On July 1, 2020, Governor Mike Parson signed SB 591 into law, which will significantly impact claims for punitive damage in Missouri. Some will see SB 591 as much-needed legislation to level the playing field for businesses and insurers by curtailing a recent trend that has seen juries award colossal punitive damages. Others will view the legislation as an unnecessary limit on a jury’s ability to consider a wide range of factors in determining the appropriate amount of damages in civil cases. No matter how one characterizes SB 591, the new law will change the landscape of civil litigation when it goes into effect on August 28 of this year as it has both procedural and substantive implications.
Procedural safeguards against claims for punitive damages
Under the changes to the law resulting from SB 591, a claim for punitive damages cannot be made in an initial Petition and must be requested in a written motion. RSMo §510.261(5). This is a significant procedural requirement that will place punitive damages under the microscope early in the case and place a significant burden on plaintiffs. Currently, plaintiffs may request punitive damages in the Petition and those allegations are deemed to be true for purposes of evaluating any motion to strike or dismiss filed by defendants. But under the new law, the plaintiffs must argue and prove that a claim for punitive damages is warranted. Furthermore, the motion seeking punitive damages must have evidentiary support, which will require plaintiffs to initiate punitive damages related discovery early in the litigation. Early discovery may also have an additional benefit to litigation by narrowing the issues quickly leading to a more efficient resolution of the case.
Substantive clarification on punitive damages
Not only does SB 591 implement procedural safeguards against punitive damages, but it also clearly states what a plaintiff must prove to prevail. Punitive damages cannot be awarded unless a plaintiff proves “by clear and convincing evidence that a defendant either intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others.” RSMo §510.261(1). While this standard is not a major deviation from the current law, it clarifies some troublesome ambiguity over the precise nature and purpose of punitive damages. The law now explicitly defines the boundaries of punitive damages claims.
SB 591 also introduces a provision that explicitly states that harm to nonparties cannot be considered in awarding punitive damages. RSMo §510.261(6). While this does not necessarily change existing law, it clarifies and further codifies the role of punitive damages in litigation. This provision could soften the impact of the “reptilian” tactics that have become so pervasive in jury trials in recent years and have undoubtedly contributed to increasingly large punitive damages awards.
Protections for healthcare providers
The scope of damages classified as “punitive” in actions against healthcare providers is modified by SB 591 to include damages only for “malicious misconduct” and “conduct that intentionally caused damage to the plaintiff.” RSMo §538.205(11) (emphasis added). This is a key change to the definition because it clearly states that, for punitive damages to be awarded, there must be a finding that the conduct at issue was not only intentional, but that the intent was to cause damage.
Additionally, SB 591 limits the scope of punitive damages available against healthcare providers by stating, “[e]vidence of negligence including, but not limited to, indifference to or conscious disregard for the safety of others shall not constitute intentional conduct or malicious misconduct.” RSMo §538.210(8) (emphasis added). This significantly eases the vagueness over the nature of evidence that could warrant consideration for punitive damages in medical malpractice claims. This provision is a major step toward protecting Missouri’s healthcare providers from the fear of substantial jury awards.
Protections for employers
In addition to healthcare providers, SB 591 includes measures to control claims for punitive damages against employers for the acts of their employees and other agents. Missouri law will now recognize four scenarios in which punitive damages may be sought from an employer for the act of an agent:
“(1) The principal or a managerial agent of the principal authorized the doing and the manner of the act;
(2) The agent was unfit and the principal or a managerial agent of the principal was reckless in employing or retaining him or her;
(3) The agent was employed in a managerial capacity and was acting in the scope of employment; or
(4) The principal or a managerial agent of the principal ratified or approved the act.”
RSMo §510.261(3).
These scenarios have a common theme in that they each specifically addresses the employer-agent relationship, including the authority that the employer has bestowed upon the agent. Once again, this addition to the law narrows the extent to which an employer could be liable for the actions of an agent by limiting punitive damages to situations where there is a logical nexus between the employer, the agent, and the alleged harm.
Finally, the legislation significantly limits the breadth of discovery a plaintiff can pursue if an employer admits liability for the actions of an agent on a claim for compensatory damages. RSMo §510.261(4) (emphasis added). This offers a unique incentive for employers to resolve disputes and gives them the possibility of some relief from the increasingly burdensome discovery process that often becomes costly and time-consuming with the volume of information and data that modern businesses require to operate.
Impact of SB 591
SB 591 may serve to curb the recent trend of significant punitive damages awards in Missouri. It implements measures to ensure that, when punitive damages are awarded, they are reasonable and grounded in facts rationally connected to the law. The result may be more reliability and consistency from the start of the litigation process through the conclusion.
The attorneys at Behr, McCarter & Potter, P.C. are experienced in representing businesses and insurers in state and federal trial and appellate courts in Missouri and Illinois, in arbitration, and in successfully resolving disputes outside of the litigation process. If you have questions about a litigation matter, please do not hesitate to contact our office for assistance.
Author: Ryan Hyde