January 31, 2017

Montana House moves to tighten limits on punitive damages

Insurance Journal reports that the Montana House voted last week 60-40 to further tighten that state's legislative cap on punitive damages.  Under existing Montana law, punitive damages are capped at the lesser of $10 million or 3 percent of the defendant's net worth.  The new law would add a further limitation, prohibiting punitive damages from exceeding three times the amount of compensatory damages.

Back in 2014, a Montana trial court found the current statutory cap unconstitutional. The parties appeared to have settled that dispute, because there was no appeal to the Montana Supreme Court.  That court had another case in 2014 that raised the issue of whether the cap is constitutional, but the court ended up vacating the punitive damages award on other grounds

In any event, California plaintiffs' attorneys can rest easy.  California remains among the minority of states having no legislative limitation on the amount of punitive damages.