A Ship Without a “Cap”-tain: The Uncertain Application of the Non-Economic Damages Cap in Medical Malpractice
By By Gregg A. Hubley

Ahoy! Our elected officials in the Nevada legislature have set sail to a rudderless vessel en route to a destination with no lighthouse. Some of the more cynical (or realistic, depending upon the reader’s perspective) members of the bar would comment that this is not the first time. After determining that the exponential rise in medical malpractice premiums caused a crisis by driving physicians out of Nevada, our legislature passed a law in 2002 limiting non-economic damages in medical malpractice cases. The law was based upon California’s Medical Injury Compensation Reform Act (“MICRA”) which alleviated some of our sister-state’s malpractice woes in the 1970’s. An initiative petition/referendum, approved by Nevada voters in 2004, and codified as NRS 41A.035, now provides:
“In an action for injury or death against a provider of health care based upon professional negligence, the injured plaintiff may recover non-economic damages, but the amount of non-economic damages awarded in such an action must not exceed $350,000.00.”

NRS 41A.035 does not define, however, whether, in the case of multiple plaintiffs, the cap applies to each plaintiff or the class of plaintiffs in the aggregate. This is a very practical dilemma to counsel who practice on both sides of the bar in professional negligence. In a scenario of two plaintiffs suing a physician and alleging that their loved one died due to medical malpractice, it means the difference in potential verdict value of $1,050,000 versus $350,000 in non-economic damages for the class of plaintiffs.

Unfortunately, Nevada case law has not resolved this dilemma. The only case that addressed the Nevada cap did so only tangentially, and, since it was a federal district court matter, the precedential value of the decision is negligible in Nevada courts. In Shinn v. Baxa Corp., 2008 U.S. Dist. LEXIS 57681 (July 7, 2008), the class of plaintiffs included the parents and estate of an infant who died after receiving 1000 times the appropriate amount of zinc at the hospital. The defendant, Baxa Corporation (“Baxa”), designed a device to intravenously deliver nutrition to children. The hospital settled with the plaintiffs before Baxa was sued, but sought to intervene in the later suit against Baxa to obtain a determination that its settlement with the plaintiffs had been reached in good faith. If the court agreed, it would have the effect of extinguishing contribution and equitable indemnity claims pursuant to NRS 17.245. Baxa opposed the motion for determination of a good faith settlement, arguing in part that it was unclear how the cap outlined in NRS 41A.035 applied to the plaintiffs. Baxa contended that it was arguable that both parents and the estate of the infant each qualified as an injured plaintiff for purposes of the cap. In this case, like the scenario posed above, the hospital’s liability would be capped at $1,050,000, which was less than the amount of the settlement between the plaintiffs and the hospital.

Counsel for the plaintiffs countered that she was familiar with the legislative history and intent of the statute since she had served as a lobbyist for the doctors seeking the legislation. She articulated her rationale for evaluating the settlement value of the case (although this rationale/formula is not provided in the opinion) and she argued that the settlement was entered into by both parties in good faith and that the plaintiffs had been “made whole” for their claims against the hospital.

The court agreed with plaintiffs’ counsel, finding that the settlement (the amount of which was confidential) had been reached in good faith. Unfortunately, the court still did not identify how the cap would apply. The Shinn v. Baxa Corp. court offered only the following clarification: “Hospital’s settlement far exceeded the $350,000 damages cap for non-economic compensatory damages. Although counsel for Baxa argued that it is uncertain whether the damages cap can be “stacked” to provide a $350,000 compensatory recovery per plaintiff, counsel for plaintiffs analyzed the cap differently. Counsel for plaintiff was intimately familiar with the legislative process which resulted in enacting the non-economic compensatory damages cap in professional negligence actions as she served as a lobbyist for doctors who successfully obtained this legislation.”

The language used in Baxa, therefore, seems to indicate that this court did not believe that the damages cap can be recovered by each plaintiff in an action. However, as noted above, this dicta is far from definitive, let alone precedential.

Like a confused, pre-adolescent sibling, therefore, we Nevada lawyers look to the experiences of our older sister-state of California for guidance. The similarities in language make it seem rather clear that NRS 41A.035 was intended to mirror Section 3333.2 of the California Civil Code, which states:
(a) In any action for injury against a health care provider based on professional negligence, the injured plaintiff shall be entitled to recover noneconomic losses to compensate for pain, suffering, inconvenience, physical impairment, disfigurement and other nonpecuniary damage. (b) In no action shall the amount of damages for noneconomic losses exceed two hundred fifty thousand dollars ($250,000).

So, does our older sister provide the guidance we so desperately need to steer our vessel clear of the rocky shores? Not completely. In Yates v. Pollock, 194 Cal.App. 3d 195, 199, 239 Cal Rptr. 383 (2nd Dist., 1987) a California Court of Appeal held that the “ . . . plain language [of MICRA] unequivocably manifests a desire to place a $250,000 cap on awards for noneconomic damages in all medical malpractice litigation, whether recovery is sought by patients who have themselves suffered personal injuries or by the survivors of such victims who initiate suits for wrongful death.” In this case, the patient died as the result of a botched gallbladder operation, and the jury awarded the patient’s wife and five children nearly $2 million in damages. The economic loss portion of this award totaled only $103,560. On appeal, the total damages were reduced to $353,560. The court reasoned that only one action can be brought for wrongful death by multiple plaintiffs (i.e., preventing multiple actions by individual heirs and the personal representative). Thus, the legislature’s choice of the phrase “[i]n no action” demonstrates its “ . . . conscious decision to limit the total recovery for noneconomic loss in such suits to $250,000.” According to this case law, the medical malpractice cap amounts to $250,000 in the aggregate, irrespective of the number of plaintiffs or whether recovery was sought by the patient alone or his/her survivors.

However, three years later another California Court of Appeal held that the $250,000 limitation did not bar a separate recovery by a wife in the same action for loss of consortium. In Atkins v. Strayhorn, 223 Cal.App. 3d 1380, 273 Cal.Rptr. 231 (4th Dist., 1990), the patient was sent home by an internal medicine specialist despite indications of a serious bacterial infection. The patient’s condition deteriorated and ultimately his leg was amputated as a result of a bacterial infection that was not timely treated. This court drew a distinction between causes of action for wrongful death and those for loss of consortium, holding that loss of consortium is a common law claim and is “separate and independent” of a spouse’s claim for personal injury. The Court went one step further in analyzing the intention of the legislature by reasoning:
“Had the Legislature intended to limit the defendant’s liability encompassing all legal proceedings arising from a single act of professional negligence to $250,000, it would have included the language ‘single act of negligence’ to accomplish this purpose.”

Because of the absence of this particular language, this court held that the purpose of the cap is to limit recovery for the injury to each spouse because “. . . damages flow from injury, not the negligent acts.” Id. Thus, the Atkins decision stands for the proposition that each injured plaintiff may recover $250,000 in non-economic damages under MICRA, distinguishing Yates v. Pollock because of the different theories of recovery. Both the patient and his wife were, therefore, awarded $250,000 in non-economic damages.

The ability to “stack caps” for multiple plaintiffs under NRS 41A.035 is still untested in Nevada common law. Although the Nevada legislature seems to have copied a good portion of our statute from Section 3333.2 of the California Civil Code, and in spite of the arguably different interpretations from California courts, our lawmakers did not see fit to provide any further guidance. Since the statutes are so similar, one could argue that the California analysis represents persuasive authority. After all, both MICRA and NRS 41A.035 define the class as “the injured plaintiff,” and both limit recovery in one particular “action” or lawsuit.

However, not even the prophetic powers of Nostradamus would allow one to accurately predict the approach that will ultimately be taken by Nevada courts on the issue of “stacking” the cap. This unfortunately leaves attorneys who prosecute and defend medical malpractice claims without the ability to evaluate their clients’ cases with any real degree of accuracy. If multiple heirs are suing on a wrongful death claim, will Nevada courts allow each party to recover $350,000 for non-economic damages or will the cap be divided among them? Will it double the amount of available non-economic damages in Nevada if a spouse is named as a party with a loss of consortium claim? What if a patient’s family members assert “separate and independent” claims, such as negligent infliction of emotional distress?

Some applaud damages cap statutes as a necessary reform to an out-of-control system that serves only to line the pockets of plaintiffs’ attorneys while hindering the provision of quality health care. Others are critical, contending that these statutes are the product of powerful insurance lobbyists and result only in increasing the profit margin of the insurance companies at the expense of unfortunate patients, some of whom have suffered horrendous injuries. The recent national exposure occasioned in part by lawsuits brought against endoscopy clinics has led the legislature to reevaluate NRS 41A.035, and a new bill is being considered that will eliminate or revise caps on non-economic damages in medical malpractice cases. If this bill passes, it is unlikely that the change will be retroactively applied, however, leaving literally thousands of cases to drift on unsteady seas at the whim of different winds clad in black robes. Until the legislature provides some additional delineation or the Nevada Supreme Court interprets the statute, attorneys will unfortunately be left to navigate this dilemma without the aid of a compass.

Gregg A. Hubley is a senior associate attorney at Lewis Brisbois Bisgaard & Smith, practicing in professional negligence defense. Mr. Hubley was a prosecuting attorney in Illinois, and he tried several jury cases prior to relocating to Las Vegas. He is in his ninth year of practice in Nevada, where he has focused on civil litigation encompassing personal injury, constitutional/civil rights law, family law, and insurance defense.

To What Extent Can the Offer of Judgment Penalty Provisions Under NRS 17.115 and NRCP 68 Be Applied?
By Micah S. Echols 

After you have been through a long and protracted litigation, you want nothing more than for the case to be over. But, when you are feeling too tired to do anything else, keep in mind the attorney fees you can recover against the opposing party for your client. An offer of judgment may help you recover not only attorney fees incurred before trial, but all the attorney fees incurred from the time of the offer of judgment until the eventual end of the case, including appeal. Typically, when dealing with a personal injury or other tort case, there is usually not a contract or a statute to firmly rely upon to recover attorney fees. So, the offer of judgment under NRS 17.115 and NRCP 68, becomes an invaluable tool to recover them. But, after prevailing in the district court, and having recovered more than the offer of judgment, what happens if the opposing party files an appeal to the Supreme Court of Nevada? An appeal raises numerous issues of the applicability of an offer of judgment, especially regarding the penalty provisions that allow a successful offeree to recover attorney fees, costs, and interest. The main question is whether you can recover attorney fees that are incurred after the entry of the district court judgment, and during an appeal.

Following are some issues to be aware of, after an appeal, to determine if attorney fees are still recoverable after the entry of the district court judgment. First, do the phrases “entry of the judgment” in NRS 17.115, and “from the time of the offer” in NRCP 68 imply that the offer of judgment penalty provisions entail all proceedings until the litigation eventually ends? Second, can a prevailing party on appeal revisit the offer of judgment analysis post-appeal? Finally, what public policies support the notion that the offer of judgment penalty provisions should be enforced until the litigation eventually ends? Since the length and expense of an appeal can equal or exceed the litigation in district court, every effort should be made to recover additional fees incurred after appeal.

Recovery of fees incurred until the litigation ends
Normally, the phrase “entry of the judgment” is thought of as the judgment entered in the district court. But, there is nothing in NRS 17.115 or NRCP 68 that specifically limits the entry of the judgment to only the original district court judgment. Often the attorney fees incurred after the entry of a district court judgment are equal to or exceed the attorney fees incurred prior to the entry of the original judgment. So, the interpretation of the phrase “entry of the judgment” and “from the time of the offer” is important since the offer of judgment penalty provisions can potentially include all fees incurred in the litigation and on appeal through the eventual end of the litigation.

By definition, the term “judgment” implies a final decision, a final determination, or the last word in a judicial controversy. Black’s Law Dictionary, 841 (6th ed. 1990). The basic meaning of the term “judgment” gives a broader reading to the offer of judgment penalty provisions. NRS 17.115(4) allows for the recovery of attorney fees from “the date of service of the offer to the date of entry of the judgment.” NRCP 68(f) allows fees to be recovered “from the time of the offer.” Interestingly, NRCP 68(f) does not place an ending point on the attorney fees incurred by the successful offeror. So, under either NRS 17.115(4) or NRCP 68(f), it appears from the plain language that a successful offeror can recover attorney fees from the time of the offer of judgment until the litigation eventually ends. This interpretation of the plain language does not reward a party who loses at trial, then appeals to the Supreme Court while failing to obtain a more favorable result than the offer of judgment. Otherwise, a party who loses at trial could simply file an appeal to reduce the award by the amount of additional attorney fees incurred by the prevailing party during the appeal.

Revisiting the offer of judgment post-appeal
Once the Supreme Court has issued a remittitur, and the case is returned to the district court, the prevailing party should be able to revisit the offer of judgment analysis. While there is no law in Nevada directly on point regarding the extent of the penalty provisions of an offer of judgment, the Nevada Supreme Court has clarified that the district court is usually the proper court for post-appeal requests for attorney fees in other contexts. See Farmers Ins. Exch. v. Pickering, 104 Nev. 660,765 P.2d 181 (1988); Musso v. Binick, 104 Nev. 613, 764 P.2d 477 (1988).

In the case where a judgment is altered or reversed on appeal, the district court should be able to reevaluate the analysis under the offer of judgment penalty provisions since the original judgment is no longer a valid and controlling judgment. The district court’s ability to reevaluate goes to the very power of the Supreme Court’s constitutional authority to review the district courts and the law of the case doctrine. See Nev. Const., Art. 6, Sec. 4; see also LoBue v. State ex rel. Dep’t Hwys., 92 Nev. 529, 554 P.2d 258 (1976) (stating that upon remand a district court must abide by the Supreme Court’s orders). Otherwise, a party prevailing on appeal would be forced to give credence to an order that has been reversed or altered by the Supreme Court.

Similarly, if a prevailing party in the district court also prevails on appeal, this prevailing party should not be saddled with additional attorney fees for successfully defending a judgment on appeal. The leading federal cases construing FRCP 68 have held that “nothing in the language of Rule 68 suggests that a Rule 68 offer that is not accepted within ten days ever loses its cost-shifting affect in the life of a case.” See Pouillon v. Little, 326 F.3d 713 (6th Cir. 2003); see also Payne v. Milwaukee Cty., 288 F.3d 1021 (7th Cir. 2002). But, FRCP 68 does contain slightly different language: “the judgment that the offeree finally obtains.” (emphasis added). It is important to note, however, that the language and intent of the penalty provisions of NRS 17.115 and NRCP 68 signal a final judgment, just as FRCP 68. So, even when a judgment is simply affirmed on appeal, the prevailing party on appeal should not be punished by incurring additional attorney fees without having the ability to make the losing party responsible under the fee-shifting provisions of NRS 17.115 and NRCP 68.

Other states with similar language to Nevada’s offer of judgment statute and rule have reached the conclusion that the language should be construed broadly. For example, Florida’s offer of judgment statute does not contain any specific finality language; instead, it contains only broad language that allows the prevailing party to recover attorney fees “from the date of the filing of the demand.” Fla. Stat. § 768.79. Using this broad language, different cases arose where prevailing parties requested attorney fees in the trial court that were incurred from the date of the offer through appeals until the end of the case. The Florida Courts of Appeals construed § 768.79 as allowing a prevailing party to recover attorney fees incurred on appeal to be assessed by the trial court in a post-appeal motion. See Westfield Ins. Co. v. Mendolera, 647 So.2d 223, 224 (Fla. App. 1994).

Because of the trend of the Florida courts, the Florida Legislature later enacted Florida Statutes § 59.46, which provides that any contract provision or statute allowing for the payment of attorney fees to the prevailing party will be construed to include the payment of attorney fees incurred on appeal. So, in Florida, a party that loses in the district court cannot simply file an appeal to reduce the prevailing party’s award since the losing party will be responsible for the attorney fees incurred on appeal as well.

The prevailing party should be able to revisit the offer of judgment analysis post-appeal. Otherwise, a party that alters or reverses a judgment on appeal is unfairly bound to a judgment that no longer has any legal effect. Likewise, parties that successfully defend a judgment on appeal should not have to bear the expense of an appeal since they are operating under the fee-shifting provisions of NRS 17.115 and NRCP 68.

Public policy considerations
The offer of judgment statute and rule have been carefully crafted to avoid unnecessary litigation. See Dillard Dep’t Stores, Inc. v. Beckwith, 115 Nev. 372, 989 P.2d 882 (1999). With this policy in mind, courts should allow the offer of judgment penalty provisions to extend through the end of a case; otherwise, the underlying policy will be lost.

While the offer of judgment must be made at least ten days prior to trial, nothing limits the application of the penalty provisions for a rejected offer of judgment. Limiting the penalty provisions would unduly reward a party that loses at trial or loses on appeal since there would be no punishment for prolonging the litigation. Similarly, the prevailing party would have to bear the expense of defending an appeal, despite the fee-shifting provisions of NRS 17.115 and NRCP 68. Cf. Barney v. Mt. Rose Heating & Air Conditioning, 124 Nev. Adv. Op. No. 71, 192 P.3d 730 (2008). In short, the offer of judgment fee-shifting provisions would be severely diluted if they are not applied to the entire duration of a case since a non-prevailing party could simply prolong a case without any risk of being penalized.

If courts only consider the district court judgment in the offer of judgment analysis, this rule would promote attorney misconduct at trial. A party would do whatever it takes to obtain a favorable judgment at trial since it would be the only judgment considered for the offer of judgment fee shifting. According to this improper construction, even a Supreme Court order of reversal would not have the effect of changing the previous district court fee-shifting analysis—a proposition that runs afoul of the law of the case doctrine.

Additionally, without reading the offer of judgment penalty provisions to include all proceedings until the end of a case, the incentive of parties to settle would be lost. Parties losing at trial could simply file an appeal with the understanding that the adverse judgments and awards of attorney fees awarded could not be increased on appeal but only possibly decreased. The threat and risk of trial would be severely diluted, and the entire purpose of the offer of judgment—to avoid unnecessary litigation and settle cases—would be undermined. A proper interpretation of NRS 17.115 and NRCP 68 must include all proceedings until the eventual termination of the litigation so that the important policies underlying the offer of judgment are not lost.

The offer of judgment is a very useful tool for recovering attorney fees in personal injury and other tort cases when there is usually no governing contract provision or other reliable statute to shift attorney fees to the losing party. A plain reading of NRS 17.115(4) and NRCP 68(f) suggests that these penalty provisions will extend until the end of the case. By applying this interpretation to these penalty provisions, a prevailing party altering or reversing a judgment on appeal can revisit the offer of judgment analysis to honor the Supreme Court’s orders. Likewise, a prevailing party at trial is not prejudiced when the losing party files an appeal, especially since an appeal may be just as long and expensive as the district court litigation.

To support the underlying policies, the offer of judgment penalty provisions must be construed to include all the proceedings from the offer until the end of a case. Otherwise, non-prevailing parties could prolong litigation without any penalty, attorney misconduct at trial would be more prevalent, and parties would lose their incentive to settle cases.

Micah Echols is an attorney at Marquis & Aurbach in Las Vegas and can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or (702) 207-6087. Mr. Echols focuses his practice on commercial litigation and civil appeals.