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.”

Punitive Damages Reform: HB 212 (2003); Amended Mont. Code Anno., § 27-1-221 (2010).

Montana|2003

Brings Montana statute into conformity with Supreme Court decision that

[…]

Brings Montana statute into conformity with Supreme Court decision that punitive damages may be awarded by a two-thirds verdict rather than the previous requirement that punitive damages awards must be unanimous.  In Finstad v. W.R. Grace & Co., 2000 MT 228, 301 Mont. 240, 8 P.3d 778 (2000), the Montana Supreme Court held that the portion of section 27-1-221(6), MCA, which requires that an award of punitive damages must be unanimous as to liability and amount, violates Article II, section 26, of the Montana Constitution, guaranteeing a verdict by a two-thirds majority in all civil cases.


[hide]

Punitive Damages Reform: SB 363 (2003): Mont. Code Ann. § 27-1-220.

Montana|2003

Limits punitive damages, unless otherwise expressed by statute, to $10

[…]

Limits punitive damages, unless otherwise expressed by statute, to $10 million or 3 percent of a defendant’s net worth, whichever is less.  It does not limit the amount of punitive damages that may be awarded in class action lawsuits.


[hide]

Punitive Damages Reform: HB 442 (1987): Mont. Code Ann. § 27-1-221(5).

Montana|1987

Requires a plaintiff to show by “clear and convincing” evidence

[…]

Requires a plaintiff to show by “clear and convincing” evidence that a defendant acted with “actual fraud” or “actual malice.”  Requires the determination of awards for punitive damages to be made in a separate proceeding.  Permits the admissibility of evidence of a defendant’s net worth only during the proceeding for the determination of punitive damages.  Requires a judge to review all punitive damages awards and to issue an opinion on his decision to increase or decrease an award, or to let it stand.


[hide]