Last year, we discussed Missouri punitive damages under Ronald Sanders v. Iftekhar Agmed, MD, et al, one of several cases to go before the Missouri Supreme Court on the issue of punitive damages caps. Last month, one of these cases was decided. If this case is a harbinger of what's to come, then it looks like these caps are here to stay.
The case is Estate of Overbey v. Chad Franklin National Auto Sales North, LLC, and was issued on January 31, 2012 from an en banc panel of the Missouri Supreme Court. While the case was about fraudulent misrepresentation under the Missouri Merchandising Practices Act (MMPA) instead of personal injury, many of the issues are applicable to personal injury cases. At trial, the Overbeys were awarded $1,000,000 in punitive damages against Chad Franklin, the proprietor of the dealership. Pursuant to Mo. Rev. Stat. Section 510.265, Mr. Franklin had the damages reduced to $500,000.
Under 510.265, - Limits of Punitive Damages in Certain Cases - "No award of punitive damages against any defendant shall exceed the greater of (1) Five hundred thousand dollars; or (2) Five times the net amount of the judgment awarded to the plaintiff against the defendant." On appeal, the Overbeys claimed that the reduction violated their rights to trial by jury. The "trial by jury" claim was also the basis for the plaintiff's appeal in Sanders.
The Missouri Constitution states that "the right of trial by jury as heretofore enjoyed shall remain inviolate." Mo. Const. art. I, § 22(a). Further, in Scott v. Blue Springs Ford Sales, Inc., 176 S.W.3d 140 (Mo. banc 2005), the Court held that the right to have a jury determine damages applies to any law that allows for damages as a remedy. This includes both nominal and punitive damages. However, in this case, the Court made clear that just because a plaintiff has the right to have a jury determine damages does not mean that he is entitled to unlimited damages "under the MMPA or under any statute" (emphasis added). So long as application of the cap did not interfere with how the case was decided, application of s 510.265 does not violate the Missouri Constitution.
The plaintiffs also alleged that the reduction of their punitive damages awards violated separation of powers, equal protection, their due process rights, and Missouri's prohibition on "special laws." The Court rejected each one of these challenges.
While this case was not about personal injury per se, the phrase "under any statute" gives the court plenty of room to find caps on punitive damages constitutional in a tort context. We should be getting a decision on Sanders in the next month or two. However, if it follows the lead of the court in Overbey, it appears that the 2005 tort reforms, including punitive damage caps, are here to stay.
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