Punitive Damages

Problem

While punitive damages awards are infrequent, their frequency and size have grown greatly in recent years.  More importantly, they are routinely asked for today in civil lawsuits.  The difficulty of predicting whether punitive damages will be awarded by a jury in any particular case, and the marked trend toward astronomically large amounts when they are awarded, have seriously distorted settlement and litigation processes and have led to wildly inconsistent outcomes in similar cases.

ATRA's Position:

ATRA supports state legislation that: establishes a liability “trigger” that reflects the intentional tort origins and quasi‑criminal nature of punitive damages awards ‑ “actual malice;” requires “clear and convincing evidence” to establish punitive damages liability; and requires proportionality in punitive damages so that the punishment fits the offense.   ATRA supports federal legislation that addresses the special problem of multiple punitive damages awards.  Such legislation would protect against unfair overkill, guard against possible due process violations, and help preserve the ability of future claimants to recover basic out‑of‑pocket expenses and damages for their pain and suffering.

Opposition Opinion:

The personal injury bar’s argument against punitive damages reform – that a jury should have broad discretion to award punitive damages in order to punish and deter misconduct – fails to address the quasi-criminal nature of punitive damages necessitating such procedural safeguards for the award of punitive damages as a showing that the defendant acted with “actual malice.”

Medical Liability Reform: Nursing Homes: Punitive Damages: SB 1202 (2001).

Florida|2001

Requires a plaintiff to prove punitive damages by clear and

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Requires a plaintiff to prove punitive damages by clear and convincing evidence in cases against nursing home facilities.  Limits punitive damages against nursing home facilities to the greater of three times the award of compensatory damages or $1 million.  Limits punitive damages against nursing home facilities to the greater of $4 million or four times the award of compensatory damages, where conduct is proven to be motivated by financial gain.  Sets no limit on the award of punitive damages against nursing home facilities, where intentional harm is proven.


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Punitive Damages Reform: HB 775 (1999)

Florida|1999

Limits punitive damages to the greater of three times the

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Limits punitive damages to the greater of three times the award of compensatory damages or $500,000.  Limits punitive damages to he greater of four times compensatory damages or $2,000,000, where the defendant’s wrongful conduct was motivated by an unreasonable financial gain or the likelihood of injury was known.  Prohibits the award of multiple punitive damages awards based on the same act or course of conduct unless the court makes a specific finding that earlier punitive damages awards were insufficient.  Requires a plaintiff to prove by clear and convincing evidence that a defendant acted with intentional misconduct or gross negligence for the award of punitive damages.  Outlines circumstances when an employer is liable for punitive damages arising from an employee’s conduct.  The reform does not apply to cases involving abuses to the elderly or children, or cases where the defendant is intoxicated.


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Unchallenged

Punitive Damages Reform: SB 465 (1986).

Florida|1986

Limits punitive damages to three times the award of compensatory

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Limits punitive damages to three times the award of compensatory damages, unless a plaintiff can demonstrate by “clear and convincing” evidence that a higher award would not be excessive.  Requires sixty percent of the award to be paid to the state’s General Fund or Medical Assistance Trust Fund.  (The reform was amended in 1992 so that 35% of any punitive damages award goes to the state’s General Fund or Medical Assistance Trust Fund.)


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Challenged and Struck Down

The punitive damages limit and “clear and convincing” evidence requirement is constitutional.  Smith v. Department of Insurance, 507 So.2d 1080 (Fla. 1987).  The statute requiring plaintiffs to pay 60% of any punitive damages award to the State did not violate State or Federal right to jury trial, equal protection, or due process protections, and was not unconstitutional special legislation.  Gordon v. State of Florida, 608 So. 2d 800 (Fla. 1992) cert. denied, 507 U.S. 1005 (1993).