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SAMSEL v. WHEELER TRANSPORT SERVICES3/21/1990
The opinion of the court was delivered by
Chief Judge Earl E. O'Connor of the United States District Court for the District of Kansas has certified the following question for resolution pursuant to K.S.A. 60-3201: Does K.S.A. 1987 Supp. 60-19a01 violate the Kansas Constitution, including §§ 5 and 18 of the Kansas Bill of Rights?
The majority of our legislature voted to limit the traditional role of the jury to determine the monetary value for loss of the
quality of life in Kansas by setting a limit on the recovery of noneconomic damages. The majority of this court recognizes that the legislature's decision to modify the common law, by setting a limit on noneconomic damages, is a legislative decision that does not violate our state constitution.
Prior to discussing the certified question, however, we will review some of the findings contained in the following report: Report of the Kansas Citizens Committee to Review Legal Liability Problems in Kansas as They Affect Insurance and Other Matters: Recommendations in the Area of Liability Insurance (Oct. 17, 1986) (a report to Fletcher Bell, Kansas Commissioner of Insurance) (hereinafter Citizens Committee Report). This report provides important insights into the stormy controversy which currently surrounds the liability insurance and tort systems.
A great change in tort doctrine has taken place over the past century. The primary function of damages is no longer seen as deterrence or retribution for harm caused; damages are now seen as compensation . In large part, this shift has been caused by the modern availability of affordable liability insurance, the purchase of which has occasionally been required by legislation. See, e.g., K.S.A. 40-3401 et seq. (the Health Care Provider Insurance Availability Act guarantees the availability of insurance to all Kansas physicians).
It is the availability of liability insurance which critics warn is threatened by the present tort system. If insurance goes, so will compensation to many plaintiffs, no matter how favorable the laws are in their favor. In reality, " ustice is not achieved when deserved compensation is granted by a court; it is achieved when that compensation is paid to the plaintiff." Citizens Committee Report 52 (quoting Report of the Governor's Advisory Commission on Liability Insurance for the State of New York 121-29 [Apr. 1986]).
Insurance companies derive profits from two sources: underwriting revenues and investment income. Investment income fluctuations play an enormous part in premium cycles. "However, never before did interest rates have such a profound influence upon premiums as during the latest cycle when double digit interest rates provided insurance companies with a substantial
pool of funds available to use to increase market share by reducing premiums." Citizens Committee Report 33-34.
The insurance crisis of the 1970s, referred to in the Citizens Committee Report, was partially caused by the industry's increased market at lower premiums due to its remarkably high rate of return on investments. The crisis was especially hard-felt in the malpractice insurance area. In response to this crisis and to ensure the continued availability of medical liability insurance, every state enacted some type of tort reform; the statutes number over 300. Comment, Caps, "Crisis", and Constitutionality — Evaluating the 1986 Kansas Medical Malpractice Legislation, 35 Kan. L. Rev. 763, 765 n. 18 (1987).
The Kansas Legislature and Governor took the following actions: In 1976, the Health Care Provider Insurance Availability Act, which created the Health Care Stabilization Fund, was e
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