Missouri Senate Bill 591 - Punitive Damages (A Health Care Perspective)

Introduction

On July 1, 2020, Governor Mike Parson signed Senate Bill 591 (SB 591). The new law states it will apply to all suits filed on or after August 28, 2020. SB 591 makes significant changes to the framework for punitive damages in tort actions filed in Missouri state courts or filed in other courts but based on Missouri state law tort claims. The discussion that follows is limited solely to medical negligence cases. Though not dealt with here, SB 591 also includes significant changes to actions under Missouri's consumer protection statute, the Merchandising Practices Act (“MMPA,” § 407.025, et seq., RSMo. (2020)).

Clarifying the Proper Standard

SB 591 is intended to bring much-needed clarity to punitive damages in medical negligence cases. This is not the first time the Legislature has addressed the issue, however. Since 1986, Chapter 538 of the Missouri Revised Statutes has included a definition for punitive damages as those “intended to punish or deter willful, wanton or malicious misconduct.” § 538.205(11) (1986). Consistent with this definition, the Legislature intended that punitive damages may be awarded against a health care provider only “upon a showing by a plaintiff that the health care provider demonstrated willful, wanton or malicious misconduct . . . .  § 538.210.8 (1986).

Unfortunately, this statutory definition has proved problematic in its application. For example, in one medical negligence case involving a substantial punitive damages award, the trial court approved (over the defendants’ objection) a jury instruction submitted by the plaintiffs that used the standard “complete indifference or conscious disregard” instead of the “willful, wanton or malicious” standard mandated by § 538.210.8. See, Koon v. Walden, 539 S.W.3d 752, 773 (Mo. App. E.D. 2017). That meant the jury was not instructed using the statutory language, and the jury did not specifically find that the defendants engaged in “willful, wanton or malicious misconduct.” The Missouri Court of Appeals, Eastern District, affirmed, concluding that for purposes of punitive damages, acting with “complete indifference or conscious disregard for the safety of others” is the legal equivalent of engaging in “willful, wanton or malicious misconduct.” Id. at 774-75. In a concurring opinion, one appellate judge stated: “I agree that the common understanding of the words ‘willful, wanton or malicious’ mean something different than ‘complete indifference to or conscious disregard for the safety of others’,” and that the instructional issue merited further review by the Supreme Court. Id. at 775-76. Despite this invitation, the Supreme Court of Missouri denied the appellants’ application for transfer.

SB 591 takes this issue head on and requires that a jury find “the evidence clearly and convincingly demonstrated that the health care provider intentionally caused damage to the plaintiff or demonstrated malicious misconduct that caused damage to the plaintiff.” § 538.210.8, RSMo. (2020). Further, and apparently in response to the Koon decision, SB 591 explicitly states that: “Evidence of negligence including, but not limited to, indifference to or conscious disregard for the safety of others shall not constitute intentional conduct or malicious misconduct.” Id. This change reflects a return to the original common-law standard of intentional misconduct and is an effort to clarify for the courts the proper standard and prohibit the use of lesser standards.

As mentioned above, as part of this new, heightened standard, SB 591 includes the “clear and convincing” burden of proof for punitive damages. This concept is not new, however, as the Supreme Court of Missouri adopted this evidentiary standard for all tort cases in Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104, 106 (Mo. 1996). Now, SB 591 codifies this standard into the statutory framework. Unchanged is § 510.265, RSMo. (2005), which limits punitive damages in most civil cases to $500,000, or five times the net amount of the judgment awarded to the plaintiff, whichever is greater. The Lewellen v. Franklin, 441 S.W.3d 136 (Mo. 2014) decision, in which the Supreme Court of Missouri reasoned that applying the punitive damages cap to a common law cause of action violated the constitutional right to a trial by jury, does not prohibit the Legislature from capping damages for a statutory cause of action such as medical negligence. See § 538.210, RSMo. (2015) (creating statutory cause of action for all medical negligence actions and replacing common law claims).

Significant Procedural Hurdles

Though not solely applicable to medical negligence actions, SB 591 also includes a series of procedural hurdles that a plaintiff must overcome before a court may allow a plaintiff to plead a claim for punitive damages and submit such a claim to a jury. These changes are included in Chapter 510. Under the new law, a plaintiff may not plead a claim for punitive damages until after a court has determined, based on available evidence, that a jury could reasonably conclude that the burden of proof and standard of liability have been met. § 510.261.5, RSMo. (2020). This will be important, as it has become increasingly common for Missouri plaintiff attorneys to include in a medical negligence petition a prayer for punitive damages along with compensatory damages as a matter of course, regardless of the nature of the facts of the specific case. This should no longer be tolerated unless the court grants a motion for leave filed no later than 120 days before the final pretrial conference or trial. No pleading or discovery shall be permitted on punitive damages unless a plaintiff first clears this procedural hurdle.

Vicarious Liability Issues

SB 591 also includes a “Complicity Rule” that limits vicarious liability for punitive damages against an employer/principal for employee/agent conduct. The new law permits such an award against an employer for the conduct of an employee only if the employee was a managerial employee acting in the course and scope of his employment; the employer authorized or later ratified the employee’s conduct; or the employee was “unfit” for the job making it “reckless” for the employer to hire or retain the employee. § 510.261.3, RSMo. (2020). It remains to be seen how courts will apply this rule to health care providers, but § 538.210.4, RSMo. (2020) is unchanged and continues to prohibit health care provider vicarious liability for the conduct of a non-employee agent.

Conclusion

SB 591 represents a return to the original common law concept of intentional misconduct being a prerequisite for an award of punitive damages. It is a robust effort designed to bring into focus the blurred line between mere negligent conduct and conduct that justifies an award of punitive damages, along with a procedural framework to weed out frivolous claims and ensure plaintiffs are held to the appropriate standard and burden of proof. The provisions outlined above appear to offer significant protections for health care provider defendants, while also allowing for the possibility of a punitive damages claim, but only in the rare circumstance where the evidence would support it.   

*Baker Sterchi Member Lisa A. Larkin assisted in the research for this post.