(CN) - A California hospital is liable for an infant's brain damage despite a related $1 million settlement, the state's Supreme Court ruled, trouncing a common-law release rule.
Nancy Leung claimed her son, Aidan, suffered permanent brain damage six days after his 2003 birth at Verdugo Hills Hospital in Glendale.
Leung sued pediatrician Steven Nishibayashi and the hospital, and agreed to settle for Nishibayashi's insurance limits before trial.
A jury awarded Leung $15 million in economic and noneconomic damages in 2007, apportioning 55 percent of the fault to Nishibayashi, 40 percent to the hospital and 5 percent to Aidan's parents.
Citing precedent, however, an appeals court released the hospital. It ruled that Nishibayashi's settlement also released the hospital from liability for economic damages under California's common law release rule.
But the California Supreme Court found otherwise on Thursday.
"Under the traditional common law rule, a plaintiff's settlement with, and release from liability of, one joint tortfeasor also releases from liability all other joint tortfeasors," Justice Joyce Kennard wrote for the seven-member court.
"The common law rule's rationale is that there can be only one compensation for a single injury and because each joint tortfeasor is liable for all of the damage, any joint tortfeasor's payment of compensation in any amount satisfies the plaintiff's entire claim," Kennard wrote.
Calling the release rule "harsh," the court said Aidan would receive only a "tiny fraction" of economic damages if it upheld the appeal court's decision.
Nancy Leung claimed Aidan refused to breastfeed immediately following his birth. After examining the newborn, Nishibayashi said two bruises on the side of the baby's head were "nothing to worry about," and added that it was safe to take him home.
Three days later, the Leungs noticed that Aidan's eyes looked yellow and that his lips were chapped.
The parents called Nishibayashi's office, and a nurse told them to put Aidan in sunlight and wait four days for a scheduled appointment.
Aidan was ultimately diagnosed with permanent brain damage from jaundice, hyperbilirubinemia and kernicterus.
The court found that Nishibayashi did not settle in good faith, and that the hospital should be held jointly and severally liable for economic damages.
"Under the common law release rule, [Aidan], injured for life through no fault of his own, would be compensated for only a tiny fraction of his total economic damages, a harsh result," Kennard wrote.
"In light of the unjust and inequitable results the common law release rule can bring about, as shown in this case, we hold that the rule is no longer to be followed in California," Kennard added.
The case will return to the Court of Appeals for further proceedings.
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