NMSC Applies Notice Pleading Standard to the Medical Malpractice Act

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The New Mexico Supreme Court published an opinion this week applying New Mexico’s liberal notice pleading standard to applications to the Medical Review Commission (“MRC”) under the Medical Malpractice Act. Reversing the decisions of the district court and court of appeals, it held that a plaintiff in a medical malpractice action need not expressly name all of the defendants in its application to the MRC in order to toll the statute of limitations against the unnamed defendants.

The opinion is a fascinating mix between statutory interpretation and civil procedure and the boundaries between the legislature and the judicial branch. Like the recent case of Lewis v. APS, it involves a statutory scheme that balances to somewhat conflicting policy goals. Also like Lewis, it requires some background about medical malpractice. So let’s begin with the Medical Malpractice Act.

The Medical Malpractice Act

In the mid-1970s, our legislature perceived a developing problem: physicians were having a hard time obtaining of medical malpractice insurance. Insurance is critical both to protect patients and also to ensure that doctors will be willing to work in the state. To address this problem, New Mexico passed the Medical Malpractice Act (the “MMA”).

To make New Mexico more palatable to ensurers, the MMA imposed a variety of limits on medical malpractice actions. For example, the MMA put a limit on the size of malpractice awards and liability for future medical expenses, imposed a pre-filing review commission, and changed the statute of limitations.

To qualify for these protections, health care providers had to meet certain conditions. The conditions appear to have been designed to ensure that the providers are adequately insured to pay out malpractice judgements against them. Health care providers were not obligated to meet these conditions, but they also were not entitled to the protections of the MMA unless they took the steps to become qualified healthcare providers under the act.

The Facts

This case is a garden-variety medical malpractice case. Although the opinion goes into them in some depth, the actual facts of the alleged malpractice hardly matter. A patient received care at one or more Lovelace facilities. The patient believed the care was negligent and wished to file suit. She went through the MRC process and eventually filed a lawsuit. At issue in this case is whether her failure to expressly name Lovelace in the MRC application meant the statute of limitations was not tolled while the case was under review by the MRC.

The MMA imposes a three-year statute of repose for medical malpractice lawsuits. This means that a lawsuit must be brought within three years of the alleged malpractice, regardless of when the patient knew or should have known of it. However, because the patient cannot file the lawsuit until the MRC reviews her case, the time spent at the MRC does not count towards the three years. But the time is only tolled if the patient complies with the terms of the MMA.

After the MRC had rendered a decision, the patient sued a doctor, a medical practice, and a hospital. Although it is not clear from the opinion the doctor appears to work for the medical practice. The hospital argued that since it had not been named in the MRC application, the statute of limitations was not tolled against it, and it should be dismissed as a defendant. Examining the application, the district court agreed, and the New Mexico Court of Appeals affirmed.

The Majority Opinion

Section 41-5-15 states that no medical malpractice lawsuit may be filed against a QHP until an application is made to the MRC and the MRC renders a decision. It requires that application to include “a brief statement of the facts of the case, naming the persons involved, the dates and the circumstances, so far as they are known, of the alleged act or acts of malpractice.”

The patient’s application to the MRC named the actual doctors and other persons who treated her. It did not, however, name the hospital. Although it is not clear, the application does not appear to have included any suggestion that the individuals were employed by the hospital.

In this case, the patient appears to have filed her application to the MRC before the three years. The statute of repose ran while the case was at the MRC (not unusual since cases are often filed at the MRC near the end of the three-year period). Whether the statue of limitations had run with regard to the hospital depended on whether the patient was required to name the hospital in her MRC application, or whether it was sufficient that the MRC could have inferred that the hospital was a defendant from the entire application.

The Courts analysis on this point is somewhat confusing. After having said that “the listing provided does not include Lovelace” in the facts section, it begins its analysis by observing that the “application clearly names Lovelace.” The Court reasons:

While the MRC application does not describe specific acts of malpractice directly committed by Lovelace, the application does describe clearly and specifically the acts and omissions of named employees and physicians working in Lovelance hospitals. This is sufficient as a matter of law.

Romero v. Lovelace, No. S-1-SC-36764, paragraph 19.

In support of this argument, the Court looks to two earlier cases. The first case, Zamora v. St. Vincent Hospital, dealt with whether a plaintiff had adequately pleaded vicarious liability against a hospital. Applying New Mexico’s liberal notice pleading standard, the Court concluded that the complaint was sufficient. The second, Baer v. Regents of University of California, addressed whether an employer named as a defendant could be held liable for an employee who was not named as a defendant, holding that the employee need not be a named party.

Returning to the facts of the application, the Court concluded that because the application was “detailed and specific in describing what doctors and employees did and did not do in treating Plaintiff at the identified Lovelace hospitals,” it had adequately raised the issue of vicarious liability of Lovelace. Accordingly, it reversed the court of appeals and remanded to district court.

Justice Nakamura’s Dissent

Justice Nakamura wrote separately in dissent. She begins with a straightforward proposition: the statute required the plaintiff to name the hospital, but she did not do so. But she went on to analyze additional portions of the MMA not discussed in the majority opinion.

Sections 41-5-16 and -17 each provide additional rights to employers when the patient’s claim is based on a theory of respondeat superior. In Justice Nakamura’s view, those sections must inform what it means to “name” a provider in section 41-5-15: when a plaintiff intends to assert a claim of vicarious liability, he or she must alert the MRC to this fact in clear and express terms. This is not a heightened pleading standard; after all, even under the notice pleading standard, a plaintiff still needs to name and serve the defendants it wishes to sue.

Justice Nakamura shows how this was a problem in the instant case. Because the plaintiff did not name Lovelance, the MRC did not understand the application to include any respondeat superior claims. In fact, it even told Lovelace that the patient’s claims did not involve Lovelace. Although the complaint does not elaborate, it seems clear that under those circumstances the MRC would not have complied with the requirements of Sections 41-5-16 and -17.

Finally, Justice Nakamura identifies separation of powers concerns in the opinion. By relying on the two cases it did, the Court essentially decided the case not by interpreting the statute, but by imported notice pleading standards from court rules. But those rules have no bearing on the legislatures intent in drafting the MMA. Indeed, the two are quite different. And while the Court has the power to promulgate the rules of civil procedure, it may not re-write statutes that are a valid exercise of legislative power. But by importing the rules into the meaning of the statute, it appears to have done so in this case.

My Thoughts

To be honest, I had a hard time with this case. It seems clear that the Court has imported notice pleading into the MRC process. Notice pleading is a feature of the rules of civil procedure in New Mexico that allows plaintiffs to plead their complaints generally. Or, stated differently, it protects plaintiffs against early dismissals by not requiring excessively detailed complaints. It is a feature of the rules of civil procedure, which, as Justice Nakamura notes, the Court (not the legislature) has the power to set.

In contrast, the MMA is a set of substantive laws that, as the Majority notes, the legislature (and not the Courts) have power to set. Not only do those laws require plaintiffs to name the hospital, they provide different substantive rights when a hospital is named (because the composition of the MRC is different when a hospital is named). This opinion appears to read those rights out of the statute. In addition, it appears to run contrary to existing cases which have held that strict compliance with statutory pre-requisites to filing suit is not only necessary, but jurisdictional.

It appears that the effect of this opinion is that implicit in every MRC application going forward is that the hospitals where a patient received care will be treated as named even when they are not (indeed, even when the MRC informs them that they are not), regardless of whether they employed the persons that provided treatment. It is less clear how the opinion would treat medical practices that employ physicians to practice at hospitals, but, given the reasoning here, one must assume that they will also be treated as named. And plaintiffs will be able to control the composition of the MRC panel by electing whether or not to name the hospital, knowing that the statue will toll for the hospital regardless.

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