Opinion ID: 779713
Heading Depth: 1
Heading Rank: 1

Heading: application of the ftca to new mexico's cap on medical malpractice recoveries

Text: 4 The district court awarded the Plaintiffs over $2.1 million in damages. The Government argues on appeal that this damages award should have been subject to New Mexico's $600,000 cap on medical malpractice recoveries. N.M. Stat. § 41-5-6(A) (the recovery cap). The district court rejected this argument: 5 The New Mexico cap on damages under the New Mexico Medical Malpractice Act does not apply in this case. The cap only applies to negligence by a health care provider, which is defined as a person, corporation, organization, facility or institution licensed or certified by this state to provide health care or professional services as a doctor of medicine, hospital, outpatient health care facility, doctor of osteopathy, chiropractor, podiatrist, nurse anesthetist or physician's assistant. NMSA § 41-5-3(A). Plaintiffs' claims against the hospital administrators who elected to provide absolutely no training to Nurse Rhodes, as well as their claims of negligence against Nurse Rhodes, are not capped under the statute. 6 In other words, the district court concluded that (1) the recovery cap applies only to suits against health care providers, and (2) that Haceesa's suit against hospital administrators and a nurse was not a suit against health care providers. On appeal, the Government challenges each of these conclusions. The Plaintiffs, meanwhile, argue for affirmance on the alternative ground that, under New Mexico law, the Government is not entitled to the benefit of the recovery cap. After summarizing the relevant law, we address each of these three arguments below. 2 7 Under the FTCA, the United States is liable for its tortious conduct in the same manner and to the same extent as a private individual under like circumstances in that jurisdiction would be liable. 28 U.S.C. §§ 1346(b), 2674. Here, our charge is to determine first the scope and applicability of the limits New Mexico statutes impose on the medical malpractice liability of private entities. 8 New Mexico's recovery cap provides: Except for punitive damages and medical care and related benefits, the aggregate dollar amount recoverable by all persons for or arising from any injury or death to a patient as a result of malpractice shall not exceed six hundred thousand dollars ($600,000) per occurrence. N.M. Stat. § 41-5-6(A). A health care provider's personal liability is limited to two hundred thousand dollars ($200,000) for monetary damages and medical care and related benefits.... Any amount due from a judgment or settlement in excess of two hundred thousand dollars ... shall be paid from the patient's compensation fund.... Id. § 41-5-1(D). As the district court noted, the statute defines health care provider as a person, corporation, organization, facility or institution licensed or certified by this state to provide health care or professional services as a doctor of medicine, hospital, outpatient health care facility, doctor of osteopathy, chiropractor, podiatrist, nurse anesthetist or physician's assistant. N.M. Stat. § 41-5-3(A). `[M]alpractice claim' includes any cause of action arising in this state against a health care provider for medical treatment, lack of medical treatment or other claimed departure from accepted standards of health care.... Id. § 41-5-3(C). 9 Not all health care providers, however, are entitled to the benefit of the recovery cap: A health care provider not qualifying under this section shall not have the benefit of any of the provisions of the Medical Malpractice Act in the event of a malpractice claim against it. Id. § 41-5-5(C). In order to be qualified, a health care provider must (1) establish its financial responsibility by filing proof ... of malpractice liability insurance ... of at least two hundred thousand dollars ...; and (2) pay the [Patient's Compensation Fund] surcharge. Id. § 41-5-5(A). 10
11 The Plaintiffs argue that we need not reach the question of whether the district court's rationale for refusing to apply the recovery cap is correct, because the Government is not qualified within the meaning of the Medical Malpractice Act and therefore ineligible to benefit from the recovery cap. The Government does not dispute that it has not filed proof of liability insurance and has not paid any surcharge into the Patients' Compensation Fund, and thus, by the terms of section 41-5-5, is not qualified. 12 Three circuits have considered arguments similar to that now offered by the Plaintiffs, and all three circuits have held that the Government was entitled to the recovery cap despite failure to file proof of financial responsibility and to contribute to a compensation fund. See Carter v. United States, 982 F.2d 1141, 1143-44 (7th Cir.1992); Lozada v. United States, 974 F.2d 986, 987 (8th Cir.1992); Owen v. United States, 935 F.2d 734, 737-38 (5th Cir.1991). The rationale supporting these holdings is that (1) the FTCA refers to like circumstances rather than identical circumstances, 3 (2) the financial responsibility of the United States is assured, and (3) its failure to contribute to a compensation fund is immaterial because (unlike qualified providers) it must pay its liabilities without resort to the compensation fund. 4 This court has endorsed these holdings. Hill v. United States, 81 F.3d 118, 121 (10th Cir.1996) (citing, inter alia, Carter, Lozada, and Owen, and stating, These cases stand for the proposition that where there is a specific cap on tort liability, the United States government may benefit from this limit although it did not otherwise participate in the statutory scheme which provides the cap.... 5 13 The Plaintiffs endeavor to distinguish Carter, Lozada, and Owen by arguing that New Mexico law require[s] the United States to attend a Medical Review Panel hearing and grants plaintiffs the benefit of having a physician selected to assist them in continuing to pursue their claims if they are found to have merit. In essence, Haceesa's theory (offered without supporting authority) is that participation in the medical review commission procedures amounts to a qualification for purposes of section 41-5-5, and that New Mexico's qualification procedure thus is materially different from those at issue in Carter, Lozada, and Owen. We disagree. The Medical Malpractice Act establishes two actions that a health care provider shall perform [t]o be qualified: filing proof of insurance and payment of a compensation fund surcharge. N.M. Stat. § 41-5-5. The absence from section 41-5-5 of any requirement of participation in the commission procedures demonstrates the error in the Plaintiffs' argument. In any event, we note the Plaintiffs are mistaken that health care providers are obligated to attend panel hearings. Id. § 41-5-19(A) (providers and their attorneys may attend). 14 The Plaintiffs next argue that private individual[s] under like circumstances, 28 U.S.C. § 2674, generally have not availed themselves of New Mexico's qualification procedures, and thus the Government should not be regarded as having done so. (Aple B. 18 (A review of reported New Mexico cases indicates that most cases brought against negligent hospitals are outside the NMMMA. (citations omitted)).) By contrast, in Carter, the Seventh Circuit noted that [a]ccording to the record, more than 90% of the private medical providers had satisfied analogous qualification procedures. 982 F.2d at 1143. It is not apparent to us why the United States should be precluded from taking advantage of a state liability cap just because a substantial majority of private medical providers voluntarily chose not to qualify as a qualified health care provider. In any event, the record before us is totally inadequate even to establish Plaintiff's factual premise. Accordingly, this argument fails. 15 Finding persuasive the holdings of all of the other circuits to address this issue, we conclude that the Government is not ineligible to invoke the recovery cap merely because it did not satisfy the relevant state qualification procedures. Therefore, we reject Haceesa's proposed alternative grounds for affirmance, and we turn to the grounds actually relied upon by the district court for concluding that the recovery cap did not apply. 16
17 As noted above, the definition of health care provider does not include nurses (except for nurse anesthetists, which the nurse here undisputedly was not) or hospital administrators. On this basis, the district court concluded that the recovery cap did not apply in the present case. The Government argues, however, that the $600,000 cap is not limited to actions against health care providers, but instead applies to all malpractice defendants. By its terms, the Government argues, section 41-5-6(A) limits how much all persons may recover for or arising from any injury or death to a patient as a result of malpractice. Only section 41-5-6(D)'s $200,000 cap on personal liability refers expressly to health care providers. The New Mexico courts have not ruled on whether the recovery cap applies to all malpractice actions or only those brought against health care providers, so we must predict how they would resolve the issue. 18 The Government's argument assumes that the phrase amount ... for or arising from any injury or death to a patient as a result of malpractice, § 41-5-6(A), has a meaning distinct from malpractice claim, which is defined in relevant part by the Act to include[] any cause of action ... against a health care provider for ... lack of medical treatment. N.M. Stat. § 41-5-3(C) (emphasis added). We need not decide this question because of our conclusion in the next section that the United States is a qualified health care provider for purposes of this suit. 19
20 Ultimately, whether the recovery cap applies to the Plaintiffs' present suit turns on whether this FTCA suit against the United States, arising from the actions of a nurse and health care administrators, is a suit against a health care provider within the meaning of the recovery cap statute. To answer this question, we begin with the text of the statutory provisions governing FTCA liability. Under 28 U.S.C. § 1346(b), the district courts ... shall have exclusive jurisdiction of civil actions on claims against the United States... for injury ... caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable. Under 28 U.S.C. § 2674, the United States shall be liable ... in the same manner and to the same extent as a private individual under like circumstances. Finally, as already noted, New Mexico's statutory recovery cap applies only to suits against health care providers, a term that includes hospitals but does not include either nurses or hospital administrators. 21 The issue before us is one of statutory interpretation. If private person, § 1346(b), and private individual, § 2674, includes employers, then the recovery cap applies here because the private employer analogous to a government hospital is a private hospital. Section 1346(b) unmistakably is couched in the language of an employer's respondeat superior liability, creating jurisdiction over actions against the United States ... for injury ... caused by the ... wrongful act ... of any employee ... while acting within the scope of his office or employment. § 1346(b). See, e.g., Restatement (Second), Agency § 219(1) (A master is subject to liability for the torts of his servants committed while acting in the scope of their employment.) Further, § 1346(b) refers to circumstances where the United States, if a private person, would be liable. Because in reality the United States is not an individual employee but only an employer, this phrasing suggests that the only shoes that the Government stands in under the FTCA are those of private employers. 22 We think the text of the FTCA best supports the Government's employer interpretation, a conclusion buttressed by our rule that any waiver of sovereign immunity `must be construed strictly in favor of the sovereign and not enlarged beyond what its language requires.' United Tribe of Shawnee Indians v. United States, 253 F.3d 543, 547 (10th Cir.2001) (quoting United States v. Nordic Village, Inc., 503 U.S. 30, 34, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1991)) (internal quotation marks and alteration omitted). 23 To the extent that this issue is not resolved by the text of the statute, we look to legislative intent, and we conclude that Congress has spoken to this question. In enacting the Federal Employees Liability Reform and Tort Compensation Act of 1988, Congress found that [t]he United States, through the Federal Tort Claims Act, is responsible to injured persons for the common law torts of its employees in the same manner in which the common law historically has recognized the responsibility of an employer for torts committed by its employees within the scope of their employment. § 2(b), 102 Stat. 4564, 28 U.S.C. § 2671 note. Cf. H.R. Rep. 100-700 at 5 (1988), reprinted in 1988 U.S.C.C.A.N. 5945, 5949 (describing government's FTCA liability as vicarious). 24 Accordingly, we conclude that the Government's liability under the FTCA is limited to that of a private employer under like circumstances. Our conclusion is consistent with that of at least two other circuits. See St. John v. United States, 240 F.3d 671, 676 (8th Cir.2001) (The FTCA is a limited waiver of sovereign immunity, allowing the federal government to be sued for the actions of `any employee of the Government while acting within the scope of his office or employment' under circumstances where the United States would be liable if it were a private employer. 28 U.S.C. § 1346(b) and 2674.); Johnson v. Sawyer, 47 F.3d 716, 730 (5th Cir.1995) (All FTCA liability is respondeat superior liability.... Under the FTCA, the United States is not liable if the private employer would not be liable pursuant to local law.); see also Bryant v. United States, 126 F.Supp.2d 1227, 1234 (2000); cf. Gutierrez de Martinez v. Lamagno, 515 U.S. 417, 420, 115 S.Ct. 2227, 132 L.Ed.2d 375 (1995) (Generally, [FTCA] cases unfold much as cases do against other employers who concede respondeat superior liability.). The only circuit to reach a contrary conclusion did so in a split decision. Knowles v. United States, 91 F.3d 1147, 1150 (8th Cir.1996) (2-1 decision). The issue in Knowles was similar to the one that we face, namely whether an FTCA suit against the United States arising from the alleged malpractice of medical specialists employed by the government was subject to South Dakota's $1 million cap on medical malpractice damages. The Knowles majority concluded that the recovery cap did not apply, reasoning as follows: 25 Under the FTCA, the United States will be held liable to the same extent as a private party. It is standing in the shoes of the medical service specialists. Therefore, the United States shares in the protection of the statute to the same extent the individuals would if they were sued directly. It follows, then, that if medical services specialists, individually, are not protected by the statute, neither is the United States shielded from the consequences of their negligence. 26 91 F.3d at 1150 (internal quotation marks and alterations omitted). In dissent, Judge Beam reasoned that the `hypothetical private party' is analogous to a private employer, Id. at 1153, and [t]he government cannot stand in the shoes of a negligent federal employee, individually, because the employee is immune from suit. Id. at 1154. Ultimately, the dissent concluded that the government has waived immunity and hence is liable only under a statutorily-imposed respondeat superior theory. Id. 27 We find the Knowles dissent more persuasive. The panel majority made no effort to come to grips with the language of § 1346(b), which, as noted above, supports the view that FTCA constitutes respondeat superior liability. Nor did it acknowledge Congress's statement of intent in the note to § 2671. Finally, the majority did not purport to construe strictly Congress's FTCA waiver of sovereign immunity.
28 For the foregoing reasons, we conclude that the district court's ruling that New Mexico's $600,000 recovery cap is inapplicable to the present suit is erroneous. We hold that, because an analogous suit against a private hospital based on the actions of employees who are not themselves health care providers would be subject to the recovery cap, the Plaintiff's present FTCA suit against the Government is also subject to the $600,000 cap.