October 6, 2015

Kentucky Supreme Court recognizes that compliance with safety regulations is generally inconsistent with malicious conduct

Over two decades ago, the Supreme Court of Georgia in Stone Man v. Green held that punitive damages are generally improper where a defendant has adhered to applicable safety regulations.  The rationale behind that proposition is fairly obvious: if a defendant sets out to follow regulations designed to make a product or activity reasonably safe, the defendant’s state of mind is necessarily inconsistent with the sort of “conscious disregard” for safety that justifies punitive damages.  The Georgia rule also increases the predictability of what conduct is punishable, and thereby avoids the problem of punishing a defendant without fair notice, a concern at the heart of the U.S. Supreme Court’s punitive damages jurisprudence.

Like any general rule, the Georgia rule has exceptions.  Compliance with safety regulations will not be an absolute defense to punitive damages in all circumstances.  For example, Georgia courts have permitted punitive damages against a defendant who knew that government safety tests would not detect a serious safety problem with its product.

Last year, our firm prepared an amicus brief for the DRI in the Kentucky Supreme Court, asking that court to adopt the same approach as the Georgia Supreme Court.  On September 24, the court did exactly that.  In Nissan Motor Co. v. Maddox, the Kentucky Supreme Court cited with approval to Stone Man and stated that regulatory compliance does not automatically foreclose punitive damages, but “typically” the required state of mind necessary to punitive damages cannot be established “where undisputed evidence indicates that regulatory duties have been satisfied.”

You can read more about the opinion on the Mayer Brown Guideposts blog, which has a post entitled Kentucky Supreme Court Sets Forth Helpful Principles On Liability For Punitive Damages.