Consumer Protection Reform Bill Passed by Missouri Legislature
The Missouri legislature passed S.B. 591 to amend the Missouri Merchandising Practices Act (MMPA) and the standards by which punitive damages are awarded.
The Missouri legislature gave its stamp of approval to S.B. 591, sponsored by Sen. Bill White, amending the Missouri Merchandising Practices Act (MMPA) and the standards by which punitive damages are awarded.
The MMPA is known among trial lawyers as an overly broad consumer protection act that can be taken advantage of easily as it allows for attorney’s fees and punitive damages. The frequency with which multimillion- and even multibillion-dollar awards come out of St. Louis courts show the need to reform Missouri’s punitive damages system.
Research shows excessive tort litigation in Missouri results in a loss of $2 billion in personal income annually and a loss of 32,205 jobs. The excess costs result in a “tort tax” of $505.21 per person.
S.B. 591 now heads to Governor Mike Parson’s desk, who is expected to sign the bill into law. The amendments included in this legislation will help curb lawsuit abuse in the “Show Me Your Lawsuit” state which has been on the American Tort Reform Foundation’s list of “Judicial Hellholes” for many years. St. Louis is currently ranked No. 5.
“The passage of S.B. 591 is a win for Missourians who suffer the effects of lawsuit abuse,” ATRA President Tiger Joyce said. “We are grateful to Senators Bill White, Tony Luetkemeyer, Eric Burlison, Andrew Koenig, Senate Majority Floor Leader Caleb Rowden, Senate President Dave Schatz, Speaker Elijah Haahr, House Majority Floor Leader Rob Vescovo, and Representative Bruce DeGroot for their efforts in moving this bill through the process. Thank you for your commitment to ensuring Missouri’s civil justice system is fair to all. This bill will reduce frivolous litigation and allow for greater access to the court system for those who need it most.”
The bill passed the Missouri House of Representatives yesterday on a 98-51 vote. It passed the Senate on a 21-9 vote on March 2, 2020.
Amendments to the MMPA in S.B. 591 include:
- An MMPA plaintiff must prove the alleged violation would cause a reasonable person to enter into the transaction at issue;
- Judges will have the power to dismiss a claim when it is objectively clear that no reasonable consumer would be misled by the practice targeted in the lawsuit; and,
- Defines the requirements for proceedings as a class action under the MMPA.
A separate section in S.B. 591 also addresses punitive damages reform in light of the 2014 Missouri Supreme Court decision in Lewellen which struck down the state’s limit on punitive damages:
- Codifies the “clear and convincing evidence” standard for punitive damages that was adopted by the Missouri Supreme Court in Rodriguez;
- Specifies when punitive damages may be awarded against an entity for the acts of an agent; and,
- Establishes a process to conclude the burden of proof and standard of liability for punitive damages have been met.
“Today’s victory on MMPA was a long time coming and is one more step toward re-balancing the civil justice system in Missouri,” ATRA President Tiger Joyce said. “I look forward to Governor Parson’s signature on this important piece of legislation.”
ATRA’s written testimony summarizing the MMPA and punitive damages reforms can be found here.
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