In November, an Oklahoma jury awarded the Cunningham family $25.6 million in damages in their civil suit against Aetna. The results of the case—and the pending appeal—raise important questions about how punitive damages are awarded.
Fifty-four-year-old Oranna Cunningham was diagnosed with Stage 4 brain cancer in the spring of 2014. Doctors recommended an experimental proton beam therapy. Oranna, along with husband Ron, wanted to try the new treatment, but its experimental status was cited by Aetna as the reason for denying coverage.
The Cunninghams went ahead with both the treatment and a lawsuit, mortgaging their house and starting a GoFundMe page. Orrana passed away in 2015. They spent over $92,000 on the proton beam therapy treatment.
Did the jury overreached on the punitive damages award?
Oklahoma law has three different thresholds for juries to consider.
Level 3, the highest threshold, is the only one without any cap on damages and therefore the one that had to be reached for the jury to award $25 million. A Level 3 award requires more than negligence. It requires actual malice on the part of the defendant. Furthermore, that malice must be proven beyond a reasonable doubt—a standard that typically applies in criminal law, but not civil cases.
One part of the Cunningham case was the allegation that the doctors Aetna relied on to review claims were handling 80 cases per day.
Did that result in poor decisions? Did Aetna’s overloading of the doctors contribute to malicious intent?
The Oklahoma jury said yes.
Now it’s time for the appellate court to weigh in.
However this plays out, the size of the damages has to set off alarm bells for health insurers. Oklahoma is a politically conservative state, including on issues of liability and tort law. The fact that a jury could reach this verdict suggests that insurers might not want to dig in their heels in the face of a claim or lawsuit.
Indeed, even observers sympathetic to Aetna’s handling of the Cunningham case suggest that the company should have been able to settle this much sooner.