Missouri Examining Constitutionality of Cap on Punitive Damages

Missouri has a  cap on punitive damages.  The cap is $500,000 or five times compensatory damages, whichever is greater.

Kansas City Star reports that on November 2, 2011, the Missouri Supreme Court heard oral arguments in Estate of Max E. Overbey and Glenna J. Overbey v. Franklin,  Case No. SC91369 that challenges the punitive damages cap.  The Overbeys contend that a $1 million dollar punitive award against former car dealer Chad Franklin, which was decreased to $500,000.00 pursuant to the state’s punitive damages cap, should be reinstated because the statute is unconstitutional.  They argue  that the cap violates the constitutional separation of powers; the Overbeys’ right to trial by jury; the Overbeys’ right to equal protection; the prohibition against special legislation; the due process clause; and the Overbeys’ right to open courts.

According to one firm’s press release:

The oral argument principally focused on whether § 510.265 violates the separation of powers doctrine and the Overbeys’ right to a jury trial. Plaintiffs’ counsel argued that the statute usurped the judiciary’s power by permitting the legislature to enact a procedural statute that contravened the constitution by depriving a plaintiff his or her right to a jury trial. The parties’ arguments also focused on the fact that the actual damages awarded stemmed from a legislatively created cause of action, the MMPA, and that the cap was also legislatively created. When considering the “check and balances” issue, members of the Court inquired about what would take place in the future if, without a statutory cap, the Court approved a very high punitive damages award. Which branch would be the check on the judiciary? In response, the Plaintiffs’ counsel offered only the constitutional due process constraints referenced in the Supreme Court’s BMW and State Farm v. Campbell cases. As the statute stands now, Plaintiffs’ counsel argued that it deprives a defendant of even making such an argument that the judiciary is constrained by the BMW and State Farm due process factors.

Two briefs were filed by the defendant::  Brief One and Brief Two.  I have not been able to find the brief(s) filed by the plaintiff.

Tennessee just recently enacted caps on punitive damages, although the law is not as generous as the Missouri statute.  Tennessee imposes a cap on punitive damages of $500,000 or two times compensatory damages, whichever is greater.

I will write another post when the Missouri Supreme Court decides this case.  

Thanks to Torts Prof for telling me that this case had been argued.