The NC Chamber’s Legal Institute was founded in 2015 because the business community recognized that pro-business policy reforms won in the North Carolina General Assembly would be short-lived if they were subsequently unwound in the courts. That understanding has proven to be clairvoyant, and a case that has been pending in our Court of Appeals since late 2024 but which was decided yesterday, makes the point again. Fortunately, and quite likely as a direct result of collaborative efforts across North Carolina’s business and health community, the North Carolina Court of Appeals issued a published decision in Mohebali v. Hayes affirming the constitutionality of the state’s statutory cap on noneconomic damages in ordinary medical malpractice cases. This decision underscores North Carolina’s commitment to a stable, predictable legal environment by upholding the General Assembly’s authority to fashion damage limits.

The case arose from tragic facts. The plaintiff, Allison Mohebali, was under the care of Dr. John Hayes, who specialized in home births. Her pregnancy extended more than three weeks past her due date, during which she experienced fever, confusion, and other serious complications. Despite her repeated requests to go to the hospital, Dr. Hayes insisted she remain at home. In early August 2019, after nearly 44 weeks of gestation, Mohebali’s baby died in utero, and she required an emergency cesarean section. She sued Dr. Hayes and his practice, Harvest Moon Women’s Health, for negligence. Hayes did not appear at trial, and the jury awarded Mohebali $7.5 million in noneconomic damages. Under North Carolina’s statutory cap, however, the trial court reduced the noneconomic damages award to $656,730.

• Legislative Deference: The court underscored the General Assembly’s broad authority to set public policy by defining remedies and placing limits on damages. This reflects a consistent line of North Carolina precedent that courts should defer to legislative policy choices absent a clear constitutional prohibition.
• No Vested Right Impaired: Because Mohebali’s cause of action accrued in 2019, years after the legislature enacted the cap in 2011, the COA concluded that her right to recover damages was not impaired. The panel reaffirmed that vested property rights only arise once a cause of action accrues.
• Missed Opportunity to Avoid the Cap: While the plaintiff alleged permanent injury, she did not plead or argue gross negligence – which, if proven, would have exempted the case from the cap. Nor did she pursue punitive damages. One might posit that the case was plead without such claims for the intentional purpose of challenging the statutory cap. Regardless, the COA saw the lack of gross negligence or any punitive damage request (ways around the cap) as problematic.
• Consistency with Past Decisions: The opinion drew on prior rulings upholding limits on punitive damages (Rhyne v. K-Mart) and statutory restrictions on nuisance damages (Rural Empowerment Ass’n v. State), confirming that capping remedies is within the legislature’s authority.

Importantly, the Court noted that it had received extensive amicus briefing. The NC Chamber Legal Institute participated alongside the North Carolina Association of Defense Attorneys, the North Carolina Farm Bureau Federation, the North Carolina Home Builders Association, and the North Carolina Retail Merchants Association. Their arguments, particularly on legislative deference and the presumption of constitutionality, are reflected in the panel’s reasoning. The CLI is grateful to our outside counsel, Steve Carey and Aislinn Klos at Parker Poe, for preparing and submitting our brief.