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Schmidt v. Heather Ramsey

United States Court of Appeals, Eighth Circuit

June 22, 2017

Doran Schmidt, Individually, Plaintiff
v.
Heather Ramsey, APRN-CNM; Midwives Place LLC, Defendants S.S., a minor, by and through her mother and next friend, Doran Schmidt, Plaintiff- Appellant Bellevue Medical Center L.L.C., Defendant-Appellee State of Nebraska, Intervenor - Appellee COPIC Insurance Company Amicus on Behalf of Appellee(s) Doran Schmidt, Individually, Plaintiff S.S., a minor, by and through her mother and next friend, Doran Schmidt, Plaintiff- Appellee
v.
Heather Ramsey, APRN-CNM; Midwives Place LLC, Defendants Bellevue Medical Center L.L.C., Defendant-Appellant State of Nebraska, Intervenor - Appellee COPIC Insurance Company Amicus on Behalf of Appellee(s)

          Submitted: January 11, 2017

         Appeals from United States District Court for the District of Nebraska - Omaha

          Before SMITH [1] and KELLY, Circuit Judges, and SIPPEL, District Judge. [2]

          SMITH, Circuit Judge.

         After a jury awarded $17 million to a child born with severe brain damage, the district court[3] applied Nebraska's tort-reform act to reduce the verdict by almost 90 percent, to $1.75 million. The court declined, though, to retry the case based on alleged errors and omissions in the jury instructions. The child appeals the application and constitutionality of the Nebraska act. The hospital appeals the refusal to retry the case. For the reasons below, we affirm.

         I. Background

         A. The Nebraska Hospital Medical Liability Act

         More than 40 years ago, the Nebraska legislature passed the Nebraska Hospital Medical Liability Act ("Act") to curb meritless medical malpractice claims and efficiently resolve meritorious ones. Neb. Rev. Stat. § 44-2801. The Act caps malpractice damages according to the time of occurrence. Id. § 44-2825(1). For incidents between 2004 and 2014, such as this case, the cap is $1.75 million. Id. Capped damages are allocated between two sources. The first is the health care provider, whose liability is capped at $500, 000 per occurrence. Id. § 44-2825(2). The second is the "Excess Liability Fund" set up by the Act, which pays the remainder of damages up to the total cap. Id. § 2825(3).

         The Act does not apply automatically, and it has a notable opt-out provision. A health care provider must affirmatively qualify for the Act's protections by filing proof of financial responsibility and paying into the Excess Liability Fund. Id. § 44-2824(1). A provider who does not qualify is "subject to liability under doctrines of common law." Id. § 44-2821(1). And even when a provider does qualify, a patient may opt out. Id. § 44-2821(2). To facilitate this opt-out right, a qualified health care provider must post a sign in its "waiting room or other suitable location" notifying patients that they are subject to the Act unless they opt-out. Id. § 44-2821(4).

         B. S.S.'s Case

         S.S. was born on November 2, 2012, after a long labor. She was not breathing. She survived but suffered severe brain damage. Through her mother, S.S. sued three parties for medical negligence: (1) The Midwife's Place, where her mother received prenatal care; (2) Heather Ramsey, a certified nurse-midwife who worked at The Midwife's Place; and (3) Bellevue Medical Center ("Bellevue"), the hospital where S.S. was born. S.S. settled her claims with The Midwife's Place and Ramsey. The claims against Bellevue went to trial. These claims focused on the alleged negligence of two Bellevue nurses. A jury returned a verdict for $17 million.

         Bellevue moved for post-trial relief. The court granted Bellevue's motion to amend the judgment under Federal Rule of Civil Procedure 60(b) by reducing the damages to $1.75 million based on the Act, holding that the Act applied and did not violate the United States Constitution. But the court denied Bellevue's motion for a new trial under Federal Rule of Civil Procedure 59 based on alleged errors and omissions in the jury instructions, holding that Bellevue waived certain alleged errors and was legally incorrect about others. S.S. appeals from the Rule 60(b) ruling, and Bellevue appeals from the Rule 59 ruling.

         II. Discussion

         A. Rule 60(b) Motion

         We ordinarily review Rule 60(b) rulings for abuse of discretion. Holt v. Howard, 806 F.3d 1129, 1133 (8th Cir. 2015). But here the ruling was based on the district court's statutory and constitutional interpretations, which we review de novo as issues of law. United States v. Smith, 656 F.3d 821, 826 (8th Cir. 2011). Because an error of law is an abuse of discretion, the result in this case would be the same under either standard. See Noah v. Bond Cold Storage, 408 F.3d 1043, 1045 (8th Cir. 2005).

         S.S. challenges the Act's damages cap on six grounds. She argues that it (1) does not apply in her case; (2) violates the United States Constitution's Seventh Amendment right to a jury trial; (3) violates the United States Constitution's Fifth Amendment right to just compensation for government takings; (4) violates the federal constitutional right of access to courts; (5) violates the United States Constitution's Fourteenth Amendment right to equal protection of the laws; and (6) violates the United States Constitution's Fourteenth Amendment right to substantive due process.

         1. Statutory Notice

         S.S. contends that Bellevue is not entitled to the Act's protections because Bellevue is not a "qualified" health care provider under the Act. Bellevue met the Act's financial requirements by filing proof of financial responsibility and paying into the Excess Liability Fund. See Neb. Rev. Stat. § 44-2824(1). The issue is whether Bellevue properly posted the required opt-out notice. See id. § 44-2821(4). S.S. argues that Bellevue did not, for two reasons.

         The first is procedural. When Bellevue moved for post-trial relief under the Act, it attached evidence of compliance with the financial requirements but did not mention the notice requirement. After S.S. alleged in her response that Bellevue failed to comply with the notice requirement, Bellevue replied with evidence of notice and argued that notice is not required for qualification under the Act. S.S. insists that Bellevue waived these arguments by raising them in reply. Any such waiver, though, would not bind the court. See Barham v. Reliance Standard Life Ins. Co., 441 F.3d 581, 584 (8th Cir. 2006). And here the district court used its inherent docket-management authority, see Dietz v. Bouldin, 136 S.Ct. 1885, 1892 (2016), to allow S.S. to respond in surreply. We may therefore consider the issue of notice.

         S.S's second reason is substantive-that Bellevue did not properly post notice. Bellevue responds that posting notice is not a requirement for qualification under the Act, because the qualification requirements are plainly set out in one section, see Neb. Rev. Stat. § 44-2824(1), and the notice requirement, which appears in a different section, expressly applies to health care providers who have "qualified" under the Act, id. § 44-2821(4). According to Bellevue, this indicates that qualification occurs before and separate from the notice requirement.

         As Bellevue acknowledges, we touched on the notice requirement in Lozada v. United States, a Federal Tort Claims Act case addressing whether a federal hospital was in "like circumstances" with a qualified private hospital under the Act. 974 F.2d 986, 987-88 (8th Cir. 1992). The opinion's background section mentioned notice as a requirement for qualification, id. at 987, but notice did not form any basis of our holding, so this passing mention does not bind our panel, see Passmore v. Astrue, 533 F.3d 658, 660-61 (8th Cir. 2008).

         We hold that notice is not a requirement for qualification under the Act, but rather a requirement imposed on those already qualified. The plain language of the Act reveals as much. See Johnson v. City of Fremont, 845 N.W.2d 279, 286 (Neb. 2014) ("[A]bsent anything to the contrary, an appellate court will give statutory language its plain and ordinary meaning."). Section 44-2824 begins by listing the requirements "[t]o be qualified under the . . . Act." Neb. Rev. Stat. § 44-2824(1). Every subsection in § 44-2824 discusses something about qualification. See id. § 44-2824. Section 44-2824 does not, however, mention posting notice. See id. Instead, notice is mentioned only in § 44-2821 and only as a requirement for each health care provider "who has qualified under the act." Id. § 44-2821(4). Although the Nebraska Supreme Court has not addressed the exact issue we face, it has been careful to observe the statutory distinction between being "qualified" and posting notice. See Prendergast v. Nelson, 256 N.W.2d 657, 662 (Neb. 1977) ("Every qualified health care provider is required to post a notice that he has qualified under the act."). We see no basis to ignore the statute's wording. Bellevue therefore did not lose the Act's protections even if it failed to properly post notice.[4]

         2. Right ...


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