In Valley Health System, LLC v. Murray, a patient died while in a hospital, allegedly due in part to medication mismanagement by hospital staff. The complaint alleged the hospital was intentionally understaffed, but the evidence at trial established the hospital was fully staffed. At trial, the plaintiff instead argued the medication management policy put profits over safety. The jury found for the plaintiff and awarded more than $48 million, including $32.42 million in punitive damages. The district court refused to apply Nevada's medical malpractice cap on noneconomic compensatory damages because the jury concluded the hospital owed and breached a fiduciary duty that was outside the scope of professional negligence.
The punitive damages award rested on the fiduciary duty. Nevada recognizes fiduciary duties in other contexts, but had not determined if one exists between a hospital and a patient. The Supreme Court surveyed courts around the country and agreed with the majority that "[a] hospital does not owe a fiduciary duty to its patients in relation to medical care." It also agreed that a breach of a fiduciary duty cause of action would be duplicative of the medical malpractice cause of action in any event. Since the fiduciary duty claim failed as a matter of law, the punitive damages award was vacated and the case remanded to apply the noneconomic damages cap.
The Murray ruling is quite important to the medical field because it expressly rejects an effort to evade the noneconomic damages caps. However, Murray left one question open: the plaintiff had pled a staffing allegation but didn't prove it. One of the court's footnotes could be read to leave open the question of whether a hospital might owe a fiduciary duty as it pertains to staffing levels.
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