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Missouri Supreme Court

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The “Show-Me-Your-Lawsuits” state has quickly ascended the list of most troublesome jurisdictions in the country thanks to disappointing decisions by the high court on both punitive damages limits and workers’ compensation laws. These are just the latest rulings that have resulted in increased liability exposure for businesses across the state and across the country. From endorsing a radical approach to medical monitoring claims in 2007 to reversing in 2014 a commonsense jury verdict that found the Kansas City Royals were not liable for injuries allegedly suffered by a spectator during the team mascot’s traditional hotdog toss, Missouri’s high court is proving itself an implacable force for ever expanding liability.

STRIKING DOWN ANOTHER LIMIT ON DAMAGES

In September 2014, the Missouri Supreme Court struck down the state’s statutory limit on punitive damages when applied to common law claims in Lewellen v. Chad Franklin National Auto Sales North. The court ruled that the statute limiting punitive damages to the greater of $500,000 or five times the amount of the total judgment infringed on the right to a jury trial under the Missouri Constitution.

The decision is an outlier. Most states limit punitive damages, which punish a defendant rather than compensate a plaintiff for a loss. Some states allow them rarely or not at all. Federal and state courts have consistently found that lawmakers can take action to keep awards for punitive damages from running wild. In fact, the U.S. Supreme Court has recognized that “courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered,” a principle reflected in the Missouri statute.

But Missouri’s high court relied on a technical interpretation of the state constitution, finding that a statutory limit on punitive damages would restrict the right to a jury trial of common law claims as it existed in 1820. The court also found, incongruously, that while the legislature has the ability to specify remedies available in certain cases, it does not have the power to limit them.

This decision marks a stark change for the high court. In 2012, it reasonably upheld the limit on punitive damages in the context of the Missouri Merchandising Practices Act (the state’s consumer protection law), finding that the legislature “had a right to set limits on the substantive remedies permitted under that statute, including the limit of punitive damages that could be recovered.” However, then-Chief Justice Richard Teitelman issued a dissenting opinion that provided a roadmap for the 2014 ruling. In his dissent, Justice Teitelman focused on the word “inviolate” in the constitution when discussing the constitutional right to a trial by jury. According to Justice Teitelman, the word has a simple definition; it means “free from change or blemish, pure or unbroken.”

Of course, the Missouri Supreme Court is no stranger to striking down statutory limits on damages. In 2012 the court nullified a $350,000 limit on noneconomic damages in medical liability lawsuits. In Watts v. Cox Medical Centers a 4-3 majority hung its hat on a similar theory, holding that the state constitution’s right to a jury trial does not allow limiting damages in lawsuits arising under common law. Watts departed from a Missouri Supreme Court decision issued just months earlier that upheld the noneconomic damages limit in the context of a wrongful death case, a statutory action.

Returning to the recent case of Lewellen, not only did the high court strike down the limit on punitive damages, it permitted an excessive award. The court allowed punitive damages that were 40 times higher than the plaintiff ’s actual damages, ignoring U.S. Supreme Court precedent. instructing that punitive damages awarded in excess of a 9:1 ratio very rarely satisfy due process. The Missouri Supreme Court determined that the trial court erred in applying the $500,000 statutory cap, reinstating a $1 million award for punitive damages where the plaintiff ’s actual losses totaled just $25,000.

DECADES OF WORKERS’ COMP LAW JETTISONED

In addition to striking down the state’s limit on punitive damages, Missouri’s high court in 2014 increased the liability exposure of employers by opening the door to more retaliatory discharge claims.

Under the Court’s decision in Templemire v. W & M Welding, an employee can bring a retaliatory discharge action if he or she filed a workers’ compensation claim and then asserts the claim played a part in motivating the employer’s action. The ruling overturned three decades of precedent, altering the standard in place since 1984. This is a significant shift from the prior standard in Missouri, which permitted a retaliatory discharge claim when filing a workers’ compensation claim was the “exclusive cause” of a termination decision. The decision is the latest in a series of Missouri Supreme Court cases that have fundamentally shifted the state’s employment law to favor plaintiffs.

After all, Templemire now puts an employer that needs to replace an employee who can no longer carry out his or her duties because of an injury under threat of significant liability. To wit, John Templemire was injured
at work when a large metal beam fell and crushed his foot. When he was finally allowed to return to work, it was only on a restricted basis. He could no longer perform his previous responsibilities and duties. His employer tried to accommodate him by offering “light duty,” even though there really wasn’t any light duty work to be done when Templemire returned. After Templemire was unable to perform even simple duties and then had an intense confrontation with his boss, he was fired and later filed his retaliatory discharge claim. Jurors returned a verdict in favor of his former employer, but the Missouri Supreme Court reversed them. The court remanded the case for a new trial in which the judge would instruct the jury with the more expansive standard.

Under this new standard, an employer’s decision to replace an employee may have nothing to do with exercising workers’ compensation rights and everything to do with job performance and meeting the employer’s needs But now, the employee only has to show that a workers’ compensation claim possibly contributed to the discharge decision in order to bring a lawsuit.

THE ‘MISSOURI PLAN’ (TO ADVANTAGE PLAINTIFFS’ LAWYERS)

Missouri’s civil litigation climate is quickly deteriorating and the root of much of the problem lies with the way in which the state’s judges, at every level, are appointed. The so-called Missouri Plan was adopted in 1940 and was effectively nonpartisan until about 30 years ago. But individuals plainly aligned with the plaintiffs’ bar have since captured the appointment committee with predictable results.

Missouri’s appellate judges are appointed by a seven-member panel. The Appellate Judicial Commission’s membership is set by the Missouri Constitution. It includes three non-lawyers appointed by the governor, three lawyers elected by the Missouri Bar Association, and the chief justice of the Missouri Supreme Court. In practice, this purportedly “nonpartisan” court appointment plan is ensuring that the liability-expanding interests of plaintiffs’ lawyers are disproportionately represented.

The three lawyers currently on the committee are two personal injury lawyers, Thomas M. Burke and Donald E. Woody, and a criminal defense lawyer, J.R. Hobbs. Two non-lawyers appointed by Governor Jay Nixon are Edward “Nick” Robinson, a union representative from St. Louis, and Cheryl Darrough, a campaign staffer for the Democratic Party, both of whom consistently seek to appoint liability-expanding judges. The only committee member favoring reasonable limits on liability is John Gentry, a businessman, appointed by the previous governor, Matt Blunt. Naturally, Gentry is routinely out-voted.