In a recent medical malpractice case in Iowa arising out of a birth injury, the jury awarded $97 million to the plaintiff (later reduced by the judge to $75 million).  Birth injury cases can and do generate verdicts in the tens of millions of dollars due to the staggering cost of lifetime care for a profoundly brain injured infant.

However, there's a twist in this case—the doctors who lost the case have filed suit against their malpractice insurer alleging that the insurance company and its lawyers improperly used the lawsuit to convince Iowa legislators to pass damage caps.  The doctors allege that they wanted to settle the case all along to avoid the risk of trial, but the insurer resisted and refused.

As stated in the lawsuit, “MMIC/Constellation unreasonably chose not to settle and make the lawsuit and verdict go away, and then used OB-GYN Associates' financial and reputational demise as propaganda to pass tort reform in Iowa.”  See: https://iowacapitaldispatch.com/2023/11/22/lawsuit-claims-insurer-conned-iowa-lawmakers-into-passing-tort-reform/

The lawsuit alleged that the insurer's decision to take the case to trial, rather than settle, was part of a pre-determined strategy of forcing the clinic into bankruptcy, enabling lobbyists and lawmakers to claim tort reform was needed to save medical providers from moving out of Iowa.

Indeed, after this case, Iowa passed draconian damages caps for non-economic damages (such as pain and suffering) of $1 million against an individual doctor and $2 million against a hospital.  The law does not limit economic damages.  This law was rightly criticized by opponents as imposing one-size fits all justice on Iowans' lives.

In the Iowa case, $42.2 million of the jury verdict was for cost of care.  The balance was for pain and suffering related to severe brain damage.  Had the damages caps been in effect, the $75 million judgment would have been reduced to $44.2 million. 

By constitution, Arizona has no damages caps.  The insurance industry has twice attempted to push constitutional amendments to impose caps, but Arizona voters have wisely rejected these efforts by large margins.

Birth injury cases are certainly high stakes—for good reason.  Sound medical decision making is a must in the labor and delivery setting, and negligence can lead to catastrophic results with lifetime consequences.  It is unjust for negligent parties in these settings to evade full accountability.

At Schmidt, Sethi & Akmajian we represent families affected by these devastating injuries.