate chairman of the department of medicine at the 
University of California at San Francisco. . . . The series was 
inspired in part by a 1999 report by the Institute of Medicine, 
which found that mistakes in hospitals killed 44,000 to 98,000 
patients a year . . . In an editorial about the new series, Dr. 
Wachter and his colleagues wrote that the medical profession 
``for reasons that include liability issues . . . was not 
harnessing the full power of errors to teach [and thereby 
reduce errors].''\57\
---------------------------------------------------------------------------
    \57\Denise Grady, ``Oops, Wrong Patient: Journal Takes on Medical 
Mistakes,'' New York Times (June 18, 2002).
---------------------------------------------------------------------------
    A survey conducted for the bipartisan legal reform 
organization ``Common Good,'' whose Board of Advisors included 
former Senator George McGovern, Eric Holder, and former Senator 
Paul Simon, found that more than three-fourths of physicians 
feel that concern about malpractice litigation has hurt their 
ability to provide quality care in recent years. When 
physicians were asked, ``Generally speaking, how much do you 
think that fear of liability discourages medical professionals 
from openly discussing and thinking of ways to reduce medical 
errors?'' an astonishing 59% of physicians replied ``a 
lot.''\58\
---------------------------------------------------------------------------
    \58\See Harris Interactive, ``Common Good Fear of Litigation Study: 
The Impact of Medicine,'' Final Report (April 11, 2002) (``Executive 
Summary'') at 30 (Table 17), available at www.ourcommongood.com/
news.html.
---------------------------------------------------------------------------
    Indeed, according to an exhaustive study by the RAND 
Corporation, California's reduction in the number of health 
care lawsuits filed in that state is attributable to improved 
patient safety at California hospitals. According to the study:

        Our results showed a highly significant correlation 
        between the frequency of adverse events [medical 
        errors] and malpractice claims: On average, a county 
        that shows a decrease of 10 adverse events in a given 
        year would also see a decrease of 3.7 malpractice 
        claims. Likewise, a county that shows an increase of 10 
        adverse events in a given year would also see, on 
        average, an increase of 3.7 malpractice claims. 
        According to the statistical analysis, nearly three-
        fourths of the within-county variation in annual 
        malpractice claims could be accounted for by the 
        changes in patient safety outcomes. We also found that 
        the correlation held true when we conducted similar 
        analyses for medical specialties--specifically, 
        surgeons, nonsurgical physicians, and obstetrician/
        gynecologists (OB-GYNs). Nearly two-thirds of the 
        variation in malpractice claiming against surgeons and 
        nonsurgeons can be explained by changes in safety. The 
        association is weaker for OB-GYNs, but still 
        significant.\59\
---------------------------------------------------------------------------
    \59\Michael D. Greenberg, Amelia M. Haviland, J. Scott Ashwood, 
Regan Main, ``Is Better Patient Safety Association with Less 
Malpractice Activity?'' RAND Institute for Civil Justice (2010) at x.

    With the passage of health care lawsuit reform in 
California, doctors, hospitals and other healthcare providers 
are able to share information needed to create a safer 
environment, without fear of lawsuits, and focus on their 
patients instead of worrying about getting sued.

        THE ``98,000 MEDICAL-ERROR DEATHS PER YEAR'' STATISTIC 
                     IS EXAGGERATED AND MISLEADING

    We should do everything we can to reduce medical errors, 
but the widely cited claim that 98,000 patients die annually 
due to medical errors has been shown to be exaggerated and 
unreliable.
    The Institute of Medicine (IOM) study upon which the 98,000 
death figure is based actually estimated a range of 44,000 to 
98,000 deaths a year.\60\ So even according to that study, 
98,000 is not a definitive figure but merely the top end of a 
very wide and imprecisely estimated range.
---------------------------------------------------------------------------
    \60\Institute of Medicine, ``To Err Is Human: Building a Safer 
Health System'' (2000).
---------------------------------------------------------------------------
    Shortly after its release in the year 2000, the IOM study 
came under heavy criticism for imprecise methodology that 
greatly overstated the rate of deaths from medical errors. 
Doctors and academics have pointed to many fundamental problems 
with the IOM's data that lead it to overstate the rate of death 
from medical error. For example, the IOM data treated deaths 
from drug abuse as ``medication errors.''\61\
---------------------------------------------------------------------------
    \61\Rick Weiss, ``Report on Medical Errors Called Erroneous,'' The 
Washington Post (July 5, 2000).
---------------------------------------------------------------------------
    Dr. Troyen Brennan, the lead Harvard researcher who 
compiled much of the data upon which the IOM report was based 
wrote shortly after the report's release that ``I have 
cautioned against drawing conclusions about the numbers of 
deaths in these studies,'' that ``[t]he ability of identifying 
errors is methodologically suspect,'' and that ``[a] careful 
reader must have some reservations about the IOM report.''\62\ 
Dr. Brennan and two other researchers later revisited their 
methodology and determined that the IOM's figures were 
``imprecise,'' and that the actual figure could be as little as 
10 percent of the IOM's estimate.\63\
---------------------------------------------------------------------------
    \62\Troyen A. Brennan, ``The Institute of Medicine report on 
medical errors--could it do harm?'' New England Journal of Medicine 
(2000); see also John D. Dunn, ``The Patient Safety Crusade--a Phony 
Crisis,'' The Heartland Institute (2006).
    \63\Eric J. Thomas et al., ``The Reliability of Medical Record 
Review for Estimating Adverse Event Rates,'' Annals of Internal 
Medicine (2002); see also Zachary F. Meisel and Jesse M. Pines, 
``Health Care Scare: How to avoid medical mistakes,'' Slate Medical 
Examiner (June 3, 2009).
---------------------------------------------------------------------------
    Three doctors associated with the University of Indiana's 
Regenstreif Institute wrote in the Journal of the American 
Medical Association that the IOM study was constructed to 
exaggerate the avoidable damage done by medical mistakes, and 
concluded that ``[t]he available data do not support IOM's 
claim of large numbers of deaths caused by adverse events, 
preventable or otherwise.''\64\
---------------------------------------------------------------------------
    \64\Clement J. McDonald et al., ``Deaths Due to Medical Errors Are 
Exaggerated in Institute of Medicine Report,'' Journal of the American 
Medical Association (2000).
---------------------------------------------------------------------------

            THE CURRENT SYSTEM IS CAUSING A DOCTOR SHORTAGE

    Lawsuit abuse drives doctors out of practice. There is a 
well-documented record of doctors leaving the practice of 
medicine and hospitals shutting down particular practices that 
have high liability exposure. This problem has been 
particularly acute in the fields of OB-GYN and trauma care, as 
well as in rural areas.\65\
---------------------------------------------------------------------------
    \65\For an extensive compilation of such instances see ``Addressing 
the New Health Care Crisis: Reforming the Medical Litigation System to 
Improve the Quality of Care,'' U.S. Department of Health and Human 
Services (March 3, 2003).
---------------------------------------------------------------------------
    The absence of doctors in vital practice areas is at best 
an inconvenience; at worst it can have deadly consequences.\66\ 
Hundreds or even thousands of patients may die annually due to 
lack of doctors.\67\
---------------------------------------------------------------------------
    \66\See Testimony of Leanne Dyess, ``Patient Access Crisis: The 
Role of Medical Litigation,'' Senate Judiciary Committee (February 11, 
2003); Testimony of Dr. Thomas Gleason, ``Medical Liability Reform: 
Stopping the Skyrocketing Price of Health care,'' House Small Business 
Committee (February 17, 2005).
    \67\See Testimony of Theodore Frank, ``Protecting Main Street from 
Lawsuit Abuse,'' Senate Republican Conference (March 16, 2009) (``The 
effect of the loss of productive doctors and the closing of emergency 
rooms . . . is in the hundreds of lives a year, and perhaps as high as 
1,000 deaths and many exacerbated injuries.''); ``Tort Reform and 
Accidental Deaths,'' Paul Rubin and Joanna Shepherd, Emory Law and 
Economics Research Paper No. 05-17H (finding tort reforms saved 
approximately 2,000 lives in the year 2000 and 24,000 over a 20-year 
period).
---------------------------------------------------------------------------
    According to the Massachusetts study, 38 percent of 
physicians have reduced the number of higher-risk procedures 
they provide, and 28 percent have reduced the number of higher-
risk patients they serve, out of fear of liability.\68\ The 
American College of Obstetricians and Gynecologists has 
concluded that the ``current medico-legal environment continues 
to deprive women of all ages, especially pregnant women, of 
their most educated and experienced women's health care 
providers.''\69\
---------------------------------------------------------------------------
    \68\``Defensive Medicine in Massachusetts,'' pp. 4-5.
    \69\``Overview of the 2009 ACOG Survey on Professional Liability.''
---------------------------------------------------------------------------
    As one doctor wrote recently:

        I am what you call a successful neurosurgeon, and I 
        have nothing against ``socialized medicine'' as such. 
        Everybody deserves good health care. But I am 
        nonetheless worried about President Obama's health care 
        reform, because without tort reform as part of the 
        package, it can't address the labor shortage we face in 
        my specialty. . . .

        Only because spinal problems affect nearly 80% of our 
        aging population: It's one of the most common reasons 
        patients visit a primary care physician, right behind 
        the yearly physical, the common cold, prenatal care and 
        anxiety-related disorders. Baby boomers are about to 
        overwhelm the system with demand for treatment of 
        spinal problems--including surgery--at precisely the 
        moment the supply of neurosurgeons able to treat them 
        is dwindling. . . .

        Thus we come to the second reason: the cost of 
        malpractice insurance, which creates a very high cost 
        of entry into this field. Unfortunately, the health 
        care reforms of the Obama administration have done 
        little to curb costs. These costs are imposed by 
        hospital inefficiencies as unpoliced by government-run 
        insurance plans and by the price of malpractice 
        insurance undisciplined by tort reform.

        I believe that tort reform is the key to reducing both 
        kinds of cost, because the malignant threat of 
        malpractice haunts the hospitals as well as the 
        physicians. Without such reform, the choice for 
        practicing neurosurgeons like me is between retirement 
        and working 24/7 just to cover my insurance overhead. 
        My premature retirement will reduce the supply of 
        surgeons capable of dealing with the spinal problems of 
        an aging population--and that supply is already short 
        and getting shorter. Meanwhile, a few more board-
        certified surgeons a year won't meet the growing 
        demand. The lines at your doctor's office could get 
        long.

        When Congress returns to consider the problem of health 
        care, it must understand that without tort reform, 
        neurosurgery of the kind I can provide to an aging 
        population will be unavailable.\70\
---------------------------------------------------------------------------
    \70\Dr. Michael Lavyne, ``Obamacare Will Fail Without Tort Reforn: 
Malpractice Insurance Costs Are Crippling Medicine,'' New York Daily 
News (November 19, 2010).

    A new study from Northwestern University's Feinberg School 
of Medicine polled residents and found that many wish to leave 
the state to avoid its ``hostile'' malpractice environment. The 
study concluded that ``[a]pproximately one-half of graduating 
Illinois residents and fellows are leaving the state to 
practice . . . . [T]he medical malpractice liability 
environment is a major consideration for those that plan to 
leave Illinois to practice.''\71\ Without a uniform law to 
control health care costs, many states will continue to suffer 
under doctor shortages.
---------------------------------------------------------------------------
    \71\Northwestern University Feinberg School of Medicine, ``Illinois 
New Physician Workforce Study: Final Report November 2010) at 4.
---------------------------------------------------------------------------
    As one local New Jersey official has written:

        Let's say you are a woman over 40 who follows the 
        American Cancer Society guidelines (regardless of the 
        recent controversy about them) and faithfully gets a 
        mammogram each year.

        What would you do if you tried to make your 2010 
        appointment, only to learn this test is no longer 
        available anywhere in the state? Would you take a day 
        off from work to travel to Pennsylvania--or forgo your 
        screening entirely?

        Unfortunately, this is a very real possibility for New 
        Jersey women. Eighty-nine percent of radiologists 
        surveyed by the New Jersey Medical Care Availability 
        Task Force said that new doctors in their specialty are 
        unwilling to perform mammography or have asked for 
        limited exposure to it.

        Or, imagine getting pregnant and having your 
        obstetrician tell you that you fall into a high-risk 
        category. The good news is that you can be effectively 
        treated by a specialist. The bad news? The closest 
        specialist is in upstate New York. Do you leave your 
        family for days at a time? Do you take a risk and allow 
        your regular physician to do the best she can? This is 
        a decision no woman should have to make, but many may 
        face. Hospitals in New Jersey have reported a serious 
        decline in the number of applicants for specialized 
        obstetrics training--and no new candidates means 
        steadily decreasing access to care.

        Even as debate about national health care reform rages 
        across the country, we in New Jersey must confront a 
        homegrown crisis: Our state is losing doctors at an 
        alarming rate. With or without a Federal mandate, if 
        there are no doctors to treat New Jersey's patients, 
        the details don't matter. Why the exodus of physicians? 
        To a significant degree, they are fleeing malpractice 
        insurance premiums and legal exposure so enormous as to 
        make the practice of many medical specialties in our 
        state near untenable. . . .

        Medical malpractice liability premiums had already 
        spiraled out of control back in 2002, when huge crowds 
        of physicians donned their white coats and demonstrated 
        at the Statehouse to draw attention to the need for 
        reform. Around the same time, Dr. Dolores Williams, an 
        obstetrician, testified before an Assembly joint 
        committee that her insurance premiums--which had 
        escalated from $30,000 to an estimated $72,000--left 
        her financially unable to continue delivering babies. 
        Her decision to stop, she said, ``was based on possibly 
        losing my home, my assets, [and] my ability to fund my 
        children's college tuition.''

        Seven years later, these problems have only gotten 
        worse, not only in obstetrics but in a range of other 
        specialties like orthopedics and neonatology.

        ``The cumulative effect of medical malpractice claims 
        on the health care system in New Jersey is alarming,'' 
        agrees Marcus Rayner, executive director of the New 
        Jersey Lawsuit Reform Alliance. ``Due to skyrocketing 
        medical malpractice insurance premiums and the threat 
        of a lawsuit, hospitals have fewer OB-GYNs willing to 
        work in emergency departments, and fewer specialty 
        physicians willing to work at all.''

        Five years ago, a survey of New Jersey's neurosurgeons 
        indicated that there were only 63 remaining in the 
        state--to serve a population of more than 8.5 million. 
        Someday it could be your teenager who suffers a head 
        injury in a sports or car accident, and urgently needs 
        the care of a neurosurgeon. What are the odds that one 
        would be available?\72\
---------------------------------------------------------------------------
    \72\Amy H. Handlin, ``Reduce Medical Liability Costs Before More 
Specialists Flee N.J.,'' New Jersey Times (November 22, 2009).

    It is clear that no doctor is safe from lawsuit abuse, but 
as studies have shown, some are more vulnerable to abusive 
litigation than others because of their specialty or the 
location of their practice. Today, one-third of orthopedists, 
trauma surgeons, ER doctors and plastic surgeons will probably 
be sued in any given year.\73\ Neurosurgeons face liability 
lawsuits more often--every two years on average.\74\
---------------------------------------------------------------------------
    \73\``Defending the Practice of Medicine,'' Richard E. Anderson, 
M.D., Archives of Internal Medicine, June
    2004.
    \74\``Effective Legal Reform and the Malpractice Insurance 
Crisis,'' Richard E. Anderson, M.D., Yale Journal of Health Policy, Law 
and Ethics, December 2004.
---------------------------------------------------------------------------
    OB-GYNs are another favorite target of personal injury 
lawyers with nearly three out of five OB-GYNs sued at least 
twice in their careers. The American College of Obstetricians 
and Gynecologists (ACOG) 2009 Medical Liability Survey found 
nearly 91 percent of OB-GYNs surveyed had experienced at least 
one liability claim filed against them and sadly, we know most 
of the cases are without merit.\75\
---------------------------------------------------------------------------
    \75\American College of Obstetrics and Gynecologists Medical 
Liability Survey, 9/09.
---------------------------------------------------------------------------
    Three out of four emergency rooms say they have had to 
divert ambulances because of a shortage of specialists and more 
than 25 percent lost specialist coverage due to medical 
liability issues.\76\
---------------------------------------------------------------------------
    \76\Hospital Emergency Department Administration Survey, ``Federal 
Medical Liability Reform,'' 2004, the
    Schumacher Group, Alliance of Specialty Medicine, July 2005.
---------------------------------------------------------------------------
    One emergency room physician was quoted as saying, ``The 
lack of on-call specialists affects the numbers of patients 
referred to tertiary care facilities even for basic specialty 
related diseases (like orthopedics). This adds to emergency 
department crowding in some facilities, and it means that 
patients have to travel across town or greater distances for a 
relatively simple problem that could have been resolved if the 
specialist had been on call at the initial facility.''\77\
---------------------------------------------------------------------------
    \77\``National Report Card on the State of Emergency Medicine,'' 
American College of Emergency
    Physicians, 2009.
---------------------------------------------------------------------------
    The Association of American Medical Colleges (AAMC) has 
predicted that once the new health care reform provisions take 
effect in 2015, in just four short years, ``the shortage of 
physicians across all specialties will more than quadruple to 
almost 63,000.''\78\ Another group, the American Academy of 
Family Physicians, has projected the shortfall of family 
physicians will reach 149,000 by 2020.\79\
---------------------------------------------------------------------------
    \78\Association of American Medical Colleges Center for Workforce 
Studies estimates, 9/30/10.
    \79\``Doctor Shortage Looms as Primary Care Loses it Pull,'' Janice 
Lloyd, USA Today, 8/18/09.
---------------------------------------------------------------------------
    AAMC also found the country will need 46,000 more surgeons 
and other specialists to meet demand in the next decade and 
that those living in rural or inner city locations will suffer 
the most severe impact. According to Dr. Atul Grover, of the 
AAMC, ``This will be the first time since the 1930s that the 
ratio of physicians to the population will start to 
decline.''\80\
---------------------------------------------------------------------------
    \80\``Agencies warn of coming doctor shortage,'' Tammy Worth, Los 
Angeles Times, 6/7/10.
---------------------------------------------------------------------------

            DOCTOR SHORTAGE CONSEQUENCES: THE DYESS TRAGEDY

    Regardless of the merits of any given case, there are 
inherent problems with so-called ``pain and suffering'' or 
noneconomic damages: they are utterly standardless, 
unquantifiable, and subject to discriminatory application based 
of whether or not a particular person happens to be sympathetic 
or unsympathetic, and even whether or not a particular case has 
attracted media attention. Tony Dyess's injury did not receive 
media attention. He was in a car accident in Mississippi. There 
were no longer any neurosurgeons in the area. They had stopped 
practicing because they couldn't afford medical professional 
liability insurance. It took six hours to airlift Tony Dyess to 
a hospital that could treat his brain injury. It was too late. 
The ``golden hour'' had passed, and Tony Dyess has been left 
permanently brain damaged. As Tony Dyess' wife Leanne has said, 
``From my perspective . . . this problem far exceeds any other 
challenge facing America's health care--even the challenge of 
the uninsured. My family had insurance when Tony was injured. 
We had good insurance. What we didn't have was a doctor. And 
now, no amount of money can relieve our pain and suffering. But 
knowing that others may not have to go through what we've gone 
through, could go a long way toward helping us heal.'' When 
Leanne Dyess began telling this story, trial lawyers gave her 
false information about what happened the night her husband was 
injured, then tried to hire her. She refused.
    We all recognize that injured victims should be adequately 
compensated for their injuries. But too often in this debate we 
lose sight of the larger health care picture. This country is 
blessed with the finest health care technology in the world. It 
is blessed with the finest doctors in the world. People are 
smuggled into this country for a chance at life and healing, 
the best chance they have in the world.
    The Department of Health and Human Services issued a report 
recently that included the following amazing statistics.\81\ 
During the past half century, death rates among children and 
adults up to age 24 were cut in half. Mortality among adults 
25-64 years fell nearly as much, and dropped among those 65 
years and over by a third. The infant mortality rate--deaths 
before the first birthday--has plummeted 75 percent since 1950. 
These are amazing statistics. And they didn't just happen. They 
happened because America produces the best health care 
technology and the best health care providers to use it. But 
now there are fewer and fewer doctors to use that miraculous 
technology. We have the best brain scanning and brain operation 
devices in history, and fewer and fewer neurosurgeons to use 
them. According to the American Board of Neurological Surgery, 
in 2001 there were fewer active board-certified neurosurgeons 
(2,936) than there have been in the last decade. Also in 2001, 
4.5 times as many board-certified neurosurgeons retired as 
retired a decade ago (1,400 retired in 2001, only 309 retired 
in 1990). Only about 100-200 neurosurgeons graduate from 
residency training programs each year, but it takes about 5 
years of post-residency to become ``board certified.'' 
Unlimited lawsuits are driving doctors out of the healing 
profession. They are reversing the clock. They are making us 
all less safe. All in the name of unlimited lawsuits and 
lawyers' lust for their cut of unlimited awards. But when 
someone gets sick, or is bringing a child into the world, we 
can't call our lawyers for help.
---------------------------------------------------------------------------
    \81\Available at http://www.cdc.gov/nchs/releases/02news/hus02.htm.
---------------------------------------------------------------------------

              WOMEN ARE AT RISK UNDER THE DOCTOR SHORTAGE 
                      DRIVEN BY UNLIMITED LAWSUITS

    Women pay an especially high price when it comes medical 
liability and access to care. According to Albert L. Strunk, 
M.D., deputy executive vice president of ACOG, ``the medical 
liability situation for OB-GYNs remains a chronic crisis and 
continues to deprive women of all ages--especially pregnant 
women--of experienced ob-gyns.''\82\ ACOG's own data proves the 
point. According to their 2009 survey, 63 percent of OBGYNs 
said they had made changes to their practice because of the 
risk or fear of liability claims. Between seven and eight 
percent have stopped practicing obstetrics altogether. In fact, 
ACOG found that the average retirement age of practicing 
obstetrics was 48. Once upon a time, before the medical lawsuit 
abuse crisis, that was considered mid-point in a doctor's 
career.\83\
---------------------------------------------------------------------------
    \82\American College of Obstetricians and Gynecologists (ACOG) news 
release, 11/3/06.
    \83\``Survey on Professional Liability, ACOG, 9/09.
---------------------------------------------------------------------------
    Looking state by state, the picture is even more alarming. 
For example in 2007, Hawaiian women faced the harsh reality 
that 42 percent of the state's OB-GYNs had stopped providing 
prenatal care.\84\ Dr. Francine Sinofsky, an OB-GYN in East 
Brunswick, N.J., says two of her practice's seven members no 
longer practice obstetrics due to the cost of medical 
liability. One who practices gynecology only pays $14,000 a 
year for liability insurance while another who practices 
obstetrics as well pays more than $100,000.\85\ In 2008, 1,500 
counties in America, including eight counties in New York 
alone, did not have a single obstetrician as liability issues 
chased good doctors out of obstetrics.\86\
---------------------------------------------------------------------------
    \84\``Doctors Urging Lawmakers to Support Tort Reform,'' KGMB9.com.
    \85\``The Doctor Drain,'' Lauren Otis, The New Jersey Monthly, 2/5/
08.
    \86\``Center for Health Workforce Studies, cited in ``no Place to 
be Born,'' New York Sun, 8/25/08.
---------------------------------------------------------------------------
    But the negative impact of lawsuit abuse on women's health 
goes beyond obstetrics. Today, the number of radiologists 
willing to read mammograms is shrinking, exacerbated by the 
decreasing number of medical residents choosing radiology as 
their specialty. The reason is simple. A failure to diagnose 
properly is the number one allegation in most liability 
lawsuits.\87\ That makes radiologists the number one group of 
physicians affected.\88\ Abuse of the litigation system is 
putting women at risk.
---------------------------------------------------------------------------
    \87\AMA News, 3/20/06.
    \88\``Failure to Diagnose: Putting the Pieces Together, A Risk 
Management Review of Closed Claims in Selected Specialties 2002-2004,'' 
Linda Greenwald, Doctors' Insurance Services of New England, 2005.
---------------------------------------------------------------------------

                             PROVEN REFORMS

    The states have proven that legal reform works. While 
Democrats in Washington talk about the need to study the 
problem, states have acted to address it. Several states have 
limited noneconomic damages--such as those for ``pain and 
suffering--and dramatically lessened the burden of lawsuits. In 
states with such limits, premiums are 17 percent lower than 
they are in states without them.\89\
---------------------------------------------------------------------------
    \89\``The Medical Malpractice `Crisis': Trends and the Impact of 
State Tort Reforms,'' Kenneth E. Thorpe, (January 21, 2004) at 20-30.
---------------------------------------------------------------------------

                      PROVEN REFORMS IN CALIFORNIA

    States also have had success with a variety of other 
reforms. A comprehensive study of these reforms suggests that 
attorney-fee limits, such as those in California, are 
particularly effective.\90\ The cumulative effect of all state 
reforms put together could be as much as a 74 percent reduction 
in premiums.\91\
---------------------------------------------------------------------------
    \90\``Tort Law Tally: How State Tort Reforms Affect Tort Losses and 
Tort Insurance Premiums,'' Nicole V. Crain, and W. Mark Crain, et al, 
Pacific Research Institute (2009).
    \91\``Tort Law Tally: How State Tort Reforms Affect Tort Losses and 
Tort Insurance Premiums,'' Nicole V. Crain, and W. Mark Crain, et al, 
Pacific Research Institute (2009).
---------------------------------------------------------------------------
    California's Medical Injury Compensation Reform Act (called 
``MICRA'') has proved immensely successful in increasing access 
to affordable medical care in California since it was signed 
into law in 1975 by Governor Jerry Brown. It has kept 
California medical malpractice insurance rates consistently 
much lower than the average in the rest of the country.\92\ 
MICRA's reforms, which are included in the HEALTH Act, include: 
a $250,000 cap on noneconomic (``pain and suffering'') damages; 
limits on the contingency fees lawyers can charge, so larger 
percentages of awards go to victims, not lawyers; and 
authorization for defendants to introduce evidence showing the 
plaintiff received compensation for losses from outside sources 
(to prevent double recoveries).
---------------------------------------------------------------------------
    \92\See http://www.micra.org/about-micra/docs/
micra_access_and_affordability.pdf.
---------------------------------------------------------------------------
    Some critics claim that a California automobile insurance 
reform measure called Proposition 103 that required a 
``rollback'' of insurance premiums--and not California's health 
care litigation reforms--have controlled medical professional 
liability premiums in that state. However, according to the 
Orange County Register, ``a rollback [under Proposition 103] 
never took place because the [California Supreme] court amended 
Prop. 103 to say that insurers could not be forced to implement 
the 20 percent rollback if it would deprive them of a fair 
profit.''\93\ Further, since Proposition 103 went into effect, 
no medical professional liability insurer has been denied a 
requested premium increase.
---------------------------------------------------------------------------
    \93\Orange County Register (October 22, 1997).
---------------------------------------------------------------------------

 COMMENTS OF SUPPORTERS OF CALIFORNIA'S HEALTH CARE LITIGATION REFORMS 
                  (ON WHICH THE HEALTH ACT IS MODELED)

    Cruz Reynoso, Democratic Vice Chairman of the U.S. 
Commission on Civil Rights (appointed by former Senate Majority 
Leader George Mitchell in 1993), Professor of Law at UCLA, and 
former Justice of the California Supreme Court:

        Medical insurance has been going up. I think there's no 
        question that what the legislature did and continues to 
        do has had an influence on keeping those expenses down 
        and that's a very important public policy. . . . 
        Publicly-funded medical centers were very supportive of 
        the continued protection of MICRA because if their own 
        insurance rates would go up they would be less able to 
        serve the poor. . . . I personally have favored having 
        as much access to the courts as possible, but at the 
        same time you have to be careful that it doesn't do so 
        in a way that is destructive, for example, in the 
        medical field, destructive of the ability of society to 
        respond to the medical needs of the people.

    Nancy Sasaki, President and CEO of Planned Parenthood, Los 
Angeles:

        If the caps [on non-economic damages] in MICRA were to 
        be increased, you actually would begin to see kind of a 
        domino effect. . . . If insurance costs for the 
        physicians go up they typically will then, as any 
        business would, look at what services are their highest 
        risks, which services are costing them the most, and 
        they may no longer provide that. And that's happened in 
        the past, where physicians have stopped providing 
        obstetric care because of costs.

    Donna Stidham, Director of Managed Care and Patient 
Services, AIDS Health Care Foundation:

        [An] increase in the MICRA cap . . . would increase our 
        premiums phenomenally. In a single clinic setting it 
        could probably increase their premiums maybe twenty or 
        thirty thousand dollars. For multiple physicians, I'd 
        hate to even guess, but it'd be in the hundreds of 
        thousands, which would take away from direct patient 
        care. . . . So it would directly take away from care, 
        from the patients. You'd see us perhaps not being able 
        to admit all types of patients. Right now we can take 
        any kind of patient, whether they have the ability to 
        pay or not.

          CALIFORNIA SUPREME COURT STATEMENTS ON THE PURPOSES 
                OF MICRA'S LIMIT ON NONECONOMIC DAMAGES

    The California Supreme Court has stated the following 
purposes of California Civil Code section 3333.2, which limits 
recovery of noneconomic damages to $250,000:

        One purpose is to provide a more stable base on which 
        to calculate insurance rates'' by eliminating the 
        ``unpredictability of the size of large noneconomic 
        damage awards, resulting from the inherent difficulties 
        in valuing such damages and the great disparity in the 
        price tag which different juries placed on such 
        losses.''\94\
---------------------------------------------------------------------------
    \94\Fein v. Permanent Medical Group, 38 Cal.3d 137, 163 (1985); see 
also Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital 8 
Cal.4th 100, 112 (1984).

        Another purpose is to ``promote settlements by 
        eliminating `the unknown possibility of phenomenal 
        awards for pain and suffering that can make litigation 
        worth the gamble.'''\95\
---------------------------------------------------------------------------
    \95\Fein v. Permanent Medical Group, 38 Cal.3d 137, 163 (1985).

        Another purpose is to be fair to medical malpractice 
        plaintiffs by ``reduc[ing] only the very large 
        noneconomic damage awards, rather than to diminish the 
        more modest recoveries from pain and suffering and the 
        like in the great bulk of cases.''\96\
---------------------------------------------------------------------------
    \96\Id.
---------------------------------------------------------------------------

                        PROVEN REFORMS IN TEXAS

    After Texas adopted a new liability system in 2003, medical 
liability premiums fell dramatically, and thousands of new 
doctors flooded into the state.\97\ Communities in Texas that 
once did not have primary or specialty care doctors now have a 
full complement of physicians.
---------------------------------------------------------------------------
    \97\``Tort Reform: A Victory for Patient Access,'' Texas Medical 
Association (July 5, 2006); ``Texas-Style Health Care Reform is Bigger 
and Better,'' Sally Pipes, San Francisco Examiner (July 24, 2009).
---------------------------------------------------------------------------
    A 2008 study from the Perryman Group found that perhaps the 
most visible economic impact of the lawsuit reforms are the 
benefits experienced by Texans who have better access to high-
quality healthcare.\98\ Doctors and hospitals are using their 
liability insurance savings to expand services and initiate 
innovative programs; those savings have allowed Texas hospitals 
to expand charity care by 24 percent.\99\
---------------------------------------------------------------------------
    \98\Peggy Venable, ``Tort Reform? We've Already Done It,'' 
Washington Post (September 16, 2009).
    \99\Id.
---------------------------------------------------------------------------
    The total impact of tort reforms implemented since 1995 
includes gains of $112.5 billion in spending each year as well 
as almost 499,900 jobs in the state.\100\ The fiscal stimulus 
to the state from judicial reforms is almost a $2.6 billion per 
year increase in state revenue.\101\ In addition, these reforms 
are responsible for approximately 430,000 individuals having 
health insurance than would otherwise, and there has been an 
increase in the number of doctors, particularly in regions 
which have been facing severe shortages.\102\
---------------------------------------------------------------------------
    \100\Id.
    \101\Id.
    \102\Id.
---------------------------------------------------------------------------
    As the Wall Street Journal has observed:

        Before the reform, Texas was a kind of holy place on 
        the tort bar pilgrimage. Now it's a Mecca for doctors, 
        especially the emergency physicians, obstetricians and 
        surgical specialists who elsewhere can face blue-sky 
        malpractice premiums. Liability rates have fallen by 
        27.5% on average since 2003. The number of doctors 
        applying to practice in Texas has increased 60%, even 
        as the overall population grew by 14%.

        All of this is helping to end an acute Lone Star 
        physicians shortage, especially in rural areas. Twenty-
        three counties now have their first E.R. doctor, 10 
        their first OB-GYN. Hospitals are reinvesting the 
        malpractice savings in scarce services like 
        neurosurgery and neonatal units and expanding access to 
        care. This Texas success has opened eyes in nearby 
        Oklahoma, where even Democrats have been forced to 
        agree to some legal reforms.\103\
---------------------------------------------------------------------------
    \103\Wall Street Journal (editorial), ``Loser Pays, Everyone Wins'' 
(December 15, 2010).
---------------------------------------------------------------------------

                           BARRIERS TO REFORM

    The reason Democrats continue to refuse to add serious 
medical lawsuit reform to their health care legislation remains 
purely political, as was recently revealed by former DNC Chair 
Howard Dean. At a recent health care town hall meeting hosted 
by Rep. Jim Moran (D-VA), Dean responded to an angry 
constituent who wondered why a supposedly comprehensive 
``reform'' of the health-care system does not include tort 
reform to lower costs of malpractice insurance and reduce 
defensive medicine. Dean responded remarkably candidly, 
stating:

        ``This is the answer from a doctor and a politician,'' 
        said Dean. ``Here is why tort reform is not in the 
        bill. When you go to pass a really enormous bill like 
        that the more stuff you put in, the more enemies you 
        make, right? And the reason why tort reform is not in 
        the bill is because the people who wrote it did not 
        want to take on the trial lawyers in addition to 
        everybody else they were taking on, and that is the 
        plain and simple truth. Now, that's the truth.''

    Moreover, the Democrats' health care law's offer of HHS 
``demonstration projects'' on tort reform, rings hollow given 
that the cabinet secretary tasked with implementing this 
proposal for demonstration projects is Kathleen Sebelius. 
Before she was governor of Kansas and the insurance 
commissioner of Kansas, she spent eight years as the head of 
the Kansas Trial Lawyers Association, now the Kansas 
``Association for Justice.'' The KAJ's total opposition to 
reform is highlighted on its website. And Sebelius is also the 
state executive who, according to the New York Times, ``failed 
to make significant improvement in health coverage or costs 
during her two terms as governor.''
    The top contributor to President Obama's presidential 
campaign was the legal industry, whose donations came to more 
than $43 million. More than 80 percent of the money given to 
Congress by lawyers, mostly from the plaintiffs' bar, went to 
Democrats--almost $22 million.
    More recently, when President Obama spoke to the American 
Medical Association's convention in June of this year, he told 
the audience ``I'm not advocating caps on malpractice awards.''

                SUPPORT FOR REFORM: THE AMERICAN PEOPLE

    The American people are demanding legal reform. A recent 
survey found that 83 percent of Americans believe that 
reforming the legal system needs to be a part of any health 
care reform plan.\104\
---------------------------------------------------------------------------
    \104\``National Voter Survey: Health Care Reform and the Legal 
System 2009,'' Clarus Research Group (August 2009).
---------------------------------------------------------------------------
    As the Associated Press recently reported:

        Most Americans want Congress to deal with malpractice 
        lawsuits driving up the cost of medical care, says an 
        Associated Press poll. Yet Democrats are reluctant to 
        press forward on an issue that would upset a valuable 
        political constituency--trial lawyers--even if 
        President Barack Obama says he's open to changes. The 
        AP poll found that 54 percent of Americans favor making 
        it harder to sue doctors and hospitals for mistakes 
        taking care of patients, while 32 percent are opposed . 
        . . Support for limits on malpractice lawsuits cuts 
        across political lines, with 58 percent of independents 
        and 61 percent of Republicans in favor. Democrats are 
        more divided. Still, 47 percent said they favor making 
        it harder to sue, while 37 percent are opposed. The 
        survey was conducted by Stanford University with the 
        nonprofit Robert Wood Johnson Foundation . . . In the 
        poll, 59 percent said they thought at least half the 
        tests doctors order are unnecessary, ordered only 
        because of fear of lawsuits.\105\
---------------------------------------------------------------------------
    \105\Ricardo Alonso-Zaldivar and Trevor Tompson, ``AP: Support for 
Curbs on Malpractice Lawsuits,'' The Associated Press (November 19, 
2009).

    In a poll done by the Health Coalition on Liability and 
Access (HCLA) in October 2009, 69 percent of Americans said 
they wanted medical liability reform included in health care 
reform legislation. Seventy-two percent said that their access 
to quality medical care is at risk because lawsuit abuse forces 
good doctors out of the practice of medicine. A Rasmussen poll 
done at the same time found that 57 percent of people favored 
limiting jury awards.\106\
---------------------------------------------------------------------------
    \106\Rasmussen Research, 12/2/09.
---------------------------------------------------------------------------
    The American people clearly understand the issue of 
liability reform and the motives behind the raft of lawsuits 
trial lawyers are bringing to stop reform in its tracks. The
    Health Coalition on Liability and Access poll done in 
October 2009 found that by a wide margin, 70 percent of 
Americans support full payment for lost wages and medical 
expenses and reasonable limits on awards for non-economic 
``pain and suffering.'' Sixty-eight percent of those polled 
also favor a law to limit the fees personal injury attorneys 
can take from an award or settlement.

         BLAMING THE INSURANCE COMPANIES IS OFTEN A RED HERRING

    As Dr. Stanley Goldfarb, associate dean of clinical 
education at the University of Pennsylvania School of Medicine, 
has written: ``The president points to for-profit insurance 
companies [as the source of the problem], but for-profit 
insurance companies only make up 25 percent of the system and 
they are not that profitable, ranking 85th among all U.S. 
industries. [Insurance] `Reform' will redistribute the money, 
not reduce the overall costs. There is much that can be done to 
make our system more efficient. Tort reform is a great place to 
start.''\107\
---------------------------------------------------------------------------
    \107\Stanley Goldfarb, ``The Malpractice Problem: We Can't Have 
Health Care Reform Without Tort Reform,'' The Weekly Standard (October 
27, 2009).
---------------------------------------------------------------------------
    The Department of Health and Human Services concluded that 
the average award in medical malpractice cases has risen 76% in 
recent years, and that ``mega-awards'' for ``pain and 
suffering'' have occurred in states without any limits on what 
a plaintiff can recover.\108\ Large numbers of these cases are 
meritless. The Harvard Medical Practice Study, for example, 
found that over half of the filed medical professional 
liability claims they studied were brought by plaintiffs who 
suffered either no injuries at all, or, if they did, such 
injuries were not caused by their health care providers, but 
rather by the underlying disease.\109\ These findings have been 
confirmed.\110\ Also, before the 1960s, only one physician in 
seven had ever been sued in their entire lifetime,\111\ whereas 
today's rate is about one in seven per year.\112\
---------------------------------------------------------------------------
    \108\Department of Health and Human Services, ``Confronting the New 
Health Care Crisis: Improving Health Care Quality and Lowering Costs by 
Fixing Our Medical Liability System'' (July 24, 2002) at 9-10 (``These 
mega-awards for non-economic damages have occurred (as would be 
expected) in states that do not have limitations on the amounts that 
can be recovered.'').
    \109\See Harvard Medical Practice Study to the State of New York, 
Patients, Doctors, and Lawyers: Medical Injury, Malpractice Litigation, 
and Patient Compensation in New York at 11-5 (1990) (``[T]he tort 
system imposes the costs of defending claims on [health care] providers 
who may not even have been involved in an injury, let alone a negligent 
injury.'').
    \110\See D. Studdert et al., ``Negligent Care and Malpractice 
Claiming Behavior in Utah and Colorado,'' 38 Medical Care 3: 250-60, 
250 (2000) (``Eighteen patients from out study sample filed claims: 14 
were made in the absence of discernable negligence and 10 were made in 
the absence of any adverse event . . . The poor correlation between 
medical negligence and malpractice claims that was present in New York 
in 1984 is also present in Utah and Colorado in 1992 . . . [W]hen a 
physician is sued, there is a high probability that it will be for 
rendering nonnegligent care.'') (emphasis added).
    \111\See ``Opinion Survey of Medical Professional Liability,'' JAMA 
164:1583-1594 (1957).
    \112\See R. Bovbjerg, ``Medical Malpractice: Problems & Reforms,'' 
The Urban Institute, Intergovernmental Health Policy Project (1995).
---------------------------------------------------------------------------
    The medical insurance crisis caused insurers like St. 
Paul--an insurer of 42,000 doctors, 750 hospitals, 5,800 health 
care facilities, and 72,000 health care providers such as 
nurses--to leave the medical professional liability insurance 
business entirely.\113\ In the words of Thomas A. Bradley, 
chief financial officer of St. Paul, the medical malpractice 
insurance crisis was ``basically another World Trade Center 
loss for us this year.''\114\ Other medical malpractice 
insurers have also left the market,\115\ and many others have 
become insolvent. Licensed carriers' medical professional 
liability insurance business has, on average, been unprofitable 
since 1990-2000.\116\
---------------------------------------------------------------------------
    \113\See Joseph T. Hallinan, ``St. Paul Gradually Will Pull Out Of 
Malpractice-Insurance Sector,'' The Wall Street Journal (December 13, 
2001) at B2.
    \114\``St. Paul to Exit Medical Malpractice, Pose $900 Million 
Charge,'' Best's Insurance News (December 12, 2001).
    \115\See Meg Green, ``Med Malcontent: Top medical malpractice 
writer St. Paul Cos. Abandons the Unprofitable Business. Who Will Fill 
the Void?'' Best's Review (February 1, 2002) at 12.
    \116\See American Medical Association, ``Trends Report: Medical 
Professional Liability Insurance'' (April 2002) at 5.
---------------------------------------------------------------------------
    The claim that sharp increases in medical liability 
insurance rates are due to insurer losses in the stock market 
is also dubious, as less than 15% of the assets of medical 
liability insurance companies are stocks.\117\ Additionally, 
60% of the doctors in the United States are insured by 
insurance companies that are owned and operated by other 
doctors and which operate primarily for their benefit.\118\
---------------------------------------------------------------------------
    \117\See Physician Insurers Association of America, ``Bordering on 
Malpractice: Serious Errors Found in Consumer Federation of America 
Report on Medical Liability Insurance'' (May 9, 2002).
    \118\Physician Insurers Association of America.
---------------------------------------------------------------------------

      THE ``PATIENT PROTECTION AND AFFORDABLE CARE ACT'' (PPACA) 
                    IS A TRIAL LAWYERS' BAILOUT BILL

    The ``Patient Protection and Affordable Care Act'' (PPACA), 
passed by Democrats during the last Congress, not only fails to 
contain any of the tort reforms the CBO concluded would save at 
least $54 billion in health care costs, but it also contains a 
provision that explicitly allows trial lawyers to ``opt-out'' 
of any alternative liability system, meaning if their frivolous 
lawsuit is limited by the alternative system, they can simply 
``opt-out'' of the alternative system and file in court like 
they always have. Section 10607 of the Democrats' bill states 
that any states' ``proposed alternative'' must ``provide[] 
patients the ability to opt out of or voluntarily withdraw from 
participating in the alternative at any time and to pursue 
other options, including litigation, outside the 
alternative.''\119\ So the bill literally prohibits any 
alternative to litigation, or any new limits on litigation, 
from being enforced.
---------------------------------------------------------------------------
    \119\42 U.S.C.A. Sec. 280g-15(c)(2)(g).
---------------------------------------------------------------------------
    Also, the CBO concluded that caps on ``non-economic 
damages'' would save at least $54 billion in health care costs. 
Not only are any such caps prevented from being enforced under 
the legislation, but the legislation requires that the 
Secretary of Health and Human Services provide states with 
``guidance on [the award] of non-economic damages . . . in 
determining appropriate payment.''\120\ Consequently, not only 
does this legislation prevent states from taking part in the 
demonstration projects if they seek to enforce the reforms the 
CBO said would save $54 million; it also requires the Secretary 
of Health and Human Services to encourage states to adopt 
lawsuit damages criteria the CBO has concluded would raise 
health care costs, not lower them. That's not tort reform. It's 
tort deform.
---------------------------------------------------------------------------
    \120\42 U.S.C.A. Sec. 280g-15(f)(2)(A).
---------------------------------------------------------------------------
    Further, because the health care bill signed into law by 
President Obama calls for the Federal Government and its 
regulators to create all manner of new standards and guidelines 
for medical professionals to follow, it opens up many more 
opportunities for trial lawyers to sue doctors if they deviate 
at all from those Federal standards and guidelines. The House-
passed version of the legislation, H.R. 3962, contained a 
provision that made clear that the new government guidelines 
provided for by the bill ``shall not be construed to establish 
the standard of care or duty of care owed by health care 
providers to their patients in any medical malpractice action 
or claim.''\121\ But the bill signed into law by President 
Obama fails to contain such a provision, which can only be read 
as an invitation to trial lawyers to sue doctors whenever they 
deviate one iota from whatever guidelines or standards are 
handed down from Washington, D.C. That's a step backward for 
legal reform, and yet another cause of defensive medicine.
---------------------------------------------------------------------------
    \121\See H.R. 3962 (111th Cong. 1st Sess.) (passed November 7, 
2009) (SEC. 261. CONSTRUCTION REGARDING STANDARD OF CARE. (a) IN 
GENERAL.--The development, recognition, or implementation of any 
guideline or other standard under a provision described in subsection 
(b) shall not be construed to establish the standard of care or duty of 
care owed by health care providers to their patients in any medical 
malpractice action or claim . . . '').
---------------------------------------------------------------------------

                 REFORM MUST COME AT THE FEDERAL LEVEL

    The HEALTH Act appropriately addresses a national problem 
because doctors are moving from state to state based on which 
states have enacted reasonable legal reforms. Doctors should be 
able to practice anywhere there are patients, not just where 
certain states have enacted reasonable legal reforms that allow 
them to practice.
    As Senator Lieberman has described, the crisis is national 
in scope and warrants a Federal response: ``I did not always 
support a national or Federal approach to product liability 
reform or tort reform generally, and I can understand the 
hesitancy, particularly of some of the Members, to support 
Federal involvement in what traditionally has been a province 
of the States. . . . So I listened to [] folks, and I came to 
understand the necessity of Federal action and, of course, to 
understand the reality and appreciate the reality that we are 
one country; that products travel from State to State; that 
people using them travel from State to State; and that there is 
a crying need out there in the interest of every State and our 
country, our economy, the equity of our society, to build a 
floor of fairness, a common system that will protect the rights 
of all.''\122\
---------------------------------------------------------------------------
    \122\Senator Lieberman, floor statement on the Common Sense Product 
Liability and Legal Reform Act (April 27, 1995).
---------------------------------------------------------------------------
    Over 20 state supreme courts have judicially nullified 
reasonable litigation management provisions enacted by state 
legislatures, many of which sought to address the crisis in 
medical professional liability that reduces patients' access to 
health care. Consequently, in such states, passage of Federal 
legislation by Congress is the only means of addressing the 
state's current crisis in medical professional liability and 
restoring patients' access to health care. Many more may do so 
unless Congress acts under its Supremacy Clause and Commerce 
Clause authority to let doctors treat patients wherever they 
are, not just where states have enacted legal reforms that can 
be upheld under their state constitutions.\123\
---------------------------------------------------------------------------
    \123\See Rept. 107-693 pt. 1 (107th Cong., 2d Sess.) at 13 and 
n.14.
---------------------------------------------------------------------------

      THE NEED FOR FEDERAL LAWSUIT REFORM THAT APPROPRIATELY USES 
                    CONGRESS' COMMERCE CLAUSE POWER

    Many state supreme courts have judicially nullified 
reasonable litigation management provisions enacted by state 
legislatures, many of which sought to address the crisis in 
medical professional liability that reduces patients' access to 
health care. Consequently, in such states, passage of Federal 
legislation by Congress may be the only means of addressing the 
state's current crisis in medical professional liability and 
restoring patients' access to health care.
    Further, Federal legislation is needed to stem the flow of 
doctors from one state to another, as they flee states to avoid 
excessive liability costs. Doctors should feel free to practice 
medicine wherever they want in this country, and patients 
everywhere should be able to obtain the medical care they need.
    While tort reform is usually adopted at the state level in 
the first instance, it can also be adopted at the Federal 
level, when the effects of tort law present a threat to state 
autonomy. Indeed, James Madison described the purpose of the 
Constitution's Commerce Clause as follows: ``A very material 
object of this power [of Congress] was the relief of the States 
which import and export through other States, from the improper 
contributions levied on them by the latter. Were these [States] 
at liberty to regulate the trade between State and State, it 
must be foreseen that ways would be found out to load the 
articles of import and export, during the passage through their 
jurisdiction, with duties which would fall on the makers of the 
latter and the consumers of the former. We may be assured by 
past experience, that such a practice would be introduced by 
future contrivances; and both by that and a common knowledge of 
human affairs, that it would nourish unceasing animosities, and 
not improbably terminate in serious interruptions of the public 
tranquility.''\124\ Clearly, Madison predicted that states 
would see in the future the rise of new forms of rules and 
regulations that would increase the costs of things nationwide, 
but which could not be foreseen at the time of the Founding, 
and that Congress would needs its Commerce Clause authority to 
counter those cost-increasing influences.\125\ Indeed, one 
modern manifestation of the problem Madison foresaw is that, 
today, some states' tort law allows unbounded lawsuits that 
increase the costs of selling products or services (including 
medical services) that cross into their jurisdictions. There is 
even a word for this modern phenomenon. It is called the ``tort 
tax,'' and when it's applied to national industries, it's 
passed on to consumers everywhere. The result is higher prices, 
and potentially lost jobs, across multiple states, or 
nationwide. When that happens, Congress can, and often should, 
enact Federal tort reform to preserve federalism principles. 
While some argue that businesses can avoid tort liability by 
simply avoiding states that have oppressive tort laws, James 
Madison clearly rejected that argument against Congressional 
action, arguing instead that Congress should have the power to 
enact rules that allow businesses to enter into a state 
``jurisdiction'' without having to worry that doing so would 
dramatically increase the price of their products elsewhere. 
Likewise, Alexander Hamilton wrote in the Federalist Papers 
that ``The government of the Union must be empowered to pass 
all laws, and to make all regulations which have relation to 
them. The same must be the case in respect to commerce, and to 
every other matter to which its jurisdiction is permitted to 
extend.''\126\
---------------------------------------------------------------------------
    \124\The Federalist Papers, Federalist No. 42 at 267-68 (Clinton 
Rossiter ed., 1961) (emphasis added).
    \125\At the time of the Founding and soon thereafter, out-of-
control state litigation was kept in check in the states by strict 
limits on lawyers' fees, which no longer prevail. During the American 
Colonial period, lawyers were roundly despised and subjected to strict 
limits on lawsuits. According to one historian, ''[i]n every one of the 
Colonies, practically throughout the Seventeenth Century, a lawyer or 
attorney was a character of disrepute and of suspicion. . . . In many 
Colonies, persons acting as attorneys were forbidden to receive any fee 
. . . in all, they were subjected to the most rigid restrictions as to 
fees and procedure.'' Charles Warren, A History of the American Bar 4 
(William S. Hein & Co., Inc. 1913). Early American observer Benjamin 
Austin wrote, ``if we look through the different counties throughout 
the Commonwealth, we shall find that the troubles of the people arise 
principally from debts enormously swelled by tedious law-suits.'' 
Benjamin Austin, Observations on the Pernicious Practice of the Law 4 
(1786). As one historian summarized the situation in early America, 
``[l]awsuits were often begun or continued for no other purpose than to 
embarrass an enemy by making him incur legal costs.'' Anton-Hermann 
Chroust, The Rise of the Legal Profession in America: The Colonial 
Experience vol. 1, 82 (U. of Okla. Press 1965). Attorneys were so 
despised in early America that they often inspired violence. As one 
historian wrote:

      During Shay's Rebellion, in 1786 people actually demanded 
      that all inferior courts and all lawyers be entirely 
      eliminated . . . In Vermont and New Hampshire vociferous 
      demands were made to suppress the legal profession 
      completely, or at least to reduce the number of lawyers 
      and, incidentally, to cut down substantially the usual 
      legal fees. In Vermont, where the general populace was 
      particularly vehement in its actions and denouncements, 
      courthouses were set afire . . . As early as 1786 the town 
      of Braintree, Massachusetts, passed a resolve ``to crush . 
      . . that order of Gentlemen denominated Lawyers . . . whose 
      . . . conduct appears . . . to tend rather to the 
---------------------------------------------------------------------------
      destruction than the preservation of this Commonwealth.''

Anton-Hermann Chroust, The Rise of the Legal Profession in America: The 
Revolution and the Post-Revolutionary Era vol. 2, 26-27 (U. of Okla. 
Press 1965) (citing Laws and Resolves of Mass., c. 23, Sec. 2, (1785); 
John Adams, The Adams Papers: Diary and Autobiography of John Adams 
vol. 1, 342 (1902); John Quincy Adams, Three Episodes of Massachusetts 
History 897 (1893)).

  Fear that the legal profession would abuse its power to generate 
lawsuits was also reflected in limits on attorneys' fees. In 1784, 
Connecticut by statute limited attorneys' fees according to a ``Table 
of Fees.'' Acts and Laws of the State of Connecticut in America 10-11 
(1784). In 1792, Georgia regulated attorneys' fees as follows: for 
``each cause commenced and tried in the superior or inferior courts,'' 
eighteen shillings and eight pence. A Digest of the Laws of the State 
of Georgia 476 (1800). In 1714, Massachusetts fixed attorneys' fees at 
twelve shillings ``at the superiour court of judicature . . . and at 
the inferiour court, ten shillings, and no more.'' Acts and Laws, of 
Her Majesties Province of the Massachusetts-Bar in New-England 185 
(1714). In 1719, Rhode Island attorneys' fees were fixed at a maximum 
of twelve shillings. Charter Granted by His Majesty King Charles the 
Second to the Colony of Rhode Island and Providence-Plantations in 
America 21 (1719). In 1766 these fees were reduced to a maximum of five 
shillings. Acts and Laws of His Majesty's Colony of Rhode-Island and 
Providence-Plantations in America 98 (1767). By 1748, the New Jersey 
Legislature passed a statute establishing an elaborate schedule of 
lawyer's fees. The Acts of the General Assembly of the Province of New-
Jersey 167 (Allinson ed. 1776). In 1778, in Virginia, attorneys' fees 
were fixed by statute in the General Court and the High Court of 
Chancery depending on the nature of the action. Anton-Hermann Chroust, 
The Rise of the Legal Profession in America: The Revolution and the 
Post-Revolutionary Era vol. 2, 261-62 (U. of Okla. Press 1965) (citing 
9 Statutes at Large of Virginia 529 (Hening ed. 1823)). In 1795, in 
Pennsylvania, attorneys' fees in the Court of Common Pleas were set for 
filing a lawsuit and entering an appearance as follows: ``if the suit 
is ended before or during the sitting of the first court,'' at $1.67; 
for every suit ``ended after the first court and before judgment,'' 
$3.34; and for ``every suit prosecuted to judgment,'' $4.00. 15 
Statutes at Large of Pennsylvania, c. 1863, Sec. 1, 360 (1911). In 
1801, New York enacted the comprehensive Act Regulating the Fees of 
Several Officers and Ministers of Justice within the state, which 
included limits on attorneys' fees. 5 Laws of the State of New York 
Passed at the Session of the Legislature Held in the Year 1801, c. 190, 
553-71 (1871). In 1810, in Maryland, a statute was enacted providing 
``no attorney of any of the county courts shall be authorized to charge 
more . . . than the sum of three dollars and thirty-three cents and one 
third of a cent in any one suit.'' Laws of Maryland of 1810, c. 126, 
Sec. 2; 1 The General Public Statutory Law of Maryland 601 (1840). 
Delaware had its own unique method for reducing litigiousness. In 1793, 
Delaware passed the Act for Regulating and Establishing Fees providing 
that for all pleadings in an action subsequent to a declaration, the 
fee would be one cent for every written line, twelve words to a line. 
Anton-Hermann Chroust, The Rise of the Legal Profession in America: The 
Revolution and the Post-Revolutionary Era vol. 2, 256 (U. of Okla. 
Press 1965).
---------------------------------------------------------------------------
    \126\The Federalist Papers, Federalist No. 23 at 155 (Clinton 
Rossiter ed., 1961).
---------------------------------------------------------------------------
    James Madison and the Founders clearly supported the power 
of the People's national representatives in Congress to 
preserve citizens' access to privately-provided goods and 
services. Madison said, in the seminal speech he gave defending 
the Commerce Clause at the Virginia convention called to ratify 
the Constitution, that ``All agree that the general government 
ought to have power for the regulation of commerce . . . There 
are regulations in different states which are unfavorable to 
the inhabitants of other states . . . This will not be the case 
when uniform regulations will be made'' by Congress.\127\ 
Indeed, that's what Congress did when it passed the Protection 
of Lawful Commerce in Arms Act in 2006, which prohibits 
lawsuits in either state or Federal court against the firearms 
industry for damages resulting from the unlawful use of 
firearms by others. That Federal tort reform law was upheld as 
coming within Congress' Commerce Clause authority by the Second 
Circuit Court of Appeals, which said ``We find that Congress 
has not exceeded its authority in this case, where there can be 
no question of the interstate character of the industry in 
question and where Congress rationally perceived a substantial 
effect on the industry of the litigation that the Act seeks to 
curtail.''\128\ The same holds true where there can be no 
question of the interstate character of the health care 
industry and where Congress rationally perceives a substantial 
effect lawsuits have on that industry.\129\ Congress has 
enacted many Federal tort reform statutes.\130\
---------------------------------------------------------------------------
    \127\James Madison, ``Speech in the Virginia Ratifying Convention'' 
in Madison: Writings (1999) at 378-79.
    \128\City of New York v. Beretta Corp., 524 F.3d 384, 394 (2008), 
cert. denied 129 S.Ct. 1579 (2009).
    \129\Congress has acted many times to enact Federal tort reforms, 
including the Volunteer Protection Act of 1997, which creates immunity 
for volunteers to nonprofits or government bodies. 42 U.S.C.A. 
Sec. Sec. 14501 et seq. Congress has also passed the Partial-Birth 
Abortion Ban Act of 2003, which prohibited a specific medical procedure 
that involves a particularly gruesome form of abortion procedure. That 
Act was upheld by the Supreme Court in Gonzales v. Carhart, 550 U.S. 
124 (2007), in which the Court upheld Congress' ``legislative power, 
exercised in this instance under the Commerce Clause, to regulate the 
medical profession,'' id. at 166, concluding that ``Considerations of 
marginal safety, including the balance of risks, are within the 
legislative competence when the regulation is rational and in pursuit 
of legitimate ends.'' Id.
    \130\See, e.g., Employers Liability Act of 1908, 35 Stat. 65, c. 
149; Price-Anderson Act, 42 U.S.C. Sec. 2210(e); Atomic Testing 
Liability Act, 42 U.S.C. Sec. 2212; National Childhood Vaccine Injury 
Compensation Act of 1986
    42 U.S.C. Sec. Sec. 300aa-1-300aa-34; Comprehensive Environmental 
Response, Compensation, and Liability Act (Superfund); General Aviation 
Revitalization Act, P.L. 103-298, 49 U.S.C. Sec. 40101 note; Cruise 
Ship Liability, P.L. 104-324, Sec. 1129; Bill Emerson Good Samaritan 
Food Donation Act, P.L. 104-210, 42 U.S.C. Sec. 1791; Volunteer 
Protection Act of 1997, P.L. 105-1, 42 U.S.C. Sec. Sec. 14501-14505; 
Amtrak Reform and Accountability Act of 1997, P.L. 105-134, Sec. 161, 
49 U.S.C. Sec. 28103; Aviation Medical Assistance Act of 1998, P.L. 
105-170 (1998), 49 U.S.C. Sec. 44701 note; Biomaterials Access 
Assurance Act of 1998, P.L. 105-230, 21 U.S.C. Sec. Sec. 1601-1606; Y2K 
Act, P.L. 106-37, 15 U.S.C. Sec. Sec. 6601-6617; Cardiac Arrest 
Survival Act of 2000, P.L. 106-505, Sec. 404, 42 U.S.C. Sec. 238q; Air 
Transportation Safety and System Stabilization Act, P.L. 107-42, 
Sec. 201(b); September 11th Victim Compensation Fund of 2001, 49 U.S.C. 
Sec. 40101 note; Paul D. Coverdell Teacher Protection Act of 2001, P.L. 
107-110, Sec. Sec. 2361-2368; Multiparty, Multiforum Trial Jurisdiction 
Act of 2002, P.L. 107-273, Sec. 11020; Homeland Security Act of 2002, 
P.L. 107-296, Sec. Sec. 304, 863, 890, 1201, 1402, and 1714-1717.
---------------------------------------------------------------------------
    Of note, Congress passed the Partial-Birth Abortion Ban Act 
of 2003, which prohibited a specific medical procedure that 
involves a particularly gruesome form of abortion procedure, 
under its Commerce Clause authority. That Act was upheld by the 
Supreme Court in Gonzales v. Carhart,\131\ in which the Court 
upheld Congress' ``legislative power, exercised in this 
instance under the Commerce Clause, to regulate the medical 
profession,''\132\ concluding that ``Considerations of marginal 
safety, including the balance of risks, are within the 
legislative competence when the regulation is rational and in 
pursuit of legitimate ends.''\133\
---------------------------------------------------------------------------
    \131\550 U.S. 124 (2007).
    \132\Id. at 166.
    \133\Id.
---------------------------------------------------------------------------
    Also, Federal tort reform regarding vaccine liability has 
been the law for several decades. In the late 1980's, Congress 
enacted the National Vaccine Injury Compensation Program, 42 
U.S.C. Section 300aa-10 through -34, a Federal program that 
preempts state court tort awards, to protect vaccine 
manufacturers from bankruptcy in the face of otherwise 
unlimited state tort jury awards. The Act overrides the state 
court system, putting compensation decisions in the hands of a 
congressionally created Office of Special Masters, which 
currently consists of one Chief Special Master and seven 
Associate Special Masters who are appointed by the U.S. Court 
of Federal Claims to serve for four-year terms. To this day, 
that Act has never been successfully challenged on 
constitutional grounds. If it were, millions of children could 
be forced to go without necessary vaccines because 
manufacturers would refrain from providing them. Note that 
while the Federal vaccine compensation program completely 
overrides state courts and juries, the HEALTH does not go 
nearly so far because the HEALTH Act allows state lawsuits to 
proceed, but with reasonable limits on a narrow category of 
damages and other process reforms.
    The Congressional Research Service also ``concludes that 
enactment of tort reform legislation generally would appear to 
be within Congress's power to regulate commerce, and would not 
appear to violate principles of due process or federalism . . . 
In concluding that Congress has the authority to enact tort 
reform `generally,' we refer to reforms that have been widely 
implemented at the state level, such as caps on damages and 
limitations on joint and several liability and on the 
collateral source rule.''\134\ Caps on damages and limitations 
on joint and several liability are precisely the reforms 
contained in the HEALTH Act.
---------------------------------------------------------------------------
    \134\Henry Cohen, Legislative Attorney, American Law Division, CRS 
Report to Congress, Federal Tort Reform Legislation: Constitutionality 
and Summaries of Selected Statutes (February 26, 2003) at 1.
---------------------------------------------------------------------------
    Laws passed by states that have already provided for, or 
may in the future provide for, different limits on damages in 
health care lawsuits will be preserved under the HEALTH Act, as 
the HEALTH Act provides that ``No provision of this Act shall 
be construed to preempt . . . any State law (whether effective 
before, on, or after the date of the enactment of this Act) 
that specifies a particular monetary amount of compensatory or 
punitive damages (or the total amount of damages) that may be 
awarded in a health care lawsuit, regardless of whether or not 
such monetary amount is greater or lesser than is provided for 
under this Act . . . '' Some states have limited noneconomic 
damages in medical malpractice actions, but at levels higher 
than $250,000. Some states place aggregate limits on medical 
malpractice awards. Those limits would be preserved under the 
HEALTH Act.
    President Ronald Reagan established a special task force to 
study the need for tort reform. That task force, called the 
Tort Policy Working Group, consisted of representatives of ten 
Reagan Administration agencies and the White House. The final 
report of that task force concluded as follows: ``In sum, tort 
law appears to be a major cause of the insurance availability/
affordability crisis which the federal government can and 
should address in a variety of sensible and appropriate ways.'' 
Indeed, the Reagan task force specifically recommended 
``eliminate joint and several liability,''\135\ ``provide for 
periodic payments of future economic damages,''\136\ ``schedule 
[limit] contingency fees''\137\ of attorneys, and ``limit non-
economic damages to a fair and reasonable amount.''\138\ 
Indeed, regarding the limit on non-economic damages, the report 
concluded:
---------------------------------------------------------------------------
    \135\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 64.
    \136\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 69.
    \137\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 72.
    \138\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 66.

        Recommendation No. 4: Limit non-economic damages to a 
---------------------------------------------------------------------------
        fair and reasonable amount.

        Non-economic damages such as pain and suffering, mental 
        anguish and punitive damages are inherently open-ended. 
        They are entirely subjective, and often defy 
        quantification . . . Moreover, because such damages are 
        essentially subjective, awards for similar injuries can 
        vary immensely from case to case, leading to highly 
        inequitable, lottery-like results. Accordingly, such 
        damages are particularly suitable for a specific 
        limitation.''\139\
---------------------------------------------------------------------------
    \139\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 66.

    All of these recommended reforms are part of H.R. 5, the 
HEALTH Act. The report also contains an extensive discussion of 
the harmful effects tort law has on ``medical malpractice'' 
insurance,\140\ and a discussion and charts describing the 
impact of rising malpractice jury awards.\141\
---------------------------------------------------------------------------
    \140\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 21-24.
    \141\Report of the Tort Policy Working Group on the Causes, Extent 
and Policy Implications of the Current Crisis in Insurance Availability 
and Affordability (February 1986), at 36-37, 39-40.
---------------------------------------------------------------------------

           STATE LAWS THAT LIMIT DAMAGES TO SPECIFIC AMOUNTS 
                   ARE PRESERVED UNDER THE HEALTH ACT

    Laws passed by states that have already provided for, or 
may in the future provide for, different limits on damages in 
health care lawsuits will be preserved under the HEALTH Act, as 
the HEALTH Act provides that ``No provision of this Act shall 
be construed to preempt . . . any State statutory limit 
(whether enacted before, on, or after the date of the enactment 
of this Act) on the amount of compensatory or punitive damages 
(or the total amount of damages) that may be awarded in a 
health care lawsuit, whether or not such State limit permits 
the recovery of a specific dollar amount of damages that is 
greater or lesser than is provided for under this Act. . . .''
    What follows is a list of states that have specific limits 
on damages in health care lawsuits.
    Alabama--None; $400,000 cap on non-economic damages; $1 
million cap on wrongful death damages, overturned by Smith v. 
Shulte, 671 So.2d 1331 (1991), cert. denied, 517 U.S. 1220 
(1996).
    Alaska--$250,000 cap on non-economic damages for claims 
involving personal injury, and a $400,000 cap on non-economic 
damages for claims involving wrongful death or a severe 
permanent physical impairment that is more than seventy percent 
disabling. A single cap applies regardless of the number of 
health care providers against whom the claim is asserted or the 
number of causes of action filed. (2005).
    Arizona--None; Article 2 sec. 31 and Article 18 sec. 6 of 
Arizona's constitution prohibits limiting recoverable damages.
    Arkansas--None; Article 5 sec. 32 of Arkansas' constitution 
prohibits limiting damages recoverable for injury or death.
    California--$250,000 cap on non-economic damages (since 
1975); upheld in Fein v. Permanente Medical Group, 38 Cal. 3d 
137, 695 P.2d 665 (1985).
    Colorado--$1 million cap on total damages, including any 
derivative claim by any other claimant, of which non-economic 
losses shall not exceed $250,000 (including any derivative 
claim by any other claimant). Upon good cause shown and if the 
court determines such limit would be unfair, the court may 
award damages in excess of the limit. In this case, the court 
may award the present value of additional future damages only 
for loss of such excess future earnings or such excess future 
medical and other health care costs, or both. (1988). Upheld in 
Scholz v. Metropolitan Pathologists P.C., 851 P.2d 901 (1993). 
Effective July 1, 2003, the non-economic damages cap was raised 
to $300,000.
    Connecticut--None.
    Delaware--None.
    D.C.--None.
    Florida--For providers, $500,000 cap on non-economic 
damages for causes of action for injury or wrongful death due 
to medical negligence of physicians and other health care 
providers. Cap applies per claimant regardless of the number of 
defendants. Cap increases to $1 million for certain exceptions. 
For non-providers, $750,000 cap on non-economic damages per 
claimant for causes of action for injury or wrongful death due 
to the medical negligence of nonpractitioners, regardless of 
the number of nonpractitioner defendants. Cap increases to $1.5 
million for certain exceptions. (2003) Previous law upheld but 
subject to rules on voluntary arbitration, Univ. of Miami v. 
Echarte, 618 So.2d 189 (1993).
    Georgia--None; previous reforms included the following but 
were held unconstitutional in Atlanta Oculoplasty Surgery, P.C. 
v. Nestlehutt, 691 S.E.2d 219 (Ga. 2010) (statute limiting 
awards of noneconomic damages in medical malpractice cases to a 
predetermined amount violated state constitutional right to 
jury trial): $350,000 cap on non-economic damages awarded 
against all health care providers and a separate $350,000 cap 
on non-economic damages awarded against a single medical 
facility that can increase to $700,000 if more than one 
facility is involved. No more than $1.05 million can be awarded 
in a medical liability cause of action. Health Care Providers--
Any judgment in a medical liability action, including wrongful 
death, against a health care provider shall not exceed $350,000 
in non-economic damages regardless of the number of defendant 
health care providers against whom the claim is asserted or the 
number of separate causes of action on which the claim is 
based. The cap applies to each claimant, however, the term 
``claimant'' is defined as including all persons claiming to 
have sustained damages as a result of the bodily injury or 
death of a single person. Medical Facilities--Establishes a 
separate $350,000 cap on non-economic damages awarded in 
medical liability actions, including wrongful death, against a 
single medical facility including all persons and entities for 
which vicarious liability theories may apply, regardless of the 
number of separate causes of action on which the claim is 
based. If the lawsuit involves more than one medical facility, 
the total amount of non-economic damages that can be awarded 
against the facilities is $700,000 with a single facility not 
liable for more than $350,000. (2005).
    Hawaii--$375,000 cap on non-economic damages, with 
exceptions for certain types of damages, such as mental 
anguish. (1986).
    Idaho--$250,000 cap on non-economic damages per claimant in 
personal injury and wrongful death actions. The cap will be 
adjusted annually beginning July 1, 2004 based on the average 
annual wage. The limit does not apply to causes of action 
arising out of willful or reckless misconduct, or felonious 
actions. (2003) Upheld, Kirkland v. Blaine County Medical 
Center, 134 Idaho 464, 4 P.3d 1115 (2000).
    Illinois--None; reforms struck down in LeBron v. Gottlieb 
Memorial Hospital, 930 N.E.2d 895 (Ill. 2010) (holding 
unconstitutional caps on non-economic damages and requirement 
of periodic payments of damages). Reforms that were struck down 
included the following: $500,000 cap on non-economic damages 
for awards in a medical liability cause of action, including 
wrongful death, against a physician, the physician's business 
or corporate entity, and personnel or health care 
professionals. Separate $1 million cap on non-economic damages 
for awards in a medical liability cause of action, including 
wrongful death, against a hospital and its personnel or 
hospital affiliates. Both caps apply to all plaintiffs in any 
civil action arising out of the care. The caps apply to 
injuries that occur after the effective date of the act. 
(2005); previous $500,000 cap on non-economic damages, 
overturned Best v. Taylor Machine Works, 689 N.E.2d 1057 (Ill. 
1997). $500,000 cap on economic and non-economic damages, 
overturned Wright v. Central DuPage Hospital Assn., 63 Ill.2d 
313, 347 N.E.2d 736 (1976).
    Indiana--$750,000 cap on total damages for any act of 
malpractice that occurs after 12/31/89 and before 7/1/99. $1.25 
million total cap for any act of malpractice that occurs after 
6/30/99. Health care providers are not liable for more than 
$250,000 for an occurrence of malpractice any amount awarded in 
excess of $250,000 will be paid through the Patient 
Compensation Fund. (1975) Upheld, Johnson v. St. Vincent 
Hospital, 404 N.E. 2d 585 (1980).
    Iowa--None.
    Kansas--$250,000 cap on non-economic damages. This is the 
total amount of non-economic damages recoverable by each party 
from all of the defendants. (1988) Upheld, Samsel v. Wheeler 
Transport Services, Inc., 246 Kan. 336 (1990); previous law 
struck down as unconstitutional, Kansas Malpractice Victims 
Coalition v. Bell, 243 Kan. 333, 757 P.2d 251 (1988).
    Kentucky--None. Section 54 of Kentucky's Constitution 
prohibits cap on damages.
    Louisiana--$500,000 cap on total damages, excluding damages 
recoverable for medical care. A health care provider covered by 
the Patient's Compensation Fund shall not be liable for more 
than $100,000. The Patient's Compensation Fund will cover the 
excess amount awarded up to the cap. (1975); Upheld caps on 
total damages, but future medical expenses are excluded from 
cap, Butler v. Flint Goodrich Hospital of Dillard University, 
607 So. 2d 517 (1992); ruled unconstitutional by Louisiana 
Court of Appeal, Third Circuit in Arrington v. ER Physicians 
Group, No. 04-1235 (La. Ct. App. Sept. 2006). Vacated and set 
aside by Louisiana Supreme Court Arrington v. Galen-Med, Inc. 
(La. 06-2968 Feb. 2007).
    Maine--$400,000 cap on non-economic damages in wrongful 
death actions. (1999).
    Maryland--The limit on non-economic damages is frozen at 
$650,000 until January 1, 2009, after which time the cap will 
increase annually by $15,000 per year. Cap applies in aggregate 
to all claims and defendants arising from the same medical 
injury. (Cap also applies in wrongful death actions if the 
claim involves only one claimant or beneficiary). In wrongful 
death actions involving two or more claimants or beneficiaries, 
then the total cap on non-economic damages is $812,500 (125% of 
the cap). (2005); previous law upheld as constitutional, Murphy 
v. Edmunds, 325 MD 342, 601 A.2d 102 (1992).
    Massachusetts--$500,000 cap on non-economic damages, with 
exceptions for proof of substantial disfigurement or permanent 
loss or impairment, or other special circumstances which 
warrant a finding that imposition of such limitation would 
deprive the plaintiff of just compensation for the injuries 
sustained. (1986).
    Michigan--$280,000 cap on non-economic damages, adjusted 
annually for inflation, except in cases where the plaintiff is 
hemiplegic, paraplegic, or quadriplegic due to an injury to the 
brain or spinal cord, or where the plaintiff has permanently 
impaired cognitive capacity rendering him incapable of making 
independent, responsible life decisions and permanently 
incapable of independently performing the activities of normal, 
daily living, or the plaintiff has had permanent loss or damage 
to a reproductive organ resulting in the inability to 
procreate, then non-economic damages shall not exceed $500,000. 
As of 2003 the $280,000 cap is $359,000 and the $500,000 cap is 
$641,000. (1993) Upheld, Zdrojewski v. Murphy, 202 Mich. App. 
Lexis 1566 (2002); Upheld Smith v. Botsford General Hospital 
(6th Cir. 2005).
    Minnesota--None.
    Mississippi--$500,000 cap on non-economic damages per 
plaintiff for medical liability causes of action filed against 
a health care provider. (2004).
    Missouri--$350,000 cap on non-economic damages per 
plaintiff irrespective of the number of defendants. Law 
specifies that multiple caps cannot apply to a single 
defendant. The law also specifies that in a personal injury 
case a spouse who claims loss of consortium shall be considered 
the same plaintiff as their spouse. In wrongful death cases, 
all individuals asserting a claim shall be considered a single 
plaintiff. (2005); previous law upheld, Adams v. Children's 
Mercy Hospital, 848 S.W. 2d 535 (1993).
    Montana--$250,000 cap on non-economic damages per 
occurrence. If a single incident of malpractice injures 
multiple, unrelated patients, the $250,000 cap applies to each 
patient and all claims deriving from injuries to that patient. 
(1995, 1997).
    Nebraska--$1.75 million in total damages. Health care 
providers who qualify under the Hospital-Medical Liability Act 
(i.e. carry minimum levels of liability insurance and pay 
surcharge into excess coverage fund) shall not be liable for 
more than $500,000 in total damages. Any excess damages shall 
be paid from the excess coverage fund. (1976, 1984, 1986, 1992, 
2003); upheld, Prendergast v. Nelson, 256 N.W.2d 657 (1977); 
Gourley ex. rel Gourley v. Nebraska Methodist Health System 
Inc., 265 Neb. 918, 633 N.W.2d 43 (Neb. 2003).
    Nevada--$350,000 cap on non-economic damages awarded to 
each plaintiff from each defendant. (2004).
    New Hampshire--None; $875,000 cap on non-economic damages, 
overturned, Brannigan v. Usitalso, 587 A.2d 1232 (N.H. 1991). 
$250,000 cap on non-economic damages in medical malpractice, 
overturned, Carson v. Maurer, 424 A.2d 825 (N.H. 1980).
    New Jersey--None.
    New Mexico--$600,000 cap on total damages, excluding 
punitive damages and past and future medical care. Health care 
providers personal liability shall not exceed $200,000, any 
award in excess of this amount shall be paid by the patient 
compensation fund. (1992) Upheld, Fed. Express Corp. v. United 
States, 228 F. Supp. 2d 1267 (NM 2002).
    New York--None.
    North Carolina--None.
    North Dakota--$500,000 cap on non-economic damages. (1995) 
Economic damage awards in excess of $250,000 are subject to 
judicial review for reasonableness. (1987); previous law struck 
down as unconstitutional. Arneson v. Olson, 270 N.W.2d (N.D. 
1978).
    Ohio--Establishes a sliding cap on non-economic damages. 
The cap shall not exceed the greater of $250,000 or three times 
the plaintiff's economic loss up to a maximum of $350,000 for 
each plaintiff or $500,000 per occurrence. The maximum cap will 
increase to $500,000 per plaintiff or $1,000,000 per occurrence 
for a claim based on either (A) a permanent and substantial 
physical deformity, loss of use of a limb, or loss of a bodily 
organ system, or (B) a permanent physical functional injury 
that permanently prevents the injured person from being able to 
independently care for self and person life sustaining 
activities. (2002) Note: The Ohio Legislature's previous 
attempts to enact a law with a cap on non-economic damages were 
overturned by the Ohio Supreme Court. For example, $250,000-
500,000 sliding scale cap on non-economic damages, overturned, 
State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio 
3d 451, 715 N.E. 2d (1999).
    Oklahoma--Two caps, one for obstetric cases and care 
provided in an emergency room and a separate cap for all other 
medical liability causes of action. $300,000 cap on non-
economic damages for cases involving pregnancy, labor and 
delivery, care provided immediately post partum. The cap also 
applies in cases involving emergency-room care or medical 
services provided as a follow up to such care. The judge may 
lift the cap if the judge makes a finding, out of the presence 
of the jury, that there is clear and convincing evidence of 
negligence. The cap applies regardless of the number of parties 
against whom the medical negligence action is brought. (2003). 
$300,000 cap on non-economic damages for all other medical 
liability causes of action. The cap applies only if the 
defendant has made an offer of judgment (i.e. offer to settle) 
and the amount of the verdict awarded to the plaintiff is less 
than 1\1/2\ times the amount of the final offer of judgment. 
The cap applies to each medical injury regardless of the number 
of actions brought and adjusts annually based on any increases 
in the Consumer Price Index. The cap will not apply if nine or 
more members of the jury find by clear and convincing evidence 
that the defendant committed negligence or if nine or more 
members find by a preponderance of the evidence that the 
defendant's conduct was willful or wanton. These questions, 
however, will only be proposed to the jury if the judge makes a 
threshold finding that there is evidence to support such 
findings. (2004). Neither cap applies in wrongful death cases 
because the Oklahoma Constitution specifically limits damage 
limitations in those types of cases.
    Oregon--None; $500,000 cap on non-economic damages, 
overturned, Lakin v. Senco Products, 987 P.2d 463 (Or. 1999). 
However, an earlier decision, Greist v. Phillips, 322 Or. 281, 
906 P.2d 789 (1995), upheld the cap for wrongful death cases.
    Pennsylvania--None. Article III sec. 18 of Pennsylvania's 
Constitution prohibits limiting damages for personal injuries 
or death. Punitive damages are capped at 2 times actual 
damages.
    Rhode Island--None.
    South Carolina--$350,000 stacked cap on non-economic 
damages. A claim for non-economic damages in a medical 
liability action against a single health care provider or 
single health care institution cannot exceed $350,000. If the 
award is against more than one health care provider or 
institution, the total award for non-economic damages cannot 
exceed $1.05 million, with each defendant not liable for more 
than $350,000. The cap applies separately to each claimant and 
adjusts annually for inflation based on the Consumer Price 
Index. (2005).
    South Dakota--$500,000 cap on total general (non-economic) 
damages. (1985, revived by 1996 court decision). Struck down 
cap on total damages, revived cap on non-economic damages, 
Knowles ex. rel. Knowles v. United States, 544 N.W. 2d 183 (SD 
1996).
    Tennessee--None.
    Texas--$250,000 cap on non-economic damages for claims 
against physicians and other health care providers. The cap 
applies per claimant regardless of the number of defendants. 
Also provides a $250,000 cap on non-economic damages awarded 
against a single health care institution and a $500,000 cap on 
non-economic damages if a judgment is rendered against two or 
more health care institutions, with the total amount of non-
economic damages for each individual institution, not exceeding 
$250,000 per claimant, irrespective of the number defendants, 
causes of action, or vicarious liability theories involved. The 
total amount of noneconomic damages for health care 
institutions cannot exceed $500,000. Combining the liability 
limits for physicians, health care providers, and institutions, 
the maximum non economic damages that a claimant could recover 
in a health care liability claim is capped at $750,000. (2003). 
Proposition 12, a ballot initiative to amend the Texas 
Constitution to specifically allow the legislature to enact 
laws that place limits on non-economic damages in health care 
and medical liability cases, was approved by the voters on 
September 13, 2003. $500,000 cap on all civil damages for 
wrongful death, indexed for inflation since 1977. The cap does 
not apply to medical, hospital, and custodial care received 
before judgment or required in the future. In 2002 the cap 
reached approximately $1.4 million. (1977, limited by 1990 
court decision). $500,000 cap on non-economic damages (adjusted 
annually), overturned as applied to cases other than wrongful 
death, Rose v. Doctors Hospital, 801 S.W. 2d 841 (Tex. 1990).
    Utah--$450,000 cap on non-economic damages.
    Vermont--None.
    Virginia--$1.5 million cap on total damages for acts 
occurring on or after Aug. 1, 1999. This cap is increased by 
$50,000 annually beginning on or after July 1, 2000 until July 
1, 2006. On July 1, 2007 and July 1, 2008 the cap is increased 
by $75,000. The last increase shall be July 1, 2008. (1976, 
1977, 1983, 1999, 2001) Upheld, Etheridge, et.al. v. Medical 
Center Hospitals, 237 Va. 87, 376 S.E.2d 525 (Va. 1989).
    Washington--None; sliding cap on non-economic damages, 
overturned, Sophie v. Fiberboard Corp., 771 P.2d 711 (Wash. 
1989).
    West Virginia--$250,000 cap on non-economic damages per 
occurrence, regardless of the number of plaintiffs and number 
of defendants. The cap increases to $500,000 per occurrence, 
for the following types of injuries; permanent and substantial 
physical deformity, loss of use of a limb or loss of a bodily 
organ system; or permanent physical or mental functional injury 
that permanently prevents the injured person from being able to 
independently care for himself or herself and perform life 
sustaining activities. The limits only apply to defendants who 
have at least $1,000,000 per occurrence in medical liability 
insurance. The limits will be adjusted annually for inflation 
up to $375,000 per occurrence or $750,000 for injuries that 
fall within the exception. (2003). Upheld previous cap on non-
economic damages, Robinson v. Charleston Area Med. Center, 186 
W.Va. 720 (1991); Verba v. Ghaphery 552 S.E. 2d 406 (W.Va. 
2001).
    Wisconsin--$750,000 cap on non-economic damages. (Enacted 
2006). $350,000 cap on non economic medical malpractice damages 
overturned as unconstitutional. Ferdon v. Wisconsin Patients 
Compensation Fund, 701 N.W.2d. 440 (Wis. 2005).
    Wyoming--None; constitution prohibits caps.

     LIST OF STATES WHOSE STATE JUDGES HAVE ABUSED ``OPEN COURTS'' 
  PROVISIONS TO STRIKE DOWN TORT REFORMS ENACTED BY STATE LEGISLATURES

    State constitutions often contain provisions that are very 
malleable in the hands of activist state judges and provide an 
opportunity for a judge who perceives the judiciary to be the 
dominant branch of government to easily forget the appropriate 
powers of its co-equal branch, the legislature. For example, a 
number of state constitutions have so-called ``open courts'' 
provisions. As a practical matter, they are intended to provide 
citizens of a state with justice and reasonable access to the 
courts. Open court provisions, however, can be stretched to 
suggest that any time a legislature in any way limits any 
person's rights to sue, it is violative of the ``open courts'' 
provision. There is no state constitutional history that 
suggests this extreme result. Respect for fundamental 
principles of separation of powers counsels against such an 
interpretation. Nevertheless, in the area of civil justice 
reform and judicial nullification of legislative efforts to 
improve the system of justice, such interpretations have 
spread.
    The following cases are representative of those in which 
state courts have used a generic state constitutional provision 
providing that ``the courts shall be open'' to prohibit state 
legislatures from enacting tort reform:
    Jackson v. Mannesmann Demag Corp., 435 So. 2d 725 (Ala. 
1983) (holding statute of repose regarding improvements to real 
property violated open courts provision of state constitution)
    Smith v. Dep't of Ins., 507 So. 2d 1080 (Fla. 1987) 
(statute setting $450,000 limit on noneconomic damages awards 
violated access to courts provision of state constitution); 
Owens-Corning Fiberglass Corp. v. Corcoran, 679 So. 2d 291 
(Fla. Dist. Ct. App. 1996) (holding application of former 
statute of repose to latent asbestos injury violated access to 
courts provision of state constitution)
    Martin v. Richey, 711 N.E.2d 1273 (Ind. 1999) (finding two-
year occurrence-based statute of limitations as applied to 
plaintiff was an unconstitutional violation of the privileges 
and immunities clause and the open courts provision of the 
Indiana Constitution); Van Dusen v. Stotts, 712 N.E.2d 491 
(Ind. 1999) (holding same); Harris v. Raymond, 715 N.E.2d 388 
(Ind. 1999) (holding same)
    McCollum v. Sisters of Charity of Nazareth Health Corp., 
799 S.W.2d 15 (Ky. 1990) (holding five-year statute of repose 
for health care liability actions violated open courts 
provision of state constitution); Perkins v. N.E. Log Homes, 
808 S.W.2d 809 (Ky. 1991) (holding that seven-year statute of 
repose for improvements to real property violated state 
constitutional prohibition against ``special legislation'' and, 
according to the court, any remedial legislation would violate 
provisions in the state constitution providing for open courts 
and limits on the power of the legislature)
    Strahler v. St. Luke's Hosp., 706 S.W.2d 7 (Mo. 1986) 
(finding statute of limitations for health care liability 
actions violated access to courts provision of state 
constitution insofar as the statute applied to minors)
    Sorrell v. Thevenir, 633 N.E.2d 504 (Ohio 1994) (holding 
statute providing offset of collateral source benefits received 
by plaintiff violated right to jury trial, due process, equal 
protection, right to open courts, and right to meaningful 
recovery provisions of state constitution); Samuels v. Coil Bar 
Corp., 579 N.E.2d 558 (Ohio 1991) (finding same as applied to 
wrongful death actions)
    Daugaard v. Baltic Coop. Bldg. Supply Ass'n, 349 N.W.2d 419 
(S.D. 1984) (holding that six-year statute of repose for 
improvements to real property violated open courts provision of 
state constitution)

               LIST OF OTHER STATES WHOSE SUPREME COURTS 
                      HAVE NULLIFIED LEGAL REFORMS

    Alabama--Clark and Halliburton Industrial Services Division 
v. Container Corp. of America, 589 So. 2d 184 (Ala. 1991) 
(statute allowing for periodic payments of personal injury 
awards over $150,000 held unconstitutional under state 
constitution); Henderson v. Alabama Power Co., 627 So. 2d 878 
(Ala. 1993) (statute setting $250,000 limit on punitive damages 
awards held unconstitutional under state constitution); Moore 
v. Mobile Infirmary Association, 592 So. 2d 156 (Ala. 1991) 
(statute setting $400,000 limit on noneconomic damages awards 
in health care liability actions held unconstitutional under 
state constitution); Smith v. Schulte, 671 So. 2d 1334 (Ala.) 
(1987 statute setting $1 million aggregate limit on damages 
awards in health care liability actions held unconstitutional 
under state constitution), cert. denied, 517 U.S. 1220 (1996).
    Alaska--Turner Construction Co., Inc. v. Scales, 752 P.2d 
467 (Alaska 1988) (six-year statute of repose on suits filed 
against design professionals held unconstitutional under state 
constitution).
    Arizona--Anson v. American Motors Co., 747 P.2d 581 (Ariz. 
App. 1987) (two-year statute of limitations for wrongful death 
actions, with accrual at time of death, held unconstitutional 
under state constitution); Barrio v. San Manuel Division 
Hospital For Magma Copper Co., 692 P.2d 280 (Ariz. 1984) 
(statute of limitations which required minor injured when below 
age of seven to bring action for medical malpractice by the 
time she reached age ten held unconstitutional under state 
constitution); Hazine v. Montgomery Elevator Co., 861 P.2d 625 
(Ariz. 1993) (twelve-year product liability statute of repose 
held unconstitutional under state constitution); Kenyon v. 
Hammer, 688 P.2d 961 (Ariz. 1984) (three-year statute of 
limitations for wrongful death claim held unconstitutional 
under state constitution); Smith v. Myers, 887 P.2d 541 (1994) 
(periodic payments requirement found unconstitutional).
    Colorado--Austin v. Litvak, 682 P.2d 41 (Colo. 1984) 
(three-year statute of repose in medical malpractice actions 
held unconstitutional under state constitution insofar as the 
statute applied to persons whose claims were based on negligent 
misdiagnosis).
    Florida--Smith v. Department of Insurance, 507 So. 2d 1080 
(Fla. 1987) (statute setting $450,000 limit on noneconomic 
damages awards held unconstitutional under state constitution).
    Georgia--Denton v. Con-Way Southern Express, Inc., 402 
S.E.2d 269 (Ga. 1991) (statute authorizing admission of 
collateral sources of recovery available to plaintiffs seeking 
special damages for tortious injury held unconstitutional under 
state constitution), and Atlanta Oculoplasty Surgery, P.C. v. 
Nestlehutt, 691 S.E.2d 219 (Ga. 2010) (statute limiting awards 
of noneconomic damages in medical malpractice cases to a 
predetermined amount violated state constitutional right to 
jury trial).
    Illinois--Best v. Taylor Machine Works, Inc., 689 N.E.2d 
1057 (Ill. 1997) (Civil Justice Reform Amendments of 1995's 
$500,000 limit on noneconomic damages award and abolition of 
joint liability held unconstitutional under state 
constitution), and LeBron v. Gottlieb Memorial Hospital, 930 
N.E.2d 895 (Ill. 2010) (holding unconstitutional caps on non-
economic damages and requirement of periodic payments of 
damages).
    Indiana--Martin v. Richey, 711 N.E.2d 1273 (Ind. 1999) 
(two-year occurrence-based statute of limitations as applied to 
plaintiff was held unconstitutional under state constitution); 
Van Dusen v. Stotts, 712 N.E.2d 491 (Ind. 1999) (same); Harris 
v. Raymond, 715 N.E.2d 388 (Ind. 1999) (same).
    Kansas--Farley v. Engelken, 740 P.2d 1058 (Kan. 1987) 
(abrogation of collateral source rule in health care liability 
actions held unconstitutional under state constitution); Kansas 
Malpractice Victims Coalition v. Bell, 757 P.2d 251 (Kan. 1988) 
(Kansas Health Care Provider Insurance Availability Act 
provisions setting $1 million limit on aggregate damages in 
health care liability actions and provision requiring annuity 
for payments for future economic loss in all health care 
liability actions held unconstitutional under state 
constitution); Thompson v. KFB Insurance Co., 850 P.2d 773 
(Kan. 1993) (statute allowing evidence of collateral source 
benefits where claimant demands judgment for damages in excess 
of $150,000 held unconstitutional under state constitution).
    Kentucky--McCollum v. Sisters of Charity of Nazareth Health 
Corp., 799 S.W.2d 15 (Ky. 1990) (five-year statute of repose 
for health care liability actions held unconstitutional under 
state constitution); O'Bryan v. Hedgespeth, 892 S.W.2d 571 (Ky. 
1995) (statute allowing admission of evidence of collateral 
source payments in personal injury actions held 
unconstitutional under state constitution); Williams v. Wilson, 
972 S.W.2d 260 (Ky. 1998) (1988 punitive damages reform statute 
requiring a plaintiff to show that the defendant acted with 
``flagrant indifference to the rights of the plaintiff and with 
a subjective awareness that such conduct will result in human 
death or bodily harm'' as a predicate for punitive damages 
liability held unconstitutional under state constitution).
    Missouri--Strahler v. St. Luke's Hospital, 706 S.W.2d 7 
(Mo. 1986) (statute of limitations for health care liability 
actions held unconstitutional under state constitution insofar 
as the statute applied to minors).
    New Hampshire--Carson v. Maurer, 424 A.2d 825 (N.H. 1980) 
(this New Hampshire Supreme Court decision is, to date, the 
most sweeping repudiation of medical malpractice tort reform 
legislation on state constitutional grounds. A $250,000.00 
damage cap on non-economic damages was invalidated, along with 
restrictions on attorneys' fees, limitations on the collateral 
source rule, periodic damage payment provisions, a reduction of 
the existing statutes of limitations, generally and for minors, 
stricter requirements for expert testimony and notification of 
suit requirements); Brannigan v. Usitalo, 587 A.2d 1232 (N.H. 
1991) (statute limiting recovery for noneconomic loss to 
$875,000 in personal injury actions held unconstitutional under 
state constitution); Heath v. Sears, Roebuck & Co., 464 A.2d 
288 (N.H. 1983) (twelve-year statute of repose and three-year 
statute of limitations for product liability actions held 
unconstitutional under state constitution).
    North Dakota--Arneson v. Olson, 270 N.W. 2d (N.D. 1978) 
(struck down $500,000 cap on total non-economic damages saying 
cap constituted an unconstitutional deprivation of theright to 
a jury trial); Hanson v. Williams County, 389 N.W.2d 319 (N.D. 
1986) (ten-year product liability statute of repose held 
unconstitutional under state constitution).
    Ohio--State v. Ohio Academy of Trial Lawyers v. Sheward, 
715 N.E. 2d (1999) (court overturned caps as a violation of the 
due process clause; also found the entire bill unconstitutional 
as a violation of the one subject rule and separation of powers 
clause); Adamsky v. Buckeye Local School District, 653 N.E.2d 
212 (Ohio 1995) (two-year statute of limitations for personal 
injury actions against political subdivisions held 
unconstitutional under state constitution, as applied to 
minors); Crowe v. Owens Corning Fiberglas, 718 N.E.2d 923 (Ohio 
1999) (limitation on punitive damages held unconstitutional 
under state constitution); Gaines v. Preterm-Cleveland, Inc., 
514 N.E.2d 709 (Ohio 1987) (health care liability statute of 
repose held unconstitutional under state constitution as 
applied to adult litigants who, following discovery, did not 
have adequate time to file actions); Galayda v. Lake Hospital 
Systems, Inc., 644 N.E.2d 298 (Ohio 1994) (statute requiring 
periodic payments of future damages awards in medical 
malpractice suits held unconstitutional under state 
constitution), reconsideration denied, 644 N.E.2d 1389 (Ohio), 
cert. denied sub nom. Damian v. Galayda, 516 U.S. 810 (1995); 
Gladon v. Greater Cleveland Regional Transit Authority, 1994 WL 
78468 (Ohio App. Mar. 10, 1994) ($250,000 limit on noneconomic 
damages awards held unconstitutional under state constitution), 
rev'd on other grounds, 662 N.E.2d 287 (Ohio 1996); Hardy v. 
VerMeulen, 512 N.E.2d 626 (Ohio 1987) (statute barring health 
care liability claims brought more than four years after act or 
omission constituting alleged malpractice occurred, as applied 
to bar claims of health care liability plaintiffs who did not 
know or could not have known of their injuries, held 
unconstitutional under state constitution), cert. denied, 484 
U.S. 1066 (1988); Mominee v. Scherbarth, 503 N.E.2d 717 (Ohio 
1986) (statute which required health care liability actions to 
be brought within one year from date cause of action accrued, 
or four years from date alleged malpractice occurred, whichever 
came first, held unconstitutional under state constitution 
insofar as the statute applied to minors); Morris v. Savoy, 576 
N.E.2d 765 (Ohio 1991) ($200,000 limit on general damages in 
health care liability actions held unconstitutional under state 
constitution); Schwan v. Riverside Methodist Hospital, 452 
N.E.2d 1337 (Ohio 1983) (statute of limitations for health care 
liability actions, as it applied to minors, held 
unconstitutional under state constitution); Sorrell v. 
Thevenir, 633 N.E.2d 504 (Ohio 1994) (statute providing offset 
of collateral source benefits received by plaintiff held 
unconstitutional under state constitution); Samuels v. Coil Bar 
Corp., 579 N.E.2d 558 (Ohio Cm. Pl. 1991) (same as applied to 
wrongful death actions).
    Oklahoma--Woods v. Unity Health Center, Inc., 196 P.3d 529 
(Ok. 2008) (court overturned cap as a special law).
    Oregon--Lakin v. Senco Products, Inc., 987 P.2d 463 (Or. 
1999) ($500,000 limit on noneconomic damages in personal injury 
and wrongful death actions arising out of common law held 
unconstitutional under state constitution).
    Pennsylvania--Viadock v. Nesbitt Mem'l Hosp., 489 A.2d 240 
(Pa. Super. Ct. 1985) (finding that a collateral source 
modification was not severable from a medical malpractice 
arbitration statute, which was invalidated as a violation of 
the right to trial by jury).
    Rhode Island--Kennedy v. Cumberland Engineering Co., Inc., 
471 A.2d 195 (R.I. 1984) (ten-year statute of repose for 
product liability actions held unconstitutional under state 
constitution).
    South Dakota--Knowles v. Federal, 544 N.W.2d 183 (S.D. 
1996) ($1 million aggregate limit on economic and noneconomic 
damages in health care liability actions held unconstitutional 
under state constitution, but more limited statute capping 
noneconomic damages awards in health care liability actions at 
$500,000 remained in effect).
    Texas--Lucas v. Federal, 757 S.W.2d 687 (Tex. 1988) 
($500,000 aggregate limit on damages in health care liability 
actions held unconstitutional under state constitution); Nelson 
v. Krusen, 678 S.W.2d 918 (Tex. 1984) (two-year statute of 
limitations for medical malpractice actions held 
unconstitutional under state constitution).
    Utah--Berry v. Beech Aircraft Corp., 717 P.2d 670 (Utah 
1985) (statute of repose barring product liability claims six 
years after of purchase or ten years after date of manufacture 
of product held unconstitutional under state constitution); Lee 
v. Gaufin, 867 P.2d 572 (Utah 1993) (provision of Utah Health 
Care Malpractice Act subjecting minors to two-year statute of 
limitations and four-year statute of repose held 
unconstitutional under state constitution).
    Washington--Sofie v. Fibreboard Corp., 771 P.2d 711 (Wash. 
1989) (variable limit on noneconomic damages awards held 
unconstitutional under state constitution).
    Wisconsin--Ferdon v. Wisconsin Patient Compensation 
Fund,701 N.W.2d. 440 (Wis. 2005) (court held that cap on non-
economic damages violates the equal protection clause); Kohnke 
v. St. Paul Fire & Marine Insurance Co., 410 N.W.2d 585 (Wis. 
App. 1987) (medical malpractice statute of limitations held 
unconstitutional under state constitution), aff'd on other 
grounds, 424 N.W.2d 191 (Wis. 1988).
    Wyoming--Squillace v. Kelley, 990 P. 2d 497 (Wy. 1999) 
(striking down all legislative reforms on grounds they are an 
unconstitutional infringement on the judiciary's exclusive 
power to control practice and procedure in the state's courts).

        LIMITS ON ATTORNEYS FEES MEAN MORE MONEY GOES TO VICTIMS

    The HEALTH Act's limits on attorneys' fees--the same as 
those provided for in California's law--will reduce lawyers' 
incentives to bring frivolous lawsuits while allowing more 
money to go directly to injured patients.
    Currently, limited resources can either fund lawyers or 
they can fund patients in our health care system. Under the 
HEALTH Act, the larger a victim's demonstrable, real-life, 
quantifiable economic damages are, the more they will receive 
because lawyers will be allowed to take only 15% of awards over 
$600,000.
    Standard attorney contingency fee agreements allow lawyers 
to take one-third--a full 33.3%--of their client's awards, so 
victims are left with only 66%. The HEALTH Act would allow 
victims to keep roughly 75% of awards under $600,000, and 85% 
of awards over $600,000. Under the HEALTH Act, victims who 
demonstrate large losses get more, and lawyers get less.

            THE HEALTH ACT ALLOWS UNLIMITED ECONOMIC DAMAGES

    Nothing in the HEALTH Act denies injured plaintiffs the 
ability to obtain adequate redress, including compensation for 
100% of their economic losses (essentially anything to which a 
receipt can be attached), including their medical costs, the 
costs of pain relief medication, their lost wages, their future 
lost wages, rehabilitation costs, and any other economic out of 
pocket loss suffered as the result of a health care injury. 
``Economic damages'' include anything whose value can be 
quantified, including lost wages or home services (including 
lost services provided by stay-at-home mothers), medical costs, 
the costs of pain reducing drugs and lifetime rehabilitation 
care, and anything to which a receipt can be attached. Indeed, 
the terms ``noneconomic damages'' and ``pain and suffering 
damages'' (which the Federal legislation limits to $250,000 
unless a state law provides for a higher or lower limit) are 
misnomers: only ``economic damages''--which the Federal 
legislation does not limit--can be used to pay for drugs and 
services that actually reduce pain.
    Consequently, the HEALTH Act does nothing to hurt women and 
children. Any lawyer can easily produce charts proving the 
economic value of a stay-at-home-mom's services. Anything 
necessary to replace those services are economic damages that 
the HEALTH Act does not limit one bit. Similarly, the future 
income lost by an injured child constitutes economic damages 
that are easily proved and which would be fully available from 
responsible parties under the HEALTH Act.
    The following are some recent, very large awards to victims 
of medical malpractice under California's legal reforms, which 
cap non-economic damages at $250,000, but which do not cap 
quantifiable economic damages. The HEALTH Act is modeled on 
California's legal reform. These cases show that reasonable 
legal reforms such as those in the HEALTH Act still allow for 
very large, multi-million dollar awards to deserving victims. 
Also, loses due to disfigurement can be economically 
quantified. The Veterans Administration, for example, has a 
rating schedule that quantifies the economic costs of 
disfigurement.\142\
---------------------------------------------------------------------------
    \142\See L.E. Johnson, Robert D. Ley, and Paul T. Benshoof, 
``Estimating Economic Loss for a Facially Disfigured Minor: A Case 
Study,'' Journal of Legal Economics (July, 1993) (The V.A. rating 
schedule was obtained from a Veterans Benefits Office at the V.A. 
Center in St. Paul, Minnesota after being advised that the V.A. 
disability ratings are for economic loss exclusively. The percentage 
disability ratings contained in the V.A. S-R-D are based on case study 
data on economic loss from facial disfigurement. This data was 
initially collected during World War II by the V.A. and has been 
updated from that time . . . The first component of economic loss is 
termed social loss. Social loss refers to the additional cost of job 
search which results from facial disfigurement. The second component of 
economic loss is what the V.A. terms industrial loss. Industrial loss 
refers to lost income because of lost earning capacity.'').

August 2010, Contra Costa County
$5,500,000

February 2010, Riverside County
$16,500,000

February 2010, Los Angeles County
$12,000,000

November 2009, Los Angeles County
$5,000,000

October 2009, Sacramento County
$5,750,000

September 2009, Los Angeles County
$7,300,000

January 2009, San Diego County
$16,000,000

September 2008, Los Angeles County
$9,000,000

April 2008, San Francisco County
$5,100,000

July 2007, Los Angeles County
$96,400,000

June 2007, Orange County
$11,700,000

May 2007, San Diego County
$15,700,000

  THE KEY TO REDUCING HEALTH CARE COSTS IS A FIRM CAP ON NONECONOMIC 
                                DAMAGES

    Caps on noneconomic damages are essential to the success of 
the HEALTH Act's reforms. Indeed, the savings of $54 billion 
over ten years that CBO concluded would be significantly 
diminished if the cap were raised over time. The key to the 
success of the legal reforms in California is its cap on 
noneconomic damages at $250,000, which is not indexed to 
inflation. The recent reforms in Texas also do not index the 
caps to inflation. The California cap has stood the test of 
time and remains an effective check on medical professional 
liability rates precisely because it was not indexed to 
inflation back in 1975. What may have been described by some as 
an arbitrary figure in 1975 has become the keystone of the only 
proven, long-term, legislative solution to the current crisis 
in access to medical care. A 2010 study showed that doubling 
California's cap on noneconomic damages would cost that state 
between $1.3 and $2.4 billion in employee and retiree benefits 
over a 10-year period.\143\ If one extrapolates from that 
number, it becomes clear that linking H.R. 5's cap on 
noneconomic damages to the Consumer Price Index, or similarly 
linking it to inflation, would cost Federal taxpayers around 
$14 billion or more.
---------------------------------------------------------------------------
    \143\C. Paul Wazzan, Ph.D. and Dawn Eash, M.S., ``Estimated 
Increases in State of California Employee and Retiree Costs Caused by 
Doubling the MICRA Cap'' (June 9, 2010) at 3.
---------------------------------------------------------------------------
    The Consumer Price Index and noneconomic damages are also 
apples and oranges. ``Pain and suffering'' cannot be measured, 
and there is no consumer price index for ``pain and 
suffering.'' However, quantifiable economic damages are not 
limited by the HEALTH Act, and because those damages can be 
measured, they can and are adjusted upward in future years to 
account for inflationary effects on economic goods and services 
that can be quantified.

                CONGRESS SHOULD ENACT A FAIR SHARE RULE

    Respect for the law is fostered when it is fair and just 
and punishments are proportionate to the wrongs committed. As 
Thomas Jefferson noted, ``if the punishment were only 
proportional to the injury, men would feel that their 
inclination as well as their duty to see the laws 
observed.''\144\
---------------------------------------------------------------------------
    \144\Thomas Jefferson, A Bill for Proportioning Crimes and 
Punishments in Cases Heretofore Capital, in 2 The Papers of Thomas 
Jefferson 492, 493 (Julian P. Boyd ed., 1950).
---------------------------------------------------------------------------
    The rule of joint liability, commonly called joint and 
several liability, provides that when two or more persons 
engage in conduct that might subject them to individual 
liability and their conduct produces a single injury, each 
defendant will be liable for the total amount of damages.\145\ 
Joint liability is unfair because it puts full responsibility 
on those who may have been only marginally at fault.\146\
---------------------------------------------------------------------------
    \145\See Coney v. J.L.G. Indus., Inc., 454 N.E.2d 197 (Ill. 1983).
    \146\For example, in Walt Disney World Co. v. Wood, 515 So.2d 198 
(Fla. 1987), Disney was required to pay an entire damages award, even 
though it was found only 1% at fault for the claimant's harm.
---------------------------------------------------------------------------
    Relevant to the ``fair share'' rule in the HEALTH Act are 
Senator Lieberman's observations that

        There is a concept, joint and several liability, 
        started out in the law as a way of proportioning 
        responsibility when an accident was caused by a number 
        of different parties working together in a way that 
        caused negligence, and often it was not clear which one 
        actually caused it. So they said everybody could be 
        held liable regardless of the percentage of negligence. 
        It now has grown to a point where what it really means 
        is that somebody who is not liable, or liable very 
        little, if they happen to have deep pockets, they can 
        be held fully liable. That is the wrong message to 
        send. . . . If you hurt somebody, you have to pay. If 
        you do not, you should not have to pay. What kind of 
        cynicism is developed when somebody who did little or 
        no wrong ends up having to pay the whole bill because 
        somebody else slipped up.\147\
---------------------------------------------------------------------------
    \147\Senator Lieberman, floor statement on the Common Sense Product 
Liability and Legal Reform Act (April 27, 1995).

    Joint and several liability, although motivated by a desire 
to insure that plaintiffs are made whole, leads to a search by 
plaintiffs' attorneys for ``deep pockets'' and to a 
proliferation of lawsuits against those minimally liable or not 
liable at all. The HEALTH Act, by providing for a ``fair 
share'' rule that apportions damages in proportion to a 
defendant's degree of fault, prevents unjust situations in 
which hospitals can be forced to pay for all damages resulting 
from an injury even when the hospital is minimally at fault. 
For example, say a drug dealer staggers into the emergency room 
with a gunshot wound after a deal goes bad. The surgeon who 
works on him does the best he can, but it is not perfect. The 
drug dealer sues.\148\ The jury finds the drug dealer 
responsible for the vast majority of his own injuries, but it 
also finds the hospital 1% responsible because the physician 
was fatigued after working too long. Today the hospital can be 
made to pay 100% of the damages if no other defendant has the 
means to pay their share of the damages. That is unfair.
---------------------------------------------------------------------------
    \148\This hypothetical is not fanciful. See Ray Flanagan, ``After 
Stabbing Son, Mom Sues Doctors,'' The Scranton Time Tribune (May 29, 
2002) (``Mrs. Taylor and her husband, Brian, are suing . . . the 
obstetricians who treated her in the months before she exploded in 
violence that left her son, Zachary, with two punctured lungs, a 
severed jugular vein and scalp wounds on July 14, 2000 . . . They 
accuse the doctors and their employers of not adequately responding as 
she became more psychotic, delusional and depressed as the end of her 
pregnancy neared.'').
---------------------------------------------------------------------------
    The Volunteer Protection Act of 1997\149\ abolished joint 
liability for non-economic damages for volunteers of nonprofit 
organizations. That law was overwhelmingly supported by a 
bipartisan majority of Congress.\150\ Joint liability also 
brought about a serious public health crisis that critically 
threatened the availability of implantable medical devices, 
such as pacemakers, heart valves, artificial blood vessels, and 
hip and knee joints. Companies had ceased supplying raw 
materials and component parts to medical implant manufacturers 
because they found the costs of responding to litigation far 
exceeded potential sales revenues, even though courts were not 
finding the suppliers liable. Congress responded to the crisis 
and enacted legislation, the Biomaterials Access Assurance Act 
of 1998,\151\ that allows medical device suppliers to obtain 
early dismissal, without extensive discovery or other legal 
costs, in certain tort suits involving finished medical 
implants.
---------------------------------------------------------------------------
    \149\Pub. L. No. 105-19, 111 Stat. 218.
    \150\See Dan Carney, Volunteer Liability Limit Heads to President, 
Cong. Q., May 24, 1997, at 1199 (``The measure passed the House on May 
21 by a vote of 390-35, and the Senate cleared it by voice vote later 
that day. An earlier Senate version passed May 1 by a vote of 99-1.'') 
(omitting references to bill numbers).
    \151\P.L. No. 105-230, 21 U.S.C. Sec. Sec. 1601-1606.
---------------------------------------------------------------------------
    As Senator Lieberman has observed,

        Consumers are the ones who suffer when valuable 
        innovations do not occur or when needed products, like 
        life-saving medical devices, do not come to market or 
        are not available in our country any longer because no 
        one will supply the necessary raw materials. The 
        inadequacies and excesses of our product liability 
        system are quite literally matters of life and death 
        for some people whose lives depend on medical devices 
        that may no longer be available in the United 
        States.\152\
---------------------------------------------------------------------------
    \152\Senator Lieberman, floor statement on the Common Sense Product 
Liability and Legal Reform Act (April 27, 1995).
---------------------------------------------------------------------------

             THE HEALTH ACT DOES NOT CAP PUNITIVE DAMAGES, 
          BUT DOES INCLUDE REASONABLE GUIDELINES FOR THEIR USE

    The United States Supreme Court has observed that punitive 
damages have ``run wild'' in the United States, jeopardizing 
fundamental constitutional rights.\153\ The Supreme Court has 
also emphasized that ``the impact of [a punitive damages award] 
is unpredictable and potentially substantial.''\154\
---------------------------------------------------------------------------
    \153\Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1, 18 (1991). 
See also Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415, 432 (1994) 
(stating that punitive damages ``pose an acute danger of arbitrary 
deprivation of property,'' raising serious due process concerns).
    \154\International Bhd. of Elec. Workers v. Foust, 442 U.S. 42, 50 
(1979).
---------------------------------------------------------------------------
    The HEALTH Act does not cap punitive damages. Rather, it 
includes reasonable guidelines that would govern their award. 
Under these guidelines, a punitive damages award could not 
exceed the greater of $250,000, or two times the amount of 
economic damages that are awarded (and economic damages under 
the HEALTH Act are not limited at all). Federal legislation 
should put reasonable parameters on punitive damages to make 
the punishment fit the offense.\155\ Proportionality has been 
an important part of the United States Supreme Court's 
consideration of the validity of criminal punishment.\156\ Even 
serious crimes such as larceny, robbery, and arson have 
sentences defined with a maximum set forth in a statute.\157\ 
As former Supreme Court Justice Lewis Powell wrote, ``It is 
long past time to bring the law of punitive damages into 
conformity with our notions of just punishment.''\158\ Under 
the HEALTH Act, the larger the economic losses suffered by the 
victim, the larger the punishment can be.
---------------------------------------------------------------------------
    \155\Congress included a cap on punitive damages for individuals 
and small businesses in the Year 2000 Readiness and Responsibility Act, 
Pub. L. 106-37, 113 Stat. 135 (1999). The ``Y2K Act'' established 
procedures and legal standards for lawsuits stemming from Year 2000 
date-related computer failures.
    \156\See Solem v. Helm, 463 U.S. 277, 284 (1983) (``The principle 
that a punishment should be proportionate to the crime is deeply rooted 
and frequently repeated in common-law jurisprudence''); Weems. v. 
United States, 217 U.S. 349, 366-67 (1910) (it is ``a precept of the 
fundamental law'' as well as ``a precept of justice that punishment 
should be graduated and proportioned to the offense'').
    \157\Some examples of Federal criminal fines, even for particularly 
egregious crimes, do not exceed $250,000 and include the following: 
tampering with consumer products ($250,000 if death results), U.S. 
Sentencing Guidelines Manual Sec. Sec. 2N1.1, 5E1.2 (1998); assault on 
the President ($30,000), U.S. Sentencing Guidelines Manual 
Sec. Sec. 2A6.1, 5E1.2 (1998); bank robbery ($75,000), U.S. Sentencing 
Guidelines Manual Sec. Sec. 2B3.1, 5E1.2; and sexual exploitation of 
children ($100,000), U.S. Sentencing Guidelines Manual Sec. Sec. 2G2, 
5E1.2 (1998). See generally Jonathan Kagan, Comment, Toward a Uniform 
Application of Punishment: Using the Federal Sentencing Guidelines as a 
Model for Punitive Damages Reform, 40 U.C.L.A. L. Rev. 753 (1993).
    \158\Lewis Powell, ``The Bizarre Results of Punitive Damages,'' 
Wall Street Journal (March 8, 1995), at A21.
---------------------------------------------------------------------------
    Ten states base punitive damages awards on a similar 
formula (AL, AK, CO, CT, FL, IN, NJ, NC, ND, TX). At the state 
level, limits on punitive damages awards exist in a number of 
states.\159\
---------------------------------------------------------------------------
    \159\See Ala. Code Sec. 6-11-21 (1999); Alaska Admin. Code tit. 58 
Sec. 9.17.020(f)-(h); Colo. Rev. Stat. Sec. 13-21-102(1)(a); Conn. Gen. 
Stat. Sec. 52-240b; Fla. Stat. Ann. Sec. 768.73(1)(b); Ind. Code Ann. 
Sec. 34-51-3-4; Kan. Stat. Ann. Sec. 60-3701; N.J. Stat. Ann. 
Sec. 2A:15-5.14; N.C. Gen. Stat. Sec. 1D-25; N.D. Cent. Code 
Sec. 32.03.2-11(4); Okla. Stat. tit. 23 Sec. 9.1; Tex. Civ. Prac. & 
Rem. Code Ann. Sec. 41.008; Va. Code Ann. Sec. 8.01-38.1.
---------------------------------------------------------------------------
    Academic groups have also recommended limiting punitive 
damages to prevent excessive punitive damages awards.\160\
---------------------------------------------------------------------------
    \160\See American Bar Association, Special Committee on Punitive 
Damages of the American Bar Association, Section on Litigation, 
Punitive Damages: A Constructive Examination (1986) at 64-66 
(recommending that punitive damages awards in excess of three-to-one 
ratio to compensatory damages be considered presumptively 
``excessive''); American College of Trial Lawyers, Report on Punitive 
Damages of the Committee on Special Problems in the Administration of 
Justice 15-16 (1989), at 15 (proposing that punitive damages be awarded 
up to two times a plaintiff's compensatory damages or $250,000, 
whichever is greater); American Law Institute, 2 Enterprise 
Responsibility for Personal Injury--Reporters' Study (1991), at 258-59 
(endorsing concept of ratio coupled with alternative monetary ceiling).
---------------------------------------------------------------------------
    Opponents of punitive damages reform argue that changes in 
the law are not needed because large punitive damages awards 
are often reduced on appeal. However, the practical reality is 
that the impact of potentially infinite punitive damages 
stretches beyond an actual award. As Yale law professor George 
Priest has observed: ``[T]he availability of unlimited punitive 
damages affects the 95% to 98% of cases that settle out of 
court prior to trial. It is obvious and indisputable that a 
punitive damages claim increases the magnitude of the ultimate 
settlement and, indeed, affects the entire settlement process, 
increasing the likelihood of litigation.''\161\
---------------------------------------------------------------------------
    \161\George L. Priest, Punitive Damages Reform: The Case of 
Alabama, 56 La. L. Rev. 825, 830 (1996).
---------------------------------------------------------------------------
    It has also been argued that unlimited punitive damages are 
needed to police wrongdoing. However, there is no credible 
evidence that the behavior of profit-making enterprises is less 
safe in either those states that have set limits on punitive 
damages or in the six states--Louisiana, Nebraska, Washington, 
New Hampshire, Massachusetts, and Michigan--that do not permit 
punitive damages at all.\162\ Furthermore, plaintiffs in these 
six states have no more difficulty obtaining legal 
representation than in those states where punitive damages are 
potentially limitless.
---------------------------------------------------------------------------
    \162\See W. Kip Viscusi, Punitive Damages: The Social Costs of 
Punitive Damages Against Corporations In Environmental and Safety 
Torts, 87 Geo. L.J. 285, 294 (1998).
---------------------------------------------------------------------------
    Regarding reasonable guidelines for punitive damages, 
Senator Lieberman has supported an amendment providing that 
``punitive damages, which have been much discussed here and are 
an essential part of the continued bullying and bluffing that 
goes on in our tort system--be limited to $250,000 or three 
times economic damages.''\163\ The HEALTH Act limits punitive 
damages to two times economic damages.
---------------------------------------------------------------------------
    \163\Senator Lieberman, floor statement on the Common Sense Product 
Liability and Legal Reform Act (April 27, 1995).
---------------------------------------------------------------------------

      THE ``CLEAR AND CONVINCING'' RULE IS APPROPRIATELY APPLIED 
             TO CLAIMS FOR QUASI-CRIMINAL PUNITIVE DAMAGES

    The HEALTH Act provides that punitive damages may be 
awarded against a person in a health care lawsuit only if it is 
proven by clear and convincing evidence that such person acted 
with malicious intent to injure the claimant, or that such 
person deliberately failed to avoid unnecessary injury that 
such person knew the claimant was substantially certain to 
suffer. The ``clear and convincing evidence'' burden of proof 
standard is appropriate because it reflects the quasi-criminal 
nature of punitive damages. Such a standard takes a middle 
ground between the burden of proof standard ordinarily used in 
civil cases--that is, proof by a ``preponderance of the 
evidence''--and the criminal law standard--that is, proof 
``beyond a reasonable doubt.''
    The ``clear and convincing evidence'' standard is the law 
in twenty-nine states and the District of Columbia\164\ and it 
has been recommended by the principal academic groups that have 
analyzed the law of punitive damages over the past 15 years, 
including the American Bar Association, the American College of 
Trial Lawyers, and the National Conference of Commissioners on 
Uniform State Laws.\165\ The Supreme Court has also 
specifically endorsed the ``clear and convincing evidence'' 
standard in punitive damages cases.\166\ There is also support 
for the ``clear and convincing evidence'' standard at the 
Federal level. The Volunteer Protection Act of 1997,\167\ which 
was enacted with strong bipartisan support, requires ``clear 
and convincing evidence'' of punitive damages liability before 
punitive damages can be imposed against volunteers of nonprofit 
organizations.
---------------------------------------------------------------------------
    \164\See Ala. Code Sec. 6-11-20; Alaska Stat. Sec. 09.17.020; Cal. 
Civ. Code Sec. 3294(a); Fla. Stat. ch. 768.73; Ga. Code Ann. Sec. 51-
12-5.1; Iowa Code Ann. Sec. 668A.1; Kan. Stat. Ann. Sec. 60-3701(c); 
Ky. Rev. Stat. Ann. Sec. 411.184(2); Minn. Stat. Ann. Sec. 549.20; 
Miss. Code Ann. Sec. 11-1-65(1)(a); Mont. Code Ann. Sec. 27-1-221(5); 
N.J. Stat. Ann. Sec. 2A:15-5.12; Nev. Rev. Stat. Ann. Sec. 42-005(1); 
N.C. Gen. Stat. 10-15(b); N.D. Cent. Code Sec. 32-03.2-11; Ohio Rev. 
Code Ann. Sec. 2307.80(A); Okla. Stat. Ann. tit. 23, Sec. 9.1; Or. Rev. 
Stat. Sec. 18.537; S.C. Code Ann. Sec. 15-33-135; S.D. Codified Laws 
Ann. Sec. 21-1-4.1; Tex. Civ. Prac. & Rem. Code Sec. 41.003; Utah Code 
Ann. Sec. 78-18-1; Linthicum v. Nationwide Life Ins. Co., 723 P.2d 675 
(Ariz. 1986); Jonathan Woodner, Co. v. Breeden, 665 A.2d 929 (D.C. 
1995); Masaki v. General Motors Corp., 780 P.2d 566 (Haw. 1989); 
Travelers Indem. Co. v. Armstrong, 442 N.E.2d 349 (Ind. 1982); Tuttel 
v. Raymond, 494 A.2d 1353 (Me. 1985); Owens-Illinois v. Zenobia, 601 
A.2d 633 (Md. 1992); Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104 
(Mo. 1996); Hodges v. S.C. Toof & Co., 833 S.W.2d 896 (Tenn. 1992); 
Wangen v. Ford Motor Co., 294 N.W.2d 437 (Wis. 1980). One state, 
Colorado, requires proof ``beyond a reasonable doubt'' in punitive 
damages cases. See Colo. Rev. Stat. Sec. 13-25-127(2).
    \165\See American Bar Association, Special Committee on Punitive 
Damages of the American Bar Association, Section on Litigation, 
Punitive Damages: A Constructive Examination 19 (1986); American 
College of Trial Lawyers, Report on Punitive Damages of the Committee 
on Special Problems in the Administration of Justice 15-16 (1989); 
National Conference Of Commissioners On Uniform State Laws, Uniform Law 
Commissioners' Model Punitive Damages Act Sec. 5 (approved on July18, 
1996); see also American Law Institute, 2 Enterprise Responsibility for 
Personal Injury--Reporters' Study 248-49 (1991).
    \166\See Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1, 23 
n.11 (1991) (stating that ``[t]here is much to be said in favor of a 
state's requiring, as many do . . . a standard of `clear and convincing 
evidence''').
    \167\Pub. L. No. 105-19, 111 Stat. 218.
---------------------------------------------------------------------------

        BIFURCATED PROCEDURES FOR CONSIDERING PUNITIVE DAMAGES 
                 PREVENTS UNFAIR AND PREJUDICIAL AWARDS

    The HEALTH Act also contains a procedural reform called 
``bifurcation.'' Under such a procedure, at either party's 
request, a trial would be divided so that the proceedings on 
punitive damages would be separate from and subsequent to the 
proceedings on compensatory damages. This procedure would 
achieve judicial economy by having the same jury determine both 
compensatory damages and punitive damages issues.
    Bifurcated trials are fair because they prevent evidence 
that is highly prejudicial and relevant only to the issue of 
punishment from being heard by jurors and improperly considered 
when they are determining underlying liability. For example, 
plaintiffs' lawyers routinely introduce evidence of a company's 
net worth. Although a jury is often instructed to ignore such 
evidence unless it decides to punish the defendant, this is 
very difficult as a practical matter for jurors to do. The net 
result may be that jurors overlook key issues regarding whether 
a defendant is liable for compensatory damages and make an 
award simply because they believe the defendant can afford to 
pay it. Bifurcation would help prevent that unfair result 
because evidence of the defendant's net worth would be 
inadmissible in the first, compensatory damages phase of the 
case. Bifurcation also helps jurors compartmentalize a trial, 
allowing them to more easily separate the burden of proof that 
is required for compensatory damage awards--that is, proof by a 
preponderance of the evidence--from a higher burden of proof 
for punitive damages, that is, proof by clear and convincing 
evidence.
    Bifurcation of punitive damages trials is supported by the 
American Bar Association, the American College of Trial 
Lawyers, and the National Conference of Commissioners on 
Uniform State Laws, among other well-known organizations.\168\
---------------------------------------------------------------------------
    \168\See American Bar Association, Special Committee on Punitive 
Damages of the American Bar Association, Section on Litigation, 
Punitive Damages: A Constructive Examination (1986) at 19; American 
College of Trial Lawyers, Report on Punitive Damages of the Committee 
on Special Problems in the Administration of Justice (1989) at 18-19; 
National Conference Of Commissioners On Uniform State Laws, Uniform Law 
Commissioners' Model Punitive Damages Act Sec. 5 (approved on July 18, 
1996) at Sec. 11; American Law Institute, 2 Enterprise Responsibility 
for Personal Injury--Reporters' Study 248-49 (1991) at 255 n.41.
---------------------------------------------------------------------------

   CONGRESS SHOULD ENACT A SAFE HARBOR FROM PUNITIVE DAMAGES FOR FDA 
                               COMPLIANCE

    Litigation is threatening the viability of the life-saving 
drug industry.\169\ To help encourage new drug development and 
contain the costs of life-saving drugs, the HEALTH Act contains 
a safe harbor from punitive damages for defendants whose drugs 
or medical products comply with rigorous regulations.
---------------------------------------------------------------------------
    \169\See Michael Freedman, ``The Tort Mess'' Forbes (May 13, 2002) 
(``The pharmaceutical industry has always been a ripe target for suits. 
The difference nowadays is simply that the dollar amounts have gotten 
bigger . . . If a drug saves 100 lives for every one it loses, someone 
who faces certain death should not hesitate to use it. But what happens 
if the tort system says every death must be paid for? The average 
payout on a wrongful death claim increased from $1 million in 1994 to 
$5.7 million in 2000 (the most recent data point available), according 
to Jury Verdict Research. To merely break even, the drug's maker would 
have to charge $57,000 for every dose. It can't get away with that. So 
a potential wonder drug may never see the light of day. A study in the 
Journal of the American Medical Association estimates that 100,000 
people die each year in the U.S. from drug-related deaths. If the 
families of each sued and won that average of $5.7 million, total 
liability would hit $570 billion. That's twice the combined revenues of 
the top 12 drug companies . . . Steven Garber, a researcher at the Rand 
Research Institute for Civil Justice, says drug companies are willing 
to take on the risk of lawsuits in marketing blockbusters like Viagra 
and Vioxx. But in other cases the chance of liability is too great. 
Garber says companies once stopped making new products for use during 
pregnancy because of the high risk of birth defects. Companies also 
limit research on orphan drugs--those that cure rare, often fatal 
illnesses--because the potential tort liability outweighs the profit 
potential.'').
---------------------------------------------------------------------------
    FDA standards and regulations are rigorous. The regulatory 
objectives of the Food, Drug, and Cosmetics Act (``FDCA'') are 
to ensure that the manufacturer shares all risk information 
with the FDA so that the agency may make informed risk-benefit 
judgments about the utility of a pharmaceutical. These 
judgments occur throughout the life of the drug. The agency 
determines which drugs reach the market and the labeling for 
those that do. The receipt of new safety information can lead 
the agency, after holding a hearing, to withdraw approval for 
marketing of a drug.\170\ The Secretary of Health and Human 
Services also has the authority to order the withdrawal of 
marketing approval without a hearing where there appears to be 
an ``imminent hazard to public health.''\171\
---------------------------------------------------------------------------
    \170\See 21 U.S.C. Sec. 355(e)(1); 21 C.F.R. Sec. 5.82.
    \171\See 21 U.S.C. Sec. 355(e).
---------------------------------------------------------------------------
    To obtain FDA approval for marketing a prescription drug, a 
pharmaceutical applicant must generate substantial pre-
marketing safety and efficacy information through human 
clinical trials. The FDA must ensure that the proposed new drug 
complies with the FDCA mandate that safety be established and 
that ``substantial evidence'' of efficacy be demonstrated for 
the drug's proposed uses.\172\ The FDA review process often 
takes years of evaluation after the NDA's submission. 
Ultimately, approval by the FDA reflects a risk-benefit 
judgment that the product will enhance public health. The 
entire NDA process is a lengthy one, typically taking between 
five and seven years to complete.
---------------------------------------------------------------------------
    \172\See 21 U.S.C. Sec. 355(d) (1988) (``[S]ubstantial evidence'' 
means evidence consisting of adequate and well-controlled 
investigations, including clinical investigations, by experts qualified 
. . . to evaluate the effectiveness of the drug involved, on the basis 
of which it could fairly and responsibly be concluded by such experts 
that the drug will have the effect it purports or is represented to 
have under the conditions of use prescribed, recommended, or suggested 
in the labeling or proposed labeling thereof.'').
---------------------------------------------------------------------------
    The FDCA and its implementing regulations ensure that a 
manufacturer shares risk information with the FDA even after 
the product has been marketed.\173\ Post-marketing surveillance 
consists of two primary components: reports of individual 
adverse experiences and epidemiologic studies. Serious 
reactions must be reported within fifteen working days of 
receipt of the information.\174\ A comprehensive, post-
marketing system of reporting and record-keeping requirements 
ensures that the manufacturer reports adverse drug experiences 
discovered in clinical, epidemiological, or surveillance 
studies, through review of the medical literature, or 
otherwise.\175\ Post-marketing reporting obligations include 
the disclosure of data regarding adverse reactions outside the 
United States.
---------------------------------------------------------------------------
    \173\See 21 C.F.R. Sec. 314.80.
    \174\See 21 C.F.R. Sec. 314.80(c)(1).
    \175\See 21 C.F.R. Sec. Sec. 310.303(a), 314.80(c).
---------------------------------------------------------------------------
    A few states have already specifically focused on 
pharmaceuticals and punitive damages and statutorily provide an 
FDA regulatory compliance defense against such damages.\176\
---------------------------------------------------------------------------
    \176\The five states that have proscribed punitive damages where 
the manufacturer has complied with the FDCA are Arizona, 
Az.Rev.State.Ann. Sec. 12-701; New Jersey, N.J.Sata.Ann. Sec. 2A:58C-
5(c); Ohio, Ohio.Rev.Code Ann. Sec. 2307.80(c); Oregon, Or.Rev.Stat. 
Sec. 30.927; and Utah, Utah Code Ann. Sec. 78-18-2.
---------------------------------------------------------------------------
    Research has also confirmed that the reason drug prices 
generally are so high in the United States compared to Canada, 
for example, is because of the much larger liability risks 
drugs are exposed to in this country. One researcher, for 
example, has concluded that

        A large part of the observed variation in the price 
        differential [of drugs in the United States and Canada] 
        is attributable to anticipated liability cost, and 
        liability effects explain virtually all of the very big 
        price differences observed. . . . [T]his work indicates 
        that liability costs must have a role in any complete 
        explanation of international price differences. The 
        fact that liability risk plays such a vital role in the 
        model implies that any study of international drug 
        pricing which ignores differences in tort law 
        environments across countries is seriously flawed. The 
        size of these effects is simply too large to 
        ignore.\177\
---------------------------------------------------------------------------
    \177\Richard Manning, ``Products Liability and Prescription Drug 
Prices in Canada and the United States,'' 40 Journal of Law and 
Economics 203, 234 (1997).

    Relevant to the HEALTH Act's safe harbor from punitive 
damages for FDA-approved products is Senator Lieberman's 
observation that ``Consumers are the ones who suffer when 
valuable innovations do not occur or when needed products, like 
life-saving medical devices, do not come to market or are not 
available in our country any longer because no one will supply 
the necessary raw materials. The inadequacies and excesses of 
our product liability system are quite literally matters of 
life and death for some people whose lives depend on medical 
devices that may no longer be available in the United 
States.''\178\
---------------------------------------------------------------------------
    \178\Senator Lieberman, floor statement on the Common Sense Product 
Liability and Legal Reform Act (April 27, 1995).
---------------------------------------------------------------------------

                         STATUTE OF LIMITATIONS

    Statutes of limitation define the time period following an 
injury in which a suit must be brought, in order to protect 
defendants from the prejudice of stale claims by requiring 
trials while the best evidence is still available. The best way 
to allow every patient his or her day in court while preventing 
prejudice to health care providers is to codify a reasonable 
statute of limitations, which the HEALTH Act does.
    The HEALTH Act provides that a medical malpractice lawsuit 
must be filed no later than one year after a person discovers 
an injury, or within three years at the latest. The HEALTH Act 
makes an exception for minors under the age of 6, extending the 
time within a suit must be filed to the longer of 3 years or 
the date on which the minor reaches the age of 8. These 
provisions are based on California's MICRA law.\179\ The HEALTH 
Act's statute of limitations provisions are designed to 
protect, for example, OB-GYN's, who should not have to worry 
about being sued a decade or more after they've delivered a 
baby. Also, like the HEALTH Act, California's MICRA law 
includes no exception for latent injuries.
---------------------------------------------------------------------------
    \179\See Cal.C.C.P. Sec. 340.5.
---------------------------------------------------------------------------

              STATES ARE FREE TO ALLOW FOR HIGHER AWARDS 
                          UNDER THE HEALTH ACT

    States remain free to define how quantifiable economic 
losses are calculated in any case. Under the HEALTH Act, the 
only damages that would be limited would be those for 
unquantifiable ``pain and suffering'' damages, and ``pain and 
suffering'' damages could be up to $250,000. Also available 
under the HEALTH Act are punitive damages up to twice the 
amount of economic damages awarded. Further, the HEALTH Act 
saves from preemption any state law that limits noneconomic or 
punitive damages at a specific amount higher than the limits 
provided for in the HEALTH Act. That means that if a state law 
limited noneconomic damages to $10 billion, that state law 
would govern, even under the HEALTH Act.

                                Hearings

    The Committee on the Judiciary held an oversight hearing on 
the need for medical liability reform on January 20, 2011. 
Testimony was received from Dr. Stuart L. Weinstein, Health 
Coalition on Liability and Access; Joanne Doroshow, Executive 
Director, Center for Justice & Democracy; and Dr. Ardis Hoven, 
Chairwoman, American Medical Association Board of Trustees.

                        Committee Consideration

    On February 16, 2011, the Committee met in open session and 
ordered the bill H.R. 5 favorably reported with an amendment, 
by a roll call vote of 18 to 15, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 5:
    1. An amendment by Mr. Conyers to exempt claims based on 
intentional tort liability from the bill's coverage. Defeated 
10 to 19.

                                                 ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................
Mr. Pierluisi...................................................
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             10              19
----------------------------------------------------------------------------------------------------------------

    2. An amendment by Ms. Waters to exclude medical products 
that are defective as result of negligence in the manufacture 
or distribution of the product from the bill's punitive damage 
exemption for products that comply with FDA Standards. Defeated 
11 to 16.

                                                 ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................
Mr. Reed........................................................                              X
Mr. Griffin.....................................................
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             11              16
----------------------------------------------------------------------------------------------------------------

    3. An amendment by Mr. Nadler to add restrictions on when 
judges may issue protective orders and the sealing of cases and 
settlements. Defeated 10 to 15.

                                                 ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................
Mr. Reed........................................................                              X
Mr. Griffin.....................................................
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             10              15
----------------------------------------------------------------------------------------------------------------

    4. An amendment by Ms. Sanchez to exclude lawsuits against 
nursing homes from the bill's limits on noneconomic and 
punitive damages. Defeated 11 to 14.

                                                 ROLLCALL NO. 4
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................                              X
Ms. Waters......................................................                              X
Mr. Cohen.......................................................                              X
Mr. Johnson.....................................................
Mr. Pierluisi...................................................
Mr. Quigley.....................................................                              X
Ms. Chu.........................................................                              X
Mr. Deutch......................................................                              X
Ms. Sanchez.....................................................                              X
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             11              14
----------------------------------------------------------------------------------------------------------------

    5. An amendment by Ms. Chu to add a section to the bill 
applying antitrust laws to health sector insurers. Defeated 13 
to 13.

                                                 ROLLCALL NO. 5
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Franks......................................................
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             13              13
----------------------------------------------------------------------------------------------------------------

    6. An amendment by Ms. Jackson Lee to exclude lawsuits 
related to irreversible or life altering injuries from the 
bill's limits on noneconomic and punitive damages. Defeated 13 
to 19.

                                                 ROLLCALL NO. 6
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             13              19
----------------------------------------------------------------------------------------------------------------

    7. An amendment by Ms. Wasserman Schultz to add a section 
to the bill exempting actions by minors from the bill's limits 
on damages. Defeated 14 to 18.

                                                 ROLLCALL NO. 7
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             14              18
----------------------------------------------------------------------------------------------------------------

    8. An amendment by Ms. Wasserman Schultz to modify the 
bill's statute of limitation provision to change the timeframe 
related to the manifestation or discovery of an injury related 
to a minor. Defeated 14 to 18.

                                                 ROLLCALL NO. 8
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             14              18
----------------------------------------------------------------------------------------------------------------

    9. An amendment by Mr. Cohen to exclude from the bill's 
limits on damages lawsuits related to a foreign object being 
left inside a patient or performing a procedure on the wrong 
patient or body part. Defeated 14 to 19.

                                                 ROLLCALL NO. 9
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             14              19
----------------------------------------------------------------------------------------------------------------

    10. An amendment by Mr. Scott to strike the provision in 
the bill creating the fair share rule. Defeated 14 to 20.

                                                 ROLLCALL NO. 10
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             14              20
----------------------------------------------------------------------------------------------------------------

    11. An amendment by Mr. Quigley to strike the punitive 
damages exemption for products that comply with FDA Standards. 
Defeated 16 to 20.

                                                 ROLLCALL NO. 11
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             16              20
----------------------------------------------------------------------------------------------------------------

    12. An amendment by Mr. Johnson to specify that nothing in 
the bill shall preempt any applicable State constitutional 
provisions. Defeated 16 to 18.

                                                 ROLLCALL NO. 12
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             16              18
----------------------------------------------------------------------------------------------------------------

    13. An amendment by Mr. Johnson to strike the references in 
the bill to ``State or Federal court or pursuant to an 
alternative dispute resolution system'' and replaces those 
references with ``Federal Court.'' Defeated 16 to 19.

                                                 ROLLCALL NO. 13
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             16              19
----------------------------------------------------------------------------------------------------------------

    14. An amendment by Mr. Johnson to strike provisions in the 
bill that make the bill applicable to health care organizations 
and manufacturers, distributors, suppliers, marketers, 
promoters and sellers of medical products. Defeated 16 to 19.

                                                 ROLLCALL NO. 14
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................
Mr. Reed........................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             16              19
----------------------------------------------------------------------------------------------------------------

    15. An amendment by Mr. Deutch to apply the bill's 
provisions to lawsuits brought by health care providers, health 
care organizations, and pharmaceutical and device 
manufacturers. Defeated 15 to 20.

                                                 ROLLCALL NO. 15
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             15              20
----------------------------------------------------------------------------------------------------------------

    16. An amendment by Ms. Waters to excludes lawsuits 
involving preexisting conditions from the bill's coverage. 
Defeated 14 to 20.

                                                 ROLLCALL NO. 16
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             14              20
----------------------------------------------------------------------------------------------------------------

    17. An amendment by Ms. Waters to amend the McCarran-
Ferguson Act to clarify the application of antitrust laws to 
medical malpractice insurers. Defeated 14 to 19.

                                                 ROLLCALL NO. 17
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Reed........................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             14              19
----------------------------------------------------------------------------------------------------------------

    18. An amendment by Mr. Nadler to index the bill's $250,000 
caps for noneconomic and punitive damages to the Consumer Price 
Index. Defeated 15 to 18.

                                                 ROLLCALL NO. 18
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Reed........................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             15              18
----------------------------------------------------------------------------------------------------------------

    19. An amendment by Mr. Deutch to specifically exclude from 
the definition of ``health care liability claim'' certain 
intentional torts. Defeated 15 to 19.

                                                 ROLLCALL NO. 19
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................
Mr. Reed........................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             15              19
----------------------------------------------------------------------------------------------------------------

    20. An amendment by Ms. Jackson Lee to add to the bill a 
section declaring that it is the sense of the Congress that the 
bill should adhere to the Due Process Clause of the Fifth 
Amendment. Defeated 13 to 19.

                                                 ROLLCALL NO. 20
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................
Mr. Reed........................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................              X
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
                                                                 -----------------------------------------------
    Total.......................................................             13              19
----------------------------------------------------------------------------------------------------------------

    21. Motion to order the bill favorably reported as amended. 
Approved 18 to 15.

                                                 ROLLCALL NO. 21
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................              X
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................              X
Mr. Lungren.....................................................
Mr. Chabot......................................................              X
Mr. Issa........................................................              X
Mr. Pence.......................................................              X
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................              X
Mr. Jordan......................................................              X
Mr. Poe.........................................................              X
Mr. Chaffetz....................................................
Mr. Reed........................................................
Mr. Griffin.....................................................
Mr. Marino......................................................              X
Mr. Gowdy.......................................................              X
Mr. Ross........................................................              X
Ms. Adams.......................................................              X
Mr. Quayle......................................................              X
Mr. Conyers, Jr., Ranking Member................................                              X
Mr. Berman......................................................                              X
Mr. Nadler......................................................                              X
Mr. Scott.......................................................                              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................                              X
Ms. Jackson Lee.................................................                              X
Ms. Waters......................................................                              X
Mr. Cohen.......................................................                              X
Mr. Johnson.....................................................                              X
Mr. Pierluisi...................................................                              X
Mr. Quigley.....................................................                              X
Ms. Chu.........................................................
Mr. Deutch......................................................                              X
Ms. Sanchez.....................................................                              X
Ms. Wasserman Schultz...........................................                              X
                                                                 -----------------------------------------------
    Total.......................................................             18              15
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 5, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 10, 2011.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5, the ``Help 
Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act 
of 2011.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Tom Bradley, 
who can be reached at 226-9010.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
H.R. 5--Help Efficient, Accessible, Low-cost, Timely Healthcare 
        (HEALTH) Act of 2011.

                                SUMMARY

    H.R. 5 would impose limits on medical malpractice 
litigation in state and Federal courts by capping awards and 
attorney fees, modifying the statute of limitations, and 
eliminating joint and several liability.
    CBO expects that those changes would, on balance, lower 
costs for health care both directly and indirectly: directly, 
by lowering premiums for medical liability insurance; and 
indirectly, by reducing the use of health care services 
prescribed by providers when faced with less pressure from 
potential malpractice suits. Those reductions in costs would, 
in turn, lead to lower spending in Federal health programs and 
to lower private health insurance premiums.
    Because employers would pay less for health insurance for 
employees, more of their employees' compensation would be in 
the form of taxable wages and other fringe benefits. As 
discussed below, the bill would also increase revenues because 
it would result in lower subsidies for health insurance. In 
total, CBO and the staff of the Joint Committee on Taxation 
(JCT) estimate that enacting H.R. 5 would increase Federal 
revenues by about $6 billion over the 2011-2021 period.
    Enacting H.R. 5 would also reduce Federal direct spending 
for Medicare, Medicaid, the government's share of premiums for 
annuitants under the Federal Employees Health Benefits (FEHB) 
program, and other Federal health benefits programs. CBO 
estimates that direct spending would decline by almost $34 
billion over the 2011-2021 period.
    Because enacting the legislation would affect direct 
spending and revenues, pay-as-you-go procedures apply. In 
total, CBO estimates that enacting H.R. 5 would reduce deficits 
by almost $10 billion over the 2011-2016 period and by about 
$40 billion over the 2011-2021 period.
    Federal spending for active workers participating in the 
FEHB program is included in the appropriations for Federal 
agencies, and is therefore discretionary. H.R. 5 would also 
affect discretionary spending for health care services paid by 
the Departments of Defense (DoD) and Veterans Affairs (VA). CBO 
estimates that implementing H.R. 5 would reduce discretionary 
spending by about $1 billion over the 2012-2021 period, 
assuming appropriations actions consistent with the 
legislation.
    H.R. 5 contains an intergovernmental mandate as defined in 
the Unfunded Mandates Reform Act (UMRA) because it would 
preempt state laws that provide less protection for health care 
providers and organizations from liability, loss, or damages 
(other than caps on awards for damages). CBO estimates the cost 
of complying with the mandate would be small and would fall 
well below the threshold established in UMRA for 
intergovernmental mandates ($71 million in 2011, adjusted 
annually for inflation).
    H.R. 5 contains several mandates on the private sector, 
including caps on damages and on attorney fees, the statute of 
limitations, and the fair share rule. The cost of those 
mandates would exceed the threshold established in UMRA for 
private-sector mandates ($142 million in 2011, adjusted 
annually for inflation) in four of the first five years in 
which the mandates were effective, rising to $1.4 billion per 
year in 2016, and totaling $3.3 billion over the 2012-2016 
period.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 5 is shown in the 
following table. The costs of this legislation fall within 
multiple budget functions, primarily 550 (health) and 570 
(Medicare).

                                                         By Fiscal Year, in Millions of Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        2011   2012   2013   2014   2015   2016   2017   2018   2019   2020   2021  2011-2016  2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Estimated Revenues
  On-budget                                                0      *    0.1    0.2    0.5    0.7    0.7    0.8    0.8    0.9    0.9       1.4        5.4
  Off-budget                                               0      *      *    0.1    0.1    0.1    0.1    0.2    0.2    0.2    0.2       0.3        1.0
    Total                                                  0      *    0.1    0.3    0.5    0.8    0.8    0.9    1.0    1.0    1.1       1.7        6.4

CHANGES IN DIRECT SPENDING
Estimated Budget Authority                                 0   -0.1   -0.4   -1.2   -2.5   -3.8   -4.4   -4.7   -5.2   -5.5   -5.9      -8.0      -33.7
Estimated Outlays                                          0   -0.1   -0.4   -1.2   -2.5   -3.8   -4.4   -4.7   -5.2   -5.5   -5.9      -8.0      -33.7

NET CHANGE IN THE DEFICIT FROM CHANGES IN REVENUES AND DIRECT SPENDING
Impact on the
    Deficit\1\
  On-budget                                                0   -0.1   -0.5   -1.4   -3.0   -4.5   -5.1   -5.5   -6.0   -6.4   -6.8      -9.4      -39.1
  Off-budget                                               0      *      *   -0.1   -0.1   -0.1   -0.1   -0.2   -0.2   -0.2   -0.2      -0.3       -1.0
    Total                                                  0   -0.1   -0.5   -1.5   -3.0   -4.6   -5.2   -5.6   -6.2   -6.5   -7.0      -9.7      -40.1

CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level                              0      0      *      *   -0.1   -0.1   -0.2   -0.2   -0.2   -0.2   -0.2      -0.3       -1.1
Estimated Outlays                                          0      0      *      *   -0.1   -0.1   -0.2   -0.2   -0.2   -0.2   -0.2      -0.3       -1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Negative numbers denote decreases in deficits.

  * = Increase in revenues, reduction in spending, or reduction in deficits of less than $50 million.

                           BASIS OF ESTIMATE

    H.R. 5 would establish:

         LA 3-year statute of limitations for medical 
        malpractice claims, with certain exceptions, from the 
        date of discovery of an injury;

         LA cap of $250,000 on awards for noneconomic 
        damages;

         LA cap on awards for punitive damages that 
        would be the larger of $250,000 or twice the economic 
        damages, and restrictions on when punitive damages may 
        be awarded;

         LReplacement of joint-and-several liability 
        with a fair-share rule, under which a defendant in a 
        lawsuit would be liable only for the percentage of the 
        final award that was equal to his or her share of 
        responsibility for the injury;

         LSliding-scale limits on the contingency fees 
        that lawyers can charge; and

         LA safe harbor from punitive damages for 
        products that meet applicable FDA safety requirements.

    Over the 2011-2021 period, CBO and the staff of the Joint 
Committee on Taxation estimate that enacting H.R. 5 would 
reduce direct spending by about $34 billion and increase 
Federal revenues by about $6 billion. The combined effect of 
those changes in direct spending and revenues would reduce 
Federal deficits by $40 billion over that period, with changes 
in off-budget revenues accounting for about $1 billion of that 
reduction in deficits. Because those estimates assume enactment 
of H.R. 5 near the end of fiscal year 2011, no budgetary 
effects are expected in that year.
    In addition, CBO estimates that implementing H.R. 5 would 
reduce discretionary spending for the FEHB program, DoD, and VA 
by about $1 billion over the 2012-2021 period.
    Effects on National Spending for Health Care. CBO reviewed 
recent research on the effects of proposals to limit costs 
related to medical malpractice (``tort reform''), and estimates 
that enacting H.R. 5 would reduce national health spending by 
about 0.4 percent.\1\ That figure comprises a direct reduction 
in spending for medical liability premiums and an additional 
indirect reduction from slightly less utilization of health 
care services. CBO's estimate takes into account the fact that, 
because many states have already implemented some elements of 
H.R. 5, a significant fraction of the potential cost savings 
has already been realized. Moreover, the estimate assumes that 
the reduction of about 0.4 percent would be realized over a 
period of four years, as providers gradually change their 
practice patterns.
---------------------------------------------------------------------------
    \1\See Congressional Budget Office, letter to the Honorable Orrin 
G. Hatch regarding CBO's Analysis of the Effects of Proposals to Limit 
Costs Related to Medical Malpractice, (October 9, 2009). http://
www.cbo.gov/ftpdocs/106xx/doc10641/10-09-Tort_Reform.pdf. The estimated 
effect on national health spending reported in that letter is different 
from the estimated effect for H.R. 5 because the two proposals would 
impose different limits on medical malpractice litigation.
---------------------------------------------------------------------------
    Revenues. CBO estimates that private health spending would 
be reduced by about 0.4 percent. Much of private-sector health 
care is paid for through employment-based insurance that 
represents nontaxable compensation. In addition, beginning in 
2014, refundable tax credits will be available to certain 
individuals and families to subsidize health insurance 
purchased through new health insurance exchanges. (The portion 
of those tax credits that exceed taxpayers' liabilities are 
classified as outlays, while the portions that reduce 
taxpayers' liabilities are recorded as reductions in revenues.)
    Lower costs for health care arising from enactment of H.R. 
5 would lead to an increase in taxable compensation and a 
reduction in subsidies for health insurance purchased through 
an exchange. Those changes would increase Federal tax revenues 
by an estimated $6.4 billion over the 2011-2021 period, 
according to estimates by JCT. Social Security payroll taxes, 
which are off-budget, account for $1.0 billion of that increase 
in Federal revenues.
    Direct Spending. CBO estimates that enacting H.R. 5 would 
reduce direct spending for Medicare, Medicaid, the Children's 
Health Insurance Program, the Federal Employees Health Benefits 
program, the Defense Department's TRICARE for Life program, and 
subsidies for enrollees in health insurance exchanges by 
roughly $34 billion over the 2011-2021 period.
    For programs other than Parts A and B of Medicare, the 
estimate assumes that Federal spending for acute care services 
would be reduced by about 0.4 percent, in line with the 
estimated reductions in the private sector.
    CBO estimates that the reduction in Federal spending for 
services covered under Parts A and B of Medicare would be 
larger--about 0.5 percent--than in the other programs or in 
national health spending in general. That estimate is based on 
empirical evidence showing that the impact of tort reform on 
the utilization of health care services is greater for Medicare 
than for the rest of the health care system.\2\
---------------------------------------------------------------------------
    \2\One possible explanation for that disparity is that the bulk of 
Medicare's spending is on a fee-for-service basis, whereas most private 
health care spending occurs through plans that manage care to some 
degree. Such plans limit the use of services that have marginal or no 
benefit to patients (some of which might otherwise be provided as 
``defensive'' medicine), thus leaving less potential for savings from 
the reduction of utilization in those plans than in fee-for-service 
systems.
---------------------------------------------------------------------------
    Spending Subject to Appropriation. CBO estimates that 
implementing H.R. 5 would reduce Federal spending for health 
insurance for Federal employees covered through the FEHB 
program by about 0.4 percent--in line with the estimated 
reductions in the private sector--and would reduce spending for 
health insurance and health care services paid for by the 
Departments of Defense and Veterans Affairs by lesser amounts. 
CBO expects that the impact on those agencies would be 
proportionally smaller than the impact on overall health 
spending because medical malpractice costs are already lower 
than average for entities covered by the Federal Tort Claims 
Act. In CBO's estimation, the cost of health insurance and 
health care services funded through appropriation acts would be 
reduced by $1.1 billion over the 2012-2021 period.

                      PAY-AS-YOU-GO CONSIDERATIONS

    The Statutory Pay-As-You-Go Act of 2010 establishes budget 
reporting and enforcement procedures for legislation affecting 
direct spending or revenues. The net changes in outlays and 
revenues that are subject to those pay-as-you-go procedures are 
shown in the following table. Only on-budget changes to outlays 
or revenues are subject to pay-as-you-go procedures.



    CBO Estimate of Pay-As-You-Go Effects for H.R. 5, as 
ordered reported by the House Committee on the Judiciary on 
February 16, 2011



                                                                             By Fiscal Year, in Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2011     2012     2013     2014      2015      2016      2017      2018      2019      2020      2021    2011-2016  2011-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE ON-BUDGET DEFICIT

Statutory Pay-As-You-Go Impact                                         0     -110     -475    -1,425    -2,950    -4,450    -5,100    -5,450    -6,000    -6,350    -6,800     -9,410    -39,110

Memorandum:
  Direct spending                                                      0     -100     -400    -1,200    -2,500    -3,800    -4,400    -4,700    -5,200    -5,500    -5,900     -8,000    -33,700
  Revenues                                                             0       10       75       225       450       650       700       750       800       850       900      1,410      5,410
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

        ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

Intergovernmental Mandates
    The bill contains an intergovernmental mandate because it 
would preempt state laws that would prevent the application of 
any provision of the bill; however, it would not preempt any 
state law that provides greater protections for health care 
providers and organizations from liability, loss, or damages. 
While the preemption would limit the application of state and 
local laws, CBO estimates that it would not impose significant 
costs and would fall well below the threshold established in 
the Unfunded Mandates Reform Act for intergovernmental mandates 
($71 million in 2011, adjusted annually for inflation).
Other Impacts
    A decline in health care spending is expected to result in 
a decrease in rates for health insurance premiums. State, 
local, and tribal governments, as employers, would save money 
as a result of lower health insurance premiums precipitated by 
the bill. State, local, and tribal governments that collect 
income taxes also would realize increased tax revenues as a 
result of increases in workers' taxable income. State spending 
in Medicaid would decrease by over $3 billion over the 2012-
2016 period, with additional saving in the subsequent years.

                 ESTIMATED IMPACT ON THE PRIVATE SECTOR

    H.R. 5 contains several mandates on the private sector, 
because it would limit the amount of compensatory damages that 
a plaintiff can receive.
    Compensatory damages are paid to compensate a claimant for 
loss, injury, or harm suffered by a defendant's breach of duty. 
Laws that directly limit the right of plaintiffs to be 
compensated for losses that they incurred as a result of a 
defendant's wrongful acts impose a mandate.
    Applying this standard, the cap on non-economic damages, 
the statute of limitations, and the fair-share rule included in 
H.R. 5 would be considered mandates on the private sector, as 
defined by UMRA, because they would limit the ability of some 
claimants to recover the entire amount of compensatory damages 
that could be collected under current law. In addition, the cap 
on attorney fees is a mandate because it limits the fees that 
attorneys might otherwise be able to collect from their 
clients. The cost of those mandates would exceed the threshold 
established in UMRA for private-sector mandates ($142 million 
in 2011, adjusted annually for inflation) in four of the first 
five years in which the mandates were effective, rising to $1.4 
billion per year in 2016, and totaling $3.3 billion over the 
2012-2016 period.

                         ESTIMATE PREPARED BY:

Federal Costs: Tom Bradley and Kirstin Nelson
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
    Branum
Impact on the Private Sector: Stuart Hagen

                         ESTIMATE APPROVED BY:

Holly Harvey, Deputy Assistant Director for Budget Analysis

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 5 
will improve patient access to health care services and provide 
improved medical care by reducing the excessive burden the 
liability system places on the health care delivery system.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 5 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
    Section 1. Short Title.
    Section 2. Findings and Purpose.
    Section 3. Provides for a 3-year statute of limitations 
with certain exceptions for minors, fraud, intentional 
concealment, and the presence of a foreign body.
    Section 4. Provides for a $250,000 cap on noneconomic 
damages and a ``fair share'' rule, by which damages are 
allocated fairly, in direct proportion to fault.
    Section. 5. Provides for sliding scale limits on the 
contingency fees lawyers can charge.
    Section 6. Provides guidelines for the award of punitive 
damages, including guidelines for punitive damages awards not 
to exceed the greater of $250,000 or twice economic damages. 
Also provides a safe harbor from punitive damages for products 
that meet applicable FDA safety requirements, with exceptions 
for cases in which information required to be given to the FDA 
was withheld and cases in which illegal payments were made to 
the FDA. Also includes a provision protecting pharmacists and 
doctors from being named in lawsuits for forum-shopping 
purposes.
    Section 7. Provides authorization for courts to require 
periodic payments for future damages.
    Section 8. Definitions.
    Section 9. Provides that except as provided in the Act 
nothing in the Act shall affect any Federal vaccine-related 
injury or any defense available to a defendant in a health care 
lawsuit or action under any other provision of Federal law.
    Section 10. Provides a savings clause that saves from 
preemption state laws that limit damages to specific amounts.
    Section 11. Provides that the Act shall apply to any health 
care lawsuit brought in a Federal or State court that is 
initiated on or after the date of the enactment of this Act, 
except that any health care lawsuit arising from an injury 
occurring prior to the date of the enactment of this Act shall 
be governed by the applicable statute of limitations provisions 
in effect at the time the injury occurred.

                            Dissenting Views

                              INTRODUCTION

    H.R. 5\1\ is a relic. If the bill goes to the floor this 
Congress, it will mark the tenth time that the House of 
Representatives has considered broad legislation that preempts 
state medical malpractice laws and the sixth time it has taken 
up the HEALTH Act or substantially similar legislation. This 
iteration of H.R. 5 is identical to versions introduced in the 
108th and 109th Congresses--both labeled ``H.R. 5,'' both 
passed by the House, neither considered by the Senate.\2\ In 
the 107th Congress, the HEALTH Act was introduced as H.R. 4600 
and passed by the House, but again did not receive 
consideration in the Senate.\3\ The HEALTH Act provided the 
basis for the Republican motion to recommit offered at the end 
of debate on the ``Affordable Health Care for Americans Act.'' 
That motion was voted down 187 to 243.\4\
---------------------------------------------------------------------------
    \1\Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) 
Act of 2011, H.R. 5, 112th Cong. (2011) [hereinafter HEALTH Act].
    \2\Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) 
Act of 2005, H.R. 2580, 109th Cong. (2005); Help Efficient, Accessible, 
Low-cost, Timely Healthcare (HEALTH) Act of 2003, H.R. 5, 108th Cong. 
(2003).
    \3\Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) 
Act of 2002, H.R. 4600, 107th Cong. (2002).
    \4\Common Sense Health Care Reform and Affordability Act, H. Amdt. 
510, 111th Cong. (2009) (offered by Minority Leader John Boehner as a 
substitute amendment to H.R. 3962, the ``Affordable Health Care for 
America Act'').
---------------------------------------------------------------------------
    The substance of the bill is as dangerous and one-sided as 
it was when it was first proposed almost two decades ago.\5\ 
That this legislation has never become law is not surprising. 
The medical malpractice ``crisis'' it purports to address does 
not exist--and, if it did exist, H.R. 5 would not solve it.
---------------------------------------------------------------------------
    \5\See Common Sense Product Liability and Legal Reform Act of 1995, 
H.R. 956, 104th Cong. (1995).
---------------------------------------------------------------------------
    These dissenting views begin with background and a 
description of the legislation. It then turns to our general 
concerns, which include an analysis of the medical malpractice 
liability ``crisis'' and the policy implications of the bill. 
We then discuss the mixed messages that the majority has sent 
on the issue of states' rights, and list our specific concerns 
with the most troubling provisions of the bill. We conclude 
that the House should reject H.R. 5.

                             I. BACKGROUND

    A medical malpractice claim is a tort-based legal claim for 
damages arising out of an injury caused by a health care 
provider. Tort claims are part of the ``common law,'' or judge-
made law, of the United States civil justice system. 
Traditionally, tort claims have been reserved to the states.\6\ 
All 50 states have considered some version of limited liability 
for medical malpractice.\7\ The National Conference of State 
Legislatures maintains that ``American federalism contemplates 
diversity among the states in establishing these rules.''\8\
---------------------------------------------------------------------------
    \6\``Tort law at present is almost exclusively state law rather 
than federal law.'' U.S. Congressional Research Service, Federal Tort 
Reform Legislation: Constitutionality and Summaries of Selected 
Statutes, 95-797 (Jan. 28, 2010), at 1.
    \7\See Michael I. Krauss & Robert A. Levy, Can Tort Reform and 
Federalism Coexist? 514 Cato Inst. Pol'y Analysis (2004).
    \8\National Conference of State Legislatures, 2010-2011 Policies 
for the Jurisdiction of the Law and Criminal Justice Committee: Medical 
Malpractice, http://www.ncsl.org/default.aspx?Tab 
ID=773&tabs;=855,27,671#Medical_Malpractice (last visited Mar. 1, 2011) 
[hereinafter NCSL Policy].
---------------------------------------------------------------------------
    The tort system provides various benefits to society. 
First, it compensates patients who have been injured by the bad 
acts of others. Second, it deters future misconduct and 
carelessness that may cause injury and punishes wrongdoers who 
inflict such injury. Third, it prevents future injury by 
removing dangerous products and practices from the marketplace. 
Fourth, it informs an otherwise unknowing public of these 
harmful products or practices, thereby adding to public health 
and public safety.\9\
---------------------------------------------------------------------------
    \9\Joan Claybrook, Consumers and Tort Law, 34 Fed. B. News & J. 127 
(1987).
---------------------------------------------------------------------------
    Most medical malpractice claims are based on the tort of 
``negligence,'' defined as conduct ``which falls below the 
standard established by law for the protection of others 
against unreasonable risk and harm.''\10\ In medical 
malpractice cases, this legal standard is based on the 
practices of the medical profession,\11\ and is usually 
determined based on the testimony of expert witnesses.
---------------------------------------------------------------------------
    \10\Restatement (Second) of Torts Sec. 282 (1965).
    \11\David M. Harney, Medical Malpractice 413 (2d ed. 1987).
---------------------------------------------------------------------------
    As with other torts, there are two general types of remedy 
for medical malpractice. Courts may award compensatory damages 
for economic and noneconomic losses such as medical expenses, 
lost wages, pain and suffering, reduced life expectancy and 
diminished quality of life. Courts may also award punitive 
damages to punish and deter willful and wanton conduct.
    Medical malpractice liability reform has historically 
attracted the attention of Congress during insurance industry 
``crisis''periods, which occurred during the mid-1970s, the 
mid-1980s, and the early 2000s.\12\ These periods were marked 
by increases in insurance premiums, reported difficulties in 
finding malpractice insurance for certain medical specialties, 
and reports of physicians leaving geographical areas or 
retiring to avoid insurance difficulties. Currently, the 
medical liability insurance market does not exhibit crisis 
symptoms.\13\ Moreover, the industry's cycle of ``crisis'' and 
``calm'' appears to be driven more by the investment practices 
of insurance companies than by litigation or the legal 
system.\14\
---------------------------------------------------------------------------
    \12\U.S. Congressional Research Service, Medical Malpractice 
Insurance and Health Reform, R40862 (Apr. 15, 2010).
    \13\Id.
    \14\Id.
---------------------------------------------------------------------------
    Still, the Federal Government has a role to play in 
encouraging the states to adopt more efficient medical 
malpractice liability systems. In September 2009, President 
Obama directed the Department of Health and Human Services to 
help state governments and health care providers try 
alternative methods of resolving malpractice allegations.\15\ 
Under this directive, the Agency for Healthcare Research and 
Quality has already funded seven demonstration and various 
planning grants for a total amount of $25 million.\16\ These 
grants support evidence-based patient safety and medical 
liability projects designed to reduce preventable harms, inform 
injured patients promptly, and promote settlement of cases 
through alternative dispute resolution.\17\
---------------------------------------------------------------------------
    \15\See The White House, Office of the Press Secretary, FACT SHEET: 
Patient Safety and Medical Liability Reform Demonstration (Sept. 17, 
2009), available at http://www.whitehouse.gov/the-press-office/fact-
sheet-patient-safety-and-medical-liability-reform-demonstration.
    \16\See U.S. Dep't of Health & Human Services, Agency for Health 
Care Research and Quality, Medical Liability Reform & Patient Safety 
Initiative, http://www.ahrq.gov/qual/liability/
    \17\Id.
---------------------------------------------------------------------------
    On March 23, 2010, President Obama signed into law 
comprehensive health care reform, the Patient Protection and 
Affordable Care Act.\18\ Among other important reforms, the 
bill authorizes $50 million for grants to the states to 
develop, implement, and evaluate alternatives to current tort 
litigation systems.\19\ Preference is given to states that have 
developed alternatives in consultation with relevant 
stakeholders to enhance patient safety, reduce medical errors 
and adverse events, and improve access to medical malpractice 
liability insurance.\20\ President Obama's budget request for 
FY 2012 asks for $100 million for additional grants to develop 
medical malpractice liability reform, followed by $50 million 
for each fiscal year through 2015.\21\
---------------------------------------------------------------------------
    \18\Pub. L. No. 111-148.
    \19\Id. Sec. 10607.
    \20\Id.
    \21\Office of Mgmt. & Budget, Exec. Office of the President, Budget 
of the United States Government, Fiscal Year 2012, at 191, available at 
http://www.whitehouse.gov/omb/budget/Overview/.
---------------------------------------------------------------------------

                   II. DESCRIPTION OF THE LEGISLATION

    H.R. 5 is not ``designed brilliantly to cooperate with the 
States in trying to encourage better practices in medicine,'' 
as its supporters maintain.\22\ Rather, the bill preempts state 
law in all 50 states with a rigid, uniform set of rules 
designed to cut off restitution for victims of medical 
malpractice.
---------------------------------------------------------------------------
    \22\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of 
Rep. Trent Franks, Member, House Comm. on the Judiciary).
---------------------------------------------------------------------------
    Although it is often described as a ``medical malpractice'' 
bill, H.R. 5 extends far beyond the field of medical 
malpractice liability. The bill applies to all ``health care 
lawsuits,'' and defines the term as ``any health care liability 
claim concerning the provision of health care goods or services 
or any medical product . . . brought in a State or a Federal 
court or pursuant to an alternative dispute resolution 
system.''\23\ Because this definition is so broad, the bill 
offers new protections to medical device and pharmaceutical 
manufacturers, nursing homes, hospitals, HMOs, and insurance 
companies, among others. In any case involving these 
defendants, H.R. 5 limits the amount of noneconomic damages--
e.g., damages for physical impairment, pain, suffering, and 
wrongful death--to $250,000.\24\
---------------------------------------------------------------------------
    \23\HEALTH Act, 112th Cong. Sec. 9(7).
    \24\Id. Sec. 4(b). ``In any health care lawsuit, the amount of 
noneconomic damages recovered may be as much as $250,000, regardless of 
the number of parties against whom the action is brought or the number 
of separate claims or actions brought with respect to the same 
occurrence.'' Id.
---------------------------------------------------------------------------
    H.R. 5 eliminates joint and several liability for both 
economic and noneconomic damages.\25\ In cases where there is 
more than one defendant, joint and several liability ensures 
that injured patients are fully compensated for their losses by 
making each defendant liable for up to the full amount of the 
damages.\26\ Prior to markup, H.R. 5 also included a provision 
that would repeal the ``collateral source'' rule, which 
prevents wrongdoers from reducing damage awards by any amount a 
patient may have received from health insurance, disability 
insurance, or other outside sources. The committee accepted an 
amendment offered by Rep. Robert Scott to remove this cost-
shifting provision from the bill.\27\ It was the only amendment 
accepted by the majority during the markup of H.R. 5.
---------------------------------------------------------------------------
    \25\Id. Sec. 4(d). The so-called ``Fair Share'' rule provides: ``In 
any health care lawsuit, each party shall be liable for that party's 
several share of any damages only and not for the share of any other 
person. Each party shall be liable only for the amount of damages 
allocated to such party in direct proportion to such party's percentage 
of responsibility. A separate judgment shall be rendered against each 
such party for the amount allocated to such party.'' Id.
    \26\The sponsors of H.R. 5 imagine that a clear percentage of 
damages can always be apportioned to each defendant. Often, a clear 
allocation of fault is not possible when multiple defendants are 
involved. ``Here again is the typical case that two vehicles collide 
and injure a third person. The duties which are owed to the plaintiff 
by the defendants are separate, and may not be identical in character 
or scope, but the entire liability rests upon the fact that each has 
contributed to the single result, and that no reasonable division can 
be made.'' William Prosser, Joint Torts & Several Liability, 25 Cal. L. 
Rev. 413 (1939).
    \27\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011.
---------------------------------------------------------------------------
    H.R. 5 further limits a patient's ability to recover 
punitive damages in a number of specific and peculiar ways. 
First, the bill imposes a heightened standard for the recovery 
of punitive damages. In order to recover punitive damages at 
all, a patient must demonstrate by clear and convincing 
evidence that a defendant ``acted with malicious intent'' to 
injure the patient, or that the defendant ``deliberately failed 
to avoid unnecessary injury'' that he or she knew the patient 
was ``substantially certain'' to suffer.\28\ Second, even if a 
patient can meet this burden, the bill limits punitive damages 
to two times the amount of economic damages or $250,000, 
whichever is greater.\29\
---------------------------------------------------------------------------
    \28\HEALTH Act, 112th Cong. Sec. 7(a).
    \29\Id. Sec. 7(b)(2).
---------------------------------------------------------------------------
    In addition, H.R. 5 altogether bans punitive damages in 
cases that involve manufacturers of drugs and devices that are 
approved by the FDA.\30\ The only exceptions to this rule are 
for cases in which the defendant ``knowingly misrepresented to 
or withheld from the Food and Drug Administration information 
that is required to be submitted'' and cases in which a person 
bribes an FDA official ``for the purpose of either securing or 
maintaining approval, clearance, or licensure.''\31\ The bill 
extends this absolute ban on punitive damages to manufacturers 
of drugs and devices that are not approved by the FDA but are 
``generally recognized among qualified experts as safe and 
effective''\32\ and to all defendants with respect to the 
packaging or labeling of a pharmaceutical.\33\ These last rules 
have the pernicious effect of sidestepping federal safety 
regulations in addition to limiting a patient's ability to 
recover damages in court.
---------------------------------------------------------------------------
    \30\Id. Sec. 7(c)(1)(A)(i).
    \31\Id. Sec. 7(c)(4).
    \32\Id. Sec. 7(c)(1)(A)(ii).
    \33\HEALTH Act, 112th Cong. Sec. 7(c)(3).
---------------------------------------------------------------------------
    H.R. 5 sets strict limits on the amount an attorney may 
receive in contingency fee payments. Specifically, the total 
amount of all contingent fees for representing all claimants in 
a health care lawsuit may not exceed: (1) 40% of the first 
$50,000 recovered by the claimant(s); (2) 33 1/3% of the next 
$50,000 recovered by the claimant(s); (3) 25% of the next 
$500,000 recovered by the claimant(s); and (4) 15% of any 
amount by which the recovery by the claimant(s) is in excess of 
$600,000.\34\ The bill also gives courts the authority to 
approve fees lower than those provided for by this formula.
---------------------------------------------------------------------------
    \34\Id. Sec. 5(a).
---------------------------------------------------------------------------
    H.R. 5 also introduces a restrictive statute of limitations 
for medical malpractice claims. A ``health care lawsuit may be 
commenced no later than 3 years after the date of manifestation 
of injury or 1 year after the claimant discovers, or through 
the use of reasonable diligence should have discovered, the 
injury, whichever occurs first.''\35\ The effect of this 
provision is that a claimant often has only one year from the 
date of discovering the injury to file suit. A claimant will, 
quite often, discover an injury on the same day an injury 
manifests itself. This provision cuts in the opposite direction 
for patients whose injuries have long latency periods. A 
patient might manifest symptoms of HIV or hepatitis long before 
discovering the cause of the injury, but have no recourse if 
the 3-year deadline has expired.
---------------------------------------------------------------------------
    \35\Id. Sec. 3 (emphasis added).
---------------------------------------------------------------------------
    H.R. 5 further disadvantages patients by requiring judges 
to permit periodic payments at the request of the 
defendant.\36\ To the extent that a patient can successfully 
negotiate the obstacles set up by the bill, actual payment of 
damages could take years--assuming the defendant remains 
solvent.
---------------------------------------------------------------------------
    \36\Id. Sec. 8(a). ``In any health care lawsuit, if an award of 
future damages . . . equaling or exceeding $50,000 is made against a 
party with sufficient insurance or other assets to fund a periodic 
payment of such a judgment, the court shall, at the request of any 
party, enter a judgment ordering that the future damages be paid by 
periodic payments.'' Id. (emphasis added).
---------------------------------------------------------------------------
    H.R. 5 written to be ``one-way preemptive''--it only 
supercedes existing state and federal laws that are favorable 
to patients, and it does so on an incredibly sweeping scale. 
Many hard-earned patient and consumer protections fall to the 
wayside. For example, the most popular provisions of the 
Affordable Care Act, many of them already in effect, are 
weakened by this legislation. An insurance company might deny 
coverage of a child with a pre-existing condition, rescind 
coverage when a patient gets sick, or kick a child off a 
parent's insurance plan before his or her 26th birthday. No 
matter how blatant the violation, that company would have all 
of the new protections afforded to it under H.R. 5. Even if a 
family could overcome the procedural obstacles H.R. 5 puts in 
its path, it would be entitled to no more than $250,000 in 
noneconomic damages. That capped award might simply be the cost 
of doing business for a wealthy insurance company.

                         III. GENERAL CONCERNS

    Our general concerns with H.R. 5 stem from one of the 
bill's central flaws: this legislation was designed to address 
an insurance ``crisis'' that does not exist. This section 
demonstrates that the investment market, not litigation, drives 
the insurance industry through cycles of ``crisis'' and calm, 
and that H.R. 5 exacerbates the real crisis--the epidemic of 
actual medical malpractice. Moreover, the bill will not 
accomplish any of its supporters' stated goals--it will not 
lower insurance premiums, have a substantive effect on 
``defensive medicine,'' or significantly impact the cost of 
health care.
A. LThe cycle of ``crisis'' and ``calm'' is driven by the investment 
        practices of insurance companies.
    In past sessions of Congress, supporters of the bill have 
pointed to a common set of symptoms in the insurance market--
most often, ``skyrocketing'' insurance premiums and 
difficulties in finding medical malpractice liability 
coverage.\37\ Restricting the ability of patients to recover 
damages for malpractice, they argued, would reduce the 
frequency of malpractice lawsuits. This would, in theory, lower 
medical malpractice premiums, making insurance more available 
to doctors and doctors more available to patients. This policy 
assumption--that discouraging litigation mitigates the 
insurance ``crisis''--does not square with the facts.
---------------------------------------------------------------------------
    \37\See, e.g., 151 Cong. Rec. H6990 (daily ed. July 28, 2005). 
``The costs of the tort system continue to take their toll on the 
Nation's economy. Medical professional liability insurance rates have 
skyrocketed, causing major insurers to drop coverage or raise premiums 
to unaffordable levels. We have heard case after case where this last 
occurred nationwide. . . . The HEALTH Act . . . addresses this crisis 
by eliminating frivolous lawsuits by making health care more accessible 
and more affordable.'' Id. (statement of Rep. Steve Chabot).
---------------------------------------------------------------------------
    From a historical perspective, Congress paid closest 
attention to medical malpractice liability insurance during 
``crisis'' periods in the mid-1970s, the mid-1980s, and the 
early 2000s.\38\ These periods are punctuated by the same 
symptoms described by supporters of H.R. 5--increases in 
malpractice insurance premiums, claims of insurance scarcity, 
and stories of physicians abandoning specialties or communities 
because of the high cost of insurance.\39\ In each instance, 
the ``crisis'' abated when the financial market stabilized.\40\
---------------------------------------------------------------------------
    \38\U.S. Congressional Research Service, Medical Malpractice 
Insurance and Health Reform, R40862 (Feb. 22, 2011).
    \39\Id.
    \40\See, e.g., U.S. Congressional Research Service, Medical 
Malpractice Insurance: An Economic Introduction and Review of 
Historical Experience, RL31886 (Oct. 2, 2009).
---------------------------------------------------------------------------
    Experts attribute this cycle of crisis and calm to the 
investment practices of the insurance industry--not to the 
frequency of litigation or the size of jury awards. Joanne 
Doroshow, Executive Director for the Center for Justice and 
Democracy, testified at a hearing of the Subcommittee on 
Commercial and Administrative law in the 108th Congress and 
explained:

        Insurers make their money from investment income. 
        During years of high interest rates and/or insurer 
        profits, insurance companies engage in fierce 
        competition for premium dollars to invest for maximum 
        return. More specifically, insurers engage in severe 
        underpricing to insure very poor risks just to get 
        premium dollars to invest. But when investment income 
        decreases because interest rates drop, the stock market 
        plummets, and/or cumulative price cuts make profits 
        become unbearably low, the industry responds by sharply 
        increasing premiums and reducing coverage, creating a 
        ``liability insurance crisis.''\41\
---------------------------------------------------------------------------
    \41\Health Care Litigation Reform: Does Limitless Litigation 
Restrict Access to Health Care? Hearing on H.R. 4600 Before the 
Subcomm. on Commercial and Admin. Law of the H. Comm. On the Judiciary, 
107th Cong. 15 (2002) (statement of Joanne Doroshow, Executive 
Director, Center for Justice & Democracy).

This market-driven cycle repeats itself over and over again.
    During the ``crisis'' of the 1970s, insurance companies 
increased premiums for medical malpractice insurance by large 
margins and denied coverage to doctors in certain 
specialties.\42\ In response, the states initiated reforms 
designed to provide alternative sources of insurance and to 
reduce the volume and costs of medical malpractice claims. 
Physician- and hospital-owned insurance companies emerged as an 
alternative to traditional insurance providers, and, for at 
least a decade, insurance was accessible and affordable in a 
market dominated by these companies.
---------------------------------------------------------------------------
    \42\U.S. Congress, Office of Technology Assessment, Impact of Legal 
Reforms on Medical Malpractice Costs, Pub. No. OTA-BP-H-119, at 13 
(1993).
---------------------------------------------------------------------------
    Prior to the ``crisis'' of the mid-1980s, a favorable 
investment market allowed the insurance industry to offer 
stable and affordable premium rates for medical malpractice 
insurance. When interest rates dropped in 1984, however, 
insurance providers responded by drastically increasing the 
cost of medical malpractice insurance.\43\ In some instances, 
insurance rates more than tripled for manufacturers, 
municipalities, doctors, nurses, midwives, daycare centers, 
nonprofit groups, and other customers of liability 
insurance.\44\
---------------------------------------------------------------------------
    \43\Id. at 15.
    \44\Id.
---------------------------------------------------------------------------
    The roots of the most recent ``crisis'' were described by 
Raul King, an economist and insurance industry expert with 
Congressional Research Service, at a forum held by House 
Democrats in 2003:

        What has happened in the 1990s, after the last medical 
        malpractice in the mid-`80s, is that in the 1990s the 
        markets were up. For an extended period of time, 
        interest rates were relatively low, but the bottom line 
        is that investments were very, very high, and they can 
        continue to price their business in such a way to 
        maximize premium for investment purposes.
          Some would argue that, starting in 2000, when not 
        only the medical malpractice area but insurance in 
        general, not just medical malpractice but all P& C, 
        property and casualty insurance, when the market cycle 
        started to turn, investments were not what they 
        expected. Interest rates were low, and across the board 
        rates started firming up.
          Incidentally, when the market is considered soft, 
        coverage is readily available. Prices are relatively 
        low. The insurance company will make their products 
        available in the marketplace, and they will 
        aggressively sell as much as they can because they want 
        the business, and it's intensely competitive.
          Some would argue that this soft market that went 
        beyond the six years but right close to ten years, and 
        this is what the consumer groups have argued is cash 
        flow underwriting--what Bob Hunter, for example, would 
        argue is cash flow underwriting. They run into a 
        problem. Their investments can't cover their premium 
        losses and underwriting losses.
          So what they have to do is increase premiums 
        dramatically. They have to in some cases withdraw from 
        the marketplace, change the amount of insurance they'll 
        make available, in the marketplace. Rather than selling 
        a $500,000 policy, they'll sell only a $250,000 policy, 
        and that's all that's available in a given state.\45\
---------------------------------------------------------------------------
    \45\Democratic Forum on Malpractice, Feb. 11, 2003, Transcript at 
32-33.

Once again, when the bottom dropped out on the investment 
market, premiums increased and availability of coverage 
declined. Although each crisis ``brought about attempts at 
malpractice reform in many states, it only subsided when the 
economy finally recovered and interest rates rose.''\46\
---------------------------------------------------------------------------
    \46\Mitchell J. Nathanson, It's the Economy (and Combined Ratio), 
Stupid: Examining the Medical Malpractice Litigation Crisis Myth and 
the Factors Critical to Reform, 108 Penn. St. L. Rev. 1077 (2004).
---------------------------------------------------------------------------
    Both the American Medical Association and members of the 
insurance industry acknowledge that these periods of ``crisis'' 
are market driven. In a 2003 internal memo, the AMA's Board of 
Trustees recognized that ``the insurance underwriting cycle is 
now at a point where insurers have both pricing power and a 
need to increase revenues through premiums as returns on 
investments are no longer able to subsidize underwriting losses 
and as insurers have suffered large claim losses in other 
areas.''\47\ The memo explains further:
---------------------------------------------------------------------------
    \47\American Medical Ass'n, Report 35 of the Board of Trustees (A-
02) on Liability Reform, at 2.

          For several years, insurers kept prices artificially 
        low while competing for market share and new revenue to 
        invest in a booming stock market. As the bull market 
        surged, investments by these historically conservative 
        insurers rose to 10.6% in 1999, up from a more typical 
        3% in 1992. With the market now in a slump, the 
        insurers can no longer use investment gains to 
        subsidize low rates. The industry reported realized 
        capital gains of $381 million last year, down 30% from 
        the high point in 1998, according to the A.M. Best 
        Company, one of the most comprehensive sources of 
        insurance industry data.\48\
---------------------------------------------------------------------------
    \48\Id.

When investment income became scarce, insurance companies 
increased premiums to turn a profit. This observation has been 
confirmed by the National Conference of State Legislatures.\49\ 
The Physicians Insurers Association of America reported that 
investment income constituted 47% of insurance company income 
during the ``calm'' of 1995, but only 31% during the ``crisis'' 
of 2001.\50\
---------------------------------------------------------------------------
    \49\Peter Eisler, et al., Hype Outraces Facts in Malpractice 
Debate, USA Today, Mar. 5, 2003 available at http://www.usatoday.com/
news/nation/2003-03-04-malpractice-cover_x.htm.
    \50\Id.
---------------------------------------------------------------------------
    H.R. 5 does nothing to address this boom-and-bust cycle. It 
does nothing about the investment practices of the insurance 
industry. It does nothing to repeal the anomalous McCarran-
Ferguson antitrust exemption for the insurance industry, which 
is critical to stabilizing the medical malpractice insurance 
market.\51\ It does nothing to require that premium increases 
be justified, or to permit health care providers to challenge 
increases when they occur. Instead, H.R. 5 pretends that a 
series of restrictions on patients' rights will prevent the 
next ``crisis.''
---------------------------------------------------------------------------
    \51\See Medical Liability Reform--Cutting Costs, Spurring 
Investment, Creating Jobs, Hearing Before the H. Comm. on the 
Judiciary, 112th Cong., Jan. 20, 2011 (statement of Joanne Doroshow, 
Executive Director, Center for Justice and Democracy). Judiciary 
Republicans voted down two amendments that would have addressed this 
exemption. An amendment by Rep. Judy Chu would have applied antitrust 
laws to health-sector insurance providers. Another amendment by Rep. 
Maxine Waters and Rep. Mike Quigley that would have repaired the 
exemption in the McCarran-Ferguson Act. Continued Consideration of H.R. 
5, The Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) 
Act of 2011 and the Committee's Oversight Plan, 112th Cong., Feb. 16, 
2011.
---------------------------------------------------------------------------
B. LNo insurance ``crisis'' exists today.
    Although supporters of H.R. 5 may suggest otherwise, the 
evidence shows that there is no insurance ``crisis'' today. 
According to the Medical Liability Monitor, premiums for 
medical malpractice insurance ``have eased nationwide.''\52\ In 
2009, 58 percent of premiums stayed level and 36 percent of 
premiums fell.\53\ According to A.M. Best, after reaching an 
average annual increase of 14.2 percent during the height of 
the ``crisis'' in 2003, medical malpractice premiums began to 
fall--declining by 6.6 percent in 2007, and by an additional 
5.3 percent in 2008.\54\ Without any of the federal 
intervention contemplated by H.R. 5, the ``crisis'' of the mid-
2000s appears to have peaked in 2004 and abated by 2006. 
Premiums have dropped in every state--whether or not court 
systems have been modified to limit liability for medical 
malpractice defendants.\55\
---------------------------------------------------------------------------
    \52\Amy Lynn Sorrel, Liability Premiums Stay Stable, but Insurers 
Warn This Might Not Last, Am. Med. News (Nov. 23, 2009) available at 
http://www.ama-assn.org/amendnews/2009/11/23//prl121123.htm. See also 
Medical Liability Monitor (Oct. 2008).
    \53\Id.
    \54\U.S. Congressional Research Service, Medical Malpractice 
Insurance: An Economic Introduction and Review of Historical 
Experience, RL31886 (October 2, 2009) (citing A.M. Best Statistical 
Study, Continued Improvement in 2005 Results as Medical Malpractice 
Premium Growth Subsides (Aug. 28, 2006), and A.M. Best's Special 
Report, U.S. Medical Professional Liability 2008 Market Review (Apr. 
27, 2009).
    \55\Americans for Ins. Reform, True Risk: Medical Liability, 
Malpracitce Insurance and Health Care (July 2009) available at http://
insurance-reform.org/pr/090722.html.
---------------------------------------------------------------------------
    Insurance companies are also doing well, especially 
compared to other sectors of the economy. In 2007, medical 
malpractice insurers had an overall return on net worth of 15.6 
percent, well over the average 12.5 percent return for the 
entire property and casualty insurance industry.\56\ Profits 
are holding. In 2009, according to the National Association of 
Insurance Commissioners, return on net worth for medical 
malpractice insurers remained steady at 15.3 percent.\57\
---------------------------------------------------------------------------
    \56\A.M. Best's Special Report, Solid Underwriting Undercut by 
MPLI's Investment Losses (Apr. 27, 2009).
    \57\Americans for Ins. Reform, True Risk: Medical Liability, 
Malpractice Insurance and Health Care (July 2009). See also Medical 
Liability Reform--Cutting Costs, Spurring Investment, Creating Jobs, 
Hearing Before the H. Comm. on the Judiciary, 112th Cong., Jan. 20, 
2011 (statement of Joanne Doroshow, Executive Director, Center for 
Justice and Democracy).
---------------------------------------------------------------------------
    Medical malpractice cases are also less frequent than at 
any time in the last decade. According to the National Center 
for State Courts, only 4.4 percent of the civil caseload is 
comprised of tort cases; of these, only 2.8 percent are medical 
negligence cases.\58\ Even that share has declined by fifteen 
percent over the past ten years.\59\ The National Practitioner 
Databank, which tracks all medical malpractice payments by all 
physicians in the United States, confirms the same downward 
trend.\60\
---------------------------------------------------------------------------
    \58\Nat'l Center for State Courts, Examining the Work of State 
Courts: An Analysis of 2008 State Court Caseloads (2010) available at 
http://www.ncsconline.org/d_research/csp/2008_files/EWSC-2008-
Online%20Version%20v2.pdf.
    \59\Id.
    \60\Nat'l Practitioner Databank, Annual Report (2006) available at 
http://www.npdb-hipdb.hrsa.gov/pubs/stats/2006_NPDB_Annual_Report.pdf.
---------------------------------------------------------------------------
    In addition, jury awards are stable. An actuarial analysis 
conducted by J. Robert Hunter, Director of Insurance of the 
Consumer Federation of America, shows that the average medical 
malpractice payout hovered at just under $30,000 for an entire 
decade--from 1990 to 2000--without adjustment for 
inflation.\61\ According to a more recent study by the National 
Center for State Courts, medical malpractice claims actually 
declined 15 percent from 1999 to 2008.\62\ Insurance industry 
data shows that claims have dropped 45 percent after adjusting 
for inflation.\63\
---------------------------------------------------------------------------
    \61\Letter from J. Robert Hunter, Director of Insurance, Consumer 
Federation of America, to Joanne Doroshow, Executive Director, Center 
for Justice & Democracy (Oct. 13, 2001).
    \62\National Center for State Courts, supra note 58.
    \63\See Americans for Ins. Reform, supra note 55.
---------------------------------------------------------------------------
    H.R. 5 attempts to contain allegedly ``rampant'' punitive 
damages, but the evidence shows that punitive damages are 
rarely rewarded. According to the Bureau of Justice Statistics, 
in 1996 only 1.1 percent of medical malpractice plaintiffs who 
prevailed at trial were awarded punitive damages.\64\ Only 1.2 
percent of those awards were awarded by juries.\65\ In 2005, 
there were too few medical malpractice cases in which punitive 
damages were awarded to provide a statistically reliable 
estimate of the amount of punitive damages in state courts.\66\
---------------------------------------------------------------------------
    \64\U.S. Dep't of Justice, Bureau of Justice Stat., Tort Bench and 
Jury Trials in State Courts, 2005 (Nov. 2009).
    \65\Id.
    \66\Id.
---------------------------------------------------------------------------
C. LMedical malpractice is the real crisis.
    At best, H.R. 5 is untimely--it is designed to lower 
premium rates that have already dropped, and curb damages that 
are rare and trending downward. In practice, the bill ignores 
the real medical malpractice crisis in America.
    Medical error is the sixth leading cause of death in the 
United States.\67\ In 1999, the Institute of Medicine of the 
National Academy of Sciences estimated that between 44,000 and 
98,000 hospital deaths in the United States each year are 
attributable to medical mismanagement--at a cost of $29 billion 
annually.\68\ This estimate does not include losses for medical 
errors at outpatient centers, physician offices, or clinics. 
During the period of study, the number deaths due to medical 
malpractice was greater than the number of people who died due 
to motor vehicle accidents (43,458), breast cancer (42,297), or 
AIDS (16,516).\69\
---------------------------------------------------------------------------
    \67\Centers for Disease Control, Nat'l Center for Health Care 
Stat., Deaths/Mortality, 2005, http://www.cdc.gov/nchs/fastats/
deaths.htm.
    \68\To Err is Human: Building a Safer Health System, (Linda T. 
Kohn, Janet M. Corrigan, and Molla S. Donaldson, eds. Institute of 
Medicine, National Academy Press 1999) [hereinafter IOM Report].
    \69\Id.
---------------------------------------------------------------------------
    The Congressional Budget Office estimated 181,000 severe 
injuries occurred due to medical negligence in 2003.\70\ 
According to a 2008 report by the Institute for Healthcare 
Improvement, there are fifteen million incidents of negligent 
medical harm each year.\71\ The Joint Commission Center on 
Transforming Healthcare reports as many as forty wrong site, 
wrong side, and wrong patient procedures every week.\72\ The 
Journal of American Medicine reports that there are 1,500 
incidents of surgical tools left in patients each year.\73\ 
Notably, the majority rejected an amendment offered by Rep. 
Steve Cohen that would have exempted these incidences of gross 
negligence from the $250,000 cap on non-economic damages.\74\
---------------------------------------------------------------------------
    \70\U.S. Congressional Budget Office, Key Issues 150-54 (Dec. 
2008).
    \71\Institute for Healthcare Improvement, Campaign--FAQs, http://
www.ihi.org/IHI/Programs/Campaign/Campaign.htm?TabId=6.
    \72\American Ass'n for Justice, Medical Negligence: The Role of 
America's Civil Justice System in Protecting Patients' Rights (Feb. 
2011) (citing Joint Commission Center for Transforming Healthcare, 
Wrong Site Surgery Project http://
www.centerfortransforminghealthcare.org/projects/
display.aspx?projectid=4). Judiciary Republicans voted down an 
amendment offered by Rep. Steve Cohen that would exempt wrong-site or 
wrong-patient surgeries from the $250,000 cap on non-economic damages. 
Continued Consideration of H.R. 5, The Help Efficient, Accessible, Low-
cost, Timely Healthcare (HEALTH) Act of 2011 and the Committee's 
Oversight Plan, 112th Cong., Feb. 16, 2011.
    \73\See Nagy, et al., Radio Frequency Identification Systems 
Technology in the Surgical Setting, Surgical Innovation, Vol. 13, No. 1 
(March 2006).
    \74\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011.
---------------------------------------------------------------------------
    Medical malpractice pervades American society. A November 
2010 study by the Office of the Inspector General of the 
Department of Health and Human Services found that 
approximately one in seven hospital patients experience a 
medical error, and that these errors cost Medicare $4.4 billion 
every year.\75\ This sum does not include ``additional costs 
required for follow-up care after the sample 
hospitalizations.''\76\ Medical errors occur in more than one 
in ten cases involving children with complex medical 
problems.\77\ Two in five chronically ill patients receive care 
inconsistent with medical literature.\78\ One 15-year 
observational study showed that 45.8 percent of patients 
experience least some error while receiving medical 
treatment.\79\
---------------------------------------------------------------------------
    \75\U.S. Dep't of Health and Human Services, Office of the 
Inspector General, Adverse Events in Hospitals: National Incidence 
Among Medicare Beneficiaries (Nov. 2010), at i-ii.
    \76\Id. at ii-iii.
    \77\Eisler et al., supra note 49.
    \78\Lee Harris, Tort Reform as Carrot-and-Stick, 46 Harv. J. on 
Legis. 163, 169 (2009).
    \79\Id. (citing Lori Andrews, Studying Medical Error in Situ: 
Implications for Malpractice Law and Policy, 54 DePaul L. Rev. 357 
(2005)).
---------------------------------------------------------------------------
    These figures may even be under-reported. Twenty-three 
states have no medical error detection programs, and even those 
with mandatory programs likely miss a majority of the harm.\80\ 
The New England Journal of Medicine reports that ``Most medical 
centers continue to depend on voluntary reporting to track 
institutional safety, despite repeated studies showing the 
inadequacy of such reporting.''\81\ The only national database 
of malpractice claims, the National Practitioners Databank, 
remains closed to the public.\82\ The American Medical 
Association goes so far as to offer its members a primer on 
``How to evade a report to the NPDB.''\83\
---------------------------------------------------------------------------
    \80\Cathleen F. Crowley & Eric Nalder, Year After Report, Patients 
Still Face Risks, Times Union, Sept. 20, 2010.
    \81\Christopher P. Landrigan et al., Temporal Trends in Rates of 
Patient Harm Resulting from Medical Care, 363 N. Engl. J. Med 2124-34 
(2010).
    \82\American Ass'n for Justice, supra note 72, at 9.
    \83\AMA webpage on the National Practitioner Databank, http://
www.ama-assn.org/ama/pub/physician-resources/legal-topics/business-
management-topics/national-practitioner-data-bank.shtml.
---------------------------------------------------------------------------
    Changes to court systems that ignore patient safety do 
little to reverse this trend. After Texas enacted its cap on 
non-economic damages, complaints against Texas doctors to the 
state medical board rose from 2,942 to 6,000, more than half of 
which were focused on poor quality of medical care.\84\ And 
yet, according to a lengthy investigation by the Houston 
Chronicle, ``Texas has fumbled attempts to establish a medical 
error reporting system, often leaving patients to discover 
errors the hard way--when a mistake costs them their livelihood 
or the life of a loved one.''\85\
---------------------------------------------------------------------------
    \84\Terry Langford, Texas Laws are Vague, Abandoned or Unfunded, 
Houston Chronicle, July 30, 2009.
    \85\Id.
---------------------------------------------------------------------------
    The costs of medical malpractice are staggering. CRS has 
found that ``the damage from medical malpractice usually 
requires additional treatment to repair, sometimes an entire 
lifetime of medical treatment.''\86\ In addition to these human 
costs, the total financial cost of medical malpractice--
including lost income, lost household production, disability 
and health care costs--is estimated by the Centers for Disease 
Control to be between $17 billion and $29 billion each 
year.\87\
---------------------------------------------------------------------------
    \86\U.S. Congressional Research Service, supra note 54.
    \87\See Centers for Disease Control, supra note 67.
---------------------------------------------------------------------------
    And yet, there is a profound disconnect between the actual 
incidence of medical malpractice and the insurance industry. 
According to one analysis published in the Harvard Journal on 
Legislation: ``Bad doctors are not penalized by insurance 
companies, which do not normally take into account previous 
performance when assessing medical malpractice insurance 
rates.''\88\ Instead, insurance companies charge premiums based 
on general factors like physician speciality, without giving an 
``account for the competence, skill, and quality of medical 
services provided by the physician.''\89\ The problem is 
compounded by lax discipline for habitually negligent health 
care providers. In one study published by N.Y.U., state 
licensing boards were found to have disciplined less than 17 
percent of doctors with five or more medical malpractice 
payouts on record.\90\
---------------------------------------------------------------------------
    \88\Lee Harris, supra note 78 at 178.
    \89\Id. (citing Catherine Sharkey, Unintended Consequences of 
Medical Malpractice Damage Caps, 80 N.Y.U.L. Rev. 391, 410 (2005) 
(noting that physicians are not experience-rated and, thus, both 
``negligent and non-negligent physicians pay similar premiums'')).
    \90\Id.
---------------------------------------------------------------------------
    This disconnect is the foundation for H.R. 5. By enacting 
sweeping changes to the court systems in all 50 states, this 
bill gives all health care providers--all physicians, 
hospitals, clinics, pharmaceutical manufacturers, device 
manufacturers, and insurance companies--the benefit of 
additional liability protection in cases of medical 
malpractice. By forcing the states to cap non-economic damages, 
the bill disproportionately penalizes members of vulnerable 
groups, such as women, children, and minorities, all of whom 
are more likely to realize comparatively substantial non-
economic losses. Capping damages ``only serves to compel the 
most grievously injured at the hands of the most clearly 
negligent and/or reckless to bear the brunt of reform.''\91\
---------------------------------------------------------------------------
    \91\Mitchell J. Nathanson, supra note 46 at 1109.
---------------------------------------------------------------------------
    Fortunately, there appear to be effective policy solutions 
for addressing the medical malpractice crisis. For example, the 
Wall Street Journal has found that, by committing to patient 
safety, anesthesiologists have halved the rate at which they 
are sued for malpractice, and pay for malpractice insurance at 
rates lower than the rates they paid 20 years ago.\92\
---------------------------------------------------------------------------
    \92\Joseph Hallinan, Heal Thyself: Once Seen as Risky, One Group of 
Doctors Changes Its Ways, Wall St. J., June 21, 2005, at 1.
---------------------------------------------------------------------------
    Along these lines and under the leadership of the Obama 
Administration, the Affordable Care Act provides financial 
incentives for health care providers to improve care and reduce 
unnecessary errors. For example, Medicare payments will be 
reduced for ``hospital acquired conditions''\93\ and high rates 
of readmission.\94\ The Act also creates the ``Hospital Value 
Based Purchasing Program,'' which gives health care providers 
incentives to perform well on a set of quality measures that 
include efficiency, outcome, and patient experience of 
care.\95\ These reforms are the first steps towards a national 
plan to address medical malpractice. The Act instructs the 
Center for Medicare and Medicaid Innovation to develop new 
concepts for improving patient care and reducing costs.\96\
---------------------------------------------------------------------------
    \93\Central line infections and surgical site infections are common 
examples of ``hospital acquired conditions.'' Pub. L. No. 111-148 
Sec. 3008.
    \94\Id. Sec. 3025.
    \95\Id. Sec. 3001
    \96\Id. Sec. 3021.
---------------------------------------------------------------------------
    Unfortunately, H.R. 5 ignores this progress. Instead of 
encouraging health care providers to make fewer mistakes, the 
bill cuts off a patient's right to be made whole when mistakes 
are made. Effective legislation would address the real crisis 
directly. H.R. 5 addresses a crisis that does not exist.
D. LEven if the crisis did exist, H.R. 5 would not lower medical 
        malpractice insurance premiums.
    In his pitch for H.R. 5, Chairman Smith argued that, 
because of a statewide $250,000 cap on noneconomic damages, 
``the rate of increase in medical professional liability 
premiums in California since 1976 has been 280% lower than the 
rate of increase experienced in other states.''\97\ A closer 
look at the evidence will show that regulation of the insurance 
industry, not ``tort reform,'' stabilized the cost of insurance 
in California.\98\
---------------------------------------------------------------------------
    \97\Markup of H.R. 5, The Help Efficient, Accessible, Low-cost, 
Timely Healthcare (HEALTH) Act of 2011 and the Committee's Oversight 
Plan, 112th Cong., Feb. 9, 2011 (statement of Rep. Lamar Smith, 
Chairman, House Comm. on the Judiciary).
    \98\See Study Finds No Link Between Tort Reforms and Insurance 
Rates, Liability Week, July 19, 1999 (quoting Sherman Joyce, President, 
American Tort Reform Association); Michael Prince, Tort Reforms Don't 
Cut Liability Rates, Study Says, Bus. Ins., July 19, 1999 (quoting 
Victor Schwartz, General Counsel, American Tort Reform Association); 
Press Release, AIA Cites Fatal Flaws in Critic's Reports on Tort 
Reform, Am. Ins. Ass'n, Mar. 13, 2002.
---------------------------------------------------------------------------
    The California experience is instructive. H.R. 5 is based 
largely on California's ``Medical Injury Compensation Reform 
Act'' (MICRA).\99\ Enacted in 1975, MICRA caps noneconomic 
damages at $250,000,\100\ eliminates joint and several 
liability for noneconomic damages,\101\ limits attorneys' fees 
on a sliding scale,\102\ and imposes a strict statute of 
limitations on medical malpractice claims.\103\ These new 
protections for defendants had mixed success, at best.
---------------------------------------------------------------------------
    \99\H.R. 5 incorporates ``California's time-tested reforms at the 
Federal level.''Markup of H.R. 5, The Help Efficient, Accessible, Low-
cost, Timely Healthcare (HEALTH) Act of 2011 and the Committee's 
Oversight Plan, 112th Cong., Feb. 9, 2011 (statement of Rep. Lamar 
Smith, Chairman, House Comm. on the Judiciary).
    \100\Cal. Civ. Code Sec. 3333.2.
    \101\Id. Sec. 1431.2.
    \102\Cal. Bus. & Prof. Code Sec. 6146.
    \103\Cal. Civ. Proc. Code Sec. 340.5.
---------------------------------------------------------------------------
    In 1995, a comprehensive study of MICRA's impact found: (1) 
per capita health care expenditures in California exceeded the 
national average every year between 1975 and 1993; (2) the rise 
in the cost of health care in California exceeded the rate of 
inflation every year between 1975 and 1993; (3) hospital 
patient costs were higher in California than in almost any 
other state; and (4) California's medical malpractice liability 
premiums nearly doubled in the 12 years following the enactment 
of MICRA.\104\ In 1999, the California State Assembly Committee 
on the Judiciary concluded that medical malpractice premiums 
had not declined since the enactment of MICRA--California had, 
at best, experienced a slower rate of premium increase.\105\ 
Further, MICRA altogether failed to decrease the number of 
malpractice cases filed in California courts.\106\
---------------------------------------------------------------------------
    \104\Proposition 103 Enforcement Project, MICRA: The Impact on 
Health Care Costs of California's Experiment with Restrictions on 
Medical Malpractice Lawsuits, 1995.
    \105\Brian A. Liang & LiLan Ren, Medical Liability Insurance and 
Damage Caps: Getting Beyond Band Aids to Substantive Systems Treatment 
to Improve Quality and Safety in Healthcare, 30 Am. J. L. & Med. 501, 
506 (2004).
    \106\Id.
---------------------------------------------------------------------------
    To the extent that the cost of insurance stabilized in 
California after 1975, much of the credit is owed to 
Proposition 103, which became law in 1988. Among other reforms 
of the insurance industry, Proposition 103 required insurance 
companies to hold public hearings before increasing premiums 
more than 15 percent. This requirement effectively froze the 
cost of medical malpractice liability insurance for many health 
care providers.\107\ Under the rollback provisions of 
Proposition 103, insurance companies refunded over $1.2 million 
to policyholders.\108\ Within three years, medical malpractice 
insurance had dropped in cost, on average, by 20.2 
percent.\109\ Reform of the insurance industry, not of the 
court system, lowered the cost of insurance.
---------------------------------------------------------------------------
    \107\Testimony of Harvey Rosenfeld, Before the House Comm. on 
Energy and Commerce, Feb. 10, 2003; see also Joseph B. Treaster, 
Malpractice Insurance: No Clear or Easy Answers, N.Y. Times, Mar. 5, 
2003.
    \108\Id.
    \109\Id.
---------------------------------------------------------------------------
E. LH.R. 5 will have no substantial effect on ``defensive medicine.''
    Supporters of H.R. 5 frequently invoke ``the waste in our 
health care system caused by so-called `defensive 
medicine.'''\110\ Defensive medicine occurs, they argue, ``when 
doctors are forced by the threat of lawsuits to conduct tests 
and prescribe drugs that aren't medically required.''\111\ The 
majority's briefing memo for the markup of H.R. 5 cites to a 
``survey from Emergency Physicians Monthly'' as proof that 
``the HEALTH Act's limits on noneconomic damages are essential 
to reducing defensive medicine,'' mostly because ``non-economic 
caps are . . . physicians' preferred choice of malpractice 
reform.''\112\ Although doctors certainly have financial 
incentives to prefer damage caps, there is little evidence that 
the practice of defensive medicine exists as the majority 
defines it, and even less to suggest that H.R. 5 would reduce 
its frequency.
---------------------------------------------------------------------------
    \110\Markup of H.R. 5, The Help Efficient, Accessible, Low-cost, 
Timely Healthcare (HEALTH) Act of 2011 and the Committee's Oversight 
Plan, 112th Cong., Feb. 9, 2011 (statement of Rep. Lamar Smith, 
Chairman, House Comm. on the Judiciary).
    \111\Id.
    \112\Memorandum from Lamar Smith, Chairman, House Comm. on the 
Judiciary, to Members of the Committee (Feb. 4, 2011) at 2 (on file 
with author).
---------------------------------------------------------------------------
    A landmark study by the non-partisan Office of Technology 
Assessment found that ``[c]onventional tort reforms that tinker 
with the existing process for resolving malpractice claims 
while retaining the personal liability of the physician are 
[unlikely to] alter physician behavior.''\113\ Most defensive 
medicine studies since have failed to demonstrate any real 
impact on medical practice arising from higher malpractice 
premiums.\114\
---------------------------------------------------------------------------
    \113\U.S. Congress, Office of Technology Assessment, supra note 42, 
at 92.
    \114\Michelle M. Mello & Troyen A. Brennan, Deterrence of Medical 
Errors: Theory and Evidence for Malpractice Reform, 80 Tex. L. Rev. 
1595 (2002).
---------------------------------------------------------------------------
    The reality is that much of ``defensive medicine'' results, 
not from threat of litigation, but from financial incentives to 
order unnecessary tests and procedures. In a fee-for-service 
health care system, health care providers benefit financially 
by providing additional services.\115\ The GAO has criticized 
the use of ``self-serving'' defensive medicine surveys--such as 
the one highlighted by the majority in its briefing memo--
citing to low response rates and unscientific questioning, and 
concluding that ``so-called defensive medicine may be motivated 
less by liability concerns than by the income it generates for 
physicians or by positive (albeit small) benefits to 
patients.''\116\
---------------------------------------------------------------------------
    \115\Id.
    \116\U.S. General Accounting Office, Analysis of Medical 
Malpractice: Implications of Rising Premiums on Access to Health Care, 
GAO-03-836 (Aug. 29, 2003).
---------------------------------------------------------------------------
    A June 1, 2009, article in New Yorker magazine framed the 
issue in more direct terms. Why had the cost of health care 
risen so high in McAllen, Texas?

        ``It's malpractice,'' a family physician who had 
        practiced here for 33 years said. ``McAllen is legal 
        hell,'' the cardiologist agreed. Doctors order 
        unnecessary tests just to protect themselves, he said. 
        Everyone thought the lawyers here were worse than 
        elsewhere.

        That explanation puzzled me. Several years ago, Texas 
        passed a tough malpractice law that capped pain-and-
        suffering awards at $250,000. Didn't lawsuits go down? 
        ``Practically to zero,'' the cardiologist admitted.

        ``Come on,'' the general surgeon finally said. ``We all 
        know these arguments are bullshit. There is 
        overutilization here, pure and simple.'' Doctors, he 
        said, were racking up charges with extra tests, 
        services, and procedures.''\117\
---------------------------------------------------------------------------
    \117\Atul Gawande, The Cost Conundrum: What a Texas Town Can Teach 
Us About Health Care, New Yorker, June 1, 2009.

Additional studies have shown that doctors' fear of lawsuits is 
``out of proportion to the risk of being sued,'' that damage 
caps have little impact on these perceptions, and that many 
doctors will, wittingly or unwittingly, ``exaggerate their 
concern about being sued, using it as a justification for high-
spending behavior that is rewarded by fee-for-service payment 
systems.''\118\
---------------------------------------------------------------------------
    \118\David Katz, Physicians Still Fear Malpractice Lawsuits, 
Despite Tort Reforms, Health Affairs, Sept. 2010, Vol. 29, Issue 9 
available at http://content.healthaffairs.org/content/29/9.toc.
---------------------------------------------------------------------------
    That type of overstatement was evident in the Committee's 
January hearing on medical liability reform, where one 
Republican witness testified that ``the cost of the practice of 
defensive medicine [is estimated] to be between $70 billion and 
$126 billion per year.''\119\ When pressed by Rep. Scott, 
however, Dr. Hoven had difficulty justifying her claim:
---------------------------------------------------------------------------
    \119\Medical Liability Reform--Cutting Costs, Spurring Investment, 
Creating Jobs, Hearing Before the H. Comm. on the Judiciary, 112th 
Cong., Jan. 20, 2011 (unofficial transcript) (testimony of Dr. Ardis 
Hoven, Chair, Board of Trustees of the American Medical Association).

          Mr. Scott. And are you suggesting that $70 billion to 
        $126 billion worth of cases, services were rendered 
        that were not medically necessary, were not needed?
          Dr. Hoven. That is not what I said, Congressman.
          Mr. Scott. Well, what are you saying?
          Dr. Hoven. I am saying that health care delivered in 
        the examining room, in the operating room, is driven by 
        what is based on clinical judgment and based on 
        assurance testing, which is documentation and proving 
        that, in fact, that is what is wrong with a patient.
          When we talk about cost control in this country, we 
        are talking about the fact that--and this goes to the 
        whole issue of cost containment, which is, if, in fact, 
        you would recognize my medical judgment and allow me to 
        decide when it is important to do a test or not, then 
        our patients would be better served.
          Mr. Scott. By not providing the services?
          Dr. Hoven. If, in my judgment, they don't need it.
          Mr. Scott. And you are not able to--and you charge 
        for services that, in your judgment, are not needed to 
        the tune of $70 billion to $126 billion?
          Dr. Hoven. I do not do that.\120\
---------------------------------------------------------------------------
    \120\Id.

Supporters of H.R. 5 can speak about defensive medicine in the 
abstract, but their expert on the phenomenon was unwilling or 
unable to discuss specifics.
    A nonpartisan analysis confirms that the changes proposed 
by H.R. 5 will have a negligible impact on the behavior of 
physicians. The CBO has found not found significant evidence 
that ``defensive medicine'' exists as a pervasive problem, and 
projects a scant 0.3 percent savings ``from slightly less 
utilization of health care services'' if H.R. 5 were to be 
enacted.\121\ Once again, supporters of H.R. 5 point to a 
crisis that does not exist, and propose legislation that would 
not solve the problem the problem if it did.
---------------------------------------------------------------------------
    \121\U.S. Congressional Budget Office, Analysis of the Effects of 
Proposals to Limit Costs Related to Medical Malpractice (``Tort 
Reform''), Letter to the Hon. Orrin G. Hatch, Oct. 9, 2009, available 
at http://www.cbo.gov/doc.cfm?index=10641 [hereinafter CBO Letter].
---------------------------------------------------------------------------
F. LH.R. 5 will not have a significant impact on the cost of health 
        care or on federal spending.
    Although supporters of H.R. 5 argue that limits on medical 
malpractice liability will help lower the cost of health care, 
they have targeted a minuscule segment of annual health care 
spending. According to the National Association of Insurance 
Commissioners, medical malpractice premiums totaled 
approximately $11.2 billion in 2008.\122\ The overall cost of 
health care that year totaled $2.6 trillion.\123\ In practice, 
H.R. 5 purports to impact health care spending by taking aim at 
0.004 percent of the annual health care budget.
---------------------------------------------------------------------------
    \122\NAIC, Countrywide Summary of Medical Malpractice Insurance, 
Calendar Years 1991-2008 (Sept. 1, 2009).
    \123\Scoring Health Care Reform: CBO'S Budget Options: Hearing 
Before the S. Comm. on Finance, 111th Cong. 39 (2009) (statement of 
Douglas Elmendorf, Director, Congressional Budget Office).
---------------------------------------------------------------------------
    Proponents of H.R. 5 also mention the possibility of 
federal budget savings, citing to a 2009 CBO study that 
concludes a proposal like H.R. 5 would result in a $54 billion 
in budget savings over ten years.\124\ Their use of this study 
is troubling for several reasons. First, it is ironic that the 
same House Republicans who casually dismissed $230 billion in 
savings identified by the CBO in the Affordable Care Act now 
apply such importance to asserted savings from H.R. 5. Second, 
$13 billion of the savings identified by the CBO has nothing to 
do with federal spending; rather, it results from the increased 
taxes health professionals will pay if H.R. 5 is enacted.\125\ 
Third, at least one provision of H.R. 5 is projected to 
increase costs. The CBO concluded that ``reform of joint-and-
several liability rules . . . is likely to increase the 
financial liability of the providers assigned the greatest 
share of responsibility in malpractice cases--typically 
physicians.''\126\ Fourth, ``because many states have already 
implemented some of the changes in the package, a significant 
fraction of the potential cost savings has already been 
realized.''\127\
---------------------------------------------------------------------------
    \124\Id.
    \125\Id.
    \126\Id.
    \127\Id.
---------------------------------------------------------------------------
    Finally, supporters of H.R. 5 miss the narrow scope of the 
CBO analysis. The CBO letter is solely an analysis of the 
immediate effects of this legislation on the federal budget. It 
does not account for the full social and financial cost of 
enacting H.R. 5. The CBO admits as much: ``There is less 
evidence about the effects of tort reform on people's health, 
however, than about the effects of on health care spending--
because many studies of malpractice costs do not examine health 
outcomes.''\128\
---------------------------------------------------------------------------
    \128\Id.
---------------------------------------------------------------------------
    In the long term, victims of malpractice who are injured 
but denied full restitution require additional support from 
Medicare, Medicaid, and other government programs. Moreover, 
the CBO letter acknowledges that, if the changes contemplated 
in H.R. 5 are enacted, the U.S. morality rate will increase by 
as much as 0.2%.\129\ That constitutes an additional 4,853 
Americans killed every year, or 48,250 Americans over the 10-
year period CBO examines.\130\ In our judgment, that is too 
high a price to pay for this legislation. H.R. 5 leaves the 
families of these patients without full recourse, and leans on 
the Federal Government to make up much of the difference.
---------------------------------------------------------------------------
    \129\CBO Letter, supra note 123.
    \130\Based on 2,436,264 annual deaths, according to the Center for 
Disease Control and Prevention. Centers for Disease Control, supra note 
67.
---------------------------------------------------------------------------

               IV. STATES' RIGHTS AND FEDERALISM CONCERNS

    The majority has sent decidedly mixed messages with respect 
to states' rights. In the markup of the bill, supporters of 
H.R. 5 argued that ``bringing a medical liability lawsuit is an 
activity that substantially affects interstate commerce. There 
is no federalism concern with this legislation.''\131\ This 
claim did not sit well with many members of the majority.\132\ 
Later, proponents appeared to concede at least the existence of 
a states' rights problem, promising to work on an amendment for 
introduction on the House floor.\133\ No such amendment has 
been shared with Democratic members of the committee, and the 
majority voted down several amendments that would have 
addressed this issue directly.
---------------------------------------------------------------------------
    \131\Markup of H.R. 5, The Help Efficient, Accessible, Low-cost, 
Timely Healthcare (HEALTH) Act of 2011 and the Committee's Oversight 
Plan, 112th Cong., Feb. 9, 2011 (statement of Rep. Lamar Smith, 
Chairman, House Comm. on the Judiciary).
    \132\``I got problems with that. I think it's a violation of the 
Tenth Amendment, and I don't believe the Federal Government has any 
more authority to regulate health care under the Commerce Clause than 
it does to regulate liability caps in states under the Commerce 
Clause.'' Id. (statement of Rep. Ted Poe, Member, House Comm. on the 
Judiciary).
    \133\``I want to reassure the gentleman from Georgia and the 
gentleman from North Carolina, and particularly two gentlemen from 
Texas on my side, that we are actively working on an amendment for the 
House floor that would empower States to have control over what aspect 
of this law would apply to the States or whether the law would apply to 
those States at all.'' Continued Consideration of H.R. 5, The Help 
Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 
and the Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 
(statement of Rep. Lamar Smith, Chairman, House Comm. on the 
Judiciary).
---------------------------------------------------------------------------
    Simply put, H.R. 5 is a direct attack on states' rights. It 
preempts the law in all 50 states, and its so-called ``state 
flexibility'' provision does almost nothing to mitigate serious 
federalism concerns.
A. LThe states set the rules for their own court systems, and 
        federalism permits diverse systems to coexist.
    Historically, the states have been allowed to set their own 
rules for their own court systems. The two litigants in a 
medical malpractice case are usually an in-state plaintiff and 
an in-state physician.\134\ Except in limited circumstances, 
malpractice cases can only be filed in state court.\135\ Even 
when malpractice cases can be filed in federal court, those 
courts apply state malpractice law.
---------------------------------------------------------------------------
    \134\See Michael I. Krauss & Robert A. Levy, supra note 7.
    \135\Medical malpractice cases filed in federal court are based on 
diversity jurisdiction; e.g., where the parties reside in different 
states.
---------------------------------------------------------------------------
    All 50 states have considered some changes to their tort 
systems, and different states have adopted different approaches 
to the issue of medical malpractice liability. The National 
Conference of State Legislatures (NCSL), a bipartisan 
organization representing the elected legislators and 
professional staffs of all 50 state legislatures, maintains 
that ``American federalism contemplates diversity among the 
states in establishing these rules.''\136\
---------------------------------------------------------------------------
    \136\NCSL Policy, supra note 8.
---------------------------------------------------------------------------
    All 50 states have statutes of limitations in place with 
respect to negligence cases.\137\ All 50 states have rules of 
evidence to provide for the full and fair adjudication of 
lawsuits.\138\ Some states--Colorado, Florida, Illinois, 
Maryland, Michigan, Texas, and West Virginia, among others--
have already enacted medical malpractice damage caps of their 
own.\139\ Other states--including Arizona, Connecticut, Iowa, 
Kentucky, New York, Oregon, Tennessee, and Wyoming--have 
expressly chosen not to limit medical malpractice damages, in 
some instances by amendment to the state constitution or 
popular referendum.\140\ Federalism allows each state to choose 
the rules for medical malpractice cases that best fit the 
particular needs of its citizens, and permits diverse systems 
to flourish and to coexist.
---------------------------------------------------------------------------
    \137\Id.
    \138\Id.
    \139\Colo. Rev. Stat. Sec. 12-64-302; Fla. Stat. Sec. Sec. 766.118 
and 768.73; 735 Ill. Comp. Stat. Sec. 5/2-1115; Md. Code, Cts. & Jud. 
Proc Sec. 3-2A-09; Mich. Comp. Laws Sec. 600.1483; Tex. Civ. Proc. & 
Rem. Code Sec. 74.301; W. Va. Code Sec. 55.7B.8.
    \140\See, e.g., Ariz. Const., Art. 2, sec. 31. ``No law shall be 
enacted in this state limiting the amount of damages to be recovered 
for causing the death or injury of any person.'' Id. See also Ark. 
Const. Art.5, sec. 32; Ky. Const. Sec. 54; Penn. Const., Art III, sec. 
18.
---------------------------------------------------------------------------
B. LH.R. 5 preempts state law in all 50 states.
    H.R. 5 overturns this entire federalist approach to medical 
malpractice liability reform to impose a uniform set of rules 
on the states. No state is immune. No state has adopted the 
bill's precise regime of $250,000 caps on noneconomic damages, 
$250,000 caps on punitive damages, elimination of joint-and-
several liability, and a 3-year limited statute of limitations. 
Moreover, no state has attempted to capture every action 
against ``a health care provider, a health care organization, 
or the manufacturer, distributor, supplier, marketer, promoter, 
or seller of a medical product, regardless of the theory of 
liability on which the claim is based,''\141\ in a law to 
reform ``medical malpractice'' liability.
---------------------------------------------------------------------------
    \141\HEALTH Act, 112th Cong. Sec. 9(7).
---------------------------------------------------------------------------
    The National Conference of State Legislatures categorically 
rejects the ``one-size-fits-all approach to medical malpractice 
envisioned in H.R. 5'' and has reached the ``resounding 
bipartisan conclusion'' that ``federal medical malpractice 
legislation is unnecessary.''\142\ In a letter to the Chairman 
and Ranking Member of the Judiciary Committee, NCSL argues 
further that its opposition to H.R. 5 ``will extend to any bill 
or amendment that directly or indirectly preempts any state law 
governing the awarding of damages by mandatory, uniform amounts 
or the awarding of attorney's fees.''\143\
---------------------------------------------------------------------------
    \142\Letter from Nevada Assemblyman William Horne, Chair, NCSL, and 
Texas Rep. Jerry Madden, Immediate Past Chair, NCSL, to Rep. Lamar 
Smith and Rep. John Conyers, Feb. 16, 2011.
    \143\Id.
---------------------------------------------------------------------------
    With two limited exceptions, H.R. 5 explicitly preempts the 
states in every area of law it reaches--statutes of limitation, 
attorneys' fees, rules of evidence, suits against 
pharmaceutical and device manufacturers, and caps on punitive 
damages.\144\
---------------------------------------------------------------------------
    \144\HEALTH Act, 112th Cong. Sec. 11(a).
---------------------------------------------------------------------------
    The first exception exists solely to further disadvantage 
victims of medical malpractice. H.R. 5 does not preempt any law 
``that imposes greater procedural or substantive protections 
for healthcare providers and healthcare organizations.''\145\ 
In effect, any state law that goes further than H.R. 5 to favor 
defendants--e.g., a law that provides for shorter statutes of 
limitation, imposes lower caps on punitive damages, or removes 
consumer protections in instances of fraud\146\ or 
bribery\147\--stays on the books.
---------------------------------------------------------------------------
    \145\Id. Sec. 11(b)(2).
    \146\Id. Sec. 7(c)(4).
    \147\Id.
---------------------------------------------------------------------------
    The second exception to general preemption--the ``State 
Flexibility'' provision--is, at best, misnamed. Any state law 
that ``specifies a particular monetary amount of compensatory 
or punitive damages'' avoids preemption by the $250,000 cap on 
noneconomic damages imposed by H.R. 5.\148\ This provision 
allows existing monetary caps on medical liability damages to 
stand. But it also forces states without the full range of 
damage caps contemplated by H.R. 5 to adopt a specific scheme. 
For example:
---------------------------------------------------------------------------
    \148\Id. Sec. 11(c).

        Arizona. The Arizona state constitution explicitly 
        prohibits any statutory limit on the amount of damages 
        recoverable by a plaintiff in a medical malpractice 
        suit.\149\ H.R. 5 would preempt the state constitution 
        and force Arizona to adopt a $250,000 cap on 
        noneconomic damages in all health care lawsuits. H.R. 5 
        also preempts similar provisions in the state 
        constitutions of Arkansas, Kentucky, and Pennsylvania.
---------------------------------------------------------------------------
    \149\Ariz. Const., Art. 2, sec. 31.

        Connecticut. Connecticut imposes several procedural 
        requirements on medical malpractice litigants, but does 
        not include caps on damages.\150\ H.R. 5 would preempt 
        state law and force Connecticut to adopt a $250,000 cap 
        on noneconomic damages in all health care lawsuits.
---------------------------------------------------------------------------
    \150\Conn. Gen. Stat. Sec. Sec. 51-251c and 52-584.2.

        California. California caps only noneconomic damages 
        for medical malpractice claims involving licensed 
        medical professionals.\151\ Under H.R. 5, it would be 
        forced to cap damages on cases involving nursing homes, 
        pharmaceutical companies, and the insurance industry.
---------------------------------------------------------------------------
    \151\Cal. Civ. Code Sec. 3333.2.

        Indiana. Indiana caps total compensatory damages at 
        $1,250,000 overall and $250,000 per health care 
        provider, with no limit for wrongful death claims.\152\ 
        Under H.R. 5, it would be force to cap damages in 
        wrongful death suits, as well as in cases involving 
        nursing homes, pharmaceutical manufacturers, and 
        insurance companies.
---------------------------------------------------------------------------
    \152\Ind. Code Sec. 34-18-4-3.

        Texas. Texas caps noneconomic damages in cases 
        involving medical professionals and health care 
        institutions, but not in cases involving the drug and 
        device industry.\153\ Under H.R. 5, it would be forced 
        adopt a $250,000 cap in such cases.
---------------------------------------------------------------------------
    \153\Tex. Civ. Proc. & Rem. Code Sec. 74.301.

In sum, no state will go unaffected by the H.R. 5. The ``state 
flexibility'' provision provides for very little actual 
flexibility.
C. LThe majority sends mixed messages on states' rights and H.R. 5.
    The Federal Government has an important role to play in 
controlling the costs of health care. Supporters of H.R. 5 
invoke a broad ``effect on interstate commerce'' as 
constitutional justification for the bill.\154\ Specifically, 
they find that ``the health care insurance industries affecting 
interstate commerce and the health care liability litigation 
systems existing throughout the United States are activities 
that affect interstate commerce by contributing to the high 
costs of health care.''\155\ Because the health care and 
insurance industries have a massive impact on the national 
economy, Congress has the authority and reason to act where the 
individual states are unable to address the issue separately.
---------------------------------------------------------------------------
    \154\Id. Sec. 2(a)(2).
    \155\Id.
---------------------------------------------------------------------------
    For the past two years, supporters of H.R. 5 have argued 
precisely the opposite with respect to the Affordable Care 
Act.\156\
---------------------------------------------------------------------------
    \156\See, e.g., Rep. Lamar Smith, Updated Health Care Frequently 
Asked Questions (FAQ) available at http://lamarsmith.house.gov/Issues/
Issue/?IssueID=13970 (``I co-sponsored legislation that increases 
funding for state-based programs providing health insurance to 
individuals unable to obtain affordable insurance from private 
insurers. This bill passed by Congress is a massive overreach of 
government control.'').
---------------------------------------------------------------------------
    In fact, the majority has argued both sides of the states' 
rights question on the same day. On the morning of February 16, 
in a full committee hearing on ``The Constitutionality of the 
Patient Individual Mandate,'' Republican members described the 
Affordable Care Act as a massive overreach of the Federal 
Government and a clear violation of the Tenth Amendment.\157\ 
Chairman Smith argued further that ``if the individual mandate 
is upheld'' by the Supreme Court, ``it would be the end of 
federalism.\158\ Later that afternoon, in the continued markup 
of H.R. 5, Republican members of the committee voted twice--by 
party line both times--to reject amendments to the bill that 
would have allowed existing state laws to stand.\159\
---------------------------------------------------------------------------
    \157\``I think that [the Affordable Care Act] expanded the Commerce 
Clause beyond the intentions of the Founding Fathers and the concepts 
that we basically hold today. . . . [I]f Obamacare is upheld as 
constitutional . . . then what could be constrained by the Commerce 
Clause?'' The Constitutionality of the Patient Individual Mandate: 
Hearing Before the H. Comm. on the Judiciary, 112th Cong. (Feb. 16, 
2011) (statement of Rep. Steve King, member, H. Comm. on the 
Judiciary).
    \158\Id. (statement of Rep. Lamar Smith, chairman, H. Comm. on the 
Judiciary).
    \159\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011. Amendments 
introduced by Rep. Hank Johnson would have struck preemption language 
in H.R. 5 and permitted existing state medical malpractice liability 
laws (or, in the alternative, relevant provisions of state 
constitutions) to remain in effect. At least two members of the 
majority were ``noticeably absent from the room'' when these amendments 
were rejected. Brett Coughlin, House Judiciary Approves Tort Reform, 
Politico, Feb. 16, 2011 available at http://www.politico.com/news/
stories/0211/49703.html.
---------------------------------------------------------------------------
    The majority's position on states' rights took an even 
stranger turn when the committee considered an amendment to 
``repair certain provisions in the McCarran-Ferguson Act which 
currently exempt medical malpractice insurers from Federal 
antitrust laws.''\160\ In opposition to the amendment, the 
majority argued:
---------------------------------------------------------------------------
    \160\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of 
Rep. Maxine Waters, member, H. Comm. on the Judiciary).

        Under our current system, Mr. Chairman, State 
        regulation of health insurance, State regulators have 
        authority to prevent rates that are excessive, 
        inadequate, or unfairly discriminatory. . . . By 
        letting Department of Justice and FTC second guess 
        State insurance regulator's competition policies, this 
        amendment would disrupt subtle law in nearly every 
        State in the Union.\161\
---------------------------------------------------------------------------
    \161\Id. (statement of Rep. Trent Franks, member, H. Comm. on the 
Judiciary).

The majority opposed this amendment because it would have 
preempted state law. To summarize: the majority was in favor of 
states' rights in the morning and opposed to states' rights in 
the afternoon--except while debating this amendment, when they 
---------------------------------------------------------------------------
favored states' rights again.

    To their credit, some members of the majority have made 
public comments pointing out this inconsistency.\162\ Others 
are content to repeat the fiction that H.R. 5 ``specifically 
exempts state laws and does not change what states have already 
adopted.''\163\
---------------------------------------------------------------------------
    \162\Comparing the Affordable Care Act to H.R. 5, Rep. Ted Poe 
remarked: ``to be consistent, they're both not covered under the 
Interstate Commerce [Clause]. I don't think the Constitution gives the 
Federal government any authority in either one of those areas.'' Markup 
of H.R. 5, The Help Efficient, Accessible, Low-cost, Timely Healthcare 
(HEALTH) Act of 2011 and the Committee's Oversight Plan, 112th Cong., 
Feb. 9, 2011 (statement of Rep. Ted Poe, member, H. Comm. on the 
Judiciary).
    \163\Id. (statement of Rep. Lamar Smith, Chairman, H. Comm. on the 
Judiciary).
---------------------------------------------------------------------------

               V. SPECIFIC CONCERNS WITH THE LEGISLATION

    H.R. 5 imposes new restrictions on medical malpractice 
cases. It applies these restrictions across the board--no 
matter how much merit a case may have, regardless of the 
negligence at issue or the severity of the injury. Individually 
and collectively, the provisions of H.R. 5 are unjust and 
unfair. The following are just a few of the most pressing 
problems with the bill.
A. LThe $250,000 cap on noneconomic damages is unfair and 
        discriminatory (Section 4(b)).
    The $250,000 cap on noneconomic damages is manifestly 
unfair. It discriminates against women, children, and other 
vulnerable members of society and does account for the effects 
of inflation. The bill's sweeping definition of ``health care 
lawsuit'' gives the cap a particularly insidious reach.
    H.R. 5 imposes an arbitrarily low cap on noneconomic 
damages in every case, regardless of the negligence or the 
extent of injury involved. This one-size-fits-all approach 
objectifies patients and gives the courts little room to 
restore any loss that does not come with a price tag. The cap 
does nothing but stop the most severely injured patients from 
receiving adequate compensation.\164\ It is patently unfair.
---------------------------------------------------------------------------
    \164\A survey by the RAND Corporation found that the ``most 
significant impact'' of California's $250,000 cap ``falls on patients 
and families who are severely injured or killed as a result of medical 
negligence or mistakes.'' ConsumerWatchDog.com, RAND Study: California 
Patients Killed or Maimed by Malpractice Lose Most Under Damage Caps, 
http://www.
consumerwatchdog.org/newsrelease/rand-study-california-patients-killed-
or-maimed-malpractice-lose-most-under-damage-caps (last visited Mar. 1, 
2011).
---------------------------------------------------------------------------
    Some malpractice cases clearly call for damages that exceed 
$250,000. At a forum hosted by Democratic members in 2003, 
Kathy Olsen described her son's injuries.\165\ When Steve Olsen 
was 2 years old, he fell on a stick in the woods. His infection 
was severe enough that the Olsens asked for a CAT scan, but 
Steve's doctor administered a steroid injection and sent him 
home without further treatment. The next day, Steve returned to 
the hospital in a coma, permanently blind and brain damaged 
from a growing brain abscess. At trial, a jury concluded that 
the doctor had committed malpractice. Given the magnitude of 
the injury--Steve had no lost wages, but he would never play 
sports, work, or enjoy normal relationships with his peers--the 
jury awarded the Olsens $7.1 million in ``noneconomic'' 
damages. Because the case was subject to California's medical 
malpractice cap, the judge was forced to reduce the award to 
$250,000.
---------------------------------------------------------------------------
    \165\Democratic Forum on Malpractice, Feb. 11, 2003, Transcript at 
60.
---------------------------------------------------------------------------
    Mrs. Olsen testified: ``California's malpractice law has 
failed innocent patients, consumers, and taxpayers. Under this 
law people are victimized twice, once by the wrongdoer and 
again by the laws that deny them the right to hold the 
wrongdoer accountable.''\166\ As to the cap on damages, Mrs. 
Olsen observed that the ``law is regressive by hurting the most 
seriously injured victims, those who are permanently and 
catastrophically injured by medical negligence. . . . In 
California, and now proposed nationwide, no matter how old you 
are or how disabled you become or how catastrophic your 
injuries are, there is a one size fits all limit on your pain 
and suffering.''\167\
---------------------------------------------------------------------------
    \166\Id. at 62.
    \167\Id.
---------------------------------------------------------------------------
    The $250,000 cap is a particular burden on women, children, 
seniors, and the poor. Proportionally, these patients have more 
trouble demonstrating lost wages and other economic losses. 
Studies of medical malpractice cases show that women recover 
economic damages in lower amounts because they receive lower 
overall wages.\168\ Women are three times more likely than men 
to receive noneconomic damages.\169\ Women are far more likely 
to suffer severe noneconomic loss (e.g., loss of fertility or 
disfigurement) or to be a victim of the type of conduct that 
leads to punitive damages (e.g., sexual assault, fraud, false 
imprisonment, and extreme violation of medical standards).\170\ 
With the cap on noneconomic damages in place, a woman without a 
salary is limited to $250,000 to compensate for these injuries.
---------------------------------------------------------------------------
    \168\See Thomas Koenig & Michael Rustad, His and Her Tort Reform: 
Gender Injustice in Disguise, 70 Wash. L. Rev. 1 (1995).
    \169\Id. at 84.
    \170\Id.
---------------------------------------------------------------------------
    These effects are more than theoretical. After undergoing a 
double mastectomy, Linda McDougal was told that she had never 
had breast cancer--a pathologist had mixed up her charts with 
those of another patient.\171\ Although she recovered $8,000 in 
lost wages and $48,000 in medical bills, her actual losses were 
profound:
---------------------------------------------------------------------------
    \171\Democratic Forum on Malpractice, February 11, 2003, Transcript 
at 48.

        My scars are not only physical, but emotional as well. 
        . . . My disfigurement from medical negligence is 
        almost entirely noneconomic. . . . I could never have 
        predicted or imagined in my worst nightmare that I 
        would end up having both of my breasts removed 
        needlessly because of a medical error. No one plans on 
        being a victim of medical malpractice, but it 
        happened.\172\
---------------------------------------------------------------------------
    \172\Id. at 50-51.

The cap on non-economic damages puts a price tag on the worst 
types of physical and psychological trauma. Under H.R. 5, Mrs. 
McDougal would be entitled to $250,000 for her permanent 
disfigurement, nothing more.
    On May 29, 2010, Connie Spears went to a San Antonio 
hospital reporting excruciating leg pain. Mrs. Spears had 
experienced blood clots before, so frequently and some so 
severe that doctors had installed a filter in one of her 
heart's main veins. In the San Antonio emergency room, however, 
the doctor on call diagnosed Mrs. Spears with ``bilateral leg 
pain'' and told her to follow up with her primary care 
physician. Three days later, in immense pain and with her legs 
a burgundy color, Spears called 911 and was transported by 
ambulance to a different hospital. This time, doctors 
determined that the 54 year old's vein filter was severely 
clotted and had led to tissue death in her legs and kidney 
failure. When Mrs. Spears regained consciousness weeks later, 
she learned that doctors had amputated both of her legs to save 
her life.\173\ ```Do you know what it's like not to have any 
legs?' Mrs. Spears asked tearfully, trembling as she lifted her 
dress to reveal the thick pink scars stretched like pillow 
seams across her thighs. `It's ruined all of our lives.'''\174\ 
Under H.R. 5, Mrs. Spears would be limited to $250,000 as 
compensation for the trauma of losing her legs.
---------------------------------------------------------------------------
    \173\Emily Ramshaw, State's Tort Reform Makes Lawyers Wary of 
Taking on Patients, N.Y. Times, Dec. 19, 2010, at A39.
    \174\Id.
---------------------------------------------------------------------------
    The $250,000 cap in H.R. 5 is pegged to the amount adopted 
by California in 1975, at a time when noneconomic damages 
rarely exceeded $250,000. More than 30 years later, inflation 
has taken its toll.\175\ Translated into 2011 dollars, the 
$250,000 cap imposed in 1975 is worth about $61,000 today. If 
adjusted to reflect inflation in medical care value, the cap 
would be worth almost $2 million today. The majority voted down 
two amendments offered by Rep. Jerrold Nadler that would have 
corrected this error--one that would have raised the cap to 
$1,977,500 and ensure that the amount is adjusted annually for 
inflation, and one that would have simply adjusted the $250,000 
cap for inflation in future years.\176\ Although any arbitrary 
cap is unfair, these amendments would have at least mitigated 
the damage.
---------------------------------------------------------------------------
    \175\See U.S. Congressional Research Service, Medical Malpractice 
Liability Reform: Legal Issues and Fifty-State Survey of Caps on 
Punitive Damages and Noneconomic Damages, RL31692 (Jan. 18, 2006).
    \176\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011.
---------------------------------------------------------------------------
    Many states have adopted some form of cap on medical 
malpractice damages, but no state has capped damages in all 
``health care lawsuits,'' as H.R. 5 defines the term. H.R. 5 
reaches all suits ``concerning the provision of health care 
goods or services or any medical product affecting interstate 
commerce, or any health care liability action concerning the 
provision of health care goods or services or any medical 
product affecting interstate commerce.''\177\ The bill is an 
unprecedented experiment in limiting the rights of patients as 
they face insurance companies, HMOs, pharmaceutical and device 
manufacturers, and other entities that have nothing to do with 
traditional medical malpractice.
---------------------------------------------------------------------------
    \177\HEALTH Act, 112th Cong. Sec. 9(7).
---------------------------------------------------------------------------
    Because of the uncertain interaction between the bill's 
definition of ``economic damages'' and existing state law, caps 
on noneconomic damages have a particularly harmful effect on 
children. In markup, Rep. Debbie Wasserman Schultz offered an 
amendment to exempt minors from the $250,000 cap on noneconomic 
damages. She reasoned: ``the basis of the amendment is just 
common sense. Children don't work. Like women and the elderly 
who tend to be in lower wage jobs, children are even more 
disproportionately impacted by these noneconomic damage.''\178\ 
In response, supporters of H.R. 5 argued that ``the reality is 
that the economic damages accrue to the parents, and the 
parents certainly have the right to sue on behalf of economic 
damages in a limitless capacity.''\179\ Although the majority 
was unable to name a single malpractice case in which parents 
recovered economic damages on behalf of an injured child, they 
defeated the amendment along party lines.
---------------------------------------------------------------------------
    \178\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of 
Rep. Debbie Wasserman Schultz, member, H. Comm. on the Judiciary).
    \179\Id. (statement of Rep. Trent Franks, member, H. Comm. on the 
Judiciary).
---------------------------------------------------------------------------
    H.R. 5 defines ``economic damages'' as ``objectively 
verifiable monetary losses . . . such as past and future 
medical expense, loss of past and future earnings, cost of 
obtaining domestic services, loss of employment, and loss of 
business or employment opportunities.''\180\ On its face, this 
provision appears to be of limited use to children, who do not 
work, and the elderly, who may not have significant future 
earnings. If the majority intended for children's future lost 
wages to count as ``economic damages,'' they could have voted 
for an amendment proposed by Rep. Robert Scott that would have 
clarified the bill. Instead, they voted down the proposal--
leaving patients to sort out the meaning of the term ``economic 
damages'' case by case, and state by state.
---------------------------------------------------------------------------
    \180\HEALTH Act, 112th Cong. Sec. 9(6).
---------------------------------------------------------------------------
    The rejection of these amendments has real consequences. In 
2008, 17-year-old Olivia Cull was in the process of finishing 
her senior year at the Archer School for Girls, where she was 
an accomplished scholar, actress, and musician. She had been 
accepted early into Smith College and planned to major in 
Classical Studies and Ancient Arts and Languages. That year, 
Olivia underwent a routine cardiac catheterization to assess a 
congenital heart condition. The procedure was without incident, 
but later, while Olivia was still under general anesthesia, a 
cardiology fellow-in-training pulled the catheter lines and 
caused Olivia's heart rate, pulse, and blood pressure to drop 
rapidly. Basic cardiopulmonary resuscitation was not started 
for more than ten minutes. Olivia suffered severe and extensive 
brain damage, never regained consciousness, and died on January 
20, 2009.\181\ It is difficult to put a price tag on the loss 
caused to Olivia's parents, but it cannot be measured by 
``objectively verifiable monetary losses'' and should not be 
capped at $250,000.
---------------------------------------------------------------------------
    \181\American Ass'n for Justice, The Real Victims of H.R. 5 (Feb. 
2011).
---------------------------------------------------------------------------
B. LThe abolition of joint and several liability creates an unfair 
        standard for the patient (Section 4(d)).
    Joint and several liability has been part of American 
common law for centuries.\182\ The doctrine provides that all 
tortfeasors who are responsible for an injury are ``jointly and 
severally'' liable for the claimant's damages. A patient can 
sue all responsible defendants and recover from each one in 
proportion to degree of fault, or sue any one defendant and 
recover the total amount of damages. A defendant who pays more 
than his or her share is then entitled, under the doctrine of 
contribution, to seek compensation from other responsible 
parties based on their degree of fault.\183\ Joint and several 
liability is designed to ensure that patients of wrongful 
conduct are able to fully recover damages for their injuries, 
especially when one or more of the defendants is insolvent.
---------------------------------------------------------------------------
    \182\See, e.g., Michael L. Rustad & Thomas H. Koenig, Taming the 
Tort Monster: The American Civil Justice System As A Battleground of 
Social Theory, 68 Brook L. Rev. 1 (Fall 2002); Matthew W. Light, Who's 
the Boss?: Statutory Damage Caps, Courts, and State Constitutional Law, 
58 Wash. & Lee L. Rev. 315 (Winter, 2001).
    \183\Restatement (Third) of Torts Sec. 23 (1999).
---------------------------------------------------------------------------
    H.R. 5 replaces this doctrine with its so-called ``Fair 
Share'' rule, which provides: ``each party shall be liable for 
that party's share of any damages only and not for the share of 
any other person. . . . A separate judgment shall be rendered 
against each party for the amount allocated to such 
party.''\184\ In practice, H.R. 5 would require a patient to 
demonstrate each defendant's proportional responsibility for an 
injury.
---------------------------------------------------------------------------
    \184\HEALTH Act, 112th Cong. Sec. 4(d).
---------------------------------------------------------------------------
    This burden is unfair. Plaintiffs would be required to 
bring a separate case against each defendant, ``each requiring 
a finding of duty of care, a breach of that duty, proximate 
cause, finding damages, and a determination of what part of 
total damages are attributed to which malpractice. Each case 
requires an expert witness, depositions, and the full expense 
of complicated litigation.''\185\ The rule is also unnecessary. 
As Rep. Scott argued in markup: ``Health care providers already 
can agree, in advance, how to apportion responsibility and they 
provide insurance and all pay premiums and set fees for 
services accordingly.''\186\ Although H.R. 5 is based on 
California's medical malpractice law, not even California 
eliminates joint and several liability for economic damages. 
The CBO notes that this particular proposal will actually 
increase the overall cost of health care.\187\
---------------------------------------------------------------------------
    \185\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of 
Rep. Robert Scott, member, H. Comm. on the Judiciary).
    \186\Id.
    \187\CBO Letter, supra note 123.
---------------------------------------------------------------------------
    Rather than engage in debate on the facts, supporters of 
H.R. 5 turned to a tired anecdote to support this provision:

        Say a drug dealer staggers into an emergency room with 
        a gunshot wound after a deal dealing drugs goes bad. 
        The surgeon works on him, does the best he possibly 
        can, but it is not perfect, and drug dealer sues him. 
        The jury finds the drug dealer 99 percent responsible 
        for his own injuries. But it also finds the hospital 1 
        percent responsible because the physician was fatigued 
        after working too long. But today, the hospital can be 
        made to pay 100 percent of the damages because the drug 
        dealer is without means.\188\
---------------------------------------------------------------------------
    \188\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of 
Rep. Trent Franks, member, H. Comm. on the Judiciary).

First, this story is borrowed from past debates. It has been 
used by the majority to defend this proposal nearly every time 
H.R. 5 has been considered by the committee.\189\ Second, its 
premise is factually incorrect. All 50 states have adopted some 
form of contributory negligence or comparative negligence 
standard that bars plaintiffs from recovering for damages for 
which they are substantially responsible.\190\ Even if the 
``drug dealer'' could somehow bring a colorable malpractice 
claim against the ``hospital,'' he would not be entitled to 
recover damages if he were ``99 percent'' at fault. Third, it 
goes to show how little consideration has been given to the 
effect of preempting state law in all 50 states. Supporters of 
H.R. 5 appear to be unaware of how state law applies in 
instances of joint and several liability, let alone prepared 
for the unintended consequences of wiping out centuries of 
jurisprudence in the United States.
---------------------------------------------------------------------------
    \189\See, e.g., Markup of Help Efficient, Accessible, Low-cost, 
Timely Healthcare (HEALTH) Act of 2002, 107th Cong. (statement of Rep. 
Bachus, member, H. Comm. on the Judiciary).
    \190\See, e.g., Board of County Comm'r of Garret County v. Bell 
Atlantic, 695 A.2d 171 (Md. 1997) (outlining a standard of pure 
contributory negligence in Maryland); Liv v. Yellow Cab, 119 Cal. Rptr. 
858 (1975) (outlining a standard of pure comparative fault in 
California); O.C.G.A. Sec. 51-11-7 (codifying a 50 percent bar rule in 
Georgia); and Tex. Civ. Prac. & Rem. Code Sec. Sec. 33.001-33.017 
(codifying a 51 percent bar rule in Texas).
---------------------------------------------------------------------------
C. LPunitive damages caps protect the most egregious instances of 
        malpractice (Sections 7(a) and 7(b)).
    The bill's limits on punitive damages are problematic for 
two reasons. First, the heightened standard is practically 
impossible for patients to prove. Second, the $250,000 cap is 
fundamentally inadequate in cases extreme enough to warrant 
punitive damages.
    Under H.R. 5, punitive damages are only available if a 
plaintiff can prove by ``clear and convincing evidence'' that a 
defendant ``acted with malicious intent to injure the 
claimant'' or ``deliberately failed to avoid unnecessary 
injury'' that he or she was ``substantially certain'' the 
patient would suffer.\191\ Because proving state of mind in 
this manner is virtually impossible, perpetrators of the most 
extreme forms of malpractice will now go unpunished.
---------------------------------------------------------------------------
    \191\HEALTH Act, 112th Cong. Sec. 7(a).
---------------------------------------------------------------------------
    In markup, Ranking Member Conyers offered an amendment that 
would have exempted claims based on intentional tort liability 
from this new standard.\192\ The majority argued that the 
amendment was ``redundant'' because criminal activity is 
already exempted from the bill,\193\ and voted it down on party 
lines. There are many differences between intentional tort 
claims and criminal charges--they are brought in entirely 
separate court systems, with separate rules of procedure and 
separate burdens of proof--but H.R. 5 does not reflect this 
fact.
---------------------------------------------------------------------------
    \192\Markup of H.R. 5, The Help Efficient, Accessible, Low-cost, 
Timely Healthcare (HEALTH) Act of 2011 and the Committee's Oversight 
Plan, 112th Cong., Feb. 9, 2011.
    \193\Id. (statement of Trent Franks, member, H. Comm. on the 
Judiciary).
---------------------------------------------------------------------------
    Rep. Ted Deutch offered a narrower amendment to exempt 
certain intentional torts (e.g., assault, batter, rape, 
conversion, false imprisonment, and intentional infliction of 
emotional distress) from the scope of the bill.\194\ The 
majority voted down this amendment as well, arguing that these 
torts have ``nothing to do with medical liability.''\195\ A 
plain reading of H.R. 5 shows that the bill applies to any 
claim ``against a health care provider, health care 
organization, or the manufacturer distributor, supplier, 
marketer, promoter, or seller of a medical product . . . 
regardless of the theory of liability on which the claim is 
based.''\196\ An intentional tort claim against a health care 
provider quite clearly falls into this irresponsibly sweeping 
definition.
---------------------------------------------------------------------------
    \194\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of 
Ted Deutch, member, H. Comm. on the Judiciary).
    \195\Id. (statement of Trent Franks, member, H. Comm. on the 
Judiciary).
    \196\HEALTH Act, 112th Cong. Sec. 9(9) (emphasis added).
---------------------------------------------------------------------------
    Even if a patient is somehow able to show malicious intent, 
recovery of punitive damages is limited at $250,000 or two 
times the amount of economic damages awarded.\197\ This cap 
eliminates much of the deterrent effect of punitive damages--
$250,000 for grossly negligent conduct would merely be the 
price of doing business for many hospitals, pharmaceutical 
manufacturers, insurance companies, and other wealthy health 
care providers. Worse, the cap applies in the most outrageous 
instances of medical malpractice, including cases involving 
drug abuse, alcohol abuse, and sexual assault.\198\ In markup, 
Rep. Debbie Wasserman Schultz cited the case of Dr. Earl 
Bradley, a Delaware pediatrician who sexually assaulted 103 
children over the course of his medical career.\199\ Under H.R. 
5, the patients in this case--children, some as young as three 
months old, with no economic damages to prove--would be 
entitled seek no more than $250,000 in punitive damages.
---------------------------------------------------------------------------
    \197\Id. Sec. 7(b)(2).
    \198\Public Citizen found that ``47.7% of doctors [found to have 
been disciplined for sexual abuse or misconduct by a disciplinary 
board] were allowed to continue practicing, their behavior probably 
unknown to most if not all of their patients.'' Sidney Wolfe et al., 
20,125 Questionable Doctors (2000).
    \199\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of 
Rep. Debbie Wasserman Schultz, member, H. Comm. on the Judiciary).
---------------------------------------------------------------------------
D. LShielding drug and device manufacturers from punitive damages 
        places consumers at grave risk (Section 7(c)).
    H.R. 5 provides blanket immunity from punitive damages to 
the manufacturers of drugs and devices that have been approved 
by the Federal Drug Administration.\200\ This provision alone 
would be troubling enough. Simply because a product has been 
approved by the FDA does not mean that a company should be 
immunized from punitive liability when that product causes 
severe harm to a consumer. Medical devices cause approximately 
53 deaths and more than 1,000 serious injuries every year, with 
a cost of more than $26 billion annually.\201\ Government 
safety standards, at their best, establish only a minimum level 
of protection for the public. At their worst, they are 
outdated, under-protective, and under-enforced.
---------------------------------------------------------------------------
    \200\HEALTH Act, 112th Cong. Sec. 7(c)(1)(A)(i).
    \201\See Robert Cohen & J. Scott Orr, Faulty Medical Implants Enter 
Market Through Flawed System, Newhouse News Service, 2002.
---------------------------------------------------------------------------
    Moreover, the bill completely insulates manufacturers and 
distributors of drugs and devices from defects arising during 
the manufacturing process, which occurs after the FDA has given 
its approval of the device. This means that a drug company 
distributing an FDA-approved product that is manufactured in a 
flawed manner and harms consumers would be insulated from 
punitive damages, even if the flawed manufacture was 
intentional or reckless.
    H.R. 5 goes even further, extending this immunity to 
manufacturers and distributors of drugs and devices that are 
``generally recognized among qualified experts as safe and 
effective,'' whether or not FDA approval has been sought.\202\ 
In these cases, so long as a defendant can find an expert 
witness to vouch for its product, federal safety standards are 
sidestepped altogether. Unless the defendant company has 
withheld or misrepresented information from the FDA or 
attempted to bribe an FDA official,\203\ punitive damages are 
not available, no matter how flagrant the harm.
---------------------------------------------------------------------------
    \202\HEALTH Act, 112th Cong. Sec. 7(c)(1)(A)(ii).
    \203\Id. Sec. 7(c)(4).
---------------------------------------------------------------------------
    Rep. Mike Quigley and Rep. Sheila Jackson Lee offered an 
amendment that would have struck this provision.\204\ The 
majority opposed the amendment because ``litigation is 
threatening the viability of the lifesaving drug 
industry.''\205\ Drug manufacturers can hardly plea poverty. In 
2009, the pharmaceutical industry was the third most profitable 
segment of the U.S. economy.\206\ Medical device and equipment 
manufacturers came in fourth.\207\ By rejecting this amendment, 
supporters of H.R. 5 chose to side with these industries rather 
than with individual patients and consumers.
---------------------------------------------------------------------------
    \204\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011.
    \205\Id. (statement of Rep. Trent Franks, member, H. Comm. on the 
Judiciary).
    \206\CnnMoney.com, Fortune 500 D Top Industries: Most Profitable, 
http://money.cnn.com/ magazines/fortune/fortune500/2009/performers/
industries/profits/.
    \207\Id.
---------------------------------------------------------------------------
E. LLimits on contingency fees deny patients access to the justice 
        system (Section 5).
    Contingency fee arrangements--where attorneys forgo 
immediate payment in exchange for a share of the damages if a 
plaintiff prevails in court--serve a useful and essential 
function in the legal system.\208\ Because contingency fee 
agreements require little or no money up front, injured 
plaintiffs who could not otherwise afford legal representation 
have access to counsel. And because attorneys who take losing 
cases are paid little or nothing for their efforts, contingency 
fees also serve as a screening mechanism for ``frivolous'' 
cases.\209\ Lawyers will not incur the risk of taking a 
contingency fee case with little merit.
---------------------------------------------------------------------------
    \208\See Herbert M. Kritzer, Lawyer Fees and Lawyer Behavior in 
Litigation: What does the Empirical Literature Really Say?, 80 Tex. L. 
Rev. 1943 (2002); and Herbert M. Kritzer, Economic Policy Litigation 
Conference Seven Dogged Myths Concerning Contingency Fees, 80 Wash. U. 
L.Q. 739 (Fall 2002).
    \209\Id.
---------------------------------------------------------------------------
    In an unusual position for the traditionally free-market 
majority, supporters of H.R. 5 prefer that state and federal 
courts to step into attorney-client agreements and ``supervise 
the arrangements for payment of damages.''\210\ The bill 
requires that all contingency fee arrangements adhere to a 
specific formula: ``(1) Forty percent of the first $500,000 
recovered by the claimant(s). (2) Thirty-three percent and one-
third percent of the next $500,000 recovered by the 
claimant(s). (3) Twenty-five percent of the next $500,000 
recovered by the claimant(s). (4) Fifteen percent of the next 
$500,000 recovered by the claimant.''\211\
---------------------------------------------------------------------------
    \210\HEALTH Act, 112th Cong. Sec. 5.
    \211\Id.
---------------------------------------------------------------------------
    This provision purports to limit conflict of interest ``in 
any health care lawsuit in which the attorney for a party 
claims a financial stake in the outcome,''\212\ but the 
contingency fees formula will have the effect of making it more 
difficult for poor patients to secure legal representation in 
medical malpractice cases. Although the stated purpose of this 
bill is curb the costs of lawsuits and lower insurance 
premiums, contingency fees do not change the size of a jury 
award or an insurance company's obligation to pay damages on 
behalf of a health care provider. Moreover, the one-sided 
formula does nothing to limit conflicts of interest on the 
other side of the case. Defense counsels are paid by the hour 
and have direct financial incentive to engage in unnecessary 
litigation and drive up costs. The bill's stated concern about 
legal ethics notwithstanding, this proposal is a naked attempt 
to prevent plaintiffs from accessing the courts.
---------------------------------------------------------------------------
    \212\Id.
---------------------------------------------------------------------------
F. LPeriodic payments shift the risks of bankruptcy to individual 
        patients (Section 8).
    If H.R. 5 passes, courts will no longer have discretion in 
structuring payment of damages over time. At the request of a 
defendant found to have committed malpractice, ``the court 
shall . . . enter a judgment ordering that future damages be 
paid by periodic payments.''\213\ As with the other defendant-
friendly provisions of this bill, this requirement harms 
patients and protects proven bad actors.
---------------------------------------------------------------------------
    \213\Id. Sec. 8(a) (emphasis added).
---------------------------------------------------------------------------
    Periodic payment plans allow a negligent party to stall 
while the patient assumes the risk. The defendant (or the 
defendant's insurance company) can invest and earn interest on 
compensation owed to the patient. If a defendant files for 
bankruptcy--or simply refuses to pay--it is the patient's 
responsibility to retain counsel and press the matter in court. 
There may be instances where a court, in its discretion, finds 
good reason to structure payment of damages over time. H.R. 5 
removes that discretion, however, and the one-sidedness of this 
provision is unjustifiable.
G. LA strict statute of limitations denies patients a chance to be 
        heard in court (Section 3).
    H.R. 5 requires that a health care lawsuit commence ``3 
years after the date of manifestation of injury or 1 year after 
the claimant discovers, or through the use of reasonable 
diligence should have discovered, the injury, whichever occurs 
first.''\214\ The bill provides an oddly limited exception for 
minors under the age of six.\215\ Rep. Debbie Wasserman Schultz 
offered an amendment that would have clarified this provision 
and tolled the statute of limitations until minors reach 
adulthood, but the majority voted it down.\216\
---------------------------------------------------------------------------
    \214\Id. Sec. 3.
    \215\``Actions by a minor shall be commenced within 3 years from 
the date of the alleged manifestation of injury except that actions by 
a minor under the full age of six years shall be commenced within 3 
years of manifestation of injury or prior to the minor's 8th 
birthday.'' Id.
    \216\Continued Consideration of H.R. 5, The Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the 
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of 
Rep. Debbie Wasserman Schultz, member, H. Comm. on the Judiciary).
---------------------------------------------------------------------------
    In most cases, this 3-year statute of limitations is, in 
effect, a 1-year statute of limitations in disguise. Because 
most patients will discover an injury only when it manifests 
itself, the 1-year statute of limitations will begin to run 
immediately. In other cases, the 3-year statute of limitations 
alone cuts off patients from bringing legitimate claims--
particularly in cases that involve diseases with long latency 
periods. For example, a child infected with HIV from a tainted 
blood infusion may manifest symptoms long before a diagnosis is 
sought. If the child is at least 6 and more than 3 years have 
passed since the symptoms first began to manifest, H.R. 5 cuts 
off all legal recourse. These patients deserve their day in 
court.

                               CONCLUSION

    Collectively, the ``reforms'' proposed by H.R. 5 would 
limit a patient's ability to recover compensation for damages 
caused by medical negligence, defective products, and 
irresponsible insurance practices. In addition to raising core 
issues of fairness, H.R. 5 preempts the law in all 50 states, 
with little regard for the consequences. This legislation was 
designed more than 20 years ago to resolve an insurance 
``crisis,'' but all available evidence shows that the insurance 
market is not in crisis today. H.R. 5 does not make insurance 
more available, does not cut spending to any appreciable 
degree, and does not address issues of access to justice or 
patient safety. Because H.R. 5 solves few problems facing 
Americans and exacerbates many real ones, we believe that 
Congress should reject this bill.

                                   John Conyers, Jr.
                                   Jerrold Nadler.
                                   Robert C. ``Bobby'' Scott.
                                   Melvin L. Watt.
                                   Sheila Jackson Lee.
                                   Maxine Waters.
                                   Steve Cohen.
                                   Henry C. ``Hank'' Johnson, Jr.
                                   Pedro Pierluisi.
                                   Mike Quigley.
                                   Ted Deutch.
                                   Debbie Wasserman Schultz.

                      Additional Dissenting Views


1. Introduction

    Proponents of H.R. 5, the Help Efficient, Accessible, Low-
cost, Timely Healthcare (HEALTH) Act of 2011, claim it is the 
same as California's Medical Injury Compensation Reform Act 
(MICRA), a law passed in 1975 to limit noneconomic damages in 
medical malpractice lawsuits. While H.R. 5 may appear similar 
to the California law, a closer look reveals that H.R. 5 is 
extreme and unnecessarily limits the rights of patients. 
Indeed, there are distinct provisions contained in H.R. 5 that 
differ dramatically from MICRA.

2. HR 5 is Breathtaking in Scope

    First MICRA does not match H.R. 5 in its breathtaking scope 
by providing protection to not only doctors, but drug and 
device manufacturers, nursing homes, insurance companies and 
HMOs. H.R. 5's cap of $250,000 on noneconomic damages applies 
broadly to all ``health care lawsuits,'' including product 
liability actions against negligent drug companies and for-
profit nursing home corporations.\1\ MICRA only applies to 
malpractice cases against a doctor or hospital.
---------------------------------------------------------------------------
    \1\See Section 9, Definitions (7), (8),(9), (10), (11), (12), and 
(14).
---------------------------------------------------------------------------

3. Punitive Damages

    Punitive damages are capped in H.R. 5 at two times the 
economic loss or $250,000, whichever is greater.\2\ 
California's MICRA law does not cap punitive damages. Punitive 
damages are reserved for only the most egregious cases and are 
meant to punish the defendant and deter future dangerous 
conduct.
---------------------------------------------------------------------------
    \2\See Section 7(a) and (b).
---------------------------------------------------------------------------
    Furthermore, H.R. 5 gives total immunity from punitive 
damages to the pharmaceutical industry if the products have 
been approved by the FDA or, even if not approved by the FDA, 
are ``generally recognized among qualified experts as safe and 
effective . . .'' MICRA does not contain this kind of sweeping 
immunity for the drug industry.\3\ Granting immunity from the 
threat of punitive damages removes the major financial 
incentive for drug companies to immediately remove dangerous 
drugs from the shelves as soon as they become aware of those 
dangers.
---------------------------------------------------------------------------
    \3\See Section 7(c).
---------------------------------------------------------------------------

4. Loss of Consortium

    Unlike H.R. 5, California courts recognize a separate claim 
for loss of consortium--claims brought by the spouse of an 
injured patient for loss to the marital relationship. H.R. 5's 
more restrictive cap limits the rights of both the patient and 
the spouse to a $250,000 aggregate. The amount of noneconomic 
damages that can be recovered cannot exceed $250,000 no matter 
how many parties have suffered injuries as a result of medical 
negligence.

5. Joint & Several Liability

    H.R. 5 completely eliminates joint liability for economic 
and noneconomic loss.\4\ California law only eliminates joint 
liability for noneconomic damages. Joint liability enables an 
individual to bring one claim against all of the parties 
involved and have those responsible for the injuries apportion 
fault among them, ensuring the injured victim is fully 
compensated. Because economic damages typically include an 
award meant to pay for the future medical costs of the victim, 
a majority of states (including California) have refused to 
limit joint liability for economic loss. When injured patients 
are not fully compensated for their future health care costs, 
taxpayers end up footing the bill.
---------------------------------------------------------------------------
    \4\See Section 4(d).
---------------------------------------------------------------------------

6. Insurance Industry Reforms

    H.R. 5 does not contain any provisions addressing conduct 
in the medical malpractice insurance industry. Following the 
passage of MICRA, California enacted Proposition 103, a ballot 
initiative that included a mandatory 20% premium rate rollback. 
It is clear that both of these changes were necessary to 
address rising medical malpractice insurance premiums in 
California. H.R. 5 does not include any insurance reform to 
guarantee lower rates for doctors. In fact, the bill does not 
even mention insurance companies except for the provisions 
giving them protection from liability.

                                   Howard L. Berman.
                                   Zoe Lofgren.
                                   Maxine Waters.
                                   Judy Chu.
                                   Linda T. Sanchez.