04/06/2010 05:12 am ET Updated May 25, 2011

Illinois Supreme Court: Malpractice Law Unconstitutional

The Illinois Supreme Court struck down a law Thursday that capped the amount of damages that could be awarded in malpractice lawsuits, saying that it interfered with juries' constitutional powers to award settlements in civil cases.

The ruling comes at a delicate moment for malpractice reform. As lawmakers in Washington go back to the drawing board on healthcare reform legislation, Republicans on the Hill have been pushing caps on malpractice suits as a way to drive down health costs.

American Medical Association president James Rohack made the cost argument in this case, telling the Chicago Tribune, "Without a cap on noneconomic damages from 1997 to 2005, Chicago physicians saw their liability premiums increase an average of 10 to 12 percent each year. When the cap was reinstated in 2005, premiums for Chicago physicians stabilized and even began to shrink."

But the Illinois Supreme Court was unmoved by that argument. Nor was it swayed by the notion that other states have passed similar laws. In the majority decision, the Court wrote, "That 'everybody is doing it," is hardly a litmus test for the constitutionality of the statute."

It ultimately ruled that the statute was "facially invalid on separation of powers grounds," meaning that the legislative branch overstepped its bounds in constraining the judicial branch.

The cap had limited damages to $1 million in cases against hospitals, and $500,000 against doctors.