An insurance company is being accused of orchestrating a multi-million dollar medical malpractice verdict to push Iowa lawmakers into passing tort reform legislation.
The allegation was made in a recently filed lawsuit that centers around a previous case involving a boy who suffered severe brain damage during his birth at an Iowa City hospital.
The parents had sued the Obstetric and Gynecologic Associates of Iowa City and Coralville, among others, claiming negligence in the lead-up to their son’s birth. They were initially awarded over $94.7 million in damages by a Johnston Country jury, but this was later reduced to $75.6 million, according to the Iowa Capital Dispatch.
Court documents indicated that there were attempts to settle the case for an amount covered by the clinic’s insurance policy. However, the insurer, MMIC Insurance/Constellation Inc., allegedly resisted these settlement proposals.
Now, OB-GYN Associations has filed a lawsuit in state court alleging that its insurer acted in bad faith by using the case to influence legislators to enact tort reforms that would limit the damages that could be awarded in medical malpractice cases.
“Once a jury decided the case was worth $97 million, MMIC/Constellation used the jury’s verdict to convince Iowa politicians to put a cap on non-economic damages in place in the state of Iowa,” the lawsuit stated. “MMIC/Constellation unreasonably chose not to settle and make the lawsuit and verdict go away, and then used OB-GYN Associates’ financial and reputational demise as propaganda to pass tort reform in Iowa.”
Nick Rowley, the attorney representing OB-GYN Associates, said he doesn’t think the lawsuit would be difficult to prove.
“A jury is going to see what happened,” he told the Iowa Capital Dispatch. “It’s right there, it’s right out in the open, because that’s how bold they are in Iowa.”
MMIC/Constellation has not responded to the allegations made in the newly filed lawsuit, but it did deny wrongdoing in federal-court filings related to the case.
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