The United States Court System and Liability for Treatment of American Patients Overseas ~ Challenging Jurisdiction
So you manage a hospital or work with a hospital outside of the United States and you just cannot ignore the fact that the U.S. health care system is not readily available to just about one third of all Americans. It seems like every day you see the same statistics quoted in the news media, cited by candidates running for political office or in the trade press, that as many as 50 million Americans have no health insurance and that at least another 50 million are inadequately insured.
You read the complaints of U.S. businesses that the cost of providing health care benefits is increasing at a rate that threatens global competitiveness, if not corporate viability altogether. You see Michael Moore’s documentary, Sicko, and you know that you just might have an affordable option for care and treatment to many of these Americans. Finally, you think you understand enough of the public policy debate in the United States over health care to conclude that fundamental change to the current system is a long way off.
Wow! A market of at least 100 million potential patients, employers looking for relief, political paralysis and you have a product that is of better or equal quality and far less expensive to offer to U.S. citizens. Why not go for it?
Appropriately, you hesitate and wonder what risks are associated with this great opportunity. Although health care in the United States is heavily regulated, raising tax, ERISA, privacy, licensing and insurance issues, more likely than not, the first thing you think about is medical liability. If you are a provider, you correctly wonder if engaging in the care of American citizens exposes your organization and the individuals who provide clinical and other services to liability in United States courts.
If you help facilitate obtaining care for American citizens in foreign hospitals, you also wonder if you will find yourself in court. And if so, what does that mean and can the risk of liability in US courts be managed sufficiently to justify a business decision to go after the American market?
The American Judicial System
No doubt you already know that the United States is the most litigious country in the world and you expect that you might get sued. Inevitably, some US citizen will experience a bad result and you wonder if your healthcare facility has adequate defenses to protect you from liability in our courts. Defenses and post-judgment realities such as personal jurisdiction, waiver, choice of law and forum selection clauses, theories of medical liability, liability insurance, service of process and enforcement of judgments will be adjudicated in American courts of law.
To best understand how these issues will be resolved, it is helpful to note which aspects of the United States legal system have and will affect medical malpractice litigation. In the United States, different jurisdictions with different principles of law, aggressive and creative lawyers, and the unpredictability of individual judges will have a profound affect on the success of a medical malpractice claim.
As care is delivered outside of the United States, poor outcomes will inevitably occur. Patients will quickly realize that legal recourse outside of the U.S. courts is unattractive and inadequate by our standards. Once retained by the patient, their lawyers can be expected to examine every step in the process from initial patient contact to discharge to follow up care at home, to find a way to get jurisdiction in a U.S. court and to have that court apply U.S. law.
The same creativity and aggressive lawyering that has made for large judgments and broad liability here will be applied to these new factual circumstances. A careful examination of our system by those looking to facilitate and provide care for American citizens may influence decisions about who is treated, how the patient is treated and how the services of the provider are marketed.
51 American Court Systems
Unlike other countries, the United States does not have a unified single body of law for the entire country. Although there is a Federal Court System, liability of the type commonly alleged when a patient has a bad outcome is covered by state law. Each state has its own legislature that makes the law and courts that interpret and enforce the laws. Including the District of Columbia, that makes for 51 separate jurisdictions with sometimes subtle and sometimes significant differences in substantive law and procedure.
In the early part of this decade, the medical malpractice insurance crisis caused many state legislatures to reexamine state medical malpractice law. What resulted is typically American. Some states did nothing, many states passed reforms and plaintiff’s lawyers immediately started challenging the constitutionality of the reforms. The differences from state to state may be substantial enough to influence where the foreign provider markets its care.
The incentives to sue are high and the barriers to the courts are low in America. While the law continues to vary from state to state, it is clear that judgments and settlements are much higher in all of the 51 jurisdictions than in other country. This is largely attributable to the ability in almost all states to recover non-economic damages and the high cost of care that cause actual damages to be so high.
No matter which state the patient decides to sue in, access to the courts is easy because each side pays its own legal fees and this type of case is almost always taken on a contingency basis thus, requiring no legal fees to be paid by the injured patient until the case is resolved.
Lawyers and the Search for Deep Pockets
The expansion of liability theories in medical malpractice law in the U.S. can be attributed to the constant creativity of plaintiff’s lawyers. Physicians typically carry no more than $1,000,000 of liability insurance for any one claim. As lawyers seek to increase the size of judgments, they look for other defendants to share the burden of paying for judgments that exceed the amount of insurance of any single physician defendant.
Medical malpractice attorneys have responded aggressively and resourcefully by advocating new theories of liability which open up the pockets of others in the continuum of care to joint and several liability for the same injury.
Starting with the 1967, Illinois Supreme Court decision in Darling, hospitals have been independently liable under an increasing number theories for the care delivered to inpatients. Injured patient’s lawyers have successfully applied theories of direct and apparent agency to expand the number of defendants against whom liability could be imposed; even when the care is delivered in the doctor’s office.
And in the quest for ever larger awards and settlements, plaintiffs attorneys have convinced courts and juries of the viability of pain and suffering and new bases upon which their clients can be compensated for non-economic damages. Faced with a client allegedly injured as a result of care in a foreign provider, it is not unreasonable to expect the same persistence and ingenuity to be applied to finding a way to bring the claim to a U.S. court under U.S. law. Anyone arguably involved in the care of the patient can be a target.
Judges are People Too
Just as the law may be different from state to state, the interpretation and application of the law can be highly influenced by the judge before whom the case is tried. In many states, judges are elected by the citizens of the county or region in which the judge will preside. While judges are bound to follow the law and the precedent from prior cases, the application of the facts of any single case to the law can be somewhat subjective even in the same state.
Some judges sit in areas of the same state which are vastly different in culture and perspective. In Illinois for example, Cook County could not be any different than its immediate neighbor to the west, Du Page County. Judges and juries in Cook County are generally known to be more inclined to side with a plaintiff and if, so, the size of the judgment is likely to be higher than in Du Page County.
Further, as will be discussed later, a judge facing a ruling on whether he has jurisdiction over a defendant may be more inclined to find some basis to take the case if the alternative is that a member of his community is left with no adequate legal recourse if injured in another country.
Assuming the business proposition is compelling enough to encourage you to go forward, what are the defenses that can be raised in the event a lawyer wants to get his client’s claim decided in an American court of law and what can be done to put the providers in the best position to defend?
A court must have personal jurisdiction over a defendant before it can enter a valid judgment imposing a personal obligation on the defendant. Therefore, first line of defense for a foreign hospital or provider will be to challenge the court’s jurisdiction. Will the fact that you are located outside of the United States, that you have no offices or employees in the state where the suit is filed, that you have not consented to jurisdiction, and the alleged injury occurred outside of the United States, immunize you from liability?
It depends! But it is clear that over the years, starting with a case called International Shoe Co. v Washington, the United States Supreme Court, has allowed state courts to assert personal “long-arm” jurisdiction over a nonresident even though the defendant is not personally served within the state, provided the defendant has certain “minimum contacts” and the action “does not offend traditional notions of fair play and substantial justice.” Long-arm jurisdiction can be general or specific.
Specific Personal Jurisdiction
A court can exercise specific personal jurisdiction over a non-resident defendant when the defendant’s activities within the state serve as or are related to the basis of the lawsuit. For example, a patient calls a medical tourism facilitator in another state acting as a representative of a foreign health care provider and the representative assists the patient in the selection of a hospital and the patient alleges he has been the victim of negligent care.
In addition to suing the hospital and physicians for negligence, the patient might also allege that the decision to travel abroad for the procedure and the referral to the specific hospital or physician was the proximate cause of the injury. Before the defendants are forced to defend the claim on the merits, they can first challenge whether there is proof of the requisite connection between the act allegedly occurring in the state in which suit is sought, the recommendation or referral and the injury.
An inquiry of this nature would not extend to the actual merits of the negligence claim, but if the court believes there is a connection, it will exercise specific personal jurisdiction and force the defendant hospital and physicians to defend or face a default judgment. Even if the defendant’s are successful in getting the matter dismissed for lack of personal jurisdiction, it will cost time and money to defend.
With extensive use of the Internet to reach out to prospective patients, claims of specific personal jurisdiction are likely to arise. Developing case law tells us that the interactivity of the website consulted by and used by the patient and the hospital, may give a court sufficient grounds to find specific personal jurisdiction.
It is important to remember that specific personal jurisdiction is for that case only and other claims involving the same defendant and the same state are subject to fresh analysis of the underlying facts.
General personal jurisdiction.
As opposed to specific personal jurisdiction, general personal jurisdiction exposes a defendant to the jurisdiction of the courts for all actions. A court can exercise general jurisdiction over a person if the defendant’s conduct in the state is “continuous and systematic”. Because a plaintiff bears a higher burden of proof to establish general jurisdiction, even the use of a highly interactive web site on the internet would be less likely to constitute the kind of continuous and systematic presence in the state to give a court the basis to assert general personal jurisdiction.
However, the more the website becomes a virtual transactional workplace, developing legal precedents might encourage a judge to conclude that the website is no different than a physical office, that the presence of the foreign defendant is “continuous and systematic” and that there is jurisdiction for all purposes.
Bad results and poor outcomes occur whenever patients receive health care. This will be true whether the patient receives treatment in the United States or abroad. Methods of compensation for medical injuries in other countries are likely to be viewed as inadequate when compared to the American system. Some patients will understand that limited compensation in the event of a poor outcome is one of the tradeoffs for going abroad for medical care.
Other patients may not be as forgiving. Those who choose to help arrange for care and those who engage in the treatment of Americans abroad must prepare to defend against clever, resourceful and aggressive lawyers and sympathetic judges.
This article has discussed the first line of defense, challenging jurisdiction. While a future article will go into more detail about jurisdictional pitfalls, other articles will discuss how to manage risk in the event a sympathetic judge takes jurisdiction and requires the foreign health care provide to defend itself.
Bio Fredric J. Entin is a partner with Foley & Lardner LLP. A member of the firm’s Health Care Industry Team, he served as chair of the former Health Legislation/Associations Practice. Mr. Entin has broad experience representing hospitals and other health care providers focusing on compliance with a wide variety of issues including antitrust, Medicare and Medicaid, medical staff and exempt tax law. He has also represented trade associations and their subsidiaries for many years. Prior to joining the firm, Mr. Entin served as senior vice president and general counsel for the American Hospital Association (AHA) for more than eight years. Fred is an Advisory Board Member of the Medical Tourism Association.