Challenge to Sovereign Immunity/Damages Cap
In Freilich v. Se. Pennsylvania Transportation Auth., 302 A.3d 1261 (Pa. Commw. Ct. 2023), appeal granted, No. 245 EAL 2023, 2024 WL 1044586 (Pa. Mar. 11, 2024), the Pennsylvania Supreme Court was asked whether Section 8528(b)’s statutory cap on damages of $250,000 violates Article I, Section 6 and Article I, Section 11 of the Pennsylvania Constitution?
Hayley Freilich, the plaintiff, appealed from the judgment entered in the Philadelphia County Court of Common Pleas and the Commonwealth Court of Pennsylvania. On October 2, 2017, Hayley was struck by a SEPTA bus while in a crosswalk at Broad and Vine Streets in downtown Philadelphia. The bus ran over Hayley’s left foot, and she underwent a partial left foot amputation, which has required multiple additional surgeries and significant medical care and will require medical care for the rest of her life.
Hayley retained Kline & Specter, P.C. to represent her in litigation against SEPTA. A basis for this representation was that this law firm would challenge the constitutionality of Section 8528(b) of the Code, which limits SEPTA’s liability to the $250,000 cap, asserting that the cap violates Article I, Section 6 and Article I, Section 11 of the Pennsylvania Constitution. The plaintiff brought a one-count complaint in negligence against SEPTA. On July 20, 2018, SEPTA made a formal offer to settle all of the plaintiff’s claims for the maximum $250,000 cap on damages. Hayley rejected this offer as part of her constitutional challenge to the statutory cap. SEPTA admitted liability, and a jury trial limited to determining compensatory damages was scheduled. The parties entered into a stipulated jury verdict for the plaintiff. The damages awarded were $500,000 for past economic loss; $500,000 for future economic loss; and $6,000,000 for past and present non-economic losses.
The plaintiff then filed a motion for delay damages, while SEPTA filed a motion to mold the verdict, alleging that the stipulated verdict should be molded to conform to the statutory cap. Hayley filed an answer and memorandum of law in opposition, relying on Chief Justice Baer’s concurring opinion in Zauflik v. Pennsbury School District, 104 A.3d 1096, 1134 (Pa. 2014), in which he stated the constitutional challenge to the statutory cap for local political subdivisions was without merit, but “that through a properly developed record, a victim may be able to establish that the statutory damages cap constitutes an onerous procedural barrier to the jury trial right in violation of [a]rticle I, [s]ection 6.”
Relative to costs, after deducting these litigation expenses and counsel fees from the $250,000 gross recovery, the plaintiff would only net $90,462 in compensation. Hayley’s health insurer, Aetna, has paid $520,668.42 for health care resulting from the accident. Therefore, any net recovery could be recovered by Aetna. Hayley also received $7,967.31 in short-term disability benefits and $31,383.31 in long-term disability benefits, which would also be subject to recovery. The trial court heard argument on the post-trial motions and granted SEPTA’s motion to mold the verdict to comply with Section 8528(b) and denied the plaintiff’s motion for delay damages. The plaintiff appealed, claiming the trial court erred in molding the stipulated verdict to the statutory cap because it violates her right to a jury trial under Article I, Section 6 as the judgment will be consumed by costs, fees, and insurance reimbursement claims.
The Commonwealth Court found that Hayley was able to adequately prosecute the instant matter. The plaintiff asserted that the trial court erred in failing to adopt the late Chief Justice Baer’s minority position and in failing to determine the appropriate criteria upon which she may rely “to establish that the statutory damages cap constitutes an onerous procedural barrier to her jury trial right.” The court found that the trial court and the Commonwealth Court are bound by the majority opinion in Zauflik, in which the Supreme Court rejected the argument that the mere reduction in recovery is a basis upon which the foregoing constitutional violations may be found. The court recognized the harsh result that stemmed from its decision, but, nevertheless, it was compelled to affirm the trial court’s order molding the verdict to conform to the constitutionally valid provision of Section 8528(b) of the Judicial Code unless and until the Pennsylvania Supreme Court provides the basis upon which to do otherwise.
On March 11, 2024, the Petition for Allowance of Appeal was granted by the Pennsylvania Supreme Court, and the parties are directed to address the following issue: If the court concludes that the limitation of damages set forth in 42 Pa.C.S. § 8528 is unconstitutional, is Section 8528 severable from the limited waiver of sovereign immunity set forth in 42 Pa.C.S. § 8522(a)?
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