Early in 1983, Margaret Kawaauhau went to see her doctor, Dr. Geiger, because her foot was bothering her. The doctor suggested a course of oral prescriptions instead of surgery or more invasive procedures because he thought the patient would prefer it. Geiger then left the area for business reasons. While he was gone, Kawaauhau’s treating prescriptions recommended that she be transferred to another facility for further treatment. Upon Geiger’s return from his work trip, he expressed his disagreement with the other doctors’ orders, cancelled the transfer, and even discontinued all of her medications because he believed her foot issue had subsided. Unfortunately, it did not and her condition actually became much worse.

Subsequently, she sued Geiger for medical malpractice and successfully received a sizeable jury award; however, Geiger fled the state and the plaintiffs were forced to garnish his wages. Left with no other choice (because he did not carry malpractice insurance), Geiger filed for bankruptcy and sought to discharge the medical malpractice judgment award. The District Court sided with the plaintiff. Yet, the Appellate Court and later the Supreme Court did not and the latter returned a unanimous opinion in Geiger’s favor.

ISSUE

Is a medical malpractice judgment debt arising from “willful and malicious injury by the debtor or another” dischargeable under 11 U.S.C. § 523(a)(6)?

ANALYSIS

Both sides in this case relied on statutory construction, congressional intent, and public policy. As the petitioner, Kawaauhau looked first to the relevant portion of the bankruptcy code:

“A discharge under Section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt…for willful and malicious injury by the debtor to another entity or to the property of another entity.” 11 U.S.C. § 523(a)(6).

Here, she gathered that since the doctor willfully and intentionally directed all of the acts, then he should be liable and unable to discharge the judgment amount in bankruptcy per this section. To this point, the respondent replied that there was a difference between intending to cause an injury and intent to cause an action. The law barred the former, but Geiger only did the latter; therefore, in his opinion, he should be able to discharge the debt. The petitioner also maintained that, as a matter of public policy, doctors should not be allowed to discharge this kind of debts especially when the underlying behavior is so egregious. To this point, the respondent argued that if Congress had intended this outcome it would have clearly and expressly done so but it did not. Finally, the responded made the case that adopting the petitioner’s reading of 11 U.S.C. § 523(a)(6) would nullify other parts of federal law and that would be an improper construction of this statute.

HOLDING

The Supreme Court unanimously adopted the views of the respondent and not those of the plaintiff/petitioner. Using a plain-text meaning of the statute, it said that “debts arising from recklessly or negligently inflicted injuries do not fall within the compass of [section 523(a)(6)].” The Court feared that the petitioner’s usage of intentional acts as the barometer instead of intentional injury would open up a lot more liability to potential defendants than was intended. As a safeguard, it ruled that the injury must be intended and not just the act. Otherwise, as the Court stated, “A construction so broad would be incompatible with the “well-known” guide that exceptions to discharge ‘should be confined to those plainly expressed.’”

RULE

No, a medical malpractice judgment debt arising from “willful and malicious injury by the debtor or another” is not dischargeable under 11 U.S.C. § 523(a)(6).

BREAKDOWN

The decision in this case was unanimous with all members of the Court siding with the plaintiff/petitioner (Rehnquist, Stevens, O’Connor, Scalia, Kennedy, Souter, Thomas, Ginsburg, and Breyer).

CONSEQUENCES

Even with the advent of strict malpractice laws for doctors, this case is important. If you want to put a doctor on the hook for judgment awards after he or she goes bankrupt, you must show more than that the act was intended, you must show that the injury was intended as well.