On July 1, 2020, Governor Parsons signed into law Senate Bill 591 which reforms the punitive damages system in civil proceedings, as well as the Missouri Merchandising Practices Act (MMPA).
Punitive Damages Modifications
Under SB 591, punitive damages shall only be awarded where “the plaintiff proves by clear and convincing evidence that the defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others, and the plaintiff is awarded more than nominal damages.” Plaintiffs can no longer seek punitive damages in initial pleadings under SB 591. Instead, plaintiffs may only seek punitive damages by written motion, with permission from the court. Motions for punitive damages must be supported by evidence that establishes “a reasonable basis for recovery of punitive damages.” Notably, punitive damages “shall not be based in whole or in part, on harm to nonparties.”
SB 591 sets forth strict time periods to file motion for punitive damages. Specifically, Plaintiffs must file their motion for punitive damages no later than 120 days prior to the final pre-trial conference or trial date. The court must rule on the motion for punitive damages no later than 45 days after a hearing on the motion or if no hearing is held, after the defendant has filed its response to the motion. Under SB 591, if the trial court concludes based on admissible evidence, that “a trier of fact could reasonably conclude, based on clear and convincing evidence, that the standards for a punitive damage award” have been met, the trial court must grant the plaintiff leave to file a pleading seeking a punitive damages. In such an event, the defendant’s responsive pleading is limited to the newly amended punitive damages claim. Discovery of a defendant’s assets shall only be allowed after the trial court has granted the plaintiff leave to file a pleading seeking punitive damages. SB 591 also allows courts to credit defendants for punitive damages paid for in another state or federal court for the same conduct following a hearing in certain circumstances.
SB 591 provides additional safeguards for employers where an employee’s conduct may have otherwise exposed an employer to punitive damages. Under SB 591, an employer is vicariously liable for punitive damages for its employee’s conduct in certain situations. Specifically, punitive damages can only be awarded against an employer because of its employee’s conduct where: (1) the principal authorized “the doing of and the manner of the act”; (2) the employee was unfit and principal was reckless in employing or retaining the employee; (3) the employee was employed in a managerial capacity and was acting in the scope of employment; or (4) the principal or managerial agent of the employer “ratified or approved of the act.”
Additionally, SB 591 modifies the definition of “punitive damages” in medical malpractice claims. Under SB 591, to obtain a punitive damages award, the trier of fact must find that the health care provider intentionally caused or demonstrated malicious conduct in causing the plaintiff’s injuries/death by rendering or failing to render health care services, by clear and convincing evidence. Notably, “[e]vidence of negligence, including indifference or conscious disregard for the safety of others” does not meet the new punitive damages standard set forth in SB 591 as it pertains to medical malpractice claims. It should also be noted that SB 591 does not apply to claims for unlawful housing practices under the Missouri Human Rights Act.
MMPA Modifications
The MMPA was originally intended to provide relief to consumers if businesses engaged in deceptive or unfair business practices. However, since its enactment, the MMPA has served as a catch-all mechanism leading to mass litigation against businesses for matters not originally contemplated under the Act. In addition to punitive damages reform, SB 591 also reforms the MMPA in an attempt to stop the misuses of the Act.
The amended MMPA sets forth new procedures to pursue a MMPA claims. Under the revised MMPA, plaintiffs now have to establish that they acted “as a reasonable consumer” in light of all the circumstances and that the alleged MMPA violation that the business committed would have caused a reasonable person enter the transaction which caused the plaintiff’s damages. Further, plaintiffs must now show individual damages with “sufficiently definitive and objective evidence” to allow the loss to be calculated with a reasonable degree of certainty. In a class action, any class representative must establish these requirements. All other members of the class must establish individual damages in a manner determined by the court. Plaintiffs may not bring actions to recover damages for personal injury or death in which a claim arises out of the rendering of or failure to render health care services.
Under the amended MMPA, the court may dismiss an MMPA claim for failure to show a likelihood that the alleged unlawful act would mislead a reasonable consumer. Plaintiffs may continue to seek punitive damages and attorneys’ fees under the revised MMPA. However, under the revised MMPA, attorneys’ fees must “bear a reasonable relationship to the amount of the judgment.” Additionally, the revised Act clarifies that if the court grants equitable relief to the prevailing party, said relief must be deemed by the court as necessary to protect the plaintiff from the acts that are declared unlawful under the MMPA. It should be noted that where the court grants equitable relief, an award of attorneys’ fees is based on the amount of time reasonably expended.
The MMPA does not apply to advertisements, merchandise, or transactions in which the merchandise consists of a new residence where the buyer is offered and accepts an express warranty by the builder or a third-party warranty company paid for by the builder where the contract contains a disclaimer indicating that the contract, merchandise, and property is excluded under the MMPA. It should be noted that the MMPA sets forth specific language and font type requirements that must be complied with for such disclaimers to be valid. Under this provision of the MMPA, “residence” is defined as a “single-family house, duplex, triplex, quadruplex, or a unit in a multiunit residential structure in which title to each individual unit is transferred to the owner under a condominium or cooperative system and shall include common areas and common elements.”
Senate Bill 591 goes into effect on August 28, 2020 and applies to any cause of action filed on or after August 28, 2020.
If you have questions about these legal changes or general liability queries, please contact Lace Cline.
Disclaimer and warning: This information was published by McAnany, Van Cleave & Phillips, P.A., and is to be used only for general informational purposes and should not be construed as legal advice or legal opinion on any specific facts or circumstances. This is not inclusive of all exceptions and requirements which may apply to any individual claim. It is imperative to promptly obtain legal advice to determine the rights, obligations and options of a specific situation.
