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James Ganas is a 3L at New York University School of Law.

Unintended Consequences of Medical Malpractice Damages Caps

Catherine M. Sharkey

With a tiny handful of exceptions, common law jurisprudence is predicated on a “winner-take-all” principle: The plaintiff either gets the entire entitlement at issue or collects nothing at all. Cases that split an entitlement between the two parties are exceedingly rare. While there may be sound reasons for the all-or-nothing rule, in this Article we argue that there is a limited but important set of property, torts, and contracts cases in which an equal division of an entitlement should be adopted. The common element in these cases is a windfall—a gain or loss that occurs despite the fact that no effort to promote, prevent, or allocate it ex ante would be cost-justified or reasonable. We show that an equal division of disputed windfalls promotes both efficiency and fairness and also has the virtue of clarifying several tortured legal doctrines.

We also address and reject the standard objections to split-the-difference remedies. We demonstrate that the introduction of a splitting option is unlikely to distort judicial incentives, and that it is likely to improve the integrity of the judicial system. Counterintuitively, we show that giving judges the option to order a compromise remedy in windfall disputes is likely to reduce judicial error, rather than increase it, and that the valuation problems that attend the introduction of a split-the-difference rule are insignificant.

Book Review of The Future of Reputation: Gossip, Rumor, and Privacy on the Internet. By Daniel J. Solove. New Haven & London: Yale University Press, 2007. Pp. 256. $24.00.

In deciding First Amendment cases, courts generally attempt to find distinctions between speech and nonspeech (or between speech and conduct) in order to determine whether government limitations on speech are appropriate. This analysis, however, is misguided, because whether such limitations are or are not upheld nearly always depends upon whether the conduct does or does not do harm. Recognizing this—and the inherent arbitrariness of speech-nonspeech line-drawing—this Note proposes that attempts at making such distinctions be abandoned. This Note addresses the impact of adopting the harm principle for the criminal law system, and further contends—given the principles underlying our system of civil law—that including so-called moral harms in the list of legitimate bases for state action is untenable.

The American Bar Association’s widely adopted Model Rule 1.8(g) requires that attorneys handling aggregate settlements obtain the consent of each client before the settlement is finalized. This method is well suited to cases involving small-scale tort litigation with few parties, but Rule 1.8(g) does not meet the complex demands of mass torts, which can involve thousands of plaintiffs represented by a handful of law firms. Rule 1.8(g) creates a procedural obstacle to the efficient settlement of mass torts while obfuscating the ethical role of plaintiffs’ counsel in these settlements. This Note proposes a modified Rule 1.8(g), drawing upon a successful procedure used in asbestos bankruptcies. By incorporating these mechanisms from the Bankruptcy Code into the Model Rules of Professional Conduct, an alternative Rule 1.8(g) would reduce the costs of mass tort settlement, improve the clarity of the aggregate settlement rule, and protect clients from ethical misconduct by their attorneys.

Scholars have argued that the malpractice system would be better off if patients had the option of waiving the right to sue for malpractice in exchange for a lower fee. Some doctors have tried to follow this advice by having their patients sign medical malpractice exculpatory agreements, but courts usually have refused to enforce these agreements, invoking a void-for-public-policy rationale. This Note argues that a doctor could maximize the odds that a court would enforce her medical malpractice exculpatory agreement by somehow ensuring that she will never find out whether her patient decided to sign. A case study of the law in New York highlights the ambiguity in the void-for-public-policy rationale as to whether the simple fact that the doctor-patient relationship is implicated in a medical malpractice contract is fatal to enforcement, or whether such a contract could be enforced if it were nonadhesive and clearly worded. A behavioral-economic analysis of the patient’s decision to sign a medical malpractice exculpatory agreement reveals a reason why the agreements may be categorically barred: Some patients might unwillingly agree to sign for fear of signaling distrust or litigiousness to their doctors. A confidential contract—in which the offeror never knew whether the offeree had accepted or not—would avoid this signaling effect. A provider using such a contract could distinguish those cases in which the doctor-patient relationship alone seemed to justify nonenforcement as not involving this prophylactic measure.

Litigants’ briefs in the myriad cases arising from the Deepwater Horizon explosion
raise questions about the extent to which the Oil Pollution Act’s two savings clauses
preserve additional remedies, such as punitive damages. A large number of comprehensive
federal frameworks include savings clauses that anticipate supplementing
the statute with additional federal or state law. When these clauses are
ambiguous, the statute and precedent may not suffice to resolve the ambiguity. This
Note explores how economic policy, specifically optimal deterrence theory, may be
used to resolve whether the Oil Pollution Act’s ambiguous maritime savings clause
preserves or precludes maritime punitive damages. Optimal deterrence theory bolsters
the Supreme Court’s recent repeated affirmances of using maritime punitive
damages to supplement federal statutes, providing a firmer justification for the
argument that two lower courts wrongly held that the Act precludes the maritime
damages for oil spill injuries. Having resolved the ambiguity caused by the interaction
between maritime punitive damages and the Oil Pollution Act with optimal
deterrence theory, I conclude by proposing a framework that courts could use to
determine when and how to award maritime punitive damages for oil spill injuries
in particular cases, integrating the common law remedy with the statutory scheme.

In Riegel v. Medtronic, Inc., the Supreme Court held that because the FDA
imposes device-specific requirements on the most sophisticated medical devices, tort
claims that would impose different or additional requirements on such devices are
preempted. The Court created an exception to this preemption rule for claims that
parallel federal requirements. However, it failed to define precisely what constitutes
a parallel claim. Lower courts have split on whether claims based on violations of
non–device specific, industry-wide federal regulations survive preemption. Several
courts, including the Eighth Circuit, and at least one scholarly article, have concluded
such claims are expressly and/or impliedly preempted. However, the Fifth
and Seventh Circuits, and a handful of district courts, have taken a more liberal
approach, holding that these claims should survive preemption. This Note explores
the split and argues that the liberal approach is preferable for doctrinal and public policy
reasons.

Accident compensation, and particularly auto accident compensation, is typically
thought to take one of two dichotomous forms: either no-fault or traditional tort.
Further, conventional wisdom holds that while pure no-fault may be an option in
theory, it is not one in practice. No pure no-fault auto regime has ever been enacted
in the United States, and states these days are repealing, rather than enacting, modified
no-fault legislation. Yet something peculiar is happening on the ground. Far
out of the light of day, high-volume personal injury firms that I call “settlement
mills” are quietly achieving many of no-fault’s objectives—speeding recoveries,
lowering systemic costs, and delivering relatively standardized sums to an apparently
expanded set of clients—while ostensibly operating within traditional tort.
What settlement mills are accomplishing, then, is in some respects astonishing—and
certainly commendable. Yet, the fact settlement mills’ distinctive operations are out
of the light of day and rarely revealed to clients is problematic, raising profound
issues of informed consent and highlighting severe information deficiencies in the
market for legal services. A well-designed disclosure regime can preserve settlement
mills’ substantial benefits, ameliorate their unique costs, and, more broadly,
improve the tort system’s operation and address the vexing problem of attorney
choice.