California Raises Medical Malpractice Damages Cap—Will Other States Follow?

On Monday, May 23, 2022, California Governor Gavin Newsom signed California Assembly Bill 35 into law, which raised the non-economic damages cap that plaintiffs may receive in medical malpractice cases. In doing so, it was the first increase in the non-economic damages cap in medical malpractice cases since the California Legislature first enacted a cap on non-economic damages almost a half-century ago. In California, as with many states, laws relating to medical malpractice damage caps have changed very little since they were first signed into law. California’s statutory scheme that governs medical malpractice claims, among other things, is known as the Medical Injury Compensation Reform Act, or “MICRA,” and was passed in 1975. As is universally the case, MICRA was passed in the face of rising insurance premiums, which carriers blamed on large jury verdicts in medical malpractice cases. Interestingly, California’s old law under MICRA did and does not cap how much a plaintiff may be awarded for economic loss. Instead, the focus of MICRA was the non-economic category of pain and suffering, which was limited to $250,000 as a maximum award. Commentary on California’s cap prior to Assembly Bill 35’s passage noted that the $250,000 cap was devised in 1975, which adjusted for inflation would be $1,300,000—yet for forty-seven years, no correction was made.

            Assembly Bill 35 attempts to close this gap. To do this, the new law will function in parts, over time. First, on January 1, 2023, the non-economic cap will increase to $350,000. After that, each year for ten years, the cap will steadily rise to $750,000 by 2033. Second, in cases involving the death of a patient, the non-economic cap will increase to $500,000 on January 1, 2023, and like the first provision, the cap will steadily to rise to $1,000,000 over the next ten years on a per annum basis. For both provisions, the cap will then increase two percent (2%) per year after 2033, potentially for perpetuity. At the present juncture, it appears that how long the annual increase will extend to the future is uncertain beyond the plan with 2033 as the endpoint. However, what is certain is that California’s update in plaintiff’s rights in medical malpractice cases will be significantly strengthened by Assembly Bill 35’s passage. What remains to be seen, and what we will monitor attentively, is whether any other states follow California’s lead in adjusting damage caps to account for economic forces which impact a claimant’s ability to be made whole—which to be sure, is particularly topical given the current state of the global economy.

If you or someone you know has been injured or killed as a result of what you believe was medical malpractice, please contact the office of Ben Agosto III at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner, at (713) 222-7211; toll-free at 1-800-594-4884; or by email at [email protected].