Smith v. Department of Ins.
507 So. 2d 1080, 55 U.S.L.W. 2608 (1987)
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Rule of Law:
A legislative cap on non-economic damages in a tort action violates the state constitutional right of access to courts for redress of any injury unless the legislature provides a reasonable alternative remedy or demonstrates an overpowering public necessity with no other alternative method to meet that necessity.
Facts:
- The Florida legislature found that a financial crisis existed in the commercial liability insurance industry, leading to a serious lack of availability and affordability of coverage.
- The legislature determined that professionals, businesses, and government entities were facing dramatic increases in the cost of liability insurance.
- This lack of affordable insurance was found to be seriously adverse to many sectors of Florida's economy.
- The legislature concluded that the existing tort system significantly contributed to the insurance availability and affordability crisis.
- In response, the legislature enacted the "Tort Reform and Insurance Act of 1986."
- The Act contained numerous provisions, including comprehensive insurance regulations, a modification of the doctrine of joint and several liability, and a $450,000 cap on non-economic damages in any civil action.
Procedural Posture:
- Various parties, including Robert P. Smith, Jr. (representing trial lawyers) and several insurance companies, filed a lawsuit in a Florida circuit court challenging the constitutionality of the 'Tort Reform and Insurance Act of 1986.'
- The circuit court, as the court of first instance, entered a final judgment upholding substantially all of the Act as constitutional.
- The circuit court found unconstitutional only certain insurance premium rebate provisions as they applied retroactively to existing contracts.
- Appellants (Smith and the insurance companies) appealed the judgment, and the Appellees (Department of Insurance) cross-appealed.
- The First District Court of Appeal certified the appeal directly to the Supreme Court of Florida as an issue of great public importance requiring immediate resolution.
- The Supreme Court of Florida accepted jurisdiction to hear the appeal.
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Issue:
Does a statutory cap of $450,000 on non-economic damages in tort actions violate the right of access to courts guaranteed by Article I, Section 21 of the Florida Constitution?
Opinions:
Majority - Per Curiam
Yes, a statutory cap of $450,000 on non-economic damages violates the right of access to courts. The right to sue for and recover non-economic damages existed at common law and is protected by Article I, Section 21. Citing Kluger v. White, the court held that the legislature cannot abolish a right of access to the courts without either providing a reasonable alternative remedy or demonstrating an overpowering public necessity for which no other alternative exists. The Act's damage cap provides no alternative remedy or commensurate benefit to the injured party. Unlike no-fault insurance statutes previously upheld, where a plaintiff gives up the right to sue in exchange for prompt payment of benefits and immunity from being sued, the cap here provides no such trade-off. Arbitrarily reducing a jury's verdict from a higher amount to $450,000 denies the plaintiff a constitutional redress of injuries. The court upheld other provisions of the act, including the modification of joint and several liability and the finding that the act did not violate the single-subject rule because tort reform and insurance regulation are properly connected to the single goal of creating a stable insurance market.
Concurring - Overton, J.
No, the statutory cap on non-economic damages should not be found to violate the right of access to courts. Justice Overton would have upheld the $450,000 cap. He reasoned that the limitation was an important legislative tool to ensure that liability insurance remains available and affordable. The availability of insurance provides a source of recovery for injured victims, which is a justifiable legislative purpose. In his view, having an insured defendant from whom to collect a judgment is a critical component of meaningful access to the courts, and the cap was rationally related to achieving that goal.
Dissenting - Ehrlich, J.
Yes, the statutory cap on non-economic damages violates the right of access to courts. While Justice Ehrlich agreed with the majority's conclusion that the damage cap was unconstitutional, he dissented on the grounds that the entire Act violated the single-subject requirement of Article III, Section 6 of the Florida Constitution. He argued that the Act was a "gargantuan logroll" that combined multiple, distinct subjects—such as tort reform and insurance reform—into one bill. This practice is precisely what the constitutional provision was designed to prevent. He contended that the court's prior decisions on this issue were erroneous and should be overruled, and that the entire act should be declared unconstitutional.
Analysis:
This decision is a landmark case in tort reform litigation, firmly establishing that state constitutional 'access to courts' provisions impose significant limitations on a legislature's ability to cap damages. The court's application of the stringent Kluger test makes it difficult for legislatures to limit common law remedies without providing a clear and substantial quid pro quo for potential plaintiffs. While the court struck down the non-economic damages cap, its broad interpretation of the single-subject rule gives the legislature wide latitude to enact comprehensive, multi-faceted legislation to address complex social problems, as long as the provisions can be linked to a single, overarching goal. This case set a crucial precedent for future challenges to tort reform measures in Florida and other states with similar constitutional protections.
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