Punitive damage awards in medical malpractice actions seem to be on the rise. According to a recent study by Jury Verdict Research, while the percentage of cases involving punitive damages remains low - 3 percent in 1999 - this was the highest reported percentage in the seven-year period analyzed (1993-1999).¹ At the same time, malpractice claims generally appear to be on the increase; some 58 percent of physicians who responded to a recent survey indicated that they had been sued, and more than one in five had been sued three times or more. The percentages were even higher for general surgeons, orthopedists, and obstetrician-gynecologists.²

A potential increase in punitive damage claims is cause for concern both within the health care community and by defense counsel representing health care providers. Often punitive damage awards are not covered by insurance, and accordingly a claim for punitive damages may place a defendant's personal assets at risk. Likewise, a judgment awarding punitive damages may not be subject to discharge in bankruptcy. Therefore, it is essential for defense counsel, as well as risk managers and insurance claims personnel, to be familiar with the standards applicable to punitive damage claims, and the types of fact patterns where punitive damages have previously been allowed.

Historically, awards of punitive damages have been rare in medical malpractice cases. According to a study sponsored by the Department of Justice and released in June, 1996, plaintiffs were awarded punitive damages in only 6 percent of all jury cases where plaintiffs prevailed, and only 4 percent of all punitive damage awards were made in medical malpractice or product liability actions. The study found that punitive damage awards were far more frequent in contract cases and employment disputes, or cases involving intentional conduct such as assault or defamation.³ These results were consistent with a previous study released in 1995, which analyzed civil jury cases in the country's 75 most heavily populated counties, and found that punitive damages were awarded in only 13 of 403 successful medical malpractice actions.⁴

One reason for the relative scarcity of punitive damage awards in medical malpractice actions to date is the inherent tension between the purpose of punitive damages and the objectives of the healing arts. As the term implies, "punitive" or "exemplary" damages are awarded not to compensate the injured party, as are damages for pain and suffering or lost earnings, but to punish the wrongdoer for egregious conduct and serve as a deterrent to others who might be similarly inclined. According to New York's highest court, punitive damages "are prohibited unless the harmful conduct is intentional, malicious, outrageous or otherwise aggravated beyond mere negligence." McDougald v. Garber, 73 N.Y.2d 246, 254, 536 N.E.2d 372, 374, 538 N.Y.S.2d 937, 939 (1989)(emphasis added); Garrity v. Lyle Stuart, Inc., 40 N.Y.2d 354, 358, 353 N.E.2d 793, 386 N.Y.S.2d 831, 833 (1976). Sec. 908 of the Restatement of Torts, similarly, defines punitive damages as damages, "other than compensatory or nominal damages, awarded against a person to punish him for his outrageous conduct," while comment (b) to that section explains that "[p]unitive damages are awarded only for outrageous conduct, that is, for acts done with a bad motive or with a reckless indifference to the interests of others." Fortunately such conduct is rare in a medical context; while a physician may be tragically mistaken in a diagnosis or the treatment prescribed for a particular condition, most physicians do not deliberately harm their patients and are not indifferent to their well-being.

With respect to medical malpractice actions specifically, the courts have held that an award of punitive damages requires a showing of "gross indifference" to patient care. Pascazi v. Pelton, 210 A.D.2d 910, 621 N.Y.S.2d 979 (N.Y. App. Div. 4th Dept. 1994). The United States Court of Appeals for the Third Circuit, applying Pennsylvania law, has phrased the applicable standard as "whether there had been sufficient aggravated conduct contrary to the patient's interests, involving bad motive or reckless indifference, to justify the special sanction of punitive damages." (Medvecz v. Choi, 569 F.2d 1221, 1227 (3d Cir. 1977).

Because the plaintiff must establish a "bad motive" or "reckless indifference," punitive damage claims have generally not been allowed in cases involving simple errors of diagnosis or implementation of the wrong treatment, even where the error was substantial. For example, a California appellate court dismissed a claim for punitive damages in a case where, as a result of a mix-up in hospital charts, one surgeon performed abdominal surgery on a patient who had been scheduled for a breast biopsy, while another made an incision in the breast of the patient who was supposed to have the abdominal surgery. Ebaugh v. Rabkin, 22 Cal. App. 3d 891, 99 Cal. Rptr. 706 (Cal. Ct. App. 1st Dist. 1972). The court emphasized that under California law, an award of punitive damages requires a showing of malice, ill will, or the desire to do harm for the sake of doing harm, and that there was no evidence that any of the defendants was guilty of malice. With respect to the doctor who performed the abdominal surgery, the court commented:

Dr. Scruggs' action was admittedly negligent, amounting to a technical battery. However, the facts disclose that he did not know that he was operating on the wrong person. Thus, due to inadvertence, he was acting under a mistake of fact. Punitive damages are not recoverable where a person, acting in good faith, commits the tort of battery under a mistake of fact (citations omitted).

Likewise, in a case where a practitioner of alternative medicine allegedly counseled a cancer patient against conventional chemotherapy, and embarked on an unorthodox regimen involving coffee enemas several times a day, a New York appellate court reversed the trial judge and dismissed a claim for punitive damages. The appellate court held that the defendant's conduct was not so "wantonly dishonest," or "so malicious and/or reckless" as to warrant punitive damages. Charell v. Gonzalez, 251 A.D.2d 72, 673 N.Y.S.2d 685 (N.Y. App. Div. 1st Dept. 1998).

Thus, in a typical case where the claim is that a pathologist reviewing slides from a biopsy missed a diagnosis of cancer, or a physician negligently implemented a course of conservative treatment rather than recommending immediate surgery, a claim for punitive damages is likely to be dismissed unless there are other factors suggesting wilful or reckless indifference to the patient's interests, such as an attempt to conceal malpractice or falsify the patient's medical records. On the other hand, if the pathologist never looked at the slides and then lied and said he did so, or if a physician was notified of a patient's deteriorating condition and took no action, then a claim for punitive damages is likely to be permitted. In the latter instances, the allegations would support an inference of reckless indifference to the patient's welfare.

Malpractice cases where punitive damage claims have been allowed have typically involved abandonment of a patient; an inexcusable failure to render treatment; assault; or sexual misconduct. Punitive damages claims have also been allowed in cases where there was a pattern of statutory or regulatory violations; the defendants engaged in fraud or deception, such as an attempt to alter medical records to conceal malpractice; or the defendants knowingly allowed unlicensed and incompetent personnel to provide treatment. Still other cases have involved overcharging; performing non-emergency surgery after putting in an already long day; performing a particular procedure at a significantly higher than normal rate; performing a procedure when a more appropriate procedure is indicated, but which could not be performed by the defendant; and continuing to utilize a particular treatment which has had disastrous consequences in the past.⁵ In such cases, in contrast to cases involving a mistaken diagnosis or negligent recommendation for the wrong treatment, the element of reckless or wanton indifference to a patient's welfare is apparent. This article will discuss a number of these scenarios; part 2 of the article will cover several others.

Neglect By Director Of Laboratory

In a recent New York case, the court allowed a punitive damages claim against the director of a testing laboratory who essentially let the laboratory run itself. In Villanueva v. Polavarapu, N.Y.L.J. April 30, p. 25, col. 3, the plaintiff developed cervical cancer and underwent a hysterectomy at the age of 32. She brought suit stemming from the misreading of two Pap smears, alleging that proper testing would have led to an earlier diagnosis and enabled her to avoid radical surgery. Plaintiff alleged that the lack of a proper diagnosis resulted, in part, from negligent supervision of the testing laboratory, Medicon Diagnostic Laboratories, by the defendant Dr. Leza Gallo, who was in charge of cytology or cell research. In pertinent part, Dr. Gallo admitted at her deposition that she went to the laboratory twice a week for no longer than five hours at a time; that she never saw a technician stain a slide; and that she was unaware of the number of technicians employed at the laboratory.

Based on this evidence, the court allowed the plaintiff to amend her complaint to add a claim for punitive damages. The evidence, according to the court,

could support a finding by the jury that defendant was in gross dereliction of the supervisory responsibilities which she undertook, responsibilities imposed by law to protect the public from the very kind of injury which allegedly occurred herein. . . .[D]efendant's own testimony could support the conclusion that rather than fulfill her administrative responsibilities, defendant, in effect, let the laboratory run itself, stripping the public of the protections required by law.

Villanueva thus involves not only reckless indifference to a particular patient's welfare as a basis for punitive damages, but also gross negligence and dereliction of duty which potentially extended to all the patients of the testing laboratory.

Refusal To Treat Critically Ill Patient

Another New York case allowed a claim for punitive damages where a hospital turned away a critically ill patient, allegedly in violation of a state law requiring hospitals to provide emergency treatment to members of the public. In Sultan v. Kings Highway Hospital Center, Inc., 167 A.D.2d 534, 552 N.Y.S.2d 204 (N.Y. App. Div. 2d Dept. 1990), the plaintiff's wife was brought to the defendant hospital by ambulance, in the throes of a cardiac arrest. A supervising nurse allegedly told the plaintiff that the hospital was operating at full capacity, and that as a result, his wife would have to be transported to Brookdale Medical Center. The patient was subsequently admitted to Brookdale, where she died the following morning.

The court in Sultan rejected an argument that even assuming the conduct of the hospital's employees was grossly negligent, the plaintiff had failed to demonstrate that the hospital itself could be held liable for punitive damages under the "complicity rule." Pursuant to the "complicity rule," punitive damages may only be imposed on an employer for the wrongdoing of its employees if the management authorized, participated in, consented to, or ratified the conduct giving rise to the claim for punitive damages. The court in Sultan held that, when the plaintiff was afforded the benefit of every favorable inference as was required on a motion to dismiss, there were issues of fact as to whether punitive damages could be imposed on the hospital, and accordingly the question was one for the jury.

Violation Of State Laws Or Regulations

In McIntyre v. Transitional Health Services, Inc., d/b/a Silver Pointe Nursing Center, 1998 U.S. Dist. LEXIS 13965 (M.D.N.C. 1998), a federal district court in North Carolina allowed a claim for punitive damages to proceed against the operator of a nursing home based on gross neglect of the patients. Among other things, the plaintiffs alleged that the nursing home failed to provide hygienic and nutritional care to its elderly residents; and that it also failed to administer medication to patients and communicate medical information to families. Specific complaints included unexplained bruises, weight loss, and falls, as well as dehydration and malnutrition. The court concluded that such allegations, if proved, could constitute reckless indifference to the patients' welfare, and accordingly denied the defendant's motion to dismiss the claim for punitive damages. There was also evidence that Silver Pointe was operating in serious violation of several state health codes.

Unlicensed Practitioner

Knowingly permitting an unlicenced person to provide treatment was found to be a basis for punitive damages as early as 1905. In Mandeville v. Courtright, 142 F. 97 (3d Cir. 1905), the plaintiff contracted with the defendants for a set of false teeth and the necessary extraction of her natural teeth. Unbeknownst to plaintiff, the defendants' employee who operated on her mouth was not licensed as a dentist. In the course of attempting to perform an extraction, he removed a piece of her upper jawbone, in the mistaken belief that it was the root or a piece of a tooth. As a result, the plaintiff suffered a badly broken jaw.

The jury awarded the plaintiff $4000, of which $1500 was designated as punitive damages. The appellate court affirmed, holding that to put a patient into the hands of a person lacking the necessary training and qualifications exhibited a reckless disregard of the patient's interests:

The operation itself called for experience, knowledge and skill. These the person who operated seemed to have lacked. It was a great wrong to the plaintiff and a reckless indifference to her welfare to put her in the hands of such an incompetent person. Moreover, the evidence justified a finding by the jury that he acted with reckless disregard of the consequences to the plaintiff in extracting from her jaw what he supposed to be a root or piece of process, but what was, in fact, a portion of her jawbone. We think that the facts disclosed by the evidence fully justified the jury in awarding to the plaintiff exemplary damages.

Much the same reasoning was applied in Stevens v. Superior Court, 180 Cal. App. 3d 605, 225 Cal. Rptr. 624 (Cal. App. 2d Dist. 1986), which allowed claims for intentional fraud and deceit against a hospital. In Stevens, it was alleged that a hospital intentionally concealed from the plaintiff and other patients the fact that foreign physicians, who were not licenced to practice medicine in California, were allowed to function as staff physicians and surgeons without the supervision required by statute in such cases. Because the physician who performed a Caesarean section on the plaintiff in Stevens had not been trained in California hospital emergency procedures and was not under any supervision, he failed to call in a "Code Blue" alert until 10 minutes after the plaintiff went into cardiac arrest, which resulted in brain death. In allowing the claim for punitive damages, the court found that the hospital was engaged in an intentional scheme to use foreign doctors for it sown financial benefit, and that it acted in conscious disregard of the increased risk to its patients.

Abandonment of a Patient

In Medvecz v. Choi, 569 F.2d 1221 (3d Cir. 1977), the court found that punitive damages were potentially warranted based on evidence that an anesthesiologist may have walked out on a patient in the midst of an operation, without first making certain that a qualified replacement was present. The patient became permanently paralyzed from the waist down following the procedure, which involved the injection of a radiopaque dye into her blood vessels in order to take X-rays of her kidneys. Plaintiffs alleged that this was due in part to a precipitous drop in blood pressure, which allowed the dye to enter the spinal cord. A qualified anesthesiologist, according to plaintiffs, should have informed the surgeon that the patient's blood pressure had dropped dramatically during the operation. As it was, the surgeon testified that he was never told that the patient's blood pressure had dropped, and that if he had been so informed, he would have stopped the procedure.

Evidence at the trial suggested that the anesthesiologist, Dr. Choi, left the operating room during the procedure. After the trial court declined to submit the issue of either abandonment or punitive damages to the jury, the appellate court reversed and remanded the case for a new trial. The court commented that if the jury found that Dr. Choi abandoned the patient in the sense that he was not replaced by a competent anesthesiologist, then the jury could also find that he manifested reckless indifference and award punitive damages.

Another case involving allegations tantamount to abandonment of a patient is Graham v. Columbia-Presbyterian Medical Center, 185 A.D.2d 753, 588 N.Y.S.2d 2 (N.Y. App. Div. 1st Dept. 1992). In Graham, the plaintiff's decedent began bleeding uncontrollably following a transurethral resection, and eventually went into cardiac arrest and died.

Plaintiff sought punitive damages against the surgeon who had performed the operation, alleging that he had failed to examine his patient and instead went home to have dinner and take a shower. Subsequently, the residents treating the patient made several telephone calls to the surgeon, but by the time he returned to the hospital the decedent had already lost a significant amount of blood, and his condition was terminal. The court allowed the claim for punitive damages to proceed, concluding that the plaintiff's allegations, if true, amounted to a failure to render assistance to a patient in need of emergency treatment.

Other possible scenarios for the award of punitive damages are alteration of medical records and intentional misconduct by a health care provider; these will be covered in part 2 of this article, which will also feature a discussion of the amount of punitive damages.

1. From Joan R. Rose, "Plaintiffs Lose More Often, But When They Win, They Win Big," Medical Economics, April 23, 2001.
2. From Mark Crane, "Our National Survey Confirms: Even The Best Doctors Are Targets," Medical Economics, July 26, 1999.
3. From "Punitive Damages - Eisenberg Study," ATLA Advocate, October, 1996.
4. From "Medical Malpractice," ATLA Advocate, November, 1995.
5. See 35 A.L.R. 5th 145, § 2b.