Court Opinion

ID: 9541674
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:27:40.810419+00
Date Added: 2024-06-11T15:04:21.831944
License: Public Domain

MOSK, J.
I dissent. This imprudent legislation provides benefits to the wrongdoer at the expense of his victim.
First, I disagree with the majority’s view that the detrimental effect of Code of Civil Procedure section 667.7 on malpractice victims is irrelevant to a determination of unconstitutionality. Second, while I concur with the *379majority that the rational relationship test is the appropriate standard to apply in evaluating the challenge to MICRA on equal protection grounds, I disagree with its conclusion as to the purpose of the legislation, and with the failure to consider certain statistical information in deciding the equal protection issue.
It is true, as the majority hold, that the Legislature is not required to provide a quid pro quo as a condition of diminishing the common law rights of tort victims. However, consideration of the detrimental effect of legislation on a disadvantaged class is not irrelevant to a determination of whether the members of the class have been deprived of due process of law. A number of cases, in passing on the constitutionality of statutes imposing disabilities on certain categories of tort victims, have relied on the presence or absence of a quid pro quo to the detrimentally affected class as a factor in their determinations. (See, e.g., Duke Power Co. v. Carolina Env. Study Group (1978) 438 U.S. 59, 93 [57 L.Ed.2d 595, 623, 98 S.Ct. 2620]; New York Central R.R. Co. v. White (1917) 243 U.S. 188, 201 [61 L.Ed. 667, 674, 37 S.Ct. 247]; Hurst v. Triad Shipping Co. (3d Cir. 1977) 554 F.2d 1237, 1243-1244; see also Carr v. United States (4th Cir. 1970) 422 F.2d 1007, 1011; Learner, Medical Malpractice (1981) 18 Harv.J.Legis. 143.) Indeed, the absence of quid pro quo to malpractice victims was held to render unconstitutional a monetary limit on the amount of recovery (Wright v. Central DuPage Hospital Association (1976) 63 Ill.2d 313 [347 N.E.2d 736, 742-743, 80 A.L.R.3d 566]) and a statute of limitations applicable only to malpractice victims who are minors (Sax v. Votteler (Tex. 1983) 648 S.W.2d 661, 667.)
Although the hospital claims that periodic payments are fair to the malpractice victim because damages are paid out as they are incurred, this assumes that a court, in structuring payments for future damages, will be prescient enough to predict with unerring accuracy the future condition of the plaintiff and the rate of inflation for perhaps decades into the future. If the victim’s condition deteriorates so that medical treatment or custodial care costs more than the amount set forth in the schedule of payments, he is unable to obtain the additional sums required because the payment schedule is fixed. Even if his condition remains as predicted, it is impossible to foresee in advance the rate at which future medical costs will increase. For a number of years, such costs have been rising at a pace substantially higher than the general inflation rate. (Health United States—1981 (U.S. Dept. of Health & Human Services, Pub. Health Service, Office of Health Research, Statistics & Technology) p. 83.)
By depriving a malpractice victim of access to the whole amount of the judgment awarded by the trier of fact and the benefits from its investment, *380section 667.7 places upon him the entire risk that unpredictable future consequences of his injury will render the periodic payments inadequate to meet his needs. This problem is alleviated for the victims of every tort except medical malpractice; all other prevailing plaintiffs may use the entire amount awarded by the judgment and the earnings therefrom as needed.
While subdivision (f) of section 667.7 eliminates the possibility that the heirs of a malpractice victim would obtain a “windfall” if there were funds awarded by the judgment remaining at the time of his death, the availability of such funds may well be due to the fact that the statute has prevented the victim from using the entire amount of the judgment as his needs require. Under the statute, the sums retained by the insurer are those which would have provided a financial safety valve to the victim for unexpected expenses connected with his injury during the course of his life. Thus, it is the insurer for the wrongdoer which obtains a windfall under the statute, by retaining some—perhaps in some instances most—of the funds which the judgment has awarded to the victim.
Of course, the periodic payment arrangement prevents dissipation of the funds awarded to the victim of the malpractice so that continued compensation is assured. However, the injured party who receives payment in full may also assure a continued income by purchasing an annuity and he may, in addition, derive growth and flexibility by acquiring liquid, income-producing investments with some of the funds awarded.
In short, section 667.7 provides a wrongdoer in a malpractice action with substantial advantages without compensating advantages to his victim.
Next, I disagree with the majority’s explanation as to the purposes underlying this unfair distribution of burdens and benefits. The major thrust of the majority’s opinion appears to be that the “fundamental goal” of section 667.7 is to “ensure that money paid to an injured plaintiff will in fact be available” when he incurs future expenses and to prevent a “windfall” to heirs of a malpractice victim who dies before his lump-sum award is exhausted. (Maj. opn., ante at p. 369.) According to the majority, the so-called “malpractice crisis” merely provided the “immediate impetus” for the initial application of this general reform to malpractice victims. (Maj. opn., ante at p. 371.) This approach turns the purpose of section 667.7 on its head. Neither the Governor’s proclamation calling the Legislature into special session, nor the preamble to the measure mention these goals as a justification for MICRA. While the majority cites various commentators and other authorities for the proposition that such reforms may be desirable, there is no indication that the Legislature itself viewed the *381premature dissipation of amounts recovered by tort plaintiffs or a possible “windfall” to their heirs as a general problem which the Legislature was meeting by adopting a “piecemeal” solution.
Almost all of the decisions which have upheld the constitutionality of legislation diminishing the rights of malpractice victims have justified the legislation on the ground that its purpose was to alleviate a “malpractice crisis,” and some decisions which have invalidated malpractice reforms have done so because they concluded that such a crisis did not exist. (Arneson v. Olson (N.D. 1978) 270 N.W.2d 125, 136; Boucher v. Sayeed (1983) — R.I. — [459 A.2d 87, 93], see Jones v. State Board of Medicine (1976) 97 Idaho 859 [555 P.2d 399, 412-416].)
A second reason advanced by the majority as justification for the classification made in section 667.7 is that it was intended to reduce the cost of premiums for malpractice insurance, thereby inducing doctors who had withdrawn their services because of the rise in premiums to resume practice, and to encourage doctors to carry malpractice insurance. (Maj. opn., ante at p. 372.)
In my view, the purpose of MICRA, including section 667.7, was, instead, to lower malpractice premiums for the purpose of reducing or containing the cost of medical care to the public. A number of cases from other jurisdictions recognize this containment of overall medical costs as a main objective of legislation similar to MICRA. (See, e.g., Gay v. Rabon (1983) 280 Ark. 5 [652 S.W.2d 836, 838]; Pinillos v. Cedars of Lebanon Hospital Corp. (Fla. 1981) 403 So.2d 365, 367; Everett v. Goldman (La. 1978) 359 So.2d 1256, 1266; Attorney General v. Johnson (1978) 282 Md. 274 [385 A.2d 57, fn. 35 at pp. 78-79]; Prendergast v. Nelson (1977) 199 Neb. 97 [256 N.W.2d 657, 668]; Beatty v. Akron City Hospital (1981) 67 Ohio St.2d 483 [424 N.E.2d 586, 594]; Allen v. Intermountain Health Care, Inc. (Utah 1981) 635 P.2d 30, 32; State ex rel. Strykowski v. Wilkie (1978) 81 Wis.2d 491 [261 N.W.2d 434, 442].) This intent is implicit in the statement of the preamble that the health care crisis, with its resulting hardship to the “medically indigent” and the “economically marginal” is “attributable to skyrocketing medical malpractice premium costs,” and in the statement in the Governor’s proclamation that the inability of doctors to obtain such insurance at reasonable rates was endangering the health of the people and threatened the closing of many hospitals, a result which would seriously limit the health care available to hundreds of thousands of Californians. The withdrawal of some medical services and the threat that some doctors would not purchase malpractice insurance would not necessarily threaten the health of *382the “medically indigent” or the “economically marginal,” it seems to me, whereas a rise in the overall cost of medical care would pose such a threat.
The assumption made by the Legislature was that insurers could provide malpractice insurance at lower rates if they could save on the cost of providing such insurance, and that these lower premium rates would then be passed on to the public in the form of lower medical costs, or at least in the containment of such costs.
The assumption that there exists a significant relationship between the reduction in malpractice premiums and a meaningful containment of medical costs to the general public lies at the heart of MICRA. Yet, a comparison between the amount of such premiums and the cost of hospital care in the years following the enactment of the legislation demonstrates that this premise is erroneous.
According to amicus curiae, the California Hospital Association, in a study of the premiums paid by 420 of the state’s 650 hospitals, the cost of malpractice insurance had risen dramatically before the enactment of MICRA, so that by October 1, 1976, the charge for $1 million in coverage for each occupied hospital bed was $124.31 a month, or roughly $4 a day. Premium charges were lower by 1981, amounting to only $93.46 a month for the same amount of coverage for each occupied bed, or approximately $3 a day.1
In 1975, the year MICRA was enacted, the average daily charge for hospitalization in a community hospital in California was $217 a day. (U.S. Dept, of Commerce, Statistical Abstract of the U.S., table No. 177, p. 111 (1981).) By 1981, the average hospital charge had risen to $547 daily, an increase of more than 20 percent over the previous year. (Cal. Health Facil. Com., Q. Fin. & Utilization Rep. No. 82-5, Aggregate Hospital Data, 4th Quarter 1981 (Apr. 15, 1982) at p. A-1.) Another increase of more than 20 percent occurred between the first quarter of 1981 and the first quarter of 1982, so that in the latter period, the average daily hospitalization charge *383amounted to $620. (Id., Rep. No. 82-8, 1st Quarter 1982 (July 15, 1982) at p. A-1.)2
In short, while malpractice premiums for most of the state’s hospitals declined by 25 percent in the years following enactment of MICRA, the cost of hospitalization rose dramatically. These spiraling costs are significant in assessing the total expense for medical care because hospital expenditures constitute more than 40 cents of every dollar spent on medical care, a far higher segment than any other component of the overall cost. (Health United States—1981 (U.S. Dept, of Health & Human Services, Pub. Health Service, Office of Health Research, Statistics & Technology) table No. 68, p. 203.)
We do not imply, of course, that the charge for malpractice premiums plays no part in the cost of hospitalization. It is obvious from the figures set forth above, however, that the cost effect of the former on the latter is negligible at best, and that experience since 1975 has demonstrated the fallacy of the Legislature’s assumption that the reduction of malpractice premiums paid by hospitals would result in a meaningful containment of hospital costs.3
But, claims the majority, we are precluded from considering these matters because “the constitutionality of a measure under the equal protection clause does not depend on a court’s assessment of the empirical success or failure of the measure’s provisions.” (Maj. opn., ante at p. 374.) It is true, nevertheless, that a number of cases have relied on events following enactment of a statute in holding that it violates equal protection or other constitutional principles because the assumption on which the legislation was premised has ceased to exist.
In Brown v. Merlo (1973) 8 Cal.3d 855, 869 [106 Cal.Rptr. 388, 506 P.2d 212, 66 A.L.R.3d 505], we held invalid as a denial of equal protection a statute which denied recovery to nonpaying automobile passengers against a negligent driver reasoning, in part, that although the statute might have *384been justified when it was enacted as rationally related to the protection of hosts from the “ingratitude” of their passengers, the widespread availability of liability insurance in later years eliminated this justification for the distinction between those passengers who were entitled to recover against a negligent driver and those who were not. The guest statute has been invalidated in other states on this basis. (See, e.g., Thompson v. Hagan (1974) 96 Idaho 19 [523 P.2d 1365, 1368-1369]; Henry v. Bauder (1974) 213 Kan. 751 [518 P.2d 362, 369-371]; McGeehan v. Bunch (1975) 88 N.M. 308 [540 P.2d 238, 242-244]; see also, Johnson v. Hassett (N.D. 1974) 217 N.W.2d 771, 779-780.)
The application of this principle is not confined to guest statutes. (E.g., Milnot Company v. Richardson (S.D.Ill. 1972) 350 F.Supp. 221, 224-225 [statute prohibiting interstate shipment of imitation milk and dairy products violated equal protection in view of changes in marketing conditions occurring after earlier decision of United States Supreme Court upholding constitutionality of statute]; People v. McCabe (1971) 49 Ill.2d 338 [275 N.E.2d 407, 409, 413, 50 A.L.R.3d 1149] [classification of marijuana under law providing for 10-year mandatory sentence violated equal protection in view of recent information regarding nature and effects of marijuana]; State v. Anonymous (1976) 32 Conn.Supp. 324 [355 A.2d 729, 732-733, 740-741] [classification of marijuana with certain dangerous drugs for penalty purposes violated equal protection on basis of “present state of knowledge” regarding properties of the drug].)
The rule that postenactment information may be considered in passing on the constitutionality of a statute has been invoked with respect to constitutional provisions other than equal protection. In a recent case, this court applied such reasoning to hold unconstitutional a statute challenged on the ground that it impaired the obligation of contracts in violation of the United States and California Constitutions. (Sonoma County Organization of Public Employees v. County of Sonoma (1979) 23 Cal.3d 296, 311 [152 Cal.Rptr. 903, 591 P.2d 1].) We observed that a law which depends on the existence of an emergency to uphold it may be invalid if the emergency ceases or if the facts have changed even though the law was valid when passed, that it is “always, open to judicial inquiry whether the exigency still exists upon which the continued operation of the law depends,” and that a court is not precluded from considering matters which occurred after enactment of the statute in order to decide whether later events render it invalid. (See also, Leary v. United States (1969) 395 U.S. 6, 38, 52-53 [23 L.Ed.2d 57, 83, 91, 89 S.Ct. 1532] [statutory presumption that users knew that marijuana was imported held irrational in part on basis of information developed following enactment]; Chastelton Corp. v. Sinclair (1924) 264 U.S. 543, 547-*385548 [68 L.Ed. 841, 843, 44 S.Ct. 405] [question whether emergency initially justifying legislation still continued remanded to lower court]; see the seminal case of Home Bldg. & L. Assn. v. Blaisdell (1934) 290 U.S. 398, 442 [78 L.Ed. 413, 431, 54 S.Ct. 231, 88 A.L.R. 1481]; Abie State Bank v. Bryan (1931) 282 U.S. 765, 772 [75 L.Ed. 690, 701, 51 S.Ct. 252].)
Of particular interest are Arneson v. Olson, supra, 270 N.W.2d 125, Boucher v. Sayeed, supra, 459 A.2d 87 and two cases each from Florida and Pennsylvania. In Arneson, the North Dakota Supreme Court held unconstitutional as a denial of equal protection a monetary limit on the amount of compensation recoverable by malpractice victims. The court held that the limitation amounted to a drastic curtailment of the rights of malpractice victims and was not justified by the Legislature’s purpose to enhance the availability and lower the cost of malpractice insurance. The trial court had found that there was no crisis attributable to these factors, and the North Dakota Supreme Court upheld this finding, stating (at p. 136) that the “evidence in the case before us . . . indicates that either the Legislature was misinformed or subsequent events have changed the situation substantially” because malpractice insurance rates in North Dakota are the sixth lowest in the United States.
In Boucher, it was held that, while a medical malpractice crisis may have existed when legislation requiring the submission of malpractice claims to a liability panel was first enacted, there was no crisis at the time the legislation was amended. Absent such a crisis, held the court, the requirement that malpractice plaintiffs submit their claims to such a panel denied them equal protection. (459 A.2d at p. 93.)
The Florida cases considered the constitutionality of a statute requiring plaintiffs to submit malpractice claims to a medical liability mediation panel. Initially, the Florida Supreme Court held the statute constitutional on its face. (Carter v. Sparkman (Fla. 1976) 335 So.2d 802, 805-806.) Four years later, however, the court reversed itself, holding that the statute had proved “unworkable and inequitable in practical operation,” thereby denying due process to plaintiffs in malpractice actions. (Aldana v. Holub (Fla. 1980) 381 So.2d 231, 237.)
Substantially the same sequence occurred in Pennsylvania. The Supreme Court of that state refused initially to declare unconstitutional a statutory requirement that a malpractice litigant submit his case to an arbitration panel. (Parker v. Children’s Hospital of Philadelphia (1978) 483 Pa. 106 [394 A.2d 932, 938-940].) After several years of experience with the procedure, however, the court held that the lengthy delays in the arbitration *386process denied malpractice litigants of their constitutional right to trial by jury, and held the statute requiring arbitration unconstitutional. (Mattos v. Thompson (1980) 491 Pa. 385 [421 A.2d 190, 195].)
As the majority observe, many jurisdictions have enacted statutes to deal with the problems posed by malpractice insurance. Only a few of the decisions cited by the majority (maj. opn., ante, at p. 369, fn. 9) deal with substantive limitations on recovery such as section 667.7. Rather, they affirm the constitutionality of procedural conditions to recovery, such as the requirement that a plaintiff submit his claim to a malpractice review panel before filing an action. (E.g., Everett v. Goldman, supra, 359 So.2d 1256, 1267; Attorney General v. Johnson, supra, 385 A.2d 57, 65-66; Paro v. Longwood Hospital (1977) 373 Mass. 645 [369 N.E.2d 985, 992]; Linder v. Smith (1981) — Mont. — [629 P.2d 1187, 1192].)
A few cases have upheld more substantive limitations on the rights of malpractice plaintiffs, such as the abolition of the collateral source rule (e.g., Eastin v. Broomfield (1977) 116 Ariz. 576 [570 P.2d 744, 752-753]; Pinillos v. Cedars of Lebanon Hospital Corp., supra, 403 So.2d 365, 368; Rudolph v. Iowa Methodist Medical Ctr. (Iowa 1980) 293 N.W.2d 550, 559) and monetary limitations on the fees of plaintiffs’ attorneys (Johnson v. St. Vincent Hospital, Inc. (1980) 273 Ind. 374 [404 N.E.2d 585, 602-603]) and on the amount of recovery (id., at p. 598).
However, the decisions are by no means unanimous. Both substantive and procedural limitations have been struck down in a significant number of decisions. These cases have held unconstitutional the requirement for submission of malpractice claims to a review panel (Aldana v. Holub, supra, 381 So.2d 231, 237; Mattos v. Thompson, supra, 421 A.2d 190, 195; State, Cardinal Glennon Mem. Hosp. v. Gaertner (Mo. 1979) 583 S.W.2d 107, 110; Boucher v. Sayeed, supra, 459 A.2d 87, 93-94), imposition of a monetary limitation on recovery (Carson v. Maurer (1980) 120 N.H. 925 [424 A.2d 825, 836, 838]; Arneson v. Olson, supra, 270 N.W.2d 125, 136; Simon v. St. Elizabeth Medical Center (1976) 30 Ohio Ops.2d 164 [355 N.E.2d 903, 910]; Wright v. Central DuPage Hospital Association, supra, 347 N.E.2d 736, 743), abolition of the collateral source rule (Doran v. Priddy (D.Kan. 1981) 534 F.Supp. 30, 37; Graley v. Satayatham (1976) 74 Ohio Ops.3d 316 [343 N.E.2d 832, 836]; see also, Jones v. State Board of Medicine, supra, 555 P.2d 399), limitations on attorneys fees (Heller v. Frankston Pa. Commw. 294 (1983) [464 A.2d 581, 586-587]), and a special statute of limitations for certain minors (Schwan v. Riverside Methodist Hosp. (1983) 6 Ohio St.3d 300 [452 N.E.2d 1337, 1339]; Sax v. Votteler, supra, 648 S.W.2d 661, 667).
*387We are aware of only two cases which have ruled on the constitutionality of a provision for periodic payments. One of these held the statute unconstitutional on the ground that it unreasonably discriminated against malpractice plaintiffs and deprived them of the right to dispose of their property (Carson v. Maurer, supra, 424 A.2d 825, 836), while the other upheld the constitutionality of the provision against an equal protection challenge, reasoning that it was intended to benefit a claimant who required long term care (State ex rel. Strykowski v. Wilkie, supra, 261 N.W.2d 434, 443).4 Thus, the cases from other jurisdictions which have considered the constitutionality of legislation similar to MICRA are not consistent in their results.
The rationale employed by the majority could just as logically justify the abolition of any right to recovery by victims of malpractice if it served to induce recalcitrant doctors not to withhold their services from the public and to carry insurance. In my opinion, this legislation, which I indicated at the outset merely benefits the wrongdoer at the expense of his victim, is unconstitutional as a denial of equal protection of the law.
Rattigan, J.,* concurred.

Amicus explains that 420 of the 650 hospitals in California and the 6,000 doctors they employ are insured through an insurance exchange which furnishes the hospitals a claims service for a fee. The claims experience of these hospitals is directly reflected in the malpractice premiums paid by them, since any savings or losses are passed directly from the exchange to the affected hospitals. The hospitals which are not insured through the exchange are self-insured either by virtue of the fact that they are operated by the government or because they are insured by companies owned by the hospitals themselves. Commercial insurers have virtually abandoned the hospital insurance market in California since 1975.

These daily charges are based on a study of 552 hospitals, not including state hospitals, Kaiser Foundation hospitals, Shriners’ hospitals, and dental hospitals. If these additional special facilities are considered, the average daily cost of hospitalization for the first quarter of 1982 would be $488 a day (id., Rep. No. 82-8, 1st Quarter 1982 (July 15, 1982) at p. A-2), and for 1981 $431 a day (id., Rep. No. 82-5, 4th Quarter 1981 (Apr. 15, 1982) at p. A-2).

The majority opinion states at page 374 that section 667.7 has not been widely enforced because of doubts as to its constitutionality. Presumably, this applies to other provisions of MICRA as well. I find this observation inconsistent with the majority’s prior statement that MICRA has been successful in reducing the cost of malpractice premiums.

The statute considered in Strykowski is significantly different than section 667.7. It requires that future medical expense awards of more than $25,000 be paid to a fund to be disbursed in periodic payments as expenses are incurred, until the amount is exhausted or the patient dies.

Retired Associate Justice of the Court of Appeal sitting under assignment by the Chairperson of the Judicial Council.