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Missouri Cap on Punitive Damages Overturned

October 22, 2014

Punitive damages–monetary amounts designed to be a deterrent for reckless behavior against defendants–are important to the civil justice system in this country. However, they are also often attacked by critics in the so-called “tort reform” movement for being disproportionately large and arbitrarily assigned. The headlines that accompany recent cases–like Cynthia Robinson’s $23 billion punitive damages award by a Florida jury after her husband died from smoking cigarettes–have fueled this fire, but suits like Robinson’s are not the norm, not by a long shot.

Civil justice blog ThePopTort.com reports that juries only award punitive damages in about three percent of all civil cases. And the median total of such awards is around $55,000, a far cry from the millions or billions that lobbyists representing Big Business would have the public believe. Despite relatively low averages, there are many cases in which victims are entitled to punitive damages that are significantly greater. This is a problem in many states due to existing caps on punitive damages. This means that no matter what a jury of one’s peers decides, a judge will be required by law to limit such awards to a pre-set total.

Until very recently, Missouri was one such state, but its Supreme Court struck down the cap (unanimously) in a case involving a 77-year-old widow named Lillian Lewellen. After seeing advertisements for National’s $49 per month vehicle rentals, Ms. Lewellen picked a car that qualified and went on her way. Before long, however, her monthly bills began creeping toward $400. She had to take out a loan from a local bank, and because she could not keep up with her loan payments, her car was repossessed.

When Lewellen and her attorneys began doing research, they found that the dealership’s owner had over 70 similar complaints filed against him in Missouri and still more in Kansas. After a jury decided to award Lewellen $1 million in punitive damages from the dealership owner, a judge, citing the state’s cap, reduced this amount to $500,000. Eventually, after years of fighting, the case made it to the Missouri Supreme Court, where justices decided that the cap violated Lewellen’s right to a trial by jury, one to which all citizens are entitled in both that state and all other states.

While Missouri is following in the footsteps of several states on this issue, others–Wisconsin, for example–are moving in the opposite direction. After repealing its $350,000 cap on punitive damages in 2005 (which one justice claimed placed “plaintiffs with the most severe injuries […] at the highest risk for inadequate compensation),” the state recently passed legislation that no longer allows punitive damages at all.

As we have noted time and time again on this blog, the civil justice system is often the only thing standing between a large corporation and its victims, many of whom have been harmed through no fault of their own. Where industry regulation fails, the only way left to punish wrongdoers is through punitive damages.

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