Louisiana Supreme Court Clarifies “Reasonably Anticipated Use” in Product Liability Claim

On June 30, 2020, the last day of the 2020 First Extraordinary Session, the Louisiana legislature passed HB 57 legislation designed to revise tort law legislation. Although not yet signed by Governor Edwards, it appears he is likely to sign this legislation into law. The highlights of this new legislation include the following:

• The jury trial threshold has been lowered from $50,000 to $10,000;

• If the tort demand is between $10,000 and $50,000, the party demanding a jury must post a cash deposit of $5,000 within sixty (60) days of the jury demand;

• The existence of insurance coverage will not be communicated to the jury unless (a) the jury will decide a coverage issue; (b) “the existence of insurance would be admissible to attack the credibility of the witness under Article 607;” or (c) bad faith is claimed under La. R.S. 22:1973 or against the insurer alone under the Direct Action statute;

• The identity of the insurer will not be communicated to the jury “unless the identity of the insurer would be admissible to attack the credibility of a witness under Article 607.” The Judge will instruct the jury at the opening and closing of trial that there is insurance coverage for the damages claimed by the plaintiff;

• If Medicaid or workers’ compensation pays medical bills, the amount recoverable is limited to the amount actually paid. If health insurance or Medicare pays medical bills, the amount recoverable is limited to the amount actually paid (plus any co-pays, deductibles, etc.). Additionally, the Court shall award 40% of the difference between the amount of the bill and the amount paid. If anyone other than health insurance, Medicare, Medicaid, or workers’ compensation pays the medical bills, the amount recoverable is the amount actually paid and amounts remaining owed;

• Except for Medicaid and workers’ compensation the jury will only know the amount of medical treatment billed. After trial, the Judge will take evidence relevant to any discounts;

• Failure of the plaintiff to wear a seat belt is now admissible evidence of comparative fault or failure to mitigate.

Importantly, if signed by the Governor, HB 57 will become effective on January 1, 2021. It will have prospective application only and will not apply to a cause of action arising or action pending prior to January 1, 2021.

Chris Jones is a partner with Keogh Cox in Baton Rouge, LA. He focuses his practice on class actions and mass torts, and handles these matters in courts throughout the country. He is a life-long resident of Baton Rouge, where he lives with his wife and four children

The difference between the amount charged and the amount paid for medical treatment can be substantial. Knowing the dollar amount of the medical specials that a plaintiff will be allowed to seek at trial is often critical in case evaluation and resolution. In this context, the Louisiana Supreme Court provided a “bright-line” rule in Bozeman v. State, 03-1016 (La. 7/2/04), 879 So. 2d 692, that a plaintiff can only seek the amount actually paid for medical treatment, when it is funded by Medicaid. Our state’s highest court then added, in Simmons v. Cornerstone Investments, LLC, 18-0735 (La. 5/8/19), 282 So.3d 199, that only the amount actually paid for medical specials may be sought, when it is funded by workers’ compensation insurance. The “written off” amount is considered a “phantom charge” that the plaintiff will never pay. Some questions remain as to how courts will apply the holding and analysis of Simmons.

The rationale behind Simmons is that any discount in the amount of medical expenses given to the workers’ compensation carrier does not constitute a “collateral source” because the plaintiff did not give anything in exchange for the discount. Roughly six months after Simmons, the Louisiana First Circuit Court of Appeal reversed the trial court’s denial of the defendants’ motion in limine seeking to exclude evidence of the plaintiff’s total past medical expenses. Love v. Nelson, 2020-1050 (La.App. 1 Cir. 1/13/21), 2021 WL 118936, *1. Relying solely upon Simmons, the appellate court stated, “[T]he amount of medical expenses charged above the amount actually incurred is not a collateral source … . Accordingly, we find the trial court abused its discretion, and the motion in limine is granted and evidence of medical expenses not actually owed and paid by or on behalf of plaintiff … is excluded from evidence at the trial.” Id.

Federal courts, relying upon Simmons, have held that the collateral source rule does not apply to third-party-funded past medical expenses. See Collins v. Benton, Civ. A. No. 18-7465, 2021 WL 638116, *5, 8 (E.D. La. Feb. 17, 2021). However, see Lee v. United Rentals, Inc., Civ. A. No. 18-977, 2021 WL 2184763, *3 (M.D. La. May 28, 2021), where the court granted the defendant’s motion in limine to exclude evidence of the plaintiff’s past medical expenses not paid by workers’ compensation. Only the amounts paid by the employer/workers’ compensation carrier would be presented to the jury in support of the plaintiff’s past medical expenses. The court then added:

“However, there are two matters left in contention: first, may the Plaintiff offer evidence of the amounts charged by Plaintiff’s providers in connection with his back injury which [the employer] refused to pay? Second, may Plaintiff present evidence of the market rate for Plaintiff’s future medical needs or is he relegated to the amounts set out in the Workers’ Compensation Fee Schedule? As to both items, Simmons is not controlling.”

In other words, the federal court in Lee found that Simmons applied only to past medical expenses, but it did not apply to future medical expenses (i.e., the plaintiff would be allowed to present the full amount of anticipated future medical charges to the jury). As a federal court sitting in diversity, the Lee court applied the law of the state. Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). The findings in Lee may be correct, but, until it is definitively resolved by legislative act or by the Louisiana Supreme Court, parties will likely continue to debate what impact the reasoning of Simmons will have as to future medical charges past the date of trial. If, as held in Lee, the reduced workers’ compensation rate is irrelevant to future medical specials, then plaintiffs will seek the full future medical charges. This blog does not address the potential impact of the “Civil Justice Reform Act of 2020” which can reduce a plaintiff’s ability seek full medical charges for cases arising after January 1, 2021 in some circumstances.

Under the Louisiana Health Emergency Powers Act (“LHEPA”), a plaintiff must establish a medical provider’s gross negligence in a medical malpractice case when the treatment at issue occurred during a declared state of public health emergency.^ However, the Louisiana Supreme Court recently ruled that a medical review panel shall not consider gross negligence when the medical treatment occurred during a declared state of public health emergency.

In Sebble v. St. Luke’s, the plaintiff instituted a medical review panel for a medical malpractice claim related to medical treatment provided from June 17, 2020 to June 24, 2020. This treatment was received during a declared state of public health emergency. Sebble asked the court for a declaratory judgment to state that the gross negligence standard, usually applied during a state of public health emergency, should not be considered or applied in medical review panel proceedings conducted pursuant to the Louisiana Medical Malpractice Act (“LMMA”).

In response, the health care provider also sought a declaratory judgment that LHEPA’s standard of gross negligence applied and that the medical review panel must consider and analyze the claim under the gross negligence standard. The trial court ruled in favor of Sebble declaring that the gross negligence standard shall not be considered or applied in the medical review panel proceeding. The Louisiana Fourth Circuit Court of Appeal affirmed.

The Louisiana Supreme Court examined provisions of the LMMA and the LHEPA and affirmed the trial court and court of appeal. The court agreed there is a distinction between a medical standard of care (considered by the medical review panel) and a legal standard of care (dictated by the LHEPA). The panel of medical experts is only qualified to render an opinion based on the medical standard of care. The panel’s opinion is then considered by the trier of fact in making a judicial determination.

Medical review panels include an attorney chairperson. However, the Supreme Court stated that the attorney chairperson is not authorized to instruct the panel on gross negligence. The Supreme Court also rejected a proposed two-step process where the panel would first determine whether the medical provider breached the standard of care; and only if the panel found a breach would it consider whether there was gross negligence. The Court rejected this proposal because the legislature did not provide for this process in the statute.

Although the Court agreed that the LHEPA is an immunity statute, it made clear that immunity is an affirmative defense that can only be plead in civil litigation. The statute provides for two defenses at the panel stage: right of action and prescription. Therefore, immunity provided under the LHEPA may not be invoked until a civil action is instituted district court.

However, Sebble was 4-3 decision, with a dissent by Justices Weimer, Cain, and McCallum, which may suggest this issue could resurface in the future. For now, under Sebble, gross negligence is not to be considered by the medical review panel.

References:

Sebble v. St. Luke’s, 2023-C-00483 (La. 10/20/23), 379 So.3d 615.

^ La. R.S. 29:766(A).