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A state appeals court is allowing a suit to be filed on behalf of a child who was brain-damaged at birth into a New York State indemnity fund created to cover medical malpractice expenses to move forward, which may be a hopeful sign for hundreds of other plaintiffs fighting similar cases.

The ruling by a four-judge panel from the Appellate Division, Second Department affirms Brooklyn Supreme Court Justice Marsha Steinhardt's ruling to deny the Attorney General's Office's motion to dismiss the suit.

The indemnity fund was created in 2011 to pay the future costs portion of verdicts and settlements in malpractice suits for birth-related brain injuries, which was the product of an effort to find ways to address increasing med mal insurance premiums.

Before the establishment of the fund, obstetrical malpractice claims were paid for with up-front, lump-sum settlements, and Medicaid often bore the cost of injured infants' medical care, according to an amicus brief that the New York State Academy of Trial Lawyers filed in the case.

But the attorney general argues that the indemnity fund was not intended to cover injuries that babies suffer from malpractice before their mothers go into labor.

In the Brooklyn case, the Attorney General's Office maintains that the funds administrator was justified in denying enrollment in the fund for a girl born in 2008 in Brooklyn with a brain injury that left her paralyzed from the neck down and that Steinhardt, who ordered the state to enroll the plaintiff in the fund, got it wrong when she found that the plaintiff's injuries occurred while her mother was in labor.

Lambros Lambrou of the Lambrou Law Firm, the plaintiff's attorney who sits on the board of the New York State Academy of Trial Lawyers, said the attorney general's position on the law is leaving cases across the state in limbo while shifting costs over to Medicaid.

“It really is sad and ridiculous,” Lambrou said. Medicaid is currently picking up the tab for his client's care, Lambrou said; he argues in court papers that his client's medical costs are expected to exceed $10 million.

Assistant Attorneys General Anisha Dasgupta and Philip Tisne appeared for the government in the case. The office did not respond to requests for comment.

The Attorney General's Office argues that Steinhardt was incorrect in finding that labor begins with a mother's first contractions and says that the plaintiff was injured at an unknown time during the pregnancy. 

While the Second Department affirmed Steinhardt's ruling to deny the state's effort to throw out the plaintiff's Article 78 proceeding, the appeals court sided with the Attorney General's Office on its argument that Steinhardt spoke too soon on the merits of the case, as the state had not yet had the chance to file an answer or an administrative record.

Justices Reinaldo Rivera, Ruth Balkin, Joseph Maltese and Betsy Barros joined on the unsigned decision.  

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