Business leaders and tort reform advocates have welcomed changes that will limit punitive damage awards in Missouri.
Senate Bill 591 passed by the legislature includes another key target for business leaders, a reform of the MIssouri Merchandising Practices Act (MMPA), which allows consumers to sue for misleading marketing and packaging of products.
Punitive damages will now be limited to egregious cases where a “defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others."
Mehan
Brad Jones, state director of the National Federation of Independent Business (NFIB) said the measure relating to the punitive damages was a high priority in what is a truncated session.
"There was not much being passed," Jones told the St. Louis Record. "It is a huge, huge deal."
State Rep. Deb Lavender, D-Kirkwood, who lobbied against the bill, told KRCU that the measure protects “large banks and bad business.” The bill passed along partisan lines.
Gov. Mike Parson is expected to sign the bill into law.
Missouri lawmakers have passed legislation to bring much needed reforms to Missouri’s legal climate, according to the Missouri Chamber of Commerce.
"Our state’s legal climate currently ranks 44th in the nation according to the U.S. Chamber Institute for Legal Reform. Senate Bill 591 will stop abuse of the state’s punitive damage system," the chamber said.
"Originally designed as a way to punish and deter a small number of defendants who demonstrated the worst type of conduct, today Missouri’s punitive damage system is often used to pressure businesses into agreeing to windfall-sized payouts," it added.
“Improving Missouri’s legal climate was the Missouri Chamber’s top priority this session and we applaud the Missouri General Assembly for passing these very meaningful reforms,” said Daniel P. Mehan, Missouri Chamber president and CEO.
“As our state begins its economic recovery from the COVID-19 crisis, we need to ensure Missouri is business-friendly and welcoming for job growth opportunities.
"Unfortunately, for years our legal climate has been sending the opposite message. But by passing these reforms we are finally addressing this problem and helping set the stage for a strong recovery.”
Research shows that a state’s legal climate does in fact have a strong impact on job growth, according to the Chamber.
Defense attorneys Mark A. Behrens and Jennifer J. Artman, Shook, Hardy & Bacon L.L.P, a firm that closely follows legal issues in Missouri, said the bill introduces "sweeping changes to the state’s punitive damages law and its consumer protection statute," the MMPA.
"The new law will apply to all cases filed on or after August 28. The changes add to other recent reforms passed by the legislature that have improved the legal climate in a state that has consistently been positioned near the bottom of businesses’ rankings of state legal systems in recent years," the authors explained in a legal note.
They added, "Concern about punitive damages that 'run wild' has existed in Missouri since the state’s supreme court struck down a cap on such damages in 2014 for tort actions that existed at common law
"The legislature enacted the cap after years of state court decisions had diluted the standard for punitive damages and created untenable unpredictability for defendants. Courts had blurred the line between ordinary negligence and the type of conduct that should be required for punitive damages. The new law codifies a clear standard of liability for punitive damages."
According to the American Tort Reform Association (ATRA), the MMPA is known among trial lawyers as an overly broad consumer protection act "that can be taken advantage of easily as it allows for attorney’s fees and punitive damages."
"The frequency with which multimillion- and even multibillion-dollar awards come out of St. Louis courts show the need to reform Missouri’s punitive damages system," ATRA has stated.
ATRA's president Tiger Joyce thanked legislators who were key to bringing forward the legislation and the "commitment to ensuring Missouri’s civil justice system is fair to all. This bill will reduce frivolous litigation and allow for greater access to the court system for those who need it most."
Editor's note: The St. Louis Record is owned by the U.S. Chamber Institute for Legal Reform.