Protection Against Punitive Damage Claims at Pleading Stage Denied to California Health Plan


California Code of Civil Procedure section 425.13 precludes a claim for punitive damages in an action seeking damages arising out of a health care provider's negligence unless the plaintiff first obtains a court order. To garner such an order, plaintiffs must show there is a substantial probability they will prevail on the claim at trial. In a case of first impression, the California Court of Appeal in Kaiser Foundation Health Plan, Inc. v. Superior Court (Rahm), __ Cal.App.4th __ (February 15, 2012) held that section 425.13 does not apply to a health care service plan.

Anna Rahm and her parents sued the health plan and two affiliated health care providers for injuries Rahm alleged she sustained because of a delay in diagnosing a fast-growing cancer. Plaintiffs asserted the delay resulted from initial refusals of the health care providers to approve a diagnostic MRI. Further, they alleged the health plan – which delegated to its contracted physicians the responsibility of deciding what medical care to provide plan members – induced their physicians to deny costly medical services to plan members. More specifically, the plaintiffs contended the plan required its physicians to base their approval of medical care (at least in part) on the cost of the care, and then incentivized the physicians to withhold more costly care through a bonus system directly dependent upon cost savings the plan realized. The plaintiffs alleged tort and contract claims and sought punitive damages against all defendants.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sedgwick LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.