TORTS: EMTLA, Medical Negligence, and punitive damages — Larry O’Neil Thomas v. St. Joseph Healthcare, Inc. (COA 12/5/2008)

Gray’s Estate (Estate) brought this action alleging medical negligence against the Hospital, Dr. Joseph Richardson (a physician who treated Gray during an earlier visit to the Hospital on March 9, 1999), Dr. Parsley, Dr.
Geren, physician’s assistant Adkins, and several members of the nursing staff. 
In addition, the Estate alleged that the Hospital violated the Emergency Medical Treatment and Active Labor Act
(EMTALA). After a lengthy period of discovery, the matter proceeded to trial on October 3, 2005. However, that trial ended in a mistrial. 
Before the second trial, the Estate settled with all but the hospital and
proceeded against it with the jury apportioning 15 % of the fault to the
hospital. The jury awarded compensatory damages of $25,000.00, of which the Hospital’s share was $3,750.00. The jury also assessed punitive damages against the Hospital in the amount of $1,500,000.00. 
The trial court concluded that the award of punitive damages was clearly excessive and therefore a new trial on that issue was in order. This appeal and cross-appeal followed.

The Hospital first argues that the Estate failed to establish the elements of a viable claim under
EMTALA. Specifically, the Hospital raises two arguments. First, the Hospital contends that a plaintiff cannot simultaneously pursue a claim under EMTALA and for medical negligence.

Second, the Hospital argues that it cannot be liable under EMTALA merely because its agents failed to correctly diagnose Gray’s condition
claiming it could only be liable for failing to stabilize an emergency medical condition which its physicians actually detected.

The Court of Appeals disagreed with the Hospital that claims under EMTALA and for medical negligence are mutually exclusive. The case law makes it clear that these claims are separate and have different elements of proof. Nevertheless, a failure to provide appropriate medical screening and stabilization of an emergency medical condition may amount to both a violation of EMTALA and medical negligence. See
Cleland v. Bronson Health Care Group, Inc., 917 F.2d 266, 270 (6th Cir. 1990).

Thus, the fact that the Estate is asserting a medical negligence claim does not automatically preclude it from bringing a claim against the Hospital under
EMTALA. The more germane issue is whether the Estate has presented sufficient evidence to support a claim under EMTALA

Consequently, the only issue presented to the jury was whether the Hospital failed to stabilize Gray’s emergency medical condition prior to discharging him. The Hospital argues that the Estate cannot sustain an action under the Act because Gray actually received treatment. 

Liability under EMTALA does not rest on its negligence for failing to detect and treat a
condition, but rather the Hospital’s duty to stabilize arose “if it determined that . . . Gray had an emergency medical condition.” The instruction’s definition of “emergency medical condition” is the same as the statutory definition found at 42
U.S.C. § 1395dd(e)(1).  For liability to arise, the doctors on duty must have actual knowledge of the patient’s emergency medical condition. 
The duty to stabilize under EMTALA “to provide such medical treatment of the [emergency medical] condition as may be necessary to assure, within reasonable medical probability, that no material deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility[.] . . .” 42
U.S.C. § 1395dd(e)(3)(A).  Thus it is clear that the duty to stabilize under EMTALA does not require that the Hospital
have actual knowledge of a specific condition. Rather, the duty arises upon the Hospital’s determination that the patient is manifesting symptoms of sufficient severity as to constitute an “emergency medical condition.”

The Hospital argues that punitive damages could not be assessed against it without a showing that it ratified the grossly negligent conduct of its employees. The Hospital argues that there was no evidence showing that it had ratified the conduct of the physicians and Hospital staff, and therefore it was entitled to a directed verdict on the Estate’s claim for punitive damages.

Kentucky Revised Statutes (KRS) 411.184(3) limits vicarious liability for punitive damages to instances where the employer authorized, ratified, or should have anticipated the bad conduct of its employee. 
The Hospital contends that it was entitled to a jury instruction on ratification as a prerequisite to an award of punitive damages.
COA agreed.

Not only did the court fail to provide such an instruction on ratification of
the employees acts, its answer to the jury’s question implied that it could impose punitive damages on the Hospital for the acts of its agents without a finding that it ratified or had reason to know of their conduct.

We also agree with the Hospital that the trial court erred in failing to instruct the jury that the Estate must prove its right to punitive damages by clear and convincing evidence.

Since the COA found that the punitive damages instruction was inadequate, a new trial would be necessary in any event. However,
the COA did address the trial court’s decision finding that the award of punitive damages was excessive.

In State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 425, 123 S. Ct. 1513, 1524, 155 L. Ed. 2d 585 (2003), the United States Supreme Court suggested that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” In this case, the jury’s award of punitive damages is 60 times the total amount of compensatory damages awarded to the Estate and 400 times the amount of compensatory damages apportioned against the Hospital. Based on this obvious disparity, the trial court concluded that the award of punitive damages was clearly excessive.

However, the Court in Campbell rejected a bright-line ratio or mathematical formula to determine the reasonableness of a punitive damages award. Campbell, 538 U.S. at 424-25, 123 S. Ct. at 1524. Rather, the Court specified that in order to satisfy due process, punitive damage awards must be evaluated under three factors: “1) the degree of reprehensibility of the defendant’s conduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.” Campbell, 538 U.S. at 418, 123 S. Ct. at 1520. See also BMW of North America v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996).

Of the three factors, “the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct.” Campbell, 538 U.S. at
419.  The purpose of the EMTALA is to protect indigent and uninsured patients from being refused emergency medical treatment. 
While the Hospital’s actions may have amounted to a deliberate indifference to Gray’s rights, there is no showing that it was inspired by intentional malice or trickery.

Since the jury apportioned 25% of the fault to Gray himself, thus diminishing the Hospital’s overall responsibility for the injury. Under these circumstances, an award of punitive damages may have been appropriate, but the amount awarded in this case appears excessive.