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Missouri Senate Bill 591 - Punitive Damages (A Health Care Perspective)

July 30, 2020 | John Mahon, Jr.

Introduction

On July 1, 2020, Governor Mike Parson signed Senate Bill 591 (SB 591). The new law states it will apply to all suits filed on or after August 28, 2020. SB 591 makes significant changes to the framework for punitive damages in tort actions filed in Missouri state courts or filed in other courts but based on Missouri state law tort claims. The discussion that follows is limited solely to medical negligence cases. Though not dealt with here, SB 591 also includes significant changes to actions under Missouri's consumer protection statute, the Merchandising Practices Act (“MMPA,” § 407.025, et seq., RSMo. (2020)).

Clarifying the Proper Standard

SB 591 is intended to bring much-needed clarity to punitive damages in medical negligence cases. This is not the first time the Legislature has addressed the issue, however. Since 1986, Chapter 538 of the Missouri Revised Statutes has included a definition for punitive damages as those “intended to punish or deter willful, wanton or malicious misconduct.” § 538.205(11) (1986). Consistent with this definition, the Legislature intended that punitive damages may be awarded against a health care provider only “upon a showing by a plaintiff that the health care provider demonstrated willful, wanton or malicious misconduct . . . .  § 538.210.8 (1986).

Unfortunately, this statutory definition has proved problematic in its application. For example, in one medical negligence case involving a substantial punitive damages award, the trial court approved (over the defendants’ objection) a jury instruction submitted by the plaintiffs that used the standard “complete indifference or conscious disregard” instead of the “willful, wanton or malicious” standard mandated by § 538.210.8. See, Koon v. Walden, 539 S.W.3d 752, 773 (Mo. App. E.D. 2017). That meant the jury was not instructed using the statutory language, and the jury did not specifically find that the defendants engaged in “willful, wanton or malicious misconduct.” The Missouri Court of Appeals, Eastern District, affirmed, concluding that for purposes of punitive damages, acting with “complete indifference or conscious disregard for the safety of others” is the legal equivalent of engaging in “willful, wanton or malicious misconduct.” Id. at 774-75. In a concurring opinion, one appellate judge stated: “I agree that the common understanding of the words ‘willful, wanton or malicious’ mean something different than ‘complete indifference to or conscious disregard for the safety of others’,” and that the instructional issue merited further review by the Supreme Court. Id. at 775-76. Despite this invitation, the Supreme Court of Missouri denied the appellants’ application for transfer.

SB 591 takes this issue head on and requires that a jury find “the evidence clearly and convincingly demonstrated that the health care provider intentionally caused damage to the plaintiff or demonstrated malicious misconduct that caused damage to the plaintiff.” § 538.210.8, RSMo. (2020). Further, and apparently in response to the Koon decision, SB 591 explicitly states that: “Evidence of negligence including, but not limited to, indifference to or conscious disregard for the safety of others shall not constitute intentional conduct or malicious misconduct.” Id. This change reflects a return to the original common-law standard of intentional misconduct and is an effort to clarify for the courts the proper standard and prohibit the use of lesser standards.

As mentioned above, as part of this new, heightened standard, SB 591 includes the “clear and convincing” burden of proof for punitive damages. This concept is not new, however, as the Supreme Court of Missouri adopted this evidentiary standard for all tort cases in Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104, 106 (Mo. 1996). Now, SB 591 codifies this standard into the statutory framework. Unchanged is § 510.265, RSMo. (2005), which limits punitive damages in most civil cases to $500,000, or five times the net amount of the judgment awarded to the plaintiff, whichever is greater. The Lewellen v. Franklin, 441 S.W.3d 136 (Mo. 2014) decision, in which the Supreme Court of Missouri reasoned that applying the punitive damages cap to a common law cause of action violated the constitutional right to a trial by jury, does not prohibit the Legislature from capping damages for a statutory cause of action such as medical negligence. See § 538.210, RSMo. (2015) (creating statutory cause of action for all medical negligence actions and replacing common law claims).

Significant Procedural Hurdles

Though not solely applicable to medical negligence actions, SB 591 also includes a series of procedural hurdles that a plaintiff must overcome before a court may allow a plaintiff to plead a claim for punitive damages and submit such a claim to a jury. These changes are included in Chapter 510. Under the new law, a plaintiff may not plead a claim for punitive damages until after a court has determined, based on available evidence, that a jury could reasonably conclude that the burden of proof and standard of liability have been met. § 510.261.5, RSMo. (2020). This will be important, as it has become increasingly common for Missouri plaintiff attorneys to include in a medical negligence petition a prayer for punitive damages along with compensatory damages as a matter of course, regardless of the nature of the facts of the specific case. This should no longer be tolerated unless the court grants a motion for leave filed no later than 120 days before the final pretrial conference or trial. No pleading or discovery shall be permitted on punitive damages unless a plaintiff first clears this procedural hurdle.

Vicarious Liability Issues

SB 591 also includes a “Complicity Rule” that limits vicarious liability for punitive damages against an employer/principal for employee/agent conduct. The new law permits such an award against an employer for the conduct of an employee only if the employee was a managerial employee acting in the course and scope of his employment; the employer authorized or later ratified the employee’s conduct; or the employee was “unfit” for the job making it “reckless” for the employer to hire or retain the employee. § 510.261.3, RSMo. (2020). It remains to be seen how courts will apply this rule to health care providers, but § 538.210.4, RSMo. (2020) is unchanged and continues to prohibit health care provider vicarious liability for the conduct of a non-employee agent.

Conclusion

SB 591 represents a return to the original common law concept of intentional misconduct being a prerequisite for an award of punitive damages. It is a robust effort designed to bring into focus the blurred line between mere negligent conduct and conduct that justifies an award of punitive damages, along with a procedural framework to weed out frivolous claims and ensure plaintiffs are held to the appropriate standard and burden of proof. The provisions outlined above appear to offer significant protections for health care provider defendants, while also allowing for the possibility of a punitive damages claim, but only in the rare circumstance where the evidence would support it.   

*Baker Sterchi Member Lisa A. Larkin assisted in the research for this post. 

Telehealth and Cybersecurity Amid the Pandemic

June 30, 2020 | Paul Penticuff and Megan Sterchi Lammert
“The New Normal.” “Social distancing.” “Stay home.” “Unprecedented.”
 
You’ve probably heard the above phrases more than once, twice, or fifty times over the past couple of months during the COVID-19 pandemic.  Almost all aspects of life are changing and/or have changed, including the way in which we are seeking medical care.

Indeed, telehealth is rapidly becoming a new normal” for routine healthcare visits, a market predicted to reach more than $130 billion worldwide by 2025 and $10 billion by the end of 2020. What is telehealth? According to the U.S. Department of Health and Human Services, Office for Civil Rights, it is “the use of electronic information and telecommunications technologies to support and promote long-distance clinical healthcare, patient and professional health-related education, and public health and health administration.” 

Examples of telehealth and its technologies include: mobile and/or wireless health platforms, real-time interactive services, such as teleconsultation and telenursing, and remote patient monitoring (such as for diabetes, weight gain/loss, and dementia), which are available via the internet, video, steaming media, webcam, live chat and/or video conference.

While innovative, convenient, and helpful to our society, especially in these challenging times, such telehealth programs have also raised concerns about cybersecurity risks to healthcare organizations and the public as healthcare organizations continue to speed toward implementing these programs. Examples of such cybersecurity risks include hacking and data breaches, phishing attacks, ransomware threats, loss or theft of equipment, data loss, and medical device attacks. These threats are especially concerning considering HIPAA privacy requirements. However, during the COVID-19 pandemic, organizations implementing telehealth programs will not likely be penalized by the HHS, Office of Civil Rights for HIPAA violations should the programs fail to comply with the required regulations, as long as they are using non-public facing remote communications in good faith. This leniency is not likely to last forever though.

What makes these threats possible? The fact that these telehealth systems heavily rely on the Internet. Further vulnerabilities of such systems include weak passwords, insecure network services, lack of secure updates, lack of privacy protection, outdated antivirus software, lack of secure data transfer and storage, and lack of device management.

However, to provide some protection, the following non-public facing remote communications are currently permitted: Apple FaceTime, Facebook Messenger video chat, Google Hangouts video, Whatsapp video chat, Zoom and Skype. These types of communications use end-to-end encryption, allowing only the person or persons communicating on each end to see what is transmitted, require personal accounts, logins, and passwords, and provide the users some control over how the communication occurs (i.e. video, sound, etc.). Not included in this list are Facebook Live, Twitch, TikTok, and similar video communication applications, as they are public facing. Such public facing forms of remote communication are not secure for such telehealth programs due to being open to the public and permitting more open and uninhibited access to the communications taking place.

Telehealth is likely here to stay, which is why it is so important that organizations and individuals ensure that steps are continuously taken to protect the platforms from breaches and protect users’ private information. There are many other organizations providing continuing recommendations of how to mitigate and otherwise address cybersecurity risks and actual breaches. See American Hospital Association and National Institute of Standards and Technology.  To learn even more about cybersecurity risks and practical approaches to effectively defending against and/or addressing breaches, BSCR previously did a three part series on cybersecurity risks, which can be accessed here, here, and here.
 

COVID-19 Healthcare Heroics May Ironically Lead to Future Confrontations - Causation Issues (Part 4)

May 7, 2020 | Nathan Leming

In part four of our series of blog articles delving into potential dangers for healthcare providers related to the COVID-19 global pandemic, we consider causation issues for healthcare associated COVID-19 infections.

General Infection Causation Issues

While every corner of American commerce, including food suppliers and sellers, financial institutions, childcare providers and fitness centers, may face increasing liability claims from customers and third parties claiming to have been exposed to COVID-19 during a visit to their premises, in most cases, proving that an infected person caught COVID-19 from a specific source should be a difficult task, especially considering the known virus viability outside the body and incubation time (the time between contracting the virus and onset of symptoms).

According to a study published in the New England Journal of Medicine, SARS-CoV-2, the virus that causes COVID-19, can live in the air and on surfaces between several hours and several days. The study found that the virus is viable for up to 72 hours on plastics, 48 hours on stainless steel, 24 hours on cardboard, and 4 hours on copper. It is also detectable in the air for three hours. After interaction with an infection source, most estimates of the incubation period for COVID-19 range from 1-14 days, with most infected individuals exhibiting symptoms around five days. Given the difficulty tracking all interactions of an infected person during the combined length of time between virus viability outside the body and incubation, narrowing the source of infection to one source and effectively ruling out all other possible acquisition more likely than not to a reasonable degree of certainty will likely be a difficult task. 

Causation Issues for Healthcare Associated COVID-19 Infections

Nosocomial or healthcare associated infections are infections acquired during care which are not present or incubating at admission or treatment start. Nosocomial infections have been a reality since the origin of medicine and have been the object of litigation for some time. Undoubtedly, the COVID-19 pandemic will result in numerous lawsuits alleging that a healthcare provider’s negligence led to infection during treatment. However, given that most infections are asymptomatic for some time after their onset, it can be very difficult to identify with precision whether the infection was indeed contracted after admission or whether the patient was infected before admission but asymptomatic. Several agencies and authorities have attempted to identify time parameters for establishing what generally constitutes a nosocomial infection. For example, the World Health Organization (“WHO”) “usually” considers infections occurring more than 48 hours after admission to be nosocomial. However, the “usual” qualifier in the WHO’s definition allows a case-specific analysis of whether an infection can be deemed nosocomial. Thus, the WHO’s 48-hour cutoff, or any other third-party’s definition is not likely to apply to alleged COVID-19 infections given the longer incubation time discussed above.  

For long-term care facilities, although a complete causation defense may be complicated by a resident’s likely admission predating the COVID-19 outbreak, providers should still attempt to establish a causation defense that a resident cannot prove virus transmission to a reasonable degree of certainty after the facility knew or should have known of the risk of COVID-19 transmission and before the recommended precautions were instituted. In support of this strategy, the Centers for Disease Control (“CDC”) has recognized that long-term care residents with COVID-19 may not report common symptoms like fever or respiratory symptoms, and some may not report any symptoms at all. The CDC acknowledges that unrecognized asymptomatic and pre-symptomatic infections likely contribute to transmission in long-term care facilities. These two CDC-recognized factors should strengthen a causation defense utilizing the above strategy.

Our prior posts in this series can be found here (part 1), here (part 2), and here (part 3).

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