Simms v. U.S. – Wrongful Birth Lawsuit and Collateral Source Rule

When it comes to personal injury lawsuit verdicts, courts have consistently held that plaintiffs should not expect to obtain double recovery. For example, if a health insurance company pays for a portion of the damages, it is the insurer – rather than the insured – who would be entitled to reclaim those funds. However, the collateral source rule provides that compensation an injured person receives from a source other than the tortfeasor is not going to reduce the amount of damages the tortfeasor has to pay. pregnant woman

The idea is that independent source payments aren’t going to allow a defendant to be “off the hook” for those damages.

In the recent case of Simms v. U.S., the plaintiff in this wrongful birth/medical malpractice lawsuit sought damages from a federally supported prenatal care provider for failing to inform her in a timely manner about the fact that her child would be born with severe congenital abnormalities. The defendant knew based on an ultrasound conducted at 18 weeks that the fetus was abnormal, but this information was not relayed to the plaintiff for a full three months. By that time, it was too late under state law to undergo an abortion because she was well into her third trimester.

The baby was born and now lives in a persistent vegetative state. As expected, he has severe brain damage and numerous related muscular and developmental conditions. He requires 24-hour care and constant medical monitoring. His medical bills are astronomical.

The plaintiff filed a personal injury lawsuit against the federal government under the Federal Tort Claims Act because the hospital was federally funded. She alleged the health care provider failed to discover and advise her of a birth defect, which in turn gave rise to this wrongful birth lawsuit.

Jurors awarded her $12 million in damages (both economic and non-economic).

The defendant did not appeal its liability. At issue on appeal was whether the trial court properly awarded damages based on what the plaintiff had been billed for past medical services, as opposed to what the state Medicaid office actually paid those providers. The defendant argued that to award the plaintiff damages related to medical costs that she didn’t personally have to pay ran contrary to the principle that one should only collect damages for harm caused. The U.S. Court of Appeals for the Fourth Circuit ruled there was no error here because of the collateral source rule. (In addition to Medicaid, other collateral sources could include Social Security, workers’ compensation, health insurance, and so on.)

The one area in which the government was successful on appeal was the issue of the failure to hold a post-verdict, pre-judgment collateral source hearing. This case occurred in West Virginia. In that state, the Medical Professional Liability Act modifies the collateral source rule in the context of medical professional liability lawsuits (like this one) and entitles a defendant to a pre-judgment hearing after the verdict to ascertain future payments from collateral sources, and economic damages may be reduced by that amount. The court is not allowed in these cases to reduce awards for which a collateral source could recover from the plaintiff through subrogation, reimbursement, or lien. Thus, for example, whatever amount Medicaid paid, it would have a right to impose subrogation rights on the plaintiff, and that amount is not subject to reduction.

Although the court affirmed the judgment, it did remand for a collateral source rule hearing.

Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:

Simms v. U.S., Oct. 7, 2016, U.S. Court of Appeals for the Fourth Circuit

More Blog Entries:

Jury Awards $1.75M for Slip-and-Fall at Dollar General, Oct. 7, 2016, Medical Malpractice Lawyer Blog

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