CONSTITUTIONAL LAW
Supreme Court of Alaska (2022)
Flora Lipsky
In Knolmayer v. McCollum, 520 P.3d 634 (Alaska 2022), the supreme court held, as a matter of
first impression, that the state statute limiting medical malpractice damages awards violated the
state constitution’s Equal Protection Clause as applied to a claimant who received compensation
from an insurer exercising a right of subrogation against the claimant’s damages award. (Id. at
663). The claimant in this case successfully sued her doctor for medical malpractice. (Id. at 638).
An Alaska statute limited her damages award to only those funds in excess of any amount received
from a collateral source, such as health insurance coverage. (Id. at 638–39). The claimant’s
insurance plan gave the insurance provider an equitable right of subrogation contractual right on
the claimant’s damages award. (Id. at 638). The right functionally placed an equitable lien for
reimbursement of insurance payouts on any damages received by the claimant in her malpractice
suit. (Id.). The claimant challenged the application of the statute’s damages award limitation as
applied to her because the statute included an exception for claimants who received coverage from
a federal program with a right of subrogation, but not for claimants who received coverage from
other collateral sources with rights of subrogation. (Id. at 637). The supreme court considered
whether the disparate treatment of claimants based solely on the nature of the subrogating collateral
source violated the state constitution’s Equal Protection Clause. (Id. at 656). In analyzing the state
law, the Court adopted a minimum scrutiny standard to consider whether the classifications created
under state law bore a fair and substantial connection to the relevant government goal in enacting
the law. (Id. at 658). In applying this means–ends scrutiny, the court concluded that the law
limiting the damages award of this claimant whose insurance plan included a right of subrogation
for the insurance provider did not bear a significant enough relationship to the government’s aim
in eliminating “double recovery” for medical malpractice claimants. (Id. at 661). The court
emphasized that the statute was meant to limit claimants who had historically recovered twice,
once from their insurance providers and a second time from the defendant in the tort litigation. (Id.
at 658). However, the court reasoned that, in fact, claimants often have insurance policies that give
the insurance company a right of subrogation amounting to an equitable lien on any damages award
received by the claimant with the result that, far from recovering double, the claimant comes up
short. (Id. at 661–62). Vacating the superior court’s order and remanding the case, the supreme
court concluded that the Alaska state law limiting damages awards violated the state constitution’s
Equal Protection Clause as applied to the claimant. (Id. at 663).
