I

103D CONGRESS

2D SESSION H. R. 5253

To establish standards relating to the calculation and payment of damages

in medical malpractice liability claims and actions, to restrict attorneys’

contingency fees under such claims and actions, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 7, 1994

Mr. BALLENGER introduced the following bill; which was referred to the

Committee on the Judiciary

A BILL

To establish standards relating to the calculation and payment of damages in medical malpractice liability claims

and actions, to restrict attorneys’ contingency fees under

such claims and actions, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Medical Malpractice

5 Reform Act of 1994’’.
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1 SEC. 2. CALCULATION AND PAYMENT OF DAMAGES IN MED2 ICAL MALPRACTICE CLAIMS AND ACTIONS.

3 (a) LIMITATION ON NONECONOMIC DAMAGES.—The

4 total amount of noneconomic damages that may be award5 ed to a claimant and the members of the claimant’s family

6 for losses resulting from the injury which is the subject

7 of a medical malpractice liability claim or action may not

8 exceed $250,000, regardless of the number of parties

9 against whom the claim or action is brought or the number

10 of actions brought with respect to the injury.

11 (b) MANDATORY OFFSETS FOR DAMAGES PAID BY

12 A COLLATERAL SOURCE.—

13 (1) IN GENERAL.—With respect to a medical

14 malpractice liability claim or action, the total

15 amount of damages received by an individual under

16 such claim or action shall be reduced, in accordance

17 with paragraph (2), by any other payment that has

18 been, or will be, made to an individual to com19 pensate such individual for the injury that was the

20 subject of such claim or action.

21 (2) AMOUNT OF REDUCTION.—The amount by

22 which an award of damages to an individual for an

23 injury shall be reduced under paragraph (1) shall

24 be—

25 (A) the total amount of any payments

26 (other than such award) that have been made
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1 or that will be made to such individual to pay

2 costs of or compensate such individual for the

3 injury that was the subject of the claim or ac4 tion; minus

5 (B) the amount paid by such individual (or

6 by the spouse, parent, or legal guardian of such

7 individual) to secure the payments described in

8 subparagraph (A).

9 (c) PERIODIC PAYMENTS FOR FUTURE LOSSES.—

10 (1) GENERAL RULE.—In any medical mal11 practice liability claim or action in which future eco12 nomic damages exceed $100,000, a defendant may

13 not be required to pay such damages in a single,

14 lump-sum payment, but shall be permitted to make

15 such payments periodically based on when the dam16 ages are found likely to occur, as such payments are

17 determined by the court.

18 (2) WAIVER.—A court may waive the applica19 tion of paragraph (1) with respect to a defendant if

20 the court determines that it is not in the best inter21 ests of the plaintiff to receive payments for damages

22 on such a periodic basis.
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1 SEC. 3. LIMITATION ON ATTORNEYS’ CONTINGENCY FEES

2 AND OTHER COSTS UNDER MEDICAL MAL3 PRACTICE CLAIMS.

4 (a) IN GENERAL.—An attorney who represents, on

5 a contingency fee basis, a claimant in a medical mal6 practice liability claim may not charge, demand, receive,

7 or collect for services rendered in connection with such

8 claim in excess of the following amount recovered by judg9 ment or settlement under such claim:

10 (1) 25 percent of the first $150,000 (or portion

11 thereof) recovered, plus

12 (2) 10 percent of any amount in excess of

13 $150,000 recovered.

14 (b) CALCULATION OF PERIODIC PAYMENTS.—In the

15 event that a judgment or settlement includes periodic or

16 future payments of damages, the amount recovered for

17 purposes of computing the limitation on the contingency

18 fee under subsection (a) shall be based on the cost of the

19 annuity or trust established to make the payments. In any

20 case in which an annuity or trust is not established to

21 make such payments, such amount shall be based on the

22 present value of the payments.

23 SEC. 4. APPLICABILITY; EFFECT ON STATE LAW.

24 (a) APPLICABILITY.—This Act shall apply with re25 spect to any medical malpractice liability claim and to any

26 medical malpractice liability action brought in any State
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1 or Federal court, except that this subtitle shall not apply

2 to a claim or action for damages arising from a vaccine3 related injury or death to the extent that title XXI of the

4 Public Health Service Act applies to the claim or action.

5 (b) PREEMPTION.—The provisions of this Act shall

6 preempt any State law to the extent such law is inconsist7 ent with such provisions, except that such provisions shall

8 not preempt any State law that places greater limitations

9 on the amount of damages that may be awarded or the

10 amount of attorneys’ fees that may be collected with re11 spect to medical malpractice liability claims.

12 (c) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE

13 OF LAW OR VENUE.—Nothing in subsection (b) shall be

14 construed to—

15 (1) waive or affect any defense of sovereign im16 munity asserted by any State under any provision of

17 law;

18 (2) waive or affect any defense of sovereign im19 munity asserted by the United States;

20 (3) affect the applicability of any provision of

21 the Foreign Sovereign Immunities Act of 1976;

22 (4) preempt State choice-of-law rules with re23 spect to claims brought by a foreign nation or a citi24 zen of a foreign nation; or
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1 (5) affect the right of any court to transfer

2 venue or to apply the law of a foreign nation or to

3 dismiss a claim of a foreign nation or of a citizen

4 of a foreign nation on the ground of inconvenient

5 forum.

6 (d) FEDERAL COURT JURISDICTION NOT ESTAB7 LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in

8 this Act shall be construed to establish any jurisdiction

9 in the district courts of the United States over medical

10 malpractice liability actions on the basis of section 1331

11 or 1337 of title 28, United States Code.

12 SEC. 5. DEFINITIONS.

13 As used in this Act:

14 (1) CLAIMANT.—The term ‘‘claimant’’ means

15 any person who alleges a medical malpractice liabil16 ity claim, and any person on whose behalf such a

17 claim is alleged, including the decedent in the case

18 of an action brought through or on behalf of an es19 tate.

20 (2) ECONOMIC DAMAGES.—The term ‘‘economic

21 damages’’ means damages paid to compensate an in22 dividual for hospital and other medical expenses, lost

23 wages, lost employment, and other pecuniary losses.

24 (3) HEALTH CARE PROFESSIONAL.—The term

25 ‘‘health care professional’’ means any individual who
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1 provides health care services in a State and who is

2 required by the laws or regulations of the State to

3 be licensed or certified by the State to provide such

4 services in the State.

5 (4) HEALTH CARE PROVIDER.—The term

6 ‘‘health care provider’’ means any organization or

7 institution that is engaged in the delivery of health

8 care services in a State and that is required by the

9 laws or regulations of the State to be licensed or cer10 tified by the State to engage in the delivery of such

11 services in the State.

12 (5) INJURY.—The term ‘‘injury’’ means any ill13 ness, disease, or other harm that is the subject of

14 a medical malpractice liability action or a medical

15 malpractice liability claim.

16 (6) MEDICAL MALPRACTICE LIABILITY AC17 TION.—The term ‘‘medical malpractice liability ac18 tion’’ means a civil action brought in a State or Fed19 eral court against a health care provider or health

20 care professional in which the plaintiff alleges a

21 medical malpractice liability claim, but does not in22 clude any action in which the plaintiff’s sole allega23 tion is an allegation of an intentional tort.

24 (7) MEDICAL MALPRACTICE LIABILITY

25 CLAIM.—The term ‘‘medical malpractice liability
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1 claim’’ means a claim in which the claimant alleges

2 that injury was caused by the provision of (or the

3 failure to provide) health care services or the use of

4 a medical product.

5 (8) MEDICAL PRODUCT.—

6 (A) IN GENERAL.—The term ‘‘medical

7 product’’ means, with respect to the allegation

8 of a claimant, a drug (as defined in section

9 201(g)(1) of the Federal Food, Drug, and Cos10 metic Act (21 U.S.C. 321(g)(1)) or a medical

11 device (as defined in section 201(h) of the Fed12 eral Food, Drug, and Cosmetic Act (21 U.S.C.

13 321(h)) if—

14 (i) such drug or device was subject to

15 premarket approval under section 505,

16 507, or 515 of the Federal Food, Drug,

17 and Cosmetic Act (21 U.S.C. 355, 357, or

18 360e) or section 351 of the Public Health

19 Service Act (42 U.S.C. 262) with respect

20 to the safety of the formulation or per21 formance of the aspect of such drug or de22 vice which is the subject of the claimant’s

23 allegation or the adequacy of the packag24 ing or labeling of such drug or device, and
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1 such drug or device is approved by the

2 Food and Drug Administration; or

3 (ii) the drug or device is generally rec4 ognized as safe and effective under regula5 tions issued by the Secretary of Health

6 and Human Services under section 201(p)

7 of the Federal Food, Drug, and Cosmetic

8 Act (21 U.S.C. 321(p)).

9 (B) EXCEPTION IN CASE OF MISREPRE10 SENTATION OR FRAUD.—Notwithstanding sub11 paragraph (A), the term ‘‘medical product’’

12 shall not include any product described in such

13 subparagraph if the claimant shows that the

14 product is approved by the Food and Drug Ad15 ministration for marketing as a result of with16 held information, misrepresentation, or an ille17 gal payment by manufacturer of the product.

18 (9) NONECONOMIC DAMAGES.—The term ‘‘non19 economic damages’’ means damages paid to com20 pensate an individual for physical and emotional

21 pain, suffering, inconvenience, physical impairment,

22 mental anguish, disfigurement, loss of enjoyment of

23 life, loss of consortium, and other nonpecuniary

24 losses, but does not include punitive damages.
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1 (10) PUNITIVE DAMAGES.—The term ‘‘punitive

2 damages’’ means compensation, in addition to com3 pensation for actual harm suffered, that is awarded

4 for the purpose of punishing a person for conduct

5 deemed to be malicious, wanton, willful, or exces6 sively reckless.

7 (11) STATE.—The term ‘‘State’’ means each of

8 the several States, the District of Columbia, the

9 Commonwealth of Puerto Rico, the Virgin Islands,

10 Guam, and American Samoa.

11 SEC. 6. EFFECTIVE DATE.

12 This Act shall apply with respect to claims accruing

13 or actions brought on or after the date of the enactment

14 of this Act.

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