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Winter 2011
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The Defense Line: Winter 2011

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The Defense Line: A Publication From The Maryland Defense Counsel, Inc.

DRD Pool Service, Inc. v. Freed

Matthew SchrollMatthew Schroll
On September 24, 2010, in DRD Pool Service, Inc. v. Freed, 5 A.3d 43, 416 Md. 46 (2010), the Court of Appeals of Maryland upheld the Maryland’s statutory cap on non-economic damages in a six to one decision. The Court held that the cap does not violate a plaintiff’s constitutional right to a jury trial or the guarantee of equal protection under the United States Constitution and Maryland Declaration of Rights.

The Freed case arose from the death of a boy who drowned at a country club pool. The boy’s parents brought a wrongful death action in the Circuit Court for Anne Arundel County against DRD Pool Service alleging DRD’s negligence in maintaining the pool. The jury found DRD was negligent and awarded the parents approximately $4 million in non-economic damages. The award was reduced to approximately $1 million under the statutory cap codified in MD. CODE, CTS. & JUD. PROC. § 11-108. The plaintiffs filed a motion to alter the judgment and challenged the constitutionality of the cap, which the Circuit Court denied. The Court of Appeals granted certiorari to consider plaintiff’s challenge to the cap on non-economic damages.

On appeal, the plaintiffs argued that the Court should employ a heightened standard of review to examine the statutory cap because the cap implicates important personal rights rather than economic or commercial rights. Under this argument, the statutory cap infringes on a plaintiff’s traditional right to have the jury determine the amount of damages as guaranteed by the right to a jury trial afforded by the Maryland Declaration of Rights. Furthermore, the plaintiffs argued that the statutory cap violates the Constitutional guarantee of equal protection because it discriminates against a class of grievously injured claimants. The defendant, DRD Pool Service, argued that the doctrine of stare decisis compelled the Court to follow its own precedent and uphold the statutory cap. DRD additionally contended that plaintiffs’ arguments regarding the right to a jury trial and equal protection were not novel and as a result did not warrant a departure from stare decisis.

Maryland Defense Counsel, Inc. (“MDC”) submitted an amicus curiae brief urging the Court of Appeals to reject the constitutional challenge to the cap. In response to the plaintiffs’ arguments that the cap violates the right to trial by jury, MDC demonstrated that jury awards may be displaced if a judge applies remittitur. Thus, the statutory cap has the same effect as constitutionally approved remittitur. Further, MDC contended that the cap did not violate the guarantee of equal protection because the cap did not classify among plaintiffs who have been more severely injured. Rather, MDC argued that monetary awards do not correlate with the severity of injury, and that the statutory cap applies equally to plaintiffs based on the amount of the award and not the severity or type of injury.

In affirming the decision of the Court of Special Appeals, the Court relied Murphy v. Edmonds, 325 Md. 342 (1992), in which the Court found that the statutory cap was an economic regulation subject to rational basis review rather than a heightened form of scrutiny. Thus, the Court considered the cap a legislative policy judgment that did not infringe on a plaintiff’s right to a trial by jury. After noting the few narrow exceptions for departure from the doctrine of stare decisis, the Court concluded that plaintiffs had not presented sufficient evidence or persuasive arguments to depart from the prior decisions upholding the cap. In dissent, Judge Murphy argued that heightened scrutiny should apply to determine whether the cap violates the guarantee of equal protection.

In upholding the cap, Maryland broke from two other state high courts—Illinois and Georgia—that recently declared similar statutory caps on non-economic damages unconstitutional under the same arguments considered by the Court of Appeals. See Lebron v. Gottlieb Mem’l Hosp., 930 N.E.2d 895 (Ill. 2010) (invalidating cap under separation of powers); Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, 691 S.E.2d 218 (Ga. 2010) (holding cap violates the constitutional right to trial by jury). Given the Court of Appeals’ faithfulness to stare decisis, Maryland’s statutory cap on non-economic damages can be considered settled law.

Matthew Schroll is an associate at Miles & Stockbridge P.C. in the firm’s Products Liability Practice Group.

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