A proposal to raise the standard of proof for punitive damage lawsuits drew opposition from trial attorneys in a legislative committee hearing Tuesday morning.
State Sen. Bill White, R-Joplin, proposed a bill that opponents said would make it more difficult to secure punitive damages judgments by requiring plaintiffs to prove the defendant had intentionally harmed them. The bill would also give the state sovereign immunity from punitive judgments.
The Senate Government Reform Committee heard testimony on the bill, which White said had been working through the chamber for the past four years. Testimony was about evenly split, with business and health care groups in support and trial attorneys in main opposition. White said he has worked with the trial attorneys on the issue before, and he’ll continue to work with them if they have specific ideas to change the bill.
There are two types of damages that can be assessed in a lawsuit. The main one is compensatory, which is meant to make the plaintiff whole for their loss. Punitive damages are meant to punish defendants. In Missouri, half of punitive damage awards are put into the state’s Tort Victims Compensation Fund, which pays out to plaintiffs who win judgments in a lawsuit but aren’t paid the full amount.
White said more attorneys have been filing for punitive damages to use as leverage in their case for compensatory damages, since punitive damages are often not covered by insurance. His bill puts into law a standard that has already been set: The harm was caused by willful, wanton or reckless behavior.
“Decisions of the courts have watered that down,” White said. “Now, in a lot of cases, they seem to equate it to something very akin to just simple negligence.”
White’s bill would keep plaintiffs from filing for punitive damages at the beginning of a case. The court would only allow them to file if it decides there is enough evidence to meet the standards for a punitive damage award — that a jury could find clear and convincing evidence it’s warranted.
Dana Freese, counsel for Healthcare Services Group, which provides insurance to hospitals and doctors, said the punitive damage filings pit the hospital against its insurance provider in medical malpractice lawsuits. Lawyers file them because they know they’re not insured, and it’s a form of intimidation, he said.
Since 2014, 94 punitive damage lawsuits have been filed for medical malpractice cases, which White said shows seeking the damages is a widespread practice. The effect is increased insurance rates, which are passed on to Missourians in health care costs, Freese said.
Brett Emison, president of the Missouri Association of Trial Attorneys, said the bill could stop legitimate attempts to get punitive damages. He referenced a lawsuit against a Hy-Vee store in St. Joseph that gave a woman the wrong prescription, causing her death.
The employee at fault was a florist who had recently been promoted to pharmacy technician without proper training. The technician didn’t intend to kill the woman or act with deliberate disregard for her safety, Emison said. Her death was the result of systemic failures within Hy-Vee that set the technician up to fail.
The way White’s bill is written, Emison doesn’t believe someone could sue the technician or Hy-Vee. The technician would have had to intentionally kill the woman, which would be murder and a criminal issue rather than a civil issue, he said.
Emison also took issue with a portion of the bill that wouldn’t allow a court to impose punitive damages against an employer for the actions of an employee unless they knew about and authorized the employee’s action or knew the employee wasn’t fit to do his or her job.
“We would have to find an email or memo instructing that employee to do that, or a memo or something after the fact ratifying the conduct, and that’s just not going to happen,” Emison said.
White said that case would qualify for punitive damages under his bill. By having someone do a job they weren’t trained to do, Hy-Vee knew they weren’t fit for it. They also endorsed the technician’s actions by allowing them to do the job, satisfying at least two of the four requirements for punitive damages, he said.
White also proposed granting the state sovereign immunity against punitive damages at Gov. Mike Parson’s request. That language might be split off into another bill and added back if it passes a committee on its own, White said. Eliminating punitive damages against the state could reduce costs to its legal expense fund by up to $2.38 million in its first year and $2.86 million in subsequent years, according to the Committee on Legislative Research.
Over the past five years, the state has paid $11,446,000 in punitive damages out of its legal expense funds in 10 separate judgments — ranging from $1,000 for prison guards performing unreasonable strip searches on a prison inmate in Potosi to $3.5 million for a racial discrimination lawsuit brought by a white professor who was fired from the historically black, public Harris-Stowe State University.
Lawsuits against the Missouri Department of Corrections and its employees account for half of those judgments, amounting to $2.12 million in punitive damages, including two judgments from 2018 that cost the state $1 million each.
Both of those lawsuits were brought by women who were routinely sexually harassed while working in Missouri prisons, including Debra Hesse, who was awarded nearly $1.97 million in compensatory damages, attorney fees and litigation costs in her lawsuit claiming she was harassed at both the Tipton Correctional Center and Kansas City Release Center.
Punitive damages are meant to punish and discourage bad actors. That doesn’t work for the state, which just pays taxpayer money out of its legal expense fund, White said. The judgments don’t affect the employees or department that caused the lawsuit, he said.