Kansas Declares Damage Caps Unconstitutional

Kansas FlagOn June 14, 2019, the Kansas Supreme Court issued a landmark decision that changes the landscape of personal injury and workers’ compensation third-party cases. In Hilburn v. Enerpipe Ltd., 2019 WL 2479464 (Kan. 2019), the Court declared K.S.A. § 60-19a02 — a 1986 law which originally capped non-economic damages (e.g., pain and suffering and mental anguish) to $250,000 and actual damages (e.g., medical expenses and lost wages) to $1 million—unconstitutional.

Section 60-19a02 increased the non-economic damages cap over time to its current $350,000, and in 1988, the Kansas Supreme Court threw out a $1 million damage cap on actual damages in medical malpractice cases (which surprised nobody). But last Friday’s decision erased 30+ years of Kansas tort reform in one fell swoop, leaving the prospect of unlimited damages for defendants going forward.

In Hilburn v. Enerpipe, Ltd., a tractor trailer rear-ended a vehicle being driving by Diana Hilburn. A jury awarded $335,000 in actual damages, including $33,490.86 in medical expenses and $301,509.14 in non-economic damages. The trial court reduced the non-economic damages to $250,000 due to the statutory limits of K.S.A. § 60-19a02 (which has since increased to $350,000). Hilburn appealed the trial court’s reduction to the Court of Appeals, but her argument fell on deaf ears. Last Friday, the Supreme Court shocked the state and ruled 4-2 that the statutory cap infringed on the jury’s ability to award to Hilburn whatever damages they saw fit to compensate her for her injuries.

Justice Carol Beier, writing for the majority, held that the Supreme Court’s 2012 ruling in Miller v. Johnson, 289 P.3d 1098 (Kan. 2012) — which held the limits to be constitutional because the Legislature provided an “adequate and viable substitute” (known as the “quid pro quo test”) — applied the wrong constitutional test, and struck down the non-economic damage caps because it violated Hilburn’s right protected by section 5 and intruded on the jury’s determination of the compensation owed her to redress her injury. Other justices agreed with Justice Beier, calling it “a difficult constitutional call.” Two justices (Marla Luckert and Dan Biles) dissented, stating that that cap was “reasonably necessary in the public interest to promote the public welfare” and that legislators had provided an adequate alternative remedy for Hilburn. Chief Justice Lawton Nuss did not participate.

This decision will have significant ramifications for Kansas tort and third-party action lawsuits, because liability carriers intentionally stingy in Kansas due to the limited downside will now have to rethink how they approach and settle liability cases. This decision will also aid workers’ compensation subrogation, because trial lawyers were previously forced to turn their sights on subrogated workers’ compensation carriers to make up the difference.

For questions regarding workers’ compensation subrogation in Kansas or any of the other 49 states, contact Gary Wickert at [email protected].

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Gary L. Wickert
Partner

Gary L. Wickert is an insurance trial lawyer and partner with the law firm of Matthiesen, Wickert & Lehrer, S.C. Gary has 35 years of litigation experience and is regarded as one of the world’s leading experts on insurance subrogation. He is the author of several subrogation books and legal treatises and a national and international speaker and lecturer on subrogation and motivational topics.