Judge Stops State Plan To Take $200 Million Out Of Malpractice Fund

May 17, 2018

A federal judge is blowing a $200 million hole in Pennsylvania's $32 billion state budget by throwing out a law that appropriated the surplus from a state-created medical malpractice insurer of last resort.

U.S. District Judge Christopher Conner on Thursday sided with the Pennsylvania Professional Liability Joint Underwriting Association and declared that the 2017 law violates the federal Constitution.

Conner says the fund is private property, so can't be seized by the government without fair compensation.

The fund consists of money from policyholder premiums and investment income and is managed by a board of directors.

State lawmakers and Democratic Gov. Tom Wolf sought to draw down the fund, citing a decline in claims.

The transfer never took place, as the association obtained an injunction from Conner in November.