Jones v. Krautheim

Page 1173

208 F.Supp.2d 1173

Donna C. JONES, Plaintiff, v. Mark KRAUTHEIM, M.D., Defendant.

No. 01-MK-2150(PAC).

United States District Court, D. Colorado.

June 25, 2002.

Eric D. Dixon, Attorney & Counselor at Law, P.A., Portales, NM, for Plaintiff.

Edward David Bronfin, Kennedy & Christopher, P.C., Denver, CO, for Defendant.

ORDER REGARDING MOTION TO DISMISS AND MEMORANDUM OPINION

KRIEGER, District Judge.

THIS MATTER comes before the Court on the Defendant's Motion to Dismiss Punitive Damage Claim Under C.R.S. § 13-64-302.5 (Motion) and the Plaintiff's Response thereto. The Court has considered the parties' written and oral legal arguments and based thereon,

FINDS and CONCLUDES as follows:

I. JURISDICTION

This is a diversity action in which this Court has jurisdiction pursuant to 28 U.S.C. § 1332.

II. FACTS AND PROCEDURAL HISTORY

Plaintiff alleges medical malpractice and requests a judgment awarding medical expenses, damages for pain and suffering and punitive damages. In the Motion, the Defendant contends that Plaintiff's prayer for punitive damages is untimely pursuant to Colorado state law embodied in C.R.S. § 13-64-302.5 and therefore must be dismissed.¹ The Plaintiff responds that such statute should not apply in a federal diversity action such as this because it conflicts with the Federal Rules of Civil Procedure.

III. ISSUE PRESENTED

Section 13-64-302.5 of the Colorado Revised Statutes addresses claims for exemplary (punitive) damage awards sought against health care professionals. Subsection (3) prohibits a plaintiff from asserting a claim for exemplary damages in the initial complaint. The subsection authorizes amendment of the complaint after substantial completion of discovery and upon a showing of prima facie proof of a triable issue. The sole issue presented by the Motion is whether the restrictions of C.R.S. § 13-64-302.5(3) are applicable in a federal diversity action. This issue is one of first impression.

IV. ANALYSIS

C.R.S. § 13-64-302.5(3) provides in pertinent part:

[i]n any civil action or arbitration proceeding alleging negligence against a health care professional, exemplary damages may not be included in any initial claim for relief. A claim for such exemplary damages may be asserted by amendment to the pleadings only after the substantial completion of discovery and only after the plaintiff establishes prima facie proof of a triable issue.

Ordinarily, federal courts sitting in diversity cases apply federal procedural law and state substantive law. Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965); Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996). However, sometimes the line between procedural and substantive law is difficult to draw. The Supreme Court has struggled for years to delineate the difference. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Guaranty Trust Co. of New York v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945); Byrd v. Blue Ridge Rural Elec. Coop., 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958); Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965).²

In Hanna v. Plumer, the Supreme Court articulated a two-part test for deciding whether state law with a procedural impact should apply in federal diversity actions. The Hanna test requires a court to first determine whether the state law in question directly conflicts with a federal rule of civil procedure. If there is a direct conflict, the federal procedural rule applies and the state provision does not.³ If there is no direct conflict between the state statute and a federal rule, then a court must consider Erie's twin goals of discouraging forum shopping and avoiding inequitable administration of the law. Walker, 446 U.S. at 752-53; Hanna, 380 U.S. at 468.

Using this approach, I conclude that the provisions of C.R.S. § 13-64-302.5(3) do not directly conflict with any particular Federal Rule of Civil Procedure or the Federal Rules as a whole. Furthermore, the twin aims of Erie are best satisfied by applying the Colorado statute.

A. Interplay Between C.R.S. § 13-64-302.5(3) and the Federal Rules of Civil Procedure.

Using the Hanna approach, the first question posed is whether the state statute conflicts with any federal procedural rule. As many courts have noted, this is not a question of whether the federal rules and state law overlap. It is, instead, a question of whether a federal rule directly collides with state law, leaving no room for the state law's operation. See, Burlington N. R.R. Co. v. Woods, 480 U.S. 1, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987) (quoting Walker v. Armco Steel Corp., 446 U.S. 740, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980)). In this context, federal courts have consistently interpreted the federal rules with a sensitivity to important state interests and policies. Gasperini v. Ctr. for Humanities, 518 U.S. 415, 428 n. 7, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996).

Section 13-64-302.5(3) restricts a plaintiff's right to request exemplary damages against health care providers in two ways. First, the statute governs the timing of a plaintiff's request for an exemplary damage award. Such request may not be made in the initial complaint; it may be asserted only by amendment after the completion of discovery. Second, the statute conditions any such request upon a plaintiff's showing of prima facie proof of a triable issue. The Plaintiff in this matter contends that these provisions directly conflict with Rules 8, 9, 15 and 56 of the Federal Rules of Civil Procedure.

Although neither the parties nor the Court have found any reported decision that addresses the interplay between C.R.S. § 13-64-302.5(3) and the Federal Rules of Civil Procedure, a number of federal courts have considered the applicability of state statutes regulating a plaintiff's right to request an award of exemplary or punitive damages. District courts in Idaho, North Dakota, Minnesota and Florida have concluded that such state statutes do not conflict with the Federal Rules of Civil Procedure.⁴ District courts in Kansas, Illinois, Oregon, California and Florida have found conflicts between such statutes and the Federal Rules, but they do not agree as to which rule is implicated.⁵ The only circuit court to have addressed the issue is the Eleventh Circuit which did so in Cohen v. Office Depot, Inc., 184 F.3d 1292 (1999), vacated in part on other grounds, 204 F.3d 1069 (11th Cir.2000), cert. denied, 531 U.S. 957, 121 S.Ct. 381, 148 L.Ed.2d 294 (2000). In Cohen, the Eleventh Circuit Court of Appeals resolved the split in authority among the Florida district courts, holding that a Florida statute regulating exemplary damage claims conflicted with the provisions of Rule 8(a)(3), but not with Rules 8(a)(2) or 9(g).

Characterization of this spectrum of opinions into majority and minority viewpoints, as suggested by at least one commentator,⁶ is overly simplistic. Each state statute regulating the assertion of exemplary damages is unique and many differ in purpose or effect from the Colorado statute. Some statutes are applicable to all actions in which exemplary damages are asserted.⁷ In contrast, the Colorado statute applies only in actions brought against health care professionals. Some statutes were enacted with the purpose of limiting the amount or assertion of exemplary damages. Although no legislative history is cited by the parties, the Defendant persuasively argues that the effect, if not the purpose, of the Colorado statute is somewhat narrower. Its effect is to delay the assertion of exemplary damages thereby allowing defendant health care professionals to benefit from the representation of attorneys paid by their professional negligence insurance through the discovery phase. One statute is significantly more detailed than the Colorado statute. It specifies that particular hearings must be conducted, findings made, and discovery limited.⁸ Although most of the statutes require that some showing must be made in order to amend a complaint, two statutes require the plaintiff to establish more than a prima facie showing to support the amendment.⁹

In addition, the judicial analysis of the applicability of such statutes in federal diversity actions is not consistent. One decision offers little or no analysis.¹⁰ Rather than applying the Hanna two-part test, one opinion assesses whether the state law is substantive or procedural on an ad hoc basis¹¹ and others focus upon whether the state law will affect the outcome of the litigation.¹² Interestingly, two decisions concluding that the state law must be overridden by the federal rules also conclude that application of the federal rules will result in the same outcome as the state law, which suggests that there is no conflict or collision.¹³

In light of these variances, and in the absence of binding authority, I am guided by the reasoning of the Tenth Circuit Court of Appeals in Trierweiler v. Croxton and Trench Holding Corp., 90 F.3d 1523 (10th Cir.1996), a case analyzing the applicability of a different Colorado statute. In Trierweiler, a diversity action, the Tenth Circuit Court of Appeals considered the applicability of C.R.S. § 13-20-602, which requires that within sixty days after the filing of a complaint alleging professional negligence, a plaintiff file an expert report certifying that the claims have substantial justification. Failure to timely file the report requires dismissal of the action.

Applying the Hanna two-part test, the Tenth Circuit first considered whether the statute conflicted with Rule 11 of the Federal Rules of Civil Procedure. The Tenth Circuit reasoned that FED.R.CIV.P. 11 and § 13-20-602 demonstrated a common "intent to weed unjustifiable claims out of the system". Trierweiler, 90 F.3d at 1540. Due to their similarity in purpose and the limited application of § 13-20-602 to professional negligence cases, the statute and Rule 11 coul...