Haceesa v. U.S.

• Decision Date: 24 October 2002
• Docket Number: No. 01-2252.,01-2252.
• Citation: 309 F.3d 722
• Parties: Beverly HACEESA, individually, and First Financial Trust Company, as Conservator for Shenoel Haceesa, a minor, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

309 F.3d 722

Beverly HACEESA, individually, and First Financial Trust Company, as Conservator for Shenoel Haceesa, a minor, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.

No. 01-2252.

United States Court of Appeals, Tenth Circuit.

October 24, 2002.

William G. Cole, Attorney, Appellate Staff, Civil Division, Department of Justice, Washington, DC (Robert S. Greenspan, Attorney, Appellate Staff, Civil Division, Department of Justice, Washington, DC, Robert D. McCallum, Jr., Assistant Attorney General, and David C. Iglesias, United States Attorney, with him on the briefs), for Defendant-Appellant.

James P. Lyle, Law Offices of James P. Lyle, P.C., Albuquerque, NM (Turner W. Branch, Branch Law Firm, Albuquerque, NM, with him on the brief), for Plaintiffs-Appellees.

Before EBEL, McKAY and BRISCOE, Circuit Judges.

EBEL, Circuit Judge.

On the evening of Saturday, April 25, 1998, twenty-five year-old Hardy Haceesa walked into a hospital emergency room complaining of a fever, difficult and painful breathing, chest discomfort, and general achiness. He told the nurse he thought his condition could be the result of exposure to mice. Haceesa was sent home that night, diagnosed with bronchitis and told to check back at the local clinic on Monday. By Tuesday evening, he was dead.

Only after his death was Haceesa's disease diagnosed correctly: he died of hantavirus pulmonary syndrome, a rare, deadly disease caused by exposure to airborne particles of the urine of infected mice and characterized in its early stages by flu-like symptoms. Haceesa was a Navajo Indian, and the hospital where he was first seen on April 25 — the Northern New Mexico Navajo Hospital in Shiprock, New Mexico — is owned and operated by the Indian Health Service, an agency of the United States Department of Health and Human Services. As the district court observed, Shiprock Hospital stands "in the geographic center of the world for" hantavirus.

The present suit was brought by Haceesa's widow Beverly Haceesa and his four year-old daughter Shenoel, alleging medical malpractice in the failure to diagnose Haceesa's hantavirus. The suit was brought against the United States under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671 et seq. After a bench trial in federal district court for the District of New Mexico, the court found the Government liable and awarded the Plaintiffs damages of over $2.1 million.¹ On appeal, the Government no longer disputes its liability, but challenges the damages awarded on three distinct grounds. First, it argues that New Mexico's $600,000 statutory cap on medical malpractice recoveries applies to the Plaintiffs' suit. Second, the Government argues that its liability should be reduced to reflect its comparative negligence relative to a subsequent health care provider that also failed to diagnose Haceesa's hantavirus. Third, it argues that certain of the Plaintiffs' claims are barred because they were not administratively exhausted at the time suit was filed. The district court rejected all three arguments. We conclude that the district court erred (1) in concluding that the recovery cap did not apply; (2) in failing to calculate the Government's liability on the basis of New Mexico's "loss of chance" approach; and (3) in concluding that the Estate's claim for wrongful death was timely filed. Accordingly, we reverse and remand for further proceedings consistent with this opinion.

I. APPLICATION OF THE FTCA TO NEW MEXICO'S CAP ON MEDICAL MALPRACTICE RECOVERIES

The district court awarded the Plaintiffs over $2.1 million in damages. The Government argues on appeal that this damages award should have been subject to New Mexico's $600,000 cap on medical malpractice recoveries. N.M. Stat. § 41-5-6(A) ("the recovery cap"). The district court rejected this argument:

The New Mexico cap on damages under the New Mexico Medical Malpractice Act does not apply in this case. The cap only applies to negligence by a "health care provider," which is defined as a "person, corporation, organization, facility or institution licensed or certified by this state to provide health care or professional services as a doctor of medicine, hospital, outpatient health care facility, doctor of osteopathy, chiropractor podiatrist, nurse anesthetist or physician's assistant." NMSA § 41-5-3(A). Plaintiffs' claims against the hospital administrators who elected to provide absolutely no training to Nurse Rhodes, as well as their claims of negligence against Nurse Rhodes, are not capped under the statute.

In other words, the district court concluded that (1) the recovery cap applies only to suits against health care providers, and (2) that Haceesa's suit against hospital administrators and a nurse was not a suit against health care providers. On appeal, the Government challenges each of these conclusions. The Plaintiffs, meanwhile, argue for affirmance on the alternative ground that, under New Mexico law, the Government is not entitled to the benefit of the recovery cap. After summarizing the relevant law, we address each of these three arguments below.²

Under the FTCA, the United States is liable for its tortious conduct in the same manner and to the same extent as a private individual under like circumstances in that jurisdiction would be liable. 28 U.S.C. §§ 1346(b), 2674. Here, our charge is to determine first the scope and applicability of the limits New Mexico statutes impose on the medical malpractice liability of private entities.

New Mexico's recovery cap provides: "Except for punitive damages and medical care and related benefits, the aggregate dollar amount recoverable by all persons for or arising from any injury or death to a patient as a result of malpractice shall not exceed six hundred thousand dollars ($600,000) per occurrence." N.M. Stat. § 41-5-6(A). "A health care provider's personal liability is limited to two hundred thousand dollars ($200,000) for monetary damages and medical care and related benefits.... Any amount due from a judgment or settlement in excess of two hundred thousand dollars ... shall be paid from the patient's compensation fund...." Id. § 41-5-1(D). As the district court noted, the statute defines "health care provider" as a "person, corporation, organization, facility or institution licensed or certified by this state to provide health care or professional services as a doctor of medicine, hospital, outpatient health care facility, doctor of osteopathy, chiropractor, podiatrist, nurse anesthetist or physician's assistant." N.M. Stat. § 41-5-3(A). "`[M]alpractice claim' includes any cause of action arising in this state against a health care provider for medical treatment, lack of medical treatment or other claimed departure from accepted standards of health care...." Id. § 41-5-3(C).

Not all "health care providers," however, are entitled to the benefit of the recovery cap: "A health care provider not qualifying under this section shall not have the benefit of any of the provisions of the Medical Malpractice Act in the event of a malpractice claim against it." Id. § 41-5-5(C). In order to be "qualified," a health care provider must "(1) establish its financial responsibility by filing proof ... of malpractice liability insurance ... of at least two hundred thousand dollars ...; and (2) pay the [Patient's Compensation Fund] surcharge." Id. § 41-5-5(A).

A. Whether the recovery cap applies to a suit against the Government

The Plaintiffs argue that we need not reach the question of whether the district court's rationale for refusing to apply the recovery cap is correct, because the Government is not "qualified" within the meaning of the Medical Malpractice Act and therefore ineligible to benefit from the recovery cap. The Government does not dispute that it has not filed proof of liability insurance and has not paid any surcharge into the Patients' Compensation Fund, and thus, by the terms of section 41-5-5, is not "qualified."

Three circuits have considered arguments similar to that now offered by the Plaintiffs, and all three circuits have held that the Government was entitled to the recovery cap despite failure to file proof of financial responsibility and to contribute to a compensation fund. See Carter v. United States, 982 F.2d 1141, 1143-44 (7th Cir.1992); Lozada v. United States, 974 F.2d 986, 987 (8th Cir.1992); Owen v. United States, 935 F.2d 734, 737-38 (5th Cir.1991). The rationale supporting these holdings is that (1) the FTCA refers to like circumstances rather than identical circumstances,³ (2) the financial responsibility of the United States is assured, and (3) its failure to contribute to a compensation fund is immaterial because (unlike qualified providers) it must pay its liabilities without resort to the compensation fund.⁴ This court has endorsed these holdings. Hill v. United States, 81 F.3d 118, 121 (10th Cir.1996) (citing, inter alia, Carter, Lozada, and Owen, and stating, "These cases stand for the proposition that where there is a specific cap on tort liability, the United States government may benefit from this limit although it did not otherwise participate in the statutory scheme which provides the cap...."⁵

The Plaintiffs endeavor to distinguish Carter, Lozada, and Owen by arguing that New Mexico law "require[s] the United States to attend a Medical Review Panel hearing" and "grants plaintiffs the benefit of having a physician selected to assist them in continuing to pursue their claims if they are found to have merit." In essence Haceesa's theory (offered without supporting authority) is that participation in the medical review commission procedures amounts to a qualification for purposes of section 41-5-5, and that New Mexico's qualification procedure thus is materially different from those at issue in Carter, Lozada, and Owen. We disagree. The Medical Malpractice Act establishes two actions that a health care provider "shall" perform "...