Second Circuit Rules Against Reducing Veteran’s Damages Award

April 9, 2016, 8:00AM. By The National Trial Lawyers

The Second Circuit Court of Appeals ordered an increase in a $4.5 million verdict against the Veterans Administration, awarded to a military veteran for surgery that left him a paraplegic.

The plaintiff, Charles Malmberg, argued the district court erred when it reduced his award by $1.2 million, which is the cost of services he could receive at the VA Medical Center.

Permanent & Catastrophic Injuries

Malmberg had surgery at the Syracuse Veteran’s Administration Medical Center in 2004 to remove a degenerative disc and bone growths. Prior to the surgery, Malmberg had no symptoms associated with a spinal cord compression.

After the surgery, Malmberg complained that his legs were weak. X-rays revealed that he suffered from minor spinal cord impingements in several points in his spine. He was diagnosed with incomplete quadriplegia. He filed suit against the VA under the Federal Torts Claims Act after his administrative claim was denied.

No State or Federal Provisions Requiring Offsets

The district court held that if the VA provides the services for free, the government should not be forced to pay a third-party health care provider. The Second Circuit addressed whether federal or state law required the offset.

In similar cases, the damages awards were reduced because the plaintiffs would receive disability benefits, as an alternative to a damages award. The court distinguished Malmberg’s case because the award was reduced simply because he could receive services at the VA hospital.

The court, following a Seventh Circuit decision, stated that nothing in the federal law or the FTCA prohibited the government from paying twice for future medical expenses.

State law determines damages in a FTCA action. New York law recognizes collateral source reductions but the application is fact specific. Based on this case, Malmberg received services from the VA-selected physician - not a physician he selected himself via a private insurance plan or statute. The offset was not required by state law.

Pain and Suffering Damages

On appeal, the review of the district court’s pain and suffering award was seen as sparse and failed as a matter of law. The district court failed to provide any basis for its $500,000 to $1.5 million range of damages. Due to the lack of analysis and reasoning the Second Circuit vacated and remanded the pain and suffering award for additional determination by the lower court.

This case is Malmberg v. United States, Case No 14-3555-cv(L), United States Second Circuit Court of Appeals, New York.