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The Commerce Clause, sufficient for federal medical tort reform?

Opponents of federal medical liability reform, that is Democratic politicians and trial lawyers, commonly make two arguments against Congressional action along the lines of the current H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare Act: 1. Liability reform ignores "the real issue", that of medical errors and patient safety, and 2. Federal legislation is an attack against the states, their laws, courts and prerogatives.

The first is an attempt to change the subject, deflecting attention away from the costs of defensive medicine and putting the onus on doctors and insurance companies instead of trial lawyers.

The second serves a political purpose, appealing to federalism-minded House Republicans, especially new members aligned with the Tea Party. There's another advantage, too: The argument has legal and constitutional merit.

Unfortunately, supporters of national medical liability reform rarely engage the federalism issue. Until, that is Wednesday's hearing in a House Energy and Commerce subcommittee, "The Cost of the Medical Liability System Proposals for Reform, including H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011." In testimony on behalf of the Health Coalition on Liability and Access, Dr. Troy M. Tippett argued that activist state courts had overturned reasonable tort reforms enacted by legislatures, and health care fell under the Commerce Cause. From Dr. Tippett's prepared statement:

Enacting a federal statue, we believe, is the most effective avenue available to rein in judicial activism, address the medical liability crisis and ensure patient access to health care. H.R. 5 would level the playing field for doctors, hospitals, patients and attorneys, provide needed consistency to the system and eliminate the patchwork of protections in favor of a federal framework based on fairness and common sense.

There is plenty of legal justification for moving in this direction -- some that goes as far back as James Madison and his persuasive arguments in support of the Commerce Clause. This important provision gives Congress the ability to regulate interstate commerce (a definition which the health care industry clearly meets) when done in the public interest. In a 2003 report, the Congressional Research Service (CRS) confirmed this view, concluding that Congress has the authority to enact tort reform legislation generally, under its power to regulate interstate commerce.4 This legal logic has already been applied to an earlier medical dilemma when Congress passed the National Vaccine Injury Compensation Program, a federal program that preempts state court tort awards to protect vaccine manufacturers from bankruptcy in the face of extreme state tort jury awards. A precedent has been set, and we believe now is the time for Congress to act by passing federal medical liability legislation that protects doctors, patients and the states.

But vaccines are sold into interstate commerce and already regulated by the FDA. How is a doctor botching a procedure similar?

The 2003 CRS report Tippetts cites is "Federal Tort Reform Legislation: Constitutionality and Summaries of Selected Statutes. The CRS updated the report in 2008 (here). Both reports conclude:

Congress has the authority to enact tort reform legislation generally, under its power to regulate interstate commerce, and to make such legislation applicable to intrastate torts, because tort suits generally affect interstate commerce. However, it may be unconstitutional for tort reform legislation to be applied to particular intrastate torts that arguably do not substantially affect interstate commerce.

There would appear to be no due process or federalism (or any other constitutional) impediments to Congress' limiting a state common law right of recovery. The only exception concerns requiring alternative dispute resolution that
limits the right to a jury trial.

In their prepared statements, neither the subcommittee chairman, Rep. Joe Pitts (R-PA), nor the two other witnesses supporting the legislation (both doctors) mentioned the federalism and Commerce Clause issues. Testifying against the bill, Brian Wolfman, a visiting law professor at Georgetown and co-director of the Institute for Public Representation, focused his energies on criticizing the drug and medical device industries.

The other opposition witness was the usual suspect, Joanne Doroshow, executive director of the trial-lawyer backed Center for Justice & Democracy. In her 43-page prepared statement, she hit the talking points:

H.R. 5 would overturn traditional state common law and would be an unprecedented interference with the work of state court judges and juries in civil cases. Its one-way preemption of state law provisions that protect patients (there are some exceptions for caps) makes clear that the intent of this legislation is not to make laws uniform in the 50 states. Rather, it is a carefully crafted bill to provide relief and protections for the insurance, medical and drug industries. Every provision places a ceiling on patient recovery in tort litigation, but allows state laws to survive where those laws place more restrictions on patients' rights. There is nothing in this bill to protect patients.

Doroshow further argued that H.R. 5 is a direct attack against the Seventh Amendment's protection of trial by jury, another recurring theme from the opponents of reform. The American Association for Justice raises money via its Seventh Amendment Fund, and the AAJ's token GOP lobbyist, Andrew Cochran, blogs at The 7th Amendment Advocate.

On the legal and constitutional side of the argument, this non-lawyer has to give the edge to opponents of federal medical liability reform. Supporters would do well to solicit a serious legal analysis that lays a constitutional foundation for Congressional action.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.