Missouri Supreme Court finds punitive damage cap unconstitutional

In a court of law, there are generally two types of damages available, compensatory and punitive. Compensatory, as the name suggests, are designed to provide compensation for your injuries or other damages. These damages include such items as your medical expenses from a car accident, the cost of repairs to your vehicle and lost time from work if you were severely injured and spent months or years recovering.

They other type of damages, punitive, serve a different purpose. They are designed to punish wrongful conduct and deter similar future conduct. Because they are punishment, they typically are a multiple of the compensatory damages. Courts have allowed various amounts, but some large damage awards capture headlines.

The legislatures of many states have been convinced by some organizations to cap punitive damage amounts. In Missouri, the legislature set a cap of $500,000. This can undercut the purpose of a punitive damage award, as some corporate entities, $500,000 is a tiny fraction of their yearly earnings, and such an award do little to deter wrongful behavior.

But this month, the Missouri Supreme Court found that if the cause of action existed at the time of Missouri’s 1820 Constitution, the determination of punitive damages could not be limited, because such limits infringed on the jury’s exclusive, constitutional role of determining damage amounts.

The specific case involved fraud, where a woman was promised a $49 car payment, but in less than a year’s time, the payment increased to $387 per month. The jury awarded $1 million in punitive damages for the common law fraud action and the Supreme Court affirmed that amount, ruling that the legislature’s cap was unconstitutional.

Kansascity.com, “Missouri high court rules against caps for some punitive damages,” Mark Morris, September 11, 2014