Ohio Appellate Court Rules Damage Caps in Medical Malpractice Unconstitutional in Lyon v. Riverside

Ohio’s most recent challenge to the medical malpractice damages caps has found footing in the Tenth District Court of Appeals. In a unanimous decision, the Court held that Revised Code 2323.43, Ohio’s statute capping non-economic damages in medical claims, is unconstitutional as applied to the plaintiff in Lyon v. Riverside Methodist Hosp., 10^th Dist. Franklin No. 23AP-379, 2025-Ohio-299,1 on both due process and equal protection grounds. This represents the second appellate decision in Ohio finding R.C. 2323.43 unconstitutional, with the Ohio Supreme Court having yet to weigh in on the topic.

R.C. 2323.43 puts a cap on non-economic damages for medical claims. In cases where the plaintiff suffers permanent and substantial physical deformity, loss of use of a limb, loss of a bodily organ system or has a permanent physical functional injury that prevents them from being able to independently care for themselves or perform life sustaining activities, the cap is set at $500,000 in non-economic damages per plaintiff or $1,000,000 per occurrence.

In Lyon, plaintiff Susana Lyon sued dozens of healthcare providers and entities alleging failure to diagnose a thiamine deficiency, causing her injury.  The case was originally filed in December 2016 and as it proceeded, many of the defendants were dismissed or settled. When the remaining parties went to trial in April 2023, the jury returned a verdict for the plaintiff and awarded total damages of $25,172,526.32. The jury apportioned liability to many former defendants as well as the remaining defendants who went to trial, and in fact the three physician defendants who went to trial were only apportioned 3% liability each, with their employer being apportioned a joint 9%.  Of that total award of $25,172,526.32, the jury awarded Ms. Lyon $20,000,000 for non-economic damages (for claims like pain and suffering), with $5,000,000 for past and $15,000,000 for future non-economic damages.

Following the verdict, the defendants filed a motion asking the trial judge to reduce the non-economic damage award to $500,000 in conformance with the statute.  The plaintiff responded by filing a motion to declare R.C. 2323.43 unconstitutional. The trial court granted that motion in May 2023, finding that the non-economic damages cap in R.C. 2323.43 was unconstitutional because it violated Ms. Lyon’s due process and equal protection rights. The matter was then appealed to the Tenth District Court of Appeals, where the Court was tasked with determining whether the statute was unconstitutional both facially and as applied. An as applied challenge argues that the statute is unconstitutional as applied to the plaintiff in the case, i.e. Ms. Lyon, while a facial challenge argues that there is no situation in which the statute is constitutional.

In its analysis of whether R.C. 2323.43 is unconstitutional, the Tenth District applied the rational basis test.  The first prong of the rational basis requires that the statute bear a real and substantial relation to general welfare. To determine whether this was true of R.C. 2323.43, the Court looked to the statute’s purpose, which is to provide a reasonable level of compensation to the few individuals who bring medical claims while protecting the viability of the medical profession that serves the public.  The caps were enacted by the legislature during a period of increasing malpractice insurance premiums during which both carriers and physicians were leaving the state due to the dramatic rise of jury verdicts in malpractice cases. The Court concluded that statute met the first prong of the rational basis test, as it does bear a real and substantial relation to the public health, safety, morals or general welfare of the public. The Court also found that it passed the second prong, which requires that the statute not be unreasonable or arbitrary, noting that “at some point…the General Assembly must be able to make a policy decision to achieve a public good.” Ultimately, as the Court could envision a scenario where the $500,000 cap was a minimal reduction and thus reasonable to achieve the benefit to the public of curtailing rising healthcare costs, it found that R.C. 2323.43 is not facially unconstitutional on due process grounds.

However, the Court did find R.C. 2323.43 unconstitutional as applied to Ms. Lyon on due process grounds. The Court reasoned that in this case, the reduction in non-economic damages was unreasonable and arbitrary, relying in part on the Eighth District Court of Appeals’ decision in Paganini v. Cataract Eye Center, et al., 2025-Ohio-275, 262 N.E.3d 1161 (8th Dist.). There, the Eighth District found that R.C. 2323.43 was unreasonable and arbitrary as applied because the application of the cap reduced that plaintiff’s non-economic damages by 66.4% in order to lower medical malpractice insurance rates for the entire public’s benefit. Likewise, the Tenth District in Lyon found that applying the cap would represent a 57.4% reduction in Ms. Lyon’s non-economic damages for the same purpose. Given the severity of Ms. Lyon’s injuries, the Court found that this was unreasonable and arbitrary for Ms. Lyon to bear the cost of lowering healthcare expenses for the public and thus held that R.C. 2323.43 is unconstitutional as applied on due process grounds.

The Court then turned to the equal protection claim.  Applying the rational basis test facially, the Court’s reasoning on the first prong was largely the same as its reasoning in the due process analysis and concluded that R.C. 2323.43 is facially constitutional on equal protection grounds. However, the Court again found that R.C. 2323.43 is unconstitutional as applied to Ms. Lyon. The Court was not swayed by arguments from the defendants that these classifications and damage caps are similar to those for non-economic damages against political subdivisions who enjoy a similar cap on economic damages because this case involves a private litigant, not a political subdivision. Instead, as has occurred in past cases challenging medical malpractice non-economic damage caps, the Court found that R.C. 2323.43 is more analogous to damage caps for torts not involving political subdivisions. Particularly, the Court highlighted the fact that in R.C. 2315.18(B)(3), which caps non-economic damages for non-medical claim torts, there is no cap for catastrophic injuries. It then went on to determine that as applied here, the distinction between Ms. Lyon and a tort victim seeking comparable recovery under R.C. 2315.18(B)(3) was unreasonable and arbitrary, making the statute unconstitutional as applied. 

Since R.C. 2323.43 was signed into law, there have been a number of trial court decisions addressing this issue, but few appellate decisions. Before Lyon, only the Eighth District Court of Appeals had addressed this question in Paganini. The Ohio Supreme Court has not addressed this issue yet. However, Paganini is currently on appeal to the Ohio Supreme Court, with briefing having concluded in April of this year, but no oral argument date has been set. 

If you have questions about how the decision in Lyon v. Riverside Methodist Hospital affects your organization, reach out to a Dinsmore attorney.