Punitive damages bill faces tough road in Senate

State lawmakers returned from their mid-session break last week to inconclusive debates on changing the state’s laws on punitive damages.

The Missouri Senate debated a bill on March 27 that would make it more difficult for plaintiffs to claim and win punitive damages. The bill’s sponsor, Sen. Bill White, R-Joplin and an attorney, characterized it as a “slight reformation of what we do already.”

But Sen. Scott Sifton, D-Affton, also an attorney, said the bill would make punitive damages “darn near impossible to prove” and said he could think of no amendments that would make the bill palatable. Sifton and other Democrats held the floor for about two hours before the bill was set aside. Based on that filibuster, it’s not clear if the bill can pass the Senate unless the majority resorts to a procedural move that cuts off debate and forces a vote.

The Senate debate came a day after the House Judiciary Committee held a hearing on a similar bill, which awaits a vote before it could move to the full House. Any bill that passes the House, however, also would have to clear the Senate.

Among other changes, the proposed legislation would require the plaintiff to prove by clear and convincing evidence that the defendant “intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others.”

White alleged that the bill was needed to prevent plaintiffs’ lawyers from tacking on punitive damage claims to cases “without any basis” in an effort to drive up settlement values. The senator noted that insurance policies do not cover punitive damage awards.

White also pointed to a 2014 Missouri Supreme Court ruling that struck down the state’s punitive damage cap for many common-law causes of action. Those factors, he said, make defendants “very nervous.”

“There is no limit,” White said. “It can be anything.”

The bill also would bar plaintiffs from pleading punitive damages without the permission of a judge. The trial court couldn’t decide whether to submit punitive damages until after the jury has issued a verdict on compensatory damages. Punitive damages would be barred if the jury awarded only nominal damages.

Sifton argued that punitive damage claims aren’t submitted often and are awarded even less frequently. The purpose of the bill, he said, was to make such damages “rarer and smaller, and more appealable, and harder to hold on appeal.”

The bill in the House is similar but not identical. Among the differences debated during the March 26 committee hearing was a provision that would allow juries to consider evidence of the defendant’s financial condition when deciding the amount of a punitive award.

“You want corporations to be able to plead poverty?” said Rep. Mark Ellebracht, D-Liberty.

Phil Goldberg, a partner with Shook, Hardy & Bacon’s Washington, D.C., office, testified on behalf of the American Tort Reform Association that Missouri’s punitive damage laws have been “weakened and exploited over time.” But attorney Ken Barnes of the Missouri Association of Trial Attorneys countered that punitives are limited to “the worst of cases” and are intended to make defendants “change their ways so they don’t do it again.”

The punitive bills are among a host of tort measure under consideration as the legislative session, which ends May 17, enters its second half.

In the Senate, lawmakers on March 27 also debated SB 224, which would revise numerous Missouri Supreme Court rules concerning discovery. It marked the second time in March that the Senate has brought up the bill, though the proposal again was set aside without a vote.

The House committee, meanwhile, took testimony on HB 186, which generally would require product-liability suits to be brought within 15 years of when the product is first sold, as well as SB 38, a bill that already has cleared the Senate. SB 38 would limit employment suits against parent companies for the actions of franchisees and their employees.

The Judiciary Committee also endorsed SB 7, a bill that would alter Missouri’s venue and joinder laws to prevent mass tort cases featuring mostly out-of-state plaintiffs from being brought in St. Louis. The venue bill, which cleared the Senate in February after an all-night debate, still requires a vote by the full House to become law.

The punitive damage bills are SB 65 and HB 489.