ROA v. LODI MEDICAL GROUP INC

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Court of Appeal, Third District, California.

Frank ROA, Jr., individually, Yvonne Jean Roa, individually and as Guardian Ad Litem for Frank Joseph Roa, Plaintiffs and Appellants, v. LODI MEDICAL GROUP, INC., Gordon R. Roget, Defendants and Respondents.

Civ. 19336.

Decided: February 26, 1982

Miller, Katz, Harlem & Dixon and Robert A. Harlem, San Francisco, for plaintiffs and appellants. No appearance for defendants and respondents. Musick, Peeler & Garrett and James E. Ludlam, Los Angeles, Horvitz & Greines, John L. Klein and Ellis J. Horvitz, Encino, Hassard, Bonnington, Rogers & Huber, Maureen E. Corcoran and David Willett and Howard, Prim, Rice, Nemerovski, Canady & Pollak, Dirk M. Schenkkan and Jerome B. Falk, Jr., San Francisco as amicus curiae on behalf of defendants and respondents.

Appellants challenge the constitutionality of Business and Professions Code section 6146.   That code section limits attorney fees in actions against health providers.   We conclude, as we explain below, that the statute does not violate constitutional standards of equal protection and the due process right of counsel.

This appeal is from an order of the superior court approving the settlement of a minor's medical negligence action.   The trial court approved the settlement of the minor's claim for $495,000 and settlement of the claims of the minor's parents for $5,000.   The trial court further specified that attorney fees in the amount of $90,794.89 be paid to the plaintiff's counsel in accordance with Business and Professions Code section 6146.   The attorneys filed a notice of appeal purporting to appeal from the order on behalf of plaintiffs.   The attorneys had entered into a contingency fee agreement for 25 percent of the recovery ($122,820.57).  Business and Professions Code section 6146 is unconstitutional, they assert, in precluding the payment of attorney fees in that amount.   Although we ultimately dismiss this appeal,1 because of the significant public interest involved we will address the merits.

I

Robert A. Harlem of the law firm of Jack Miller, Richard L. Katz & Robert A. Harlem, Inc., filed a complaint for damages on behalf of plaintiffs Frank Roa, Jr., Yvonne Jean Roa, and Yvonne Jean Roa as guardian ad litem for Frank Joseph Roa.   Lodi Medical Group, Inc., Gordon B. Roget, M.D., and the Lodi Community Hospital were the named defendants.   The complaint alleged medical malpractice by the defendants in caring for Yvonne Jean Roa and Frank Joseph Roa during the birth of Frank Joseph Roa.

Later, plaintiffs filed a petition for authority to compromise the minor's claim.   The proposed settlement was to include the payment of $495,000 for the minor and $5,000 for the minor's parents.   The total sum of $500,000 represented the policy limits of the defendants' insurance coverage.   The petitioners requested that the court provide for the payment of attorney fees to the law firm of Miller, Katz, Harlem & Dixon, Inc., in the amount provided for by Business and Professions Code section 6146, that being $90,798.60.   However, a second petition for the authority to settle the minor's claim was filed.   In this petition it was asserted that the plaintiffs' agreement with their attorney called for the payment of a contingency fee to be determined by the court and that the plaintiffs believed 25 percent of the net judgment to be a proper amount.

At the hearing on the petition Yvonne Roa testified that she was aware that Business and Professions Code section 6146 did not permit the payment of attorney fees in the amount requested, but that she nevertheless agreed to petition the court for the full 25 percent contingency fee.   The attorneys filed points and authorities urging the unconstitutionality of Business and Professions Code section 6146.

In its order approving the settlement, the trial court found that 25 percent of the settlement would be a fair and reasonable amount for attorney fees and would be awarded except for the limitations of Business and Professions Code section 6146.   The court refused to hold that section unconstitutional, and authorized an award of attorney fees in accordance with the statute.   The attorneys have brought this appeal urging that Business and Professions Code section 6146 be declared unconstitutional and that they be paid the full 25 percent contingency fee as originally bargained for.

II

A. Presumption of Constitutionality

Business and Professions Code section 6146,2 which restricts the amount of attorney fees recoverable by plaintiff's attorneys in medical malpractice cases, is an integral part of the Medical Injury Compensation Reform Act (MICRA).   In a recent case, we held that three other statutes under MICRA, also dealing with reform in tort law, satisfied constitutional standards.  (Fein v. Permanente Medical Group (1981) 3 Civil 18349, filed June 30, 1981 [hg. granted].)  We must now determine whether the Legislature infringed upon constitutional standards in enacting this provision.   In undertaking this task, it is imperative that we be mindful of the court's function in such a review.

 In general, statutes are presumed to be constitutional and any doubts should be resolved in favor of their validity.   (In re Ricky H. (1970) 2 Cal.3d 513, 519, 86 Cal.Rptr. 76, 468 P.2d 204.)   In reviewing legislative acts, the courts are not to substitute their social and economic beliefs for the judgment of the legislative bodies who are elected to pass laws.  (Ferguson v. Skrupa (1963) 372 U.S. 726, 730, 83 S.Ct. 1028, 1031, 10 L.Ed.2d 93, 97.)   courts do not sit as super-legislatures to determine the wisdom, desirability, or propriety of statutes enacted by the Legislature.  (Estate of Horman (1971) 5 Cal.3d 62, 77, 95 Cal.Rptr. 433, 485 P.2d 785;  Griswold v. Connecticut (1965) 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510.)

The California Supreme Court has enunciated the same concept:  “Courts have nothing to do with the wisdom of laws or regulations, and the legislative power must be upheld unless manifestly abused so as to infringe on constitutional guaranties.   The duty to uphold the legislative power is as much the duty of appellate courts as it is of trial courts, and under the doctrine of separation of powers neither the trial nor appellate courts are authorized to ‘review’ legislative determinations.   The only function of the courts is to determine whether the exercise of legislative power has exceeded constitutional limitations.”  (Lockard v. City of Los Angeles (1949) 33 Cal.2d 453, 461–462, 202 P.2d 38.)   With these constitutional principles in mind, we now turn to the attack on the statute.

Appellants challenge the constitutionality of section 6146 on the following grounds:  (1) section 6146 violates the equal protection clause of the United States and California Constitutions;  (2) section 6146 is a denial of due process by infringing on the right to counsel;  (3) section 6146 violates the doctrine of separation of powers.

B. Equal Protection

Appellants contend that section 6146 violates the equal protection clauses of the Fourteenth Amendment of the United States Constitution, and article 1, section 7 of the California Constitution.   In support, appellants make several arguments.   First, the statute treats medical victims and their attorneys differently from plaintiffs and their counsel who employ contingent fee arrangements in other types of litigation.   Second, the statute regulates the compensation of plaintiff attorneys but not defense attorneys.   Third, the statute discriminates among several classes of medical malpractice victims and their counsel depending on the size of the claim involved.

 Before confronting appellants' challenge to section 6146, we must determine how stringent a standard to apply in evaluating these classifications.   Under the equal protection clauses of the United States and California Constitutions, statutory classifications are reviewed according to either of two standards.  (See D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 112 Cal.Rptr. 786, 520 P.2d 10.)   The first is the traditional standard used for reviewing economic regulation or social welfare legislation in which there is a “discrimination” or differentiation of treatment between classes or individuals.   Under this standard, distinctions drawn by the challenged statute must bear some rational relationship to a conceivable legitimate state purpose.  (Westbrook v. Mihaly (1970) 2 Cal.3d 765, 784, 87 Cal.Rptr. 839, 471 P.2d 487;  D'Amico v. Board of Medical Examiners, supra, at p. 16, 112 Cal.Rptr. 786, 520 P.2d 10;  Cooper v. Bray (1978) 21 Cal.3d 841, 846, 148 Cal.Rptr. 148, 582 P.2d 604.)   Moreover, the burden of demonstrating the invalidity of a classification under this standard rests squarely upon the party who assails it.  (Lindsley v. Natural Carbonic Gas Co. (1910) 220 U.S. 61, 78–80, 31 S.Ct. 337, 340–41, 55 L.Ed. 369, 377–378.)

 In cases involving “suspect classifications” such as race or sex or affecting fundamental interests that are explicitly or implicitly guaranteed by the constitution, the “strict scrutiny” test is applied.  (Hawkins v. Superior Court (1978) 22 Cal.3d 584, 592, 150 Cal.Rptr. 435, 586 P.2d 916.)   The courts are to conduct an attitude of active and critical analysis of the controverted classification.  (Serrano v. Priest (1971) 5 Cal.3d 584, 597, 96 Cal.Rptr. 601, 487 P.2d 1241.)   Under this standard, the state bears the burden of establishing not only that it has a compelling interest which justifies the law, but that distinctions drawn by the law are necessary to further its purpose.  (Westbrook v. Mihaly, supra, 2 Cal.3d at pp. 784–785, 87 Cal.Rptr. 839, 471 P.2d 487.)

The statute at bench distinguishes between attorneys who represent victims of medical malpractice, as opposed to attorneys who represent victims of other torts.   This classification, we believe, may not be labeled as “suspect” in the traditional sense of the word.   Nor can it be said that the classes are “saddled with such disabilities, or subjected to such a history of purposeful unequal treatment, or relegated to such a position of political powerlessness as to command extraordinary protection from the majoritarian political process.”  (San Antonio School District v. Rodriguez (1973) 411 U.S. 1, 28, 93 S.Ct. 1278, 36 L.Ed.2d 16, 40.)

Appellants argue that the “strict scrutiny” standard should apply because the statute impairs the right to counsel.   As we shall discuss fully under our due process analysis, section 6146 does not deprive plaintiffs of counsel in medical malpractice cases.   Accordingly, it cannot be said that impairment of a fundamental right exists.

In the absence of either a suspect class or denial of a fundamental right, the correct standard of review is the traditional rational relationship test.   That is the test we apply.   We shall examine the history surrounding the enactment of the statute to determine if the legislative classification violates such a test.

California Assemblyman Barry Keene, Chairman of the Health Committee of the California Assembly and the principal author of MICRA, noted in his article entitled “California's Medical Malpractice Crisis,” that prior to the enactment of MICRA the number of medical malpractice claims and the size of the recoveries had been dramatically increasing.   As a result, medical malpractice insurance premiums also began to increase drastically.   In January 1975, insurance companies began increasing the premiums on medical malpractice policies, some as much as 486 percent.   Many physicians began practicing medicine without malpractice insurance.   In response to this, Governor Brown called a special session of the Legislature to deal with these problems.   What resulted was a comprehensive set of statutes which sought to provide substantial reforms in the area of health care quality control, tort law, and insurance review.   In enacting section 6146, the Legislature expressly stated:  “The Legislature finds and declares that there is a major health care crisis in the State of California attributable to skyrocketing malpractice premium costs and resulting in a potential breakdown of the health delivery system, severe hardships for the medically indigent, a denial of access for the economically marginal, and depletion of physicians such as to substantially worsen the quality of health care available to citizens of this state.   The Legislature, acting within the scope of its police powers, finds the statutory remedy herein provided is intended to provide an adequate and reasonable remedy within the limits of what the foregoing public health and safety considerations permit now and into the foreseeable future.”  (Stats. 1975, Second Ex. Sess., ch. 2, § 12.5, p. 4007.)

 In light of the legislative declaration, we cannot now say that the regulation of attorney fees in medical malpractice cases is not rationally related to the societal issue of premiums for malpractice insurance.   A court need neither agree nor disagree with such a legislative assessment.

Having concluded that section 6146 is “rationally related” to a legitimate state interest, we need not address appellants' argument that the statute is discriminatory as applied to plaintiffs and their lawyers in medical malpractice cases.   It may indeed be true that the statute operates to treat similarly situated classes differently as appellants contend.   However, this will not necessarily render the statute unconstitutional.   As long as there are no suspect classes involved, and the statute does not impair any fundamental rights, the statutory classification survives equal protection analysis if it is rationally related to a legitimate state interest.   We conclude that the statute satisfies such a standard.

As we stated in the outset of our opinion, a court is not a super-legislature whose function is to determine the wisdom, desirability, or propriety of statutes enacted by the Legislature.   It is for these reasons we conclude that section 6146, as it limits attorney fees recoverable by plaintiff attorneys in a medical malpractice case, does not deny equal protection of the laws guaranteed by our state and federal Constitutions.

C. Right To Counsel—Due Process

Does section 6146 violate the due process clauses of the United States and California Constitutions by depriving plaintiffs of counsel in medical malpractice cases?   If so the statute should be reviewed under a “strict scrutiny” standard.   The preface to appellants' argument is that the right to counsel in a civil proceeding is a “fundamental right,” and all statutes which affect fundamental rights must be reviewed under the “strict scrutiny standard.”   For the reasons we explain below, we hold that section 6146 does not deprive plaintiffs of counsel in medical malpractice cases, and therefore, there is no denial of due process.

 Although the issue is seldom litigated, there is a constitutional basis for the right to counsel in noncriminal proceedings.  (Vann v. Shilleh (1975) 54 Cal.App.3d 192, 200, 126 Cal.Rptr. 401;  Fallis v. Dept. of Motor Vehicles (1968) 264 Cal.App.2d 373, 383, 70 Cal.Rptr. 595.)   This basis is found in the due process claues of the Fifth and Fourteenth Amendments and the equal protection clause of the Fourteenth Amendment of the United States Constitution.

However, in defining what rights may be labeled as “fundamental,” the United States Supreme Court has stated:  “It is not the province of this Court to create substantive constitutional rights ․  Rather, [it is the court's job to articulate only those rights which are] explicitly or implicitly guaranteed by the Constitution.”  (San Antonio School District v. Rodriguez, supra, 411 U.S. at p. 33–34, 93 S.Ct. at p. 1296–97, 36 L.Ed.2d at p. 43.)   As will appear, we need not address the question whether the right to counsel in a civil proceeding is a “fundamental right.”   Appellants have failed in their burden of demonstrating that section 6146 denies counsel to plaintiffs in medical malpractice cases.

There exists no constitutional guarantee that the most highly qualified attorneys will be plaintiff lawyers in medical malpractice cases.   Even in a criminal context, an indigent defendant is not entitled to demand court-appointed counsel of his or her own choosing and absent a conflict of interest.   Generally, the appointment of an attorney other than the public defender is not required.  (People v. Bonville (1968) 267 Cal.App.2d 4, 7, 72 Cal.Rptr. 592.)   In light of this rule, a party to a civil case is hard pressed to argue that due process is denied because of the inability to obtain the most qualified counsel.

Moreover, this is not the first area where the Legislature has seen fit to limit attorney fees.   In the probate area, attorney fees are governed by statute according to a sliding fee schedule.  (Probate Code, §§ 903, 910.)   Similarly, in workers compensation cases, any agreement between attorney and client calling for payment in excess of the amount awarded by the board is void.  (Labor Code, § 4906.)   The evils which appellants state will ultimately occur have not arisen in the above areas and the record does not demonstrate that they will occur in medical malpractice.   Hypothetical harms or evils (that the best lawyers will not make themselves available) are not persuasive.

 We conclude that section 6146 does not operate to deprive plaintiffs in medical malpractice cases of the right to counsel.   It follows that the correct standard of review to apply is the traditional “rational relationship” test.   We have already determined that the statute satisfies this test.   Accordingly, section 6146 does not violate the due process clauses of the United States and California Constitutions.

D. Separation of Powers

Article III, section 3 of the California Constitution declares:  “The powers of state government are legislative, executive, and judicial.   Persons charged with the exercise of one power may not exercise either of the others except as permitted by this constitution.”   The separation of powers doctrine is well established in the history of our country as well as in our state.   Appellants contend that section 6146 violates this doctrine by removing from the courts the inherent power to review attorney fee contracts.   This power was recently set forth in rule 2–107 of the Rules of Professional Responsibility “a member of the state bar shall not enter into an agreement for, charge or collect an illegal or unconscionable fee.”   Appellants contend that section 6146 undermines this authority.   We cannot agree.

 There is nothing inconsistent.   The Legislature may limit the amount of attorney fees recoverable in certain areas.   California cases have consistently held that the Legislature is entitled to prescribe reasonable restrictions and rules of conduct for attorneys so long as it does not interfere with the Supreme Court's ultimate authority to regulate the practice of law.  (In re Lavine (1935) 2 Cal.2d 324, 328, 41 P.2d 161, 42 P.2d 311;  Brydonjack v. State Bar (1929) 208 Cal. 439, 443, 281 P. 1018.)   Section 6146 does not interfere with the Supreme Court's ultimate authority and we therefore conclude that it does not violate the doctrine of separation of powers.

CONCLUSION

Business and Professions Code section 6146, a part of MICRA, is the product of the Legislature's efforts to regulate malpractice insurance premiums.   A court should not second guess such a legislative decision;  it is not the court's function to debate the wisdom of legislative enactments.   Our job is only to review statutes against constitutional standards.   We conclude that the statute satisfies these constitutional standards.

The appeal is dismissed.

FOOTNOTES

FOOTNOTE.  

1.   Appellants contend that they are injured by the judgment of the lower court.   Despite this, they have chosen to bring this appeal on behalf of the plaintiffs.   The attorneys' interest in their fees is adverse to that of their clients.   An attorney should not represent a client whose interest is adverse to his own.  (O'Morrow v. Borad (1946) 27 Cal.2d 794, 798, 167 P.2d 483.)   Pursuant to the order granting authority to settle the minor's claim, the attorney fees were to be paid entirely out of the minor's settlement.   Hence, any additional fees that the attorneys recover will correspondingly decrease the amount plaintiffs will ultimately receive.   That causes us to have concerns regarding the procedural posture of this case.   Nonetheless, because of the significant public interest in this matter and the likelihood of reoccurrence, we will proceed to address the merits of the case even though the appeal is ultimately dismissed.  (See 6 Witkin, Cal. Procedure (2d ed. 1971) Appeal, § 225, pp. 4214–4215.)

2.   Business and Professions Code section 6146 reads:  “(a) An attorney shall not contract for or collect a contingency fee for representing any person seeking damages in connection with an action for injury or damage against a health care provider based upon such person's alleged professional negligence in excess of the following limits:“(1) Forty percent of the first fifty thousand dollars ($50,000) recovered.“(2) Thirty-three and one-third percent of the next fifty thousand dollars ($50,000) recovered.“(3) Twenty-five percent of the next one hundred thousand dollars ($100,000) recovered.“(4) Ten percent of any amount on which the recovery exceeds two hundred thousand dollars ($200,000).“Such limitations shall apply regardless of whether the recovery is by settlement, arbitration, or judgment, or whether the person for whom the recovery is made is a responsible adult, an infant, or a person of unsound mind.“(b) If periodic payments are awarded to the plaintiff pursuant to Section 667.7 of the Code of Civil Procedure, the court shall place a total value on these payments based upon the projected life expectancy of the plaintiff and include this amount in computing the total award from which attorney's fees are calculated under this section.“(c) The Board of Governors of the State Bar of California shall report and make recommendations to the Legislature by July 1, 1976, on an equitable method for regulating compensation of defense counsel consistent with the policies embodied in this article regarding regulation of plaintiff's attorney's fees.“(d) For purposes of this section:“(1) ‘Recovered’ means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim.   Costs of medical care incurred by the plaintiff and the attorney's office-overhead costs or charges shall not be deductible disbursements or costs for such purpose;“(2) ‘Health care provider’ means any person licensed or certified pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, or licensed pursuant to the Osteopathic Initiative Act, or the Chiropractic Initiative Act, or licensed pursuant to Chapter 2.5 (commencing with Section 1440) of Division 2 of the Health and Safety Code;  and any clinic, health dispensary, or health facility, licensed pursuant to Division 2 (commencing with Section 1200) of the Health and Safety Code.  ‘Health care provider’ includes the legal representatives of a health care provider;“(3) ‘Professional negligence’ is a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the provider is licensed and which are not within any restriction imposed by the licensing agency or licensed hospital.”

REYNOSO, Associate Justice.* FN* Assigned by the Chief Justice.

EVANS, Acting P. J., and BLEASE, J., concur. Hearing granted;  RICHARDSON, J., and REYNOSO, J., did not participate. RACANELLI, J., and RATTIGAN, J., sitting under assignment by the chairperson of the Judicial Council.