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California and the West

Boy's Case Reopens Malpractice Law Debate

Courts: Although a jury awarded Jabes Salgado $550,000 for pain and suffering, by law the judgment was reduced to $250,000--and L.A. County wants to pay it off over the course of his lifetime. State Supreme Court will decide the issue.


What is the price for the pain and suffering of a little boy with a bent and partly paralyzed right arm?

A Compton jury in 1993 decided $550,000. That should be Jabes Salgado's compensation for the future distress engendered by a 1988 birth injury at Harbor/UCLA Medical Center, in which his enlarged body became lodged inside his diabetic mother, according to a Los Angeles County Superior Court panel.

But if the judge's decision in the case stands, the defendant, Los Angeles County, will invest less than $62,000 to satisfy the pain and suffering award.

Attorneys for the boy and other patients are crying foul. And the case, which has been unanimously accepted for review by the California Supreme Court, could give rise to one of the most important decisions in state malpractice law since dramatic reforms were enacted in the 1970s.

At issue is the interpretation of a controversial California legal provision capping pain and suffering awards in medical malpractice cases at $250,000. Although insurer and doctor groups say the limit is essential to control costs, plaintiffs' attorneys call it arbitrary and unfair. Juries, as in the Salgado case, typically are not informed of its existence; the reduction is automatic after trial.

The Salgado case does not challenge the $250,000 cap. But it poses a question with implications for hundreds of victims of medical malpractice in the state, especially children: Is the victim entitled to the equivalent of $250,000 up front or over the course of his lifetime?

For Jabes, now 10, the difference is substantial. If, as his lawyer argues, he is entitled to the lump sum, investment of that money could yield nearly $900,000 over his lifetime. If he is only entitled to $250,000 over his lifetime, the county can take care of its debt by buying a $62,000 annuity, which will earn enough interest to make monthly payments for the next 66 years.

The case has attracted attention far beyond the principal players, reopening wounds in the debate over the justice of California's malpractice law and whether it shortchanges plaintiffs. In critics' minds, the "reduction" of the $250,000 to a lesser annuity amounts to a double penalty for patients. Advocates for doctors and insurers say spreading out payments is good social policy; it saves the health care system money.

"I don't think [a double penalty] is what the Legislature reasonably intended," said Ken Sigelman, chairman of the medical malpractice committee of the Consumer Attorneys of California, an organization of plaintiffs' lawyers.

"What is being done amounts to deprivation of due process of law, when the will of a jury is subverted to that degree."

Malpractice defense experts say the Supreme Court has an opportunity in the Salgado case to underscore the intent of the 1975 law: to keep malpractice awards reasonable and premiums affordable.

The law, known as the Medical Injury Compensation Reform Act, was enacted during what was billed as a malpractice insurance crisis, when doctors were complaining of skyrocketing premiums and insurers of unrealistic jury awards.

A second issue, not raised in the legal briefs but looming large in the minds of plaintiffs' attorneys, is the impact of the court ruling on their practices. If the Supreme Court upholds the most recent ruling, malpractice awards will, they say, be reduced to such paltry sums that no attorney who knows the business will take malpractice cases.

They say poor families, in particular, will suffer because they cannot afford to make payments up front to lawyers; attorneys' fees come out of the awards. In cases where victims are young and there are little or no economic damages for lost wages, such as the Salgado case, the lawyers' fees often come out of awards for pain and suffering.

If Jabes doesn't prevail, "I'll quit and play the stock market," grumbled Manuel Hidalgo, the Salgados' attorney, noting that his low-income Spanish-speaking clientele in East Los Angeles can't pay him out of pocket. Jabes' father, for example, supports a family of 13 on $8 an hour as a mechanic.

Advocates for doctors and insurers dismiss that sort of talk as bluster. "I don't see any of these attorneys dropping out of medical malpractice cases," said Martin Stein, an appellate attorney for the county in the Salgado case. "I don't think that will change."

The case comes amid renewed debate about the Medical Injury Compensation Reform Act in the state Legislature and the courts. A pending bill by Assemblywoman Sheila Kuehl (D-Santa Monica), which is being hotly contested by the California Medical Assn., among others, would more or less index the law for inflation, bringing the cap to $700,000. Kuehl is scrambling for votes: If the bill is not taken up by Saturday, it dies.

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