September 15, 2014

Missouri Supreme Court strikes down punitive damages cap as unconstitutional

Last week, Missouri's high court issued a unanimous opinion holding that a statutory cap on punitive damages violates the Missouri Constitution.

The statute in question provides that a punitive damages award against a single defendant cannot exceed $500,000 or five times the amount of actual damages, whichever is greater.  The Missouri Supreme Court, relying on an earlier decision in which it invalidated a cap on noneconomic damages, struck down the punitive damages cap based on the provision in the Missouri constitution guaranteeing the right to a jury trial.

The opinion rests on the premise that, prior to the adoption of the Missouri constitution in 1820, juries in Missouri had discretion to award punitive damages.  When the state constitution was adopted, the clause preserving the right to a jury trial was intended to guarantee the then-existing common law jury trial rights.  Therefore, according to the court, the punitive damages statute is unconstitutional because it takes away a plaintiff's right to have a jury award an uncapped amount of punitive damages.

As we have noted in prior posts, most state courts have rejected arguments like this in cases challenging the legality of statutory caps on punitive damages.  Typically, courts rule that caps do not violate the right to a jury trial because such a right does not include unlimited punitive damages---the right only ensures that a jury must resolve any underlying factual disputes.

For a list of other states that have disagreed with the approach of the Missouri Supreme Court, see this post by Mark Behrens on the WLF Legal Pulse blog.